From JPMA Toward Enhancing Innovation Capacity: Industry-Led Transformation
The probability of successfully developing a single new drug is approximately 1 in 22,000; it takes more than 10 years and requires research and development costs ranging from tens of billions to hundreds of billions of yen. The pharmaceutical industry can be described as a highly specialized business with extremely high risk.
At the same time, to ensure the sustainability of our business, we use the cash generated through our business activities to invest in intangible assets such as research and development, as well as tangible assets such as research and production facilities, and to provide returns to shareholders.Since 2010, nine member companies of the JPMA have each developed nine or more new drugs, and sales of these drugs accounted for 70 percent of total pharmaceutical sales in 2021. With an eye toward future innovation, we secure profits, invest in research and development, and continuously create new drugs—thus sustaining a cycle that contributes to the health of patients and the general public.
We also make a significant contribution to the Japanese economy. The essence of the pharmaceutical industry lies in the creation of intellectual property through research and development. Exports from the balance of payments for technology licensing—derived from substance patents and technologies—exceed 600 billion yen, second only to the automotive industry. We reinvest the profits earned overseas back into Japan, the holder of this intellectual property.
Japan Pharmaceutical Manufacturers Association
Chairman Yasufumi Okada
However, the reality is that Japan’s domestic pharmaceutical market is the only one in the world currently shrinking. In other countries, growth in the pharmaceutical industry exceeds GDP growth.We believe sustainable growth is possible if the government adopts policies that allow for a slight increase of about 1–2 percent in the overall pharmaceutical market, promptly replace brand-name drugs with generics after their patents expire, and swiftly lower the prices of long-listed drugs. Our position is that the market should be brought closer to global standards and revitalized to make it more attractive.
To enhance Japan’s capacity for innovation, we need not only transformation within our own industry but also proactive government measures. As an industry, we have called for support in fostering drug discovery startups and the development of an environment conducive to the utilization of big data in healthcare.Japan faces a particular shortage of funding for the clinical development stage, and the current reality is that even promising leads struggle to mature. Against this backdrop, a supplementary budget of 300 billion yen was allocated in December 2022 to strengthen the drug discovery venture ecosystem. This demonstrates the government’s commitment, and we are determined to respond to it effectively.
The environment for utilizing health and medical big data is currently one of the most critical infrastructure developments for the nation. From the perspective of what value it provides to the public, we are calling for the simultaneous advancement of both data infrastructure and legal frameworks as two essential pillars.In 2022, Europe launched a highly advanced initiative called the European Health Data Space (EHDS) to promote the use of data in the healthcare sector. This demonstrates Europe’s—which has strict regulations regarding the handling of personal data—determination to actively advance the use of such data for the sake of healthcare, drug discovery, and public health, and we believe Japan should take this as a significant model.
To strengthen Japan’s drug discovery capabilities, a transformation of the pharmaceutical industry’s business model itself is also essential.Japan has fallen behind the trend toward biopharmaceutical development. Meanwhile, modalities—that is, drug discovery technologies and methods—have become highly diversified and sophisticated, giving rise to a wide range of modalities such as antibody drugs, nucleic acid drugs, gene therapy, and cell therapy. It is now an urgent priority to actively incorporate cutting-edge biotechnology and digital technologies.
Furthermore, while the pharmaceutical industry currently focuses primarily on diagnosis and treatment once a person becomes ill, it must evolve into a business model that supports people throughout their entire lives—encompassing prediction, prevention, and prognosis. Major IT companies have already entered the market with health apps, AI-based diagnostics, and online medical consultations; we must not stand idly by and watch this happen.We believe we should ensure the public has access to cutting-edge medical care by significantly advancing our business models—including digital transformation (DX) and AI—and by fostering a pharmaceutical market that generates Japan-originated innovations and attracts global investment.We have compiled our commitment to this goal, along with the policies we deem necessary, in the “JPMA Policy Proposals 2023.” We are working toward becoming an industry that contributes to extending the healthy life expectancy of the public and fostering economic growth.
*For details on the “34th JPMA Policy Seminar,” click here:
( https://www.jpma.or.jp/news_room/newsletter/215/15tn.html )
*For details on the “JPMA Policy Proposals 2023,” click here:
( https://www.jpma.or.jp/vision/industry_vision2023/ )
(From the presentation at the “34th JPMA Policy Seminar”)
Japan Pharmaceutical Manufacturers Association (JPMA)
Japan Pharmaceutical Manufacturers Association (JPMA)
The JPMA is a voluntary organization composed of R&D-oriented pharmaceutical companies. Established in 1968, the JPMA has contributed to global healthcare under the motto “Realizing Patient-Centered Healthcare” through the development of groundbreaking new prescription drugs.
The JPMA carries out multifaceted initiatives, including efforts to resolve common issues facing the pharmaceutical industry, activities to deepen understanding of pharmaceuticals, and international collaboration. Furthermore, the Association is committed to the sound development of the pharmaceutical industry, particularly through strengthening policy formulation and advocacy, responding to globalization, and enhancing its public relations framework.
The Japan Pharmaceutical Manufacturers Association aims to contribute to society through the development of new drugs.