In the pharmaceutical wholesaling business, we saw an impact of decreasing demand for COVID-19 drugs and reagents and promotion of the use of generic drugs following the introduction of selective treatment. On the other hand, sales of vaccines increased with the start of routine vaccination with the novel coronavirus vaccine by municipalities in October 2024. In addition, sales of specialty pharmaceuticals and other limited-handling products for selected wholesalers continued to be strong, driving overall sales. In price negotiations with medical institutions, in order to comply with the Guidelines for the Improvement of Commercial Transaction Practices of Ethical Drugs for Manufacturers, Wholesalers, and Medical Institutions/Pharmacies that were revised in March 2024, we continued our efforts to negotiate unit prices for individual products to better reflect their individual value and distribution costs. We also worked to negotiate separately for drugs that are particularly needed for medical purposes. In the area of customer support systems, we have been working to propose new products and services, such as simplified MIZAR and Byouin-Navi PR services, closely examining market needs and future prospects, focusing on high-value-added products, and promoting more efficient resource allocation, thereby optimizing our product portfolio to achieve further growth in the overall business. As a result, the pharmaceutical wholesaling business posted net sales of 1,463,520 million yen (an increase of 2.7% on a year-on-year basis) and segment profit (operating profit) of 19,033 million yen (a decrease of 2.2% on a year-on-year basis) for the consolidated fiscal year under review.

In the dispensing pharmacy business, in order to implement the transformation of the dispensing pharmacy business, which is a key measure of the Medium-term Management Plan, we pressed ahead with the reorganization of operating companies. Consequently, the number of dispensing pharmacy companies of PharmaCluster decreased from 24 at the end of March 2024 to 11 by April 1 this year, and the reorganization in East Japan is almost complete. We also opened and closed pharmacies with an emphasis on profitability. In addition to responding to the revision of dispensing fees, we worked to promote pharmacy DX by promoting the use of the My Number health insurance card and other measures, and to strengthen cooperation with clinics specializing in home health care in order to promote change toward contributing to home health care. However, due to the occurrence of temporary expenses associated with the integration of subsidiaries and an increase in personnel expenses, net sales were 95,553 million yen (an increase of 1.9% on a year-on-year basis) and segment profit (operating profit) was 852 million yen (a decrease of 44.9% on a year-on-year basis).

In the pharmaceutical manufacturing and sales business, the Group engaged in the stable supply of high-quality and high value-added pharmaceuticals by strictly monitoring the quality of products based on its own verification system and establishing a planned production system. In addition, in the same facility as TBC DynaBASE, we opened the Haneda Packaging Center as a secondary packaging facility for prescription pharmaceuticals that can conduct inspection, packaging, and storage of vial products containing cryogenic or antibody drugs. We are preparing to accept orders from pharmaceutical manufacturers starting this fall.The pharmaceutical manufacturing and sales business posted net sales of 11,459 million yen (an increase of 8.2% on a year-on-year basis.) and segment profit (operating profit) of 729 million yen (a decrease of 3.5% on a year-on-year basis.).

In the other peripheral businesses, net sales amounted to 6,850 million yen (an increase of 11.4% on a year-on year basis.) and segment profit (operating profit) was 655 million yen (an increase of 46.2% on a year-on-year
basis.).

(Note) Segment sales include inter-segment transactions.