Top News The Pharmaceutical Association of Japan (PAJ) Chairman speaks at a special session of "Nikkei Cross Health EXPO 2022". Direction and Challenges of Pharmaceutical Companies' Transformation in the Era of Innovation Ecosystem
The Nikkei Cross Health EXPO 2022, organized by Nikkei BP, was held online from October 11 to 21, 2022. This EXPO is a specialized event connecting all industries, business sectors, and people involved in healthcare. On October 21, the final day of the event, a special session titled "How to Establish an Attractive Healthcare Ecosystem in Japan" was held. The speakers for the special session were Mr. Toshiharu Furukawa, Member of the House of Councilors and Professor of Surgery at Keio Law School and Faculty of Medicine, Mr. Yasushi Okada, Chairman of the Pharmaceutical Manufacturers Association of Japan, Mr. Iwao Kurose, Executive Director of the Japan Medical Association, and Mr. Kazuto Ihara, Director of the Health Insurance Bureau, Ministry of Health, Labor and Welfare. The session theme was "How to Establish an Attractive Healthcare Ecosystem in Japan," which was discussed through presentations by the speakers and a panel discussion. The following is a transcript of Chairman Okada's presentation.
The pharmaceutical industry is currently in the midst of major changes in the business environment, and our mission is to contribute to the extension of healthy life expectancy of the Japanese people and to contribute to the growth of the Japanese economy as a key industry.
Drug discovery and development, which is our lifeblood, has been usually conducted by companies on their own. However, with the recent shift in the business model of the pharmaceutical industry, the "seeds" of new drugs are no longer found within pharmaceutical companies, but are now generated by venture companies. Data show that 80% of the products in development originate from venture companies. In particular, in the new modalities of antibody, gene therapy, and cell therapy, most of the products in development originate from venture companies.
Around the world, biotech clusters, which have promising seeds and attract people, products, and money, are forming one after another to create innovative new drugs, and are becoming a source of innovation. Unfortunately, not a single Japanese city is in the top 20 of this bio-cluster ranking. In order for Japan to compete with the rest of the world in innovation, there is an urgent need to create a bio-community that will attract investment from around the world and become a breeding ground for ventures that can compete on a global scale.
Yasushi Okada, Chairman, Pharmaceutical Manufacturers Association of Japan
So why is Japan lagging behind? One of the reasons is the lack of funding sources for venture companies in Japan. While in the U.S., there is a wide range of support for drug discovery from the initial stages, in Japan, the lack of funding sources is an issue, especially in the clinical trial stage, which requires huge investment.
In order for Japan to become a science and technology powerhouse in the life science field, we believe that it is essential to foster a pharmaceutical industry and venture businesses that can compete globally, and to provide national support so that global investors will find R&D in Japan attractive and Japan will become a global center for innovation. Specifically, in the "Drug Discovery Venture Support Program," we are appealing for the elimination of the current binding of the field of infectious diseases as well as further expansion of the scale of investment.
While making these requests to the government, we also recognize the importance of commitment as a pharmaceutical industry. We believe that the pharmaceutical industry should make a commitment to the development of innovative healthcare by supporting promising seeds in academia and ventures with the support of venture capital, the Japan Agency for Medical Research and Development (AMED), MEDISO*1, and InnoHub*2, and by having pharmaceutical companies contribute greatly to the social implementation stage in the final exit strategy. Innovative healthcare solutions will be created through this process ( Figure 1 ).
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1Ministry of Health, Labor and Welfare's Total Support Program for Medical Ventures
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2.Ministry of Economy, Trade and Industry's one-stop consultation service for support by healthcare and life science venture companies, etc.
Fig. 1 Contribution of the pharmaceutical industry in the exit strategy of innovation
In April 2022, the Cabinet Office approved the Global Bio Community based on the national Bio Strategy 2020. The Pharmaceutical Manufacturers Association of Japan (PMAJ) has declared its commitment to strengthen cooperation with this community and to revitalize it. As the first step of this initiative, the University of Tokyo, Tokyo Medical and Dental University, and the Pharmaceutical Cooperative Association have confirmed the strengthening of collaboration among the three parties in the Hongo, Ochanomizu, and Tokyo Station areas of the Greater Tokyo Bio community (GTB), mainly in the Tokyo area. We hope that this collaborative project will lead to the emergence of strong innovation as soon as possible.
In terms of contributing to the innovation exit strategy, another important commitment of the pharmaceutical industry is to support the establishment of the foundation of the value chain, which is critical to the ecosystem ( Figure 2 ). Human resources are the key players in the value chain, and in order to implement drug discovery seeds in society, in addition to funding and facilities, it is essential to develop the human resources that drive the ecosystem. In response to the inadequacies in the domestic manufacturing infrastructure and clinical environment that Japan faced during the R&D for the Corona vaccine, the government is providing support for dual-use manufacturing facilities, etc. We are committed to training the people who will operate these facilities, people familiar with CMC for biopharmaceuticals, and biostatisticians who can conduct high-quality clinical trials. We are committed to the development of human resources to run these facilities, people with expertise in biopharmaceutical CMC, and biostatisticians to conduct high-quality clinical trials.
Fig. 2 The Pharmaceutical Manufacturers Association of Japan contributes to value chain construction
Finally, I would like to mention "evaluation of innovation" as an important element of the ecosystem.
In Japan, the U.S., the U.K., and Germany, which are representative drug discovery countries, there are data showing the extent to which the top 30 global sales of new drugs are subject to price revisions during the patent period. While the value of innovation in new drugs is protected in the U.S. and Europe, it is clear that in Japan prices are being reduced even during the patent period. For the innovation ecosystem to function, it is important that the various values brought by innovations are properly evaluated and protected during the patent term. In Japan, there is a built-in mechanism whereby innovations are evaluated in the market and the price of a drug is reduced if it sells well. This is a disincentive to launch new drugs in Japan, and the number of drugs that have been approved in the US and Europe but not yet approved in Japan has increased significantly in recent years. Creating a system in which innovation is properly recognized will help ensure that Japanese patients have prompt access to innovative new drugs.
We in the pharmaceutical industry will contribute to both creating innovations originating in Japan for the world to see and building an attractive ecosystem that attracts global investment, in order to establish Japan's position as a world-leading science and technology nation ( Figure 3 ).
Fig. 3 Toward the world's most advanced science and technology nation
After the presentations by each of the four speakers in this session, a panel discussion ensued, moderated by Mr. Shinsuke Muto, Chairman of Tetsusukai Medical Corporation.
Panel Discussion
During the panel discussion, Dr. Muto posed two questions on the first topic, "Co-creation essential for building a healthcare ecosystem. Chairman Okada raised "the best balance of self-help, public assistance, and mutual assistance" as a necessary perspective for building the ecosystem, and stated, "In Japan, where the national health insurance system is based on universal coverage, it is necessary to have a wide-ranging discussion and review what should be public assistance and what should be self-help. From the perspective of patient-centeredness, the pharmaceutical industry must contribute to the nation by expanding its business model to provide not only new drug development but also services that are outside the scope of public insurance, including predictive and preventive care, along people's life course," and "The pharmaceutical industry must not compete for a share of the Japanese insurance system. From the perspective of self-help, how to position self-medication in the healthcare ecosystem will be important." "Rapid delivery of innovative new drugs to the public will help protect their health and support an increase in healthy life expectancy. To this end, the value of innovation must be evaluated and protected, and we should have the mindset that innovation is an investment, not a cost," he explained.
The second theme was "What is the purpose of medical DX (Digital Transformation)? In his flipchart, Chairman Okada stated that "Data is Oil" and explained that "DX, including the construction of AI, will not progress without data," "By accelerating the utilization of big data in healthcare, we can demonstrate the strength of Japan, which possesses homogeneous and high-quality data accumulated under universal healthcare coverage," and "Patients are at the center of the ecosystem. The ecosystem will function by providing and utilizing patients' own data, including health information, known as personal health records (PHRs). In other words, we need to take measures, including the development of laws, to prevent unauthorized use of data by firmly regulating the use of data, rather than focusing on the protection of data, and to eliminate the public's sense of uneasiness about the use of data.
Chairman Okada concluded his remarks by saying, "The mission of the pharmaceutical industry is to deliver innovations that create breakthrough new drugs to address unmet medical needs, and to provide hope to patients suffering from illnesses. We will continue to do our utmost to address these issues.
( Shinichi Sakai, Director of Public Relations)