Top News Press Conference of the President of the Pharmaceutical Manufacturers Association of Japan held. Yasuji Okada, new Chairman of the Board of Directors, delivers his policy statement
On May 20, 2021, the "Pharmaceutical Association of Japan Press Conference" was held at Hotel Metropolitan Edmont (Chiyoda-ku, Tokyo). At the press conference, Yasushi Okada, newly elected chairman of the Pharmaceutical Manufacturers Association of Japan (PMAJ) at the 260th PMAJ General Assembly held on the same day, expressed his belief in the industry and discussed the severe challenges the industry faces and the efforts the PMAJ will focus on in the future, marking a fresh start under the new chairman Okada. Although the press conference was webcast, it was attended by 36 members of the media, who engaged in a lively Q&A session, showing a high level of interest in the future direction of the pharmaceutical industry.
On assuming the position of Chairman
1. changes in the environment surrounding the pharmaceutical industry
The pharmaceutical industry is currently undergoing rapid changes in the environment in which we operate, and the structure of the market and industry, sources of competitiveness, and means of doing business are also changing dramatically. Until now, the mainstream business model has been one of "vertical integration," in which a single company manufactures everything in the value chain from R&D to sales, but this is undergoing a major shift toward a "horizontal division of labor," in which multiple companies collaborate on each stage of the value chain. Each stage of the value chain is becoming more sophisticated and complex due to advances in information technology, etc. We recognize that it is extremely important to collaborate with a wide range of partners in each field, including companies with strengths that we do not have, such as IT companies, companies handling data and digital technology, drug discovery ventures, and academia. We recognize that it is extremely important to collaborate with a wide range of partners, such as IT companies, data/digital technology companies, drug discovery ventures and academia.
We must also keep in mind that the competitiveness of pharmaceutical companies is changing from scientific and sales capabilities to a variety of other factors, such as highly independent corporate governance, human rights, diversity, and SDGs (Sustainable Development Goals).
In order to meet the increasingly diverse and sophisticated healthcare needs on a global scale, the pharmaceutical industry is now required to transform itself ( Figure 1 ).
Yasushi Okada, Chairman, Pharmaceutical Manufacturers Association of Japan
Figure 1: Changes in the environment surrounding the pharmaceutical industry
2. the vision of the pharmaceutical industry
In the midst of various ongoing changes in the environment, we believe that what the pharmaceutical industry should aim for is to satisfy unmet medical needs through the creation of new drugs, to contribute to the improvement of people's health and the extension of healthy life expectancy, and to contribute to economic growth as a key industry in Japan.
From 2000 to 2019, the creation of new drugs has contributed significantly to patient satisfaction in diseases for which effective drugs were scarce, such as HIV and AIDS, chronic hepatitis C, and various types of cancer. In addition, this has led to an increase in the average life expectancy and healthy life expectancy of the population. The "Healthy Life Expectancy Extension Plan" established by the Ministry of Health, Labour and Welfare calls for healthy life expectancy of 75 years or more for both men and women by 2040, and the pharmaceutical industry will continue to play a central role in achieving this goal.
Currently, the global pharmaceutical market is worth 126 trillion yen, which is the second largest market after automobiles and materials by industry sector, and is expected to continue to grow steadily in the future. As a knowledge-intensive industry, we in the pharmaceutical industry believe it is our responsibility to drive the Japanese economy by further strengthening our international competitiveness in resource-poor Japan and enhancing our significance in the global arena.
3. pharmaceuticals as an important strategic asset for national security policy
In the world, the decoupling between the U.S. and China is becoming increasingly fierce. In addition, with the pandemic of a new type of coronavirus infection, countries around the world have been giving priority to their own countries over vaccine supply and other issues. In other words, vaccines and pharmaceuticals must be regarded as strategic assets in national security policy, and it is time to discuss pharmaceutical industry policy from this perspective.
Toward the Promotion of the R&D-Based Pharmaceutical Industry and the Establishment of a Foundation for the Pharmaceutical Industry
1. toward establishing the foundation of the pharmaceutical industry that Japan aspires to
The spread of new coronavirus infection has revealed the fragility of Japan's vaccine development infrastructure. It is essential to strengthen Japan's drug discovery capabilities not only to respond to a possible future pandemic, but also to meet the unmet medical needs that still exist today by creating innovative new drugs to protect the lives and health of the Japanese people.
To this end, it is necessary to form a life science cluster in Japan, a center where entrepreneurial minds gather, venture companies start cutting-edge research, and various research institutes are concentrated, as is the case in Boston, in order to build the foundation of the pharmaceutical industry in Japan.
In addition, it is necessary to develop a Japanese big data infrastructure to promote digital transformation (DX), and to establish a drug pricing system that appropriately evaluates the innovations generated. It is important to build a healthcare ecosystem in Japan.
2. formation of a life science cluster
Most of the world's new drug seeds now originate in venture and academia. By country, the U.S. accounts for almost half of all new drugs in all modalities, including small molecules, antibodies, and nucleic acids. China is also growing in the field of gene therapy. Unfortunately, no Japanese city ranks in the top 20 in the ranking of the world's major biotech cluster cities. The United States accounts for about half of the cities, and Shanghai, Beijing, and Singapore are the only Asian cities on the list. The formation and development of an internationally competitive life science cluster in Japan will not be achieved overnight, but we recognize that it is an important issue that needs to be addressed by the entire nation.
In order to create a life science cluster, it is essential to change the educational system to foster an entrepreneurial spirit. Above all, successful creation of innovations requires appropriate evaluation and protection of intellectual property commensurate with the risks involved up to that point ( Figure 2 ). In the life science cluster, the pharmaceutical industry aims to play a central role in bringing innovative new medicines to patients by leveraging its expertise in cutting-edge drug discovery technologies, large-scale clinical trials, and manufacturing.
Fig. 2 Formation of Life Science Cluster
3. toward the establishment of a collaborative structure for vaccine and therapeutic drug development by industry, academia, and government
Similarly, the vaccine for new coronavirus infection originated from venture companies and academia. In the United States and Europe, where vaccines were developed, vaccine development infrastructures consisting of industry, academia, and government have been developed and strengthened since peacetime under the strong leadership of governments. Unfortunately, we believe that the difference in preparedness from peacetime is reflected in the difference between Japan and the United States this time around. Based on this experience, the Pharmaceutical Manufacturers Association of Japan (PMAJ) has proposed measures that should be promoted in normal times to prepare for future pandemics.
Even in the midst of the recent spread of the novel coronavirus, the U.S. government gathered information on what was happening in Wuhan, China, long before the pandemic, and promptly initiated government-led vaccine development. In Israel, the government also took the lead in thoroughly investigating the status of vaccine development from a very early stage and concluded a supply contract with a pharmaceutical company at an early stage, thereby realizing prompt vaccination of the population. In the event of an emergency, it is essential for the government to gather information and take prompt action based on that information, and we believe that it is also necessary for the government to take the lead in vaccine and therapeutic drug development, not by applying to companies as it does in normal times, but by mobilizing the strengths of industry, academia, and government to work together under the leadership of the government.
The patent system is a system that clarifies the scope of inventions and discoveries, avoids duplication, and efficiently promotes the next innovation. It is a system that maintains fairness by stipulating that inventions are attributed to the public domain after a certain period of time. For those who uphold the importance of innovation, any restriction or denial of the patent system cannot be justified. This is not only an issue for industry, but also for academia, start-ups, etc. We believe that the patent system is a prerequisite for stimulating innovation.
4. promotion of digital transformation (DX)
The utilization of big data on health and medical care, which includes data on people's lifestyles and behavior, medical checkup data, genome omics data, etc., called personal health records (PHR), will not only lead to the creation of innovative new drugs, but also to the realization of disease prediction and prevention, very early detection, and personalized medicine, thereby promoting health, improving QOL, and extending healthy life expectancy. We believe that the utilization of big data will not only lead to the creation of innovative new drugs, but also to the prediction and prevention of disease, very early detection, and personalized medicine, thereby improving health, enhancing QOL, and extending healthy life expectancy .
Fig. 3 Society that can be realized through the utilization of health and medical care big data, etc.
In light of the recent pandemic of novel coronavirus infection and accelerated progress in digital technology, the Pharmaceutical Manufacturers Association of Japan (PMAJ) reviewed the "PMAJ Industry Vision 2025" published in 2016 and released an addendum to it on May 20, 2021. This supplement has been prepared in an easy-to-understand manner so that the public can fully understand our six initiatives to realize this vision and the society that will be brought about by digital technology. We will continue to work to realize this vision and contribute to the realization of a society in which all citizens can live long and healthy lives.
5. appropriate evaluation of innovation
In order for Japan to build an attractive foundation for the pharmaceutical industry that produces innovative drugs one after another, it is essential to have a drug pricing system that appropriately evaluates the results of innovation. Most importantly, the value of new drugs must be appropriately reflected in NHI prices, and appropriate NHI price levels must be maintained during the patent period.
6. continuation of innovative new drug creation cycle
Unlike other industries, the pharmaceutical industry is very important to recover the investment cost of development during the patent period, since a drug is replaced by a subsequent product when the patent expires. Therefore, it is very important for pharmaceutical companies to have predictability in their business decisions. We in the pharmaceutical industry hope that the maintenance of drug prices during the patent period will enable us to secure R&D resources at an early stage and continue the cycle of developing innovative new drugs ( Figure 4 ).
Fig. 4 Innovative New Drug Creation Cycle
7. maintaining the attractiveness of the Japanese market
Japan's share of the global pharmaceutical market has been declining, and it is undeniable that the importance of the Japanese market is relatively diminishing. Recently, extremely severe systemic reforms have been implemented against pharmaceutical companies' innovation, such as the reduction of the scope of the additional subsidy for new drug creation and the mid-year revision of NHI drug prices, and as a result, there is a concern that the drug lag may resurface. In order to maintain the attractiveness of the Japanese market, innovation-friendly industrial policies are necessary even with limited financial resources. In particular, we believe that maintaining drug prices during the patent period of new drugs is a top priority.
Drug Discovery Innovation Delivered to the World
We will do our utmost to ensure that the public understands that the pharmaceutical industry is an indispensable and important industry for creating innovative innovations, extending the healthy life expectancy of the people, and contributing to Japan's economic growth, and that it will receive tremendous support. We will also actively engage in discussions with the public and many other stakeholders to build an internationally competitive life science cluster in Japan, a big data infrastructure, and a drug pricing system that appropriately evaluates innovation ( Figure 5 ).
Fig. 5 Drug Discovery Innovation to be Delivered to the World
Main Questions and Answers
Q&A session
Q1 With regard to the future development of domestically produced vaccines, what measures and framework is the Pharmaceutical Manufacturers Association of Japan (PMAJ) considering to realize the enhancement measures proposed by the Drug Development Council? Also, what are your thoughts on this?
Japan, once a "vaccine-advanced country," has experienced various setbacks in its vaccine development infrastructure, including class action lawsuits against serious adverse reactions to vaccines and revisions to the Immunization Law. In order to realize the strengthening measures recommended by the Drug Development Council, we believe it is important to be prepared for contingencies even in normal times. In the next pandemic of infectious diseases, the pharmaceutical industry will be prepared to work as one under the strong leadership of the government, mobilizing the power of industry, academia, and government.
Q2 What are your top priorities during your term of office? Also, what is the division of roles between Daiichi Sankyo, the chairman company of the Japan Federation of Pharmaceutical Manufacturers' Associations (JFPMA), and Eisai, the chairman company of the Pharmaceutical Manufacturers' Association of Japan (PAPJ)?
We will reform our own perception of the changing environment surrounding the pharmaceutical industry, which is undergoing major changes in industrial structure and the resulting wave of collaboration with other industries. We will also contribute to the extension of healthy life expectancy by expanding the scope of our business not only to patients, but also to the healthy general public, and by providing solutions such as preventive and preemptive medicine. In addition, in light of the fact that the mid-year revision has had a major impact on the industry, we feel the need for the organizations and companies of the JNYR and the Pharmaceutical Manufacturers Association of Japan (PMAJ) to work together as one. We will continue to encourage the public to understand that the pharmaceutical industry is an important industry.
Q3 What are the major changes in the "Pharmaceutical Manufacturers Association of Japan Industry Vision 2025 Supplement"?
Five years have passed since its formulation, and in light of the environmental changes resulting from the spread of novel coronavirus infection, especially the rapid progress of DX, a version that focuses on DX and is easy for patients and their families to understand has been prepared in addition to the previous editions of the vision to realize the vision.
Q4: Regarding the future development of vaccines in Japan, we feel that it is necessary to improve the underlying strength of biotechnology. Please tell us about measures to improve biotechnology and your sense of crisis over the current lack of strength. What do you think should be done to realize these measures?
While Japan has strengths in several areas, including small molecule drugs, it has lagged behind in biotechnology and cutting-edge modalities. In particular, the fact that Japan has fallen behind in industry-academia-government collaboration against novel coronavirus infection is a very serious problem, and I believe that it needs to be viewed as a crisis in national security. The global vaccine market is said to be worth 3-4 trillion yen, 90% of which is in the U.S. Furthermore, four pharmaceutical companies account for most of the market, making the Japanese vaccine market a difficult business environment. Therefore, we believe that the government, industry, academia, and government must work together as "Team Japan" to address this situation.
Q5 You talked about the importance of industry-academia-government collaboration, but given the fact that few companies have the technology to develop vaccines on their own, I got the impression that government measures are a given. Isn't it necessary for companies to lobby the government in parallel? What are your thoughts on this point?
While we cannot deny the business aspect of vaccine development, which requires a considerable investment by pharmaceutical companies and the need to recoup their investment, we believe that as an industry entrusted with the lives of the Japanese people, it is necessary to take actions that transcend the boundaries of the companies. Without delaying the measures proposed by the government, etc., we will also promote measures on the corporate side.
Q6 We are aware that the distribution of pharmaceuticals is involved in Japan's drug pricing system. What is the pharmaceutical industry's view on bid rigging by pharmaceutical wholesalers?
We believe that pharmaceutical companies are not in a position to comment on bid rigging by pharmaceutical wholesalers, as it is assumed that pharmaceutical companies cannot participate in the actual adjustment of drug prices. On the other hand, it is also true that the free market principle has resulted in a gap in drug prices, and it is not possible to judge the merits of the current system solely on the basis of the drug price system and the gap in drug prices, but we believe that overall consideration and adjustment, including medical fees and the healthcare system, are necessary.
Q7 What is the vision of the life science cluster in terms of the three pillars of efforts to extend healthy life expectancy?
In open innovation, which will lead to the establishment of a pharmaceutical industry foundation in Japan, innovation must be created based on data from Japanese people, and this innovation must be well evaluated. Against the backdrop of this delay in domestically produced vaccine development, we believe that it is important to form a life science cluster in Japan that will serve as a cluster for open innovation in order to solve national security issues and drive the growth of the Japanese economy. To this end, it is important to establish an educational system that nurtures human resources with a strong entrepreneurial spirit. In addition to government support, we believe it is necessary to establish a system that incentivizes the development of human resources who will play a leading role in healthcare in Japan.
Q8 How do you see value assessment for DX-related solutions? Do you think it will be value-based?
The scope of healthcare has expanded from the treatment of patients, which has been the target of the pharmaceutical industry, to health management and prevention before the onset of diseases among healthy people in the general population, in line with the advancement of digital technology. Whether or not these activities fall within the framework of the current social security system will be debated in the future.
Q9 Will all pharmaceutical association member companies implement preventive medicine for extending healthy life expectancy? Isn't it difficult?
The raison d'etre of pharmaceutical companies is to support the health of the people and contribute to the promotion of health. This has been the goal of the Pharmaceutical Manufacturers Association of Japan (PMAJ) since before I was appointed chairman, and we will continue to strive to contribute to the improvement of the health of the Japanese people.
Q10 There is a history of failure on the part of the pharmaceutical industry to pass requests regarding the scope of the mid-year revision of NHI drug prices. What approach will you take in the future in aiming to be innovation-friendly?
The scope of the mid-year revision of NHI drug prices is far from acceptable, but we accept the decisions that have been made as fact. We believe that the pharmaceutical industry has a responsibility to communicate the necessity and importance of pharmaceuticals to the public, and we will continue to appeal firmly for the public's understanding and support of the pharmaceutical industry as an important industry.
( Naoyuki Iwata, Media Relations Subcommittee, Public Relations Committee)