President of the Pharmaceutical Association of Japan New Year's Greetings 2023

At the beginning of the year 2023, I would like to extend my best wishes for the New Year.

The number of new cases of infection remains high and the battle against new coronavirus infection continues, and there are concerns about a simultaneous outbreak with influenza. On the other hand, Omicron strains tend to cause less severe illness than conventional strains, and discussions have begun to review the classification of new strains under the Infectious Disease Control Law. Last year, an oral treatment for new coronavirus infection from Japan was finally approved under the newly established "urgent approval system," and an application for approval of a vaccine from Japan was also filed. with As we are moving into the era of coronavirus, the Japan Agency for Medical Research and Development (AMED) has been working on an advanced Center for Advanced Research and Development Strategy (SCARDA) of the Japan Agency for Medical Research and Development (AMED) was launched, and the establishment of the Cabinet Office for Crisis Management of Infectious Diseases and the Japanese version of the CDC were decided upon. Countermeasures against infectious diseases and viruses are the most important issue for national security. In order to respond promptly and appropriately to emergencies, it is essential to be prepared from normal times, and we believe that these efforts must be steadily promoted.

The Japanese economy has been hit hard by the soaring energy prices and commodity prices due to the situation in Ukraine and the yen's depreciation due to the interest rate gap with Europe and the U.S. Pharmaceutical companies are no exception, and are also being affected in various ways, including higher costs for raw materials, active pharmaceutical ingredients, and transportation, and higher R&D costs, including overseas clinical trial costs. In this context, this year's midyear meeting was held in the midst of such circumstances. In the discussions on this year's mid-year revision, the pharmaceutical industry has been advocating that the NHI price is not in a situation to be lowered due to the characteristics of pharmaceuticals, which do not allow for price transfers or supply volume adjustments due to cost increases. As a result, as in the previous revision in FY2021, the NHI drug price will be reduced for items that exceed 0.625 times the average deviation rate, while the additional amount for the Additional Allowance for New Drug Creation will be temporarily and exceptionally increased in consideration of innovation, and the recalculation of unprofitable products will be applied to all eligible items to address stable supply issues, etc. The new law also requires that all unprofitable products be re-calculated in order to ensure stable supply.

Currently, the number of unapproved drugs that cannot be used in Japan despite being approved overseas is increasing due to the declining attractiveness of the Japanese market as a result of stagnation and other factors. In order to prevent drug-lag and drug-loss and ensure the public's access to innovative new drugs, proper evaluation of innovation is essential. Last year, the Ministry of Health, Labor and Welfare established the "Expert Panel on Comprehensive Measures to Achieve a Rapid and Stable Supply of Pharmaceuticals" and began discussions on a fundamental review of the drug pricing system. In light of the declining attractiveness of the Japanese market and the increasing number of unapproved drugs in Japan, the pharmaceutical industry proposed the introduction of a new drug price maintenance system to replace the current additional payment for new drug creation, etc., and a process to objectively and transparently evaluate the various values of pharmaceutical products. We will continue to engage in discussions with related parties in order to realize these proposals in the next NHI price reform.

Last year was also a year in which we took a major step forward in strengthening Japan's drug discovery capabilities. Many of the new drugs in development now originate from venture companies, and strengthening support for academia and venture companies is key to building a drug discovery ecosystem in Japan. In addition to recognizing the Greater Tokyo Biocommunity (GTB) and Biocommunity Kansai (BiocK) as global biocommunities, the Japanese government has expanded the scope of support for drug discovery ventures, which began at the end of last year as part of its measures against infectious diseases, to all areas of drug discovery with a budget of 300 billion yen. The government has also decided to expand the scope of support for drug discovery ventures to all drug discovery fields and to allocate a budget of 300 billion yen. The pharmaceutical industry strongly welcomes these policy decisions as they demonstrate the nation's commitment to building a drug discovery ecosystem.

The utilization of health and medical big data is essential for the creation of innovative new drugs or completely new healthcare solutions. Last year, the government established the Headquarters for the Promotion of Medical DX, and discussions on DX in the medical field began in earnest. In order to make these efforts effective, we would like to see a comprehensive policy that backcasts from the perspective of what value should be provided for patients, referring to the European Health Data Space (EHDS) concept in Europe, and that has both the construction of a data infrastructure and the development of a legal system oriented toward exit regulations. We would like to see the pharmaceutical industry move forward.

The pharmaceutical industry is in the midst of major environmental changes, but its aspirations and mission are to contribute to the extension of healthy life expectancy for all citizens and to contribute to the growth of the Japanese economy as a key industry. In order to fulfill these missions, the pharmaceutical industry will do its utmost to research and develop innovative new drugs and ensure a stable supply of high-quality pharmaceutical products. I would like to conclude my New Year's greetings by asking for your understanding and support.

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