President’s Message

Repeated Transformations Driving Healthy Living for People in Body and Mind

The MEDIPAL Group’s management philosophy is “Contributing to people’s health and the advancement of society through creation of value in distribution.” Based on this philosophy, we have developed our businesses in the fields of “Pharmaceuticals, Health, and Beauty.” Having set our ideal situation as “Expand, Support, and Connect ‘Pharmaceuticals, Health, and Beauty,’ an Orchestra in Support of People’s Health,” we strive to bring about a society in which everyone can live healthily in body and mind, and to increase our corporate value, by “expanding” businesses that create value for our stakeholders, “supporting” them by resilient distribution infrastructure and “connecting” partners across a wide range of domains.

The idea of an “Orchestra in Support of People’s Health” is one that is intended to express the idea of weaving together greater health and prosperity in people’s lives through the new value created by combining our employees, Group companies, and partner companies, as each respectively hones their own roles and strengths, with all of this coming together like the beautiful music of an orchestra.

To support people in leading healthy lives, it is essential to be able to reliably deliver products whether it be in ordinary times or in emergencies. Regardless of the era or circumstances, this therefore remains our definite and unchanging mission. Japan experiences many natural disasters, such as earthquakes, typhoons, torrential rains, and heavy snowfall. All of our employees therefore share the philosophy, “Our mission is to deliver pharmaceuticals in Japan.” We have thus established structures to reliably transport and deliver what is needed, when it is needed, and in just the amount it is needed.

The MEDIPAL Group thus constantly aspires to be the “logistical lifeline” that earns the trust of society and our stakeholders.

Executing on Five Growth Strategies for Sustainable Growth

The environment in which each MEDIPAL Group business operates is growing ever more diverse and complex, be it in the form of healthcare system reform, an aging population with declining birth rates, digital transformation or growing environmental awareness. The review of the social security system coinciding with inflation in healthcare costs and frequent revisions to drug prices in particular have become a major issue forcing new responses from pharmaceutical wholesalers. Amidst such a changing business environment, we believe that, in order to achieve sustainable business growth, we need to change to a new business model that is not mere an extension of what has come before, while retaining what is good about the wholesaler model.

Based on our vision, called “Change the Oroshi,” the MEDIPAL Group seeks to generate new value while working with Group companies and other partners. I think of a vision as something that describes our dream. I want to make MEDIPAL the sort of corporate group that achieves its dreams one by one, with each dream achieved contributing to the next.

We formulated the “2027 MEDIPAL Medium-Term Vision: Change the Oroshi Forever—Constant Innovation” as the Medium-Term Vision for the five years beginning in the fiscal year ended March 31, 2023 and ending in the fiscal year ending March 31, 2027, and we are presently advancing initiatives in line with this as a united Group.

Under the Medium-Term Vision, we will seek to carry out the following five growth strategies through business portfolio prioritizations and collaboration with partners. We will also seek to create new social and customer value, and pursue the sustainable growth of the MEDIPAL Group.

Expansion of Overseas Business

We are advancing research and development in the field of orphan drugs with the aim of global roll out of new drugs in partnership with JCR Pharmaceuticals Co., Ltd. In December 2024, the first patient was administered a treatment in a Phase I/II study for mucopolysaccharidosis type ⅢB (JR-446) created by JCR Pharmaceuticals Co., Ltd. This represented the clearing of an important milestone. We hope to help patients awaiting treatment, as soon as we can, by developing ultra-rare disease medications through this partnership going forward.

Expansion of Prevention and Pre-disease Business and AGRO & FOOD Business

To extend healthy lifespans and to create a society in which people can live every day in both physical and mental health, we believe that what matters is not just treatments for disease, but also diet, self-care, and testing at the pre-disease stage. It is in this context that, in FY2024, we merged our subsidiaries MP Gokyo Food & Chemical Co., Ltd. and MEDIPAL FOODS CORPORATION, and converted PreMedica Inc. into a subsidiary. At present, we are working to provide products, establish services and improve the customer base in order to expand business at these subsidiaries, while leveraging the strengths of the MEDIPAL Group.

Enhancement of the Business with and in Digital

The recent advancement of digital technology is giving rise to convenient services day by day. The MEDIPAL Group is also advancing a range of initiatives with the aim of offering digital services that help achieve operational streamlining for our clients in the form of medical institutions and retailers, and of offering services that support healthy living for general consumers. Such initiatives demand firms that can act as partners. That is why we have continued to generate synergies by working with partners who have strong technical capabilities, beginning with PRESUSCUBE Corporation, which we converted to a consolidated subsidiary in FY2024.

Building Sustainable Logistics Business

Logistics functions are a key business foundation for wholesale. We position not only the development of systems that enable the consistent provision of products whether in normal times or emergencies but also efficiency and concern for the environment as key issues. We have established MEDISKET CORPORATION, which is the largest healthcare distribution platform in Japan, supporting “Pharmaceuticals, Health, and Beauty,” and we are working to introduce joint deliveries (sharing logistics) for both pharmaceuticals and lab test specimens in urban areas. By optimizing supply chains in partnership with our clients, we are also driving improvements in distribution efficiency and productivity.

We are also taking on the challenge of building a new distribution model that raises productivity more than twofold by, for example, further advancing the cutting-edge SPAID* model, which integrates AI and robotics technologies into the distribution know-how built up at RDCs,* which are the strategic distribution sites at PALTAC CORPORATION.

＊SPAID: Super Productivity Advanced Innovative Distribution
A proprietary developed total-management and operation system for next-generation logistics centers based on the adoption of AI and cutting-edge robotic technology and picking systems

＊RDC: Regional Distribution Center
Large-scale distribution centers that handle cosmetics, daily necessities, pharmaceuticals, and other items. They supply products to retailers.

Value Co-creation in Community Healthcare

The regional healthcare zones approach is essential for achieving efficient healthcare. Our strength as a pharmaceutical wholesaler is in being able to “connect” medical institutions, local governments and patients in regional areas. At present, our pharmaceutical information representative, who have specialized expertise in the areas of neurological and psychiatric disorders, rare diseases and the diagnosis and treatment of women, are contributing as Regional Medical Coordinators to solving healthcare challenges rooted in regional areas.

Transformation is not something that is achieved overnight. However, I am firm in the belief that, by steadily accumulating small steps in the form of looking ahead and taking on challenges, we will forge a path to the future. The MEDIPAL Group will flexibly meet any change in the environment, and take on the challenge of creating businesses that go beyond the bounds of “wholesale” to serve the public.

Fostering a Corporate Culture That Takes on Challenges Undaunted by Change or Failure

Our human resources strategy is one of the foundations for securing our growth strategy. The MEDIPAL Group is endeavoring to improve our human capital, which is the source of improvements to corporate value, in order to grow sustainably in an era defined by dramatic change.

The MEDIPAL Group defines personnel who can take on the realization of our management philosophy as “future-oriented human resources.” At present, we are working to foster a corporate culture in which such personnel can take on challenges undaunted by change or failure, so that they can tackle their work with energy.

We believe that a workplace environment in which people can take on challenges that expand their own potential with a view to the future will increase our vitality as an overall organization, and also serve as an environment that develops sustainable strength, while allowing employees to get a palpable sense of pride and motivation about supporting healthy living among the broader public.

For this reason also, we are dedicating efforts towards further expanding measures to support the physical and mental health of each and every employee, as well as benefits to meet every life stage. We are also seeking to create an organization in which employees can express to the utmost their various individualities and capabilities.

Continuously Improving ROE and Delivering Shareholder Returns

Our financial strategy is one of the foundations for supporting our growth strategy. At present, the MEDIPAL Group is at the stage of advancing our business portfolio prioritizations in line with the Medium-Term Vision and making proactive investments in new businesses.On the other hand, we are pursuing the “implementation of management that is conscious of cost of capital and stock price,” as demanded by the Tokyo Stock Exchange. We are also driving improvement in PER, while maintaining a focus on improving ROE, in order to improve PBR. We are aiming to achieve an ROE of 9% in the final fiscal year of the Medium-Term Vision by carrying out our growth strategy.

With regard to shareholder returns, we have positioned distributing profits to shareholders as one of the most important management tasks. We have thus set a total shareholder return ratio¹ of 40% cumulatively over the five years of the Medium-Term Vision as a target. In principle, to achieve these aims, we will consistently maintain and increase the payout ratio,¹ while also comprehensively assessing demand for funding and flexibly implementing share buybacks and cancellations of shares as appropriate for the purpose of improving capital efficiency and greater return of profits.

Based on this approach, we have achieved a shareholder payout ratio of 40.2% cumulatively over three years in the fiscal year ended March 31, 2025, and have set dividends per share at ¥62 per year (up ¥2 from the previous fiscal year). We have canceled all of the shares we obtained.

We will continue to strive to be viewed positively in the eyes of the market by growing profits through business growth and by implementing appropriate capital policies.

1. The rate of return on profit before exclusion of amortization of goodwill and intangible assets accompanying the growth investment in the Medium-Term Vision.

Achieving a Sustainable Society and Enhancing Corporate Value

Even in carrying out our growth strategy, the MEDIPAL Group pursues improving profitability and addressing social issues in a joined up way. We have thus identified materiality in six categories that combines addressing such issues with sustainably growing the Group.

Among these, we view reducing greenhouse gas emissions as a pressing task, given that distribution using vehicles is essential to the MEDIPAL Group businesses. We are thus dedicating efforts to initiatives aimed at solving this problem.

We believe that reducing our own greenhouse gas emissions is our first priority, so we are working to gradually make progress towards our medium- to long-term goals through measures such as the introduction of electric vehicles and the installation of solar panels. We also view reducing emissions across the entire supply chain as important. Thus, we are attempting to solve problems together with our business partners through measures such as revisions to the number of transport routes, with the aim of optimizing distribution, and by pursuing modal shift as a measure to reduce greenhouse gas emissions stemming from transportation.

One of our materiality tasks is “Sound and Transparent Corporate Management.” In this respect, we have caused significant disturbance and concern for all our stakeholders in connection with illicit acts under the Antimonopoly Act by our consolidated subsidiary MP AGRO CO., LTD. in relation to bidding on swine fever vaccines ordered by Yamagata Prefecture and animal vaccines ordered by the Yamagata Prefecture Livestock Breeders Association. We deeply apologize for this incident. The MEDIPAL Group takes this matter solemnly and seriously, and we are working to further and more thoroughly pursue the various measures we have taken to date to ensure compliance with the Antimonopoly Act, to put in place more thoroughgoing compliance as a firm that has the trust of society, and to improve our corporate value.

The MEDIPAL Group is constantly pursuing transformation. Through transformation, we seek long-term growth in the business fields of “Pharmaceuticals, Health, and Beauty.” While valuing our origin in wholesale, we are pursuing further improvements to our corporate value and the maximization of shareholder value beyond the bounds that business model. I hope that we can continue to enjoy the understanding and support of all of our stakeholders, and that you will have confidence in us to realize our dreams through transformation.