From JPMA Reform of the industry itself to improve its ability to create innovations
The probability of success in creating a single new drug is approximately 1 in 22,000, which takes more than 10 years and requires research and development expenses ranging from tens to hundreds of billions of yen. The pharmaceutical industry is an extremely risky and unique business.
On the other hand, to ensure the sustainability of our business, we use the cash generated by our operations to invest in intangible assets such as R&D, tangible research and production facilities, and to return profits to our shareholders. 9 of the pharmaceutical association member companies have generated more than 9 new drugs each since 2010, and their sales will account for 70% of total pharmaceutical sales in 2021. We are in a cycle of securing revenues for future innovation, investing in R&D, and continuously creating new drugs to contribute to the health of patients and the public.
We are also making a significant contribution to the Japanese economy. The essence of the pharmaceutical industry is the creation of intellectual property through research and development. The amount of exports exceeds 600 billion yen in terms of technology licensing revenues from overseas through substance patents and technologies, which is the second largest after the automobile industry.
Japan Pharmaceutical Manufacturers Association, Inc.
Yasushi Okada, Chairman
However, the pharmaceutical industry's domestic market is the only one in the world that is shrinking. In many countries, the pharmaceutical industry is growing faster than GDP. We believe that sustainable growth is possible through national policies that allow for a slight increase of 1-2% in the overall pharmaceutical market, promptly replace new drugs with generics after patent expiration, and promptly reduce the prices of long-listed drugs. We argue that the market should be brought closer to global standards and revitalized to make it more attractive.
In order to enhance Japan's ability to create innovations, we need to reform our industry itself as well as proactive measures by the government. As an industry, we have requested support for fostering drug discovery startups and the development of an environment for the utilization of big data in health and medicine. In Japan, there is a lack of funding, especially at the clinical stage, which makes it difficult to nurture promising seeds. Under these circumstances, a supplementary budget of 300 billion yen was allocated in December 2022 to strengthen the drug discovery venture ecosystem. This is an indication of the nation's commitment, and we will firmly respond to it.
The environment for utilizing big data in health and medicine is one of the most important infrastructural developments for the nation today. In 2022, a very advanced initiative called the European Health Data Space (EHDS) was launched in Europe to promote the use of data in the healthcare field. This initiative shows that Europe, which is strict in its handling of personal data, is willing to actively promote the use of such data for the benefit of healthcare, drug discovery, and the health of its citizens, and we believe that Japan should take great advantage of this.
In order to strengthen Japan's drug discovery capabilities, it will be essential to change the business model of the pharmaceutical industry itself. Japan has missed the trend of biopharmaceutical development. In the meantime, modalities, i.e., drug discovery technologies and methods, have become extremely diversified and sophisticated, and a variety of modalities have emerged, including antibody drugs, nucleic acid drugs, gene therapy, and cellular medicine. There is an urgent need to actively incorporate cutting-edge biotechnologies and digital technologies.
In addition, the pharmaceutical industry, whose main domain is diagnosis and treatment of diseases, needs to evolve into a business model that supports people throughout their lives, including prediction, prevention, and prognosis. Already, giant IT companies have entered into health apps, AI diagnostics, and online medical care, etc. We must not remain static. We must make significant progress in business models, including digital transformation (DX) and AI, create innovations originating in Japan, and create a pharmaceutical market that attracts investment from around the world to provide the public with access to the most advanced medical care. We have summarized our commitment to this goal and the policies we believe are necessary in the "Pharmaceutical Manufacturers Association of Japan Policy Proposal 2023. We are working to make the industry an industry that contributes to the extension of healthy life expectancy and economic growth of the nation.
For more information on the 34th Pharmaceutical Manufacturers Association of Japan Policy Seminar, please visit
( https://www.jpma.or.jp/news_room/newsletter/215/15tn.html )
For details of the "Pharmaceutical Association of Japan Policy Proposal 2023," please click here ()
( https://www.jpma.or.jp/vision/industry_vision2023/ )
(From the speech at the "34th Pharmaceutical Association of Japan Policy Seminar")
Japan Pharmaceutical Manufacturers Association (JPMA)
Japan Pharmaceutical Manufacturers Association (JPMA)
Founded in 1968, the Pharmaceutical Manufacturers Association of Japan (PMAJ) is a voluntary association of R&D-oriented pharmaceutical companies that has contributed to global healthcare through the development of innovative new ethical drugs under the motto "Realization of Patient Participatory Medicine".
The Pharmaceutical Manufacturers Association of Japan (PMAJ) is engaged in a multifaceted program of activities to solve various problems common to the pharmaceutical industry, to deepen understanding of pharmaceuticals, and to promote international collaboration. In addition, we are committed to the sound development of the pharmaceutical industry, particularly by strengthening our policy formulation and advocacy activities, addressing internationalization, and reinforcing our public relations system.
Aiming to contribute to society through the development of new drugs Japan Pharmaceutical Manufacturers Association