The Pharmaceutical Industry at a Glance Drug Lag: Status and Characteristics of Unapproved Drugs in Japan

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Masao Yoshida, Senior Researcher, Pharmaceutical and Industrial Policy Research Institute (PIIPRI)

The Pharmaceuticals and Medical Devices Agency (PMDA), the U.S. Food and Drug Administration (FDA), and the European Medicines Agency (EMA) each publish information on drug approval and review periods in Japan, the United States, and Europe. ⁽ EMA), respectively, based on information published on their ^{websites1, 2, and 3)}, are collected and analyzed on an ongoing basis.

The environment surrounding NHI drug prices is becoming more severe every year, as evidenced by the revision of the additional system for promoting the creation of new drugs and elimination of off-label drug use in the overhaul of the NHI drug price system in FY2018 and the implementation of the mid-year revision in FY2021, and many fear a resurgence of a "drug lag" due to reduced incentives to market Japanese pharmaceuticals. The environment surrounding NHI drug prices, including the implementation of mid-year revisions in FY2021, has become more difficult every year. In this newsletter, we report on our survey of the status and characteristics of "unapproved drugs in Japan," which is one aspect of the "drug lag," covering items approved as New Molecular Entities (NMEs) in Japan, the U.S., and Europe from 2010 to 2020. The following is a report of the survey.

1-1. introduction

Unapproved drugs in Japan" are drugs that have been approved overseas but not yet approved in Japan. Currently, the cost of using domestically unapproved drugs is borne by the individual. In addition, when a patient receives treatment with a domestically unapproved drug, the hospital will not be able to bill the insurance for all drug costs, consultation fees, and laboratory fees that the medical institution would normally be able to bill the insurance for. In such cases, the patient may have to pay the full amount of all costs incurred for treatment. Furthermore, in the unlikely event of an adverse reaction to an unapproved drug in Japan, the government's Adverse Reactions Relief System for Drugs is not ^applicable4).

This problem of unapproved drugs in Japan is one aspect of the "drug lag" that has been identified as an issue in Japan from the 2000s to the 2010s. According to the Japan Pharmaceutical Manufacturers Association (JPMA), there are two aspects to the drug lag: the first is the problem of "domestically unapproved drugs" that are not available in Japan even though they are available in other countries. One is the problem of "unapproved drugs in Japan" that have not been launched in Japan even though they have been launched in other countries. The other is the "lag" problem, in which a drug has been launched in Japan but took longer to be launched than in other ^countries5). 5 ⁾ Awamura and Shibuguchi reported that the "lag" problem has been improving in recent years as a result of efforts by the government and the pharmaceutical industry to solve the problem, including an increase in international joint clinical trials, shortening and stabilizing the review period in Japan, and improving the environment of the pharmaceutical affairs and drug pricing systems.

Recently, Dr. Fujiwara, President of PMDA, reported that the drug lag of anticancer drugs is expanding, based on a survey conducted by the National Cancer Center, which showed "the number of oncology drugs approved in the US or Europe but unapproved or off-label in Japan and its transition" ⁸⁾. 8) He stated that one of the reasons for this is that many anticancer drugs are not developed in Japan because they are developed by emerging biopharma companies that do not have Japanese subsidiaries or managers in Japan. In addition, the term "off-label" was mentioned at the beginning of the paragraph. Even if a drug is approved and used in Japan, it may not be approved for a use (indication) that is approved in other countries. This is called "unapproved indications (off-label use)" and is just as problematic for patients as unapproved drugs in ^Japan4).

1-2. addressing the issue of unapproved and off-label drugs

In April 2010, the NHI introduced on a trial basis the "Additional Allowance for Promotion of New Drug Creation and Resolution of Off-label Drugs" as part of the drug pricing system, and the MHLW established the "Study Council for Unapproved Drugs and Indications of High Medical Need" ("Study Council") to promote development of unapproved drugs and off-label drugs by pharmaceutical ^{companies10, 11)}. In order to understand the status of promotion of development of unapproved drugs and off-label indications in Japan, the following table and figure show the status of approved drugs for which companies were solicited or requested to develop based on the results of the study by the Study Council (Table 1 and Figure 1, respectively).

So far, the Ministry of Health, Labour and Welfare (MHLW) has issued a total of four development requests from the first to the fourth round, for a total of 393 requested drugs. Looking at the approval status of the requested drugs, 294 (75%) of the 393 requests were approved, of which 70 (63) were for NMEs. Looking at the approval status of development-requested drugs by year of approval, a large number of target drugs were approved in the early 2010s, when the drug lag was an ^issue12). Thus, through the concerted efforts of the government, medical professionals, and pharmaceutical companies, many unapproved and off-label drugs have been developed and approved by the pharmaceutical affairs bodies, and this problem has been improved.

Survey Methodology

The survey in this issue of News was conducted using the following methodology. The survey covered items approved as NMEs in Japan, the U.S., and Europe from 2010 to 2020, and unapproved drugs in Japan were identified by comparing the approval dates in the U.S. and Europe with the approval status in Japan. Specifically, information on NME approvals in Japan, the U.S., and Europe was confirmed and supplemented by using the items listed in PMDA's "Database of Unapproved Drugs (updated on March 1, 2021) ¹³⁾ and the databases constructed by the National Institute of Pharmaceutical and Industrial ^Policy1), 2, and 3). However, the information for items classified as vaccines and regenerative medicine products (including items classified as Advanced Therapy Medicinal Products (ATMP) by the EMA) were not included in this report. The analysis was based on standard statistical analysis. Standard statistical analysis software Stata/IC 14.0 for Windows (Stata Corp LP, Col-lege Station, TX, USA) was used for the analysis.

It should be noted that this survey was analyzed from the perspective of the number of approvals and development status, and it should be presented in advance as a limitation of the survey that it does not take into account the medical needs in Japan.

3) Number of Unapproved Drugs and Percentage of Unapproved Drugs in Japan Over Time

In order to confirm changes in the number of unapproved drugs in Japan, the number of unapproved drugs in Japan and the approval rate in Japan for NMEs approved in the U.S. and Europe were tabulated for each survey point (as of the end of December of each year) using NME approval information for each of the poles from 2010 to 2020 (Supplement 1). Using this dataset, the number of unapproved drugs in Japan for the most recent five years was tabulated for each survey time point from 2014 to 2020, and the five-year total was calculated. As a comparison, the total number of European and U.S. NMEs was calculated in the same way. In addition, the ratio of the number of unapproved drugs in Japan to the number of NMEs in the U.S. and Europe was calculated to track changes over time (Figure 2). In the case of NMEs approved in both the U.S. and Europe, only the year of first approval was counted as one.

As a result of following the annual changes, the percentage of NMEs not approved in Japan decreased from 2014 to 2016 (65% to 56%), but the percentage of NMEs not approved in Japan increased after bottoming out at the time of the 2016 survey, and by the end of 2020, 72% of NMEs in the US and Europe were not approved in Japan in the last five years. Since the number of NMEs in Europe and the U.S. also increased during this period, the total number of unapproved drugs in Japan (total for the most recent 5 years) increased from 117 at the end of 2016 to 176 at the end of 2020, a 1.5-fold increase.

Here, we attempted a statistical analysis to verify the above result that the number of unapproved drugs in Japan tends to increase in the latter half of the 2010s. Using the dataset used to create Figure 2 (Supplement 1), panel data on trends in the cumulative approval rate in Japan for NMEs approved in the U.S. and Europe from 2010 to 2020 were generated, and divided into the early 2010s (2010 to 2014) and the late 2010s (2015 to 2020). Logistic regression analysis was conducted to examine the relationship between the number of years since the first approval of NMEs in Europe and the U.S. and the approval rate (Figure 3, Supplement 2).

The analysis showed that in the early 2010s, 17% of NMEs were approved in the same year (x=0) in Europe and the U.S. versus 12% in Japan in the late 2010s. Comparing the level 10 years after approval in the U.S. and Europe (x=10), 62% of items approved in the U.S. and Europe in the early 2010s were approved in Japan, while the level dropped to 54% in the late 2010s. This suggests that the curve is higher in the early period than in the late period, both initially and eventually. This decrease in the approval rate in Japan in the late 2010s compared to the early 2010s is statistically significant (Supplement 2).

4-1. status of unapproved drugs in the u.s. and europe

From this point on, we will conduct a detailed survey of the 265 NMEs that were first approved in Japan, the U.S., and Europe between 2010 and 2020, but were not yet approved in Japan as of the end of December 2020.

First, Figure 4 shows a breakdown of the number of NMEs unapproved in Japan as of the end of December 2020 and their approval status in Europe and the U.S. Of the 265 NMEs unapproved in Japan as of the end of December 2020, 125 were globally approved in both the U.S. and Europe, accounting for 47% of the total. Of the 265 drugs that had not yet been approved in Japan as of the end of December 2012, 125 (47%) were globally approved in both the U.S. and Europe, while 119 (45%) were approved only in the U.S., almost the same number as the globally approved drugs.

Next, looking at each year of first approval in Europe and the U.S., the percentage of domestically unapproved drugs approved in both the U.S. and Europe exceeded 50% in each year, with the exception of the most recent years 2020, 2019, and 2012. As one approaches the year 2020, the percentage of domestically unapproved drugs approved only in the U.S. was higher, and only a few items were approved only in Europe in each year. However, based on the results of recent surveys, the most common order of NMEs launched in Japan, the U.S., and Europe is the U.S., Europe, and Japan, in that ^order6),7 and it can be assumed that even for NMEs approved only in the U.S. at the time of this survey, there are several items approved in Europe and Japan from 2021 onward. It can be assumed that some unapproved drugs in Japan that were approved only in the U.S. at the time of this survey will be approved in Europe and Japan after 2021.

4-2. Development Status of Unapproved Drugs in Japan

Figure 5 shows a breakdown of the development status of unapproved drugs in Japan as of the end of December 2020. Of the 265 drugs not yet approved in Japan, 83 (31%) are still under development in Japan, and although there is a "lag" between the approval dates of these drugs and those in Europe and the U.S., clinical development trials are ongoing in Japan, so it is possible that these drugs will be approved by the pharmaceutical affairs bodies in Japan in the near future.

On the other hand, 33 items (13%) were judged to have had their development discontinued or suspended in Japan (including items for which there has been no further development information for 3 years). On the other hand, 33 items (13%) were judged to have had their domestic development suspended or discontinued. Although it is difficult to specify the reason for the discontinuation or suspension, there were a wide range of reasons, including strategic reasons, changes in the business environment, failure of clinical trials in Japan, and reports of serious side effects in the U.S. and Europe. In addition, 149 items (56%) had no information on development in Japan. These 182 unapproved drugs (69%) that are not currently under development in Japan will remain as "unapproved drugs in Japan" unless new domestic development is initiated in 2021 or later.

Next, we reviewed development information on the items remaining as "unapproved drugs in Japan" by year of initial approval in the U.S. and Europe. Sixty-six of the 83 items in development, accounting for 80%, were approved between 2017 and 2020, and 76 items, accounting for more than 90%, were approved between 2015 and 2020 in the U.S. and Europe, and less than 10% (7 items) of all items in development had development information for items that were approved before 2014, which is even earlier. However, there were 28 unapproved drugs that were under development in Japan before 2014 (7 items) and 21 items whose development was discontinued or suspended (21 items), which totaled 28 items. Looking at the total number of unapproved drugs in Japan from this perspective, there were 116 drugs for which efforts were being made by pharmaceutical companies to obtain regulatory approval in Japan, accounting for 44% of all unapproved drugs in Japan.

4-3 Characteristics of Unapproved Drugs without Information on Development in Japan

Here, we examined the characteristics of the 149 drugs that were classified as "no information on domestic development" with no evidence of domestic development by the end of the December 2020 survey (Figure 6).

First, the presence or absence of orphan designation in the U.S. and Europe was checked. The 149 items were classified by orphan designation, and 57 items (38%) were classified as having orphan designation. According to Policy Research Institute News No. 61, the percentage of NMEs approved in the U.S. and Europe with orphan designation over the past five years (2015-2019) has remained around ^40%2). In other words, the percentage of orphan designations in the U.S. and Europe for NMEs not approved in Japan without domestic development information was not significantly different from the percentage of orphan designations for NMEs approved in the U.S. and Europe.

Next, we checked the approval status in the U.S. and Europe. Of the 149 NMEs not approved in Japan without domestic development information, 56 (38%) were globally approved in both the U.S. and Europe. Compared to the overall case of domestically unapproved drugs in Figure 4, 9% fewer items without domestic development information were approved in both the U.S. and Europe, and 8% more items were approved only in the U.S.

Finally, when the development companies in the U.S. and Europe were investigated for the items with no domestic development information, 147 of the 149 items were developed by foreign ^companies14). In order to further examine the details of the development companies, the presence or absence of Japanese subsidiaries of the foreign companies in question was checked. As a result, it was found that 99 items (66%) were developed by foreign companies without Japanese subsidiaries.

4-4. classification and development status of unapproved drugs in Japan

As a final step of the survey, Figure 7 shows the ^{classification15) and} domestic development status of 265 unapproved drugs in Japan as of the end of December 2020.

Looking at the domestic unapproved drugs by drug class, the largest number, 52 (20%), were anti-cancer agents (L01). The classification of drugs with 10 or more unapproved drugs in Japan is as follows: gastrointestinal and metabolic agents (A) 32 (12%), systemic anti-infectives (J) 32 (12%), neurological agents (N) 28 (11%), others (V, diagnostic agents, etc.) 23 (9%), blood and blood-forming organ agents (B) 17 (6%), immunomodulators (L03, L04, L05, L06), and immunological agents (L05, L06, L07, L08). (L03,04) 12 (5%), anti-parasitic agents, insecticides and repellents (P) 11 (4%).

Looking at the 83 drugs under development in Japan shown in Figure 5 by therapeutic area, 33 of them, or 40% of the total number of drugs under development in Japan, were anti-cancer agents (L01). This number accounted for 63% of the 52 unapproved anti-cancer drugs in Japan. Thus, for unapproved anti-cancer drugs, the number of items in domestic development was not only large but also large in proportion compared to other drug classes, indicating that many items had already been initiated in domestic development. The next largest number of items in domestic development was 11 items for nervous system drugs (N), accounting for 13% of all items in domestic development (83 items). This number accounted for 39% of the 28 unapproved drugs for the nervous system in Japan, and was also the second largest proportion of drugs under development in Japan after anti-cancer drugs. These two drug classes alone accounted for more than half (53%) of all unapproved drugs in development.

On the other hand, 149 drugs with no information on development in Japan were classified by therapeutic area: 22 were systemic anti-infectives (J), 22 were gastrointestinal and metabolic agents (A), 15 were neurological agents (N), 15 were others (V, diagnostic agents, etc.), and 14 were anti-cancer agents (J01), which were more common than anti-cancer agents Four drug classes were identified. Of these, systemic anti-infectives (J) and gastrointestinal and metabolic agents (A), which had the largest number of unapproved drugs in Japan, accounted for only 5-6% of the total number of drugs in development in Japan (83 drugs), with 6 and 5 drugs in development in Japan, respectively, indicating that many unapproved drugs remain undeveloped. In addition, none of the domestically unapproved drugs classified as antiparasiticides, insecticides and repellents (P), respiratory (R), and genitourinary and sex hormones (G) were under development in Japan at the time of the survey.

5. main points of the results of this study

In this report, we surveyed the status and characteristics of unapproved drugs in Japan, covering those approved as New Molecular Entity (NME) drugs in Japan, the U.S., and Europe from 2010 to 2020. The main findings from this survey are as follows.

Discussion

We will now discuss the results obtained from the survey on the status and characteristics of unapproved drugs in Japan.

First, changes over time in the number and percentage of unapproved drugs in Japan indicate an increasing trend in the number of unapproved drugs in Japan in the late 2010s. Although we mentioned that domestically unapproved drugs are one aspect of the "drug lag," we can say that there are signs of expansion in this aspect as a result of our investigation in terms of the number of approved items and the percentage of approved items. In order to find out the reason for this, we conducted a detailed survey of unapproved drugs in Japan as of the end of December 2020.

The survey on the approval status in Europe and the U.S. revealed that about half (47%) of the unapproved drugs in Japan are globally approved drugs that have been approved in both the U.S. and Europe. The survey also revealed that about half (47%) of the unapproved drugs in Japan are globally approved in both the U.S. and Europe, while the majority of unapproved drugs in Japan are local drugs that have not been developed globally.

The survey on domestic development showed that 44% of all unapproved drugs in Japan were being developed domestically by pharmaceutical companies, while the remaining 56% had no development information. For "items under development in Japan," there is a possibility that patients will have access to the drug in Japan in the future, although the "lag" (delay) should be as short as possible. However, "items with no development information" will remain as unapproved drugs unless domestic development begins after the time of the survey.

A further analytical survey of items with no development information showed that 38% were orphan drugs in the U.S. and Europe, but a comparison of that percentage with the percentage of orphan drugs in the U.S. and European NMEs as a whole showed that there was no significant difference between the two. However, since orphan drugs are rare and thus may raise issues of market size and clinical trial feasibility, the percentage of orphan drugs that will begin clinical development in Japan alone in the future is considered low, and many may remain as unapproved drugs in Japan. Orphan-designated drugs that remain unapproved in Japan include drugs for genetic diseases and rare cancers for which clinical trials cannot be conducted due to the extremely small number of patients in ^Japan16). If overseas development and approval takes precedence, it will be difficult to conduct validation studies in Japan, which will result in a drug lag, as the scientific basis for such studies in the Japanese population will be weak. In order to provide cutting-edge medical care to the Japanese people, it is important for pharmaceutical companies to participate in international joint trials that are large enough to examine efficacy and safety, including those involving Japanese nationals, and to bring about a situation from the outset in which simultaneous approval in Japan and overseas is possible.

For items for which there was no information on development in Japan, the percentage of items approved only in the U.S. was large compared to the results for unapproved drugs in Japan as a whole. In addition, 66% of the NMEs with no domestic development information were NMEs developed in the U.S. or Europe by foreign companies without Japanese subsidiaries. According to a recent IQVIA research report, "Global Trends in R&D: Overview through 2020," more than 40% of NMEs approved in the past three years were developed and launched by emerging biopharma. However, many of these emerging biopharma companies do not have Japanese subsidiaries ^. In addition, many of the emerging biopharma companies originated in the U.S., and a high percentage of them are thought to develop and market their products only in the U.S. Therefore, a high percentage of unapproved drugs in Japan that do not have domestic development information were thought to be approved only in the U.S. This raises the question of how to attract emerging biopharmaceutical companies to domestic development as one issue for solving the problem of unapproved drugs in Japan. It is also important to attract emerging biopharmaceutical companies themselves to Japan by creating an environment that facilitates international joint clinical trials, by providing incentives for companies and an environment that encourages them to conduct clinical development in Japan, by creating an attractive domestic market, etc. It is also important to ensure the public's access to new drugs by specializing in products of emerging biopharmaceutical companies and introducing them in Japan. It may also be good for domestic pharmaceutical companies to have a strategy to secure the public's access to new drugs by specializing in the products of emerging biopharmaceutical companies and introducing them in the domestic market.

The survey of unapproved drugs in Japan by therapeutic category showed that the number of unapproved drugs in Japan for anti-cancer agents was the largest compared to other therapeutic categories, but the percentage of drugs in clinical development in Japan was also the largest, indicating that development efforts by pharmaceutical companies are continuing for many unapproved drugs. In the future, we hope that the lag time for approval will become shorter, and that the percentage of unapproved drugs in Japan that have not yet been developed, such as drugs for rare cancers, will be further reduced.

In the survey of items for which development information was not available by drug category, the percentage of unapproved drugs classified as anti-infective agents was high, and furthermore, not a single unapproved drug classified as an anti-parasitic agent had been developed domestically. Although it is recognized that certain measures have been taken with the establishment of the "designated drug for specific indications" designation system by the Ministry of Health, Labour and Welfare in the fall of 2020, the recent COVID-19 pandemic in Japan has shown that the R&D status of drugs for anti-infective diseases with higher efficacy is still not satisfactory. However, in light of the recent COVID-19 pandemic in Japan, we feel that more effective anti-infective measures are needed. For example, it may be time to seriously discuss pull-type incentives such as the subscription-based reimbursement model implemented in the U.K. in ^202018).

7. summary

In this report, we have discussed the status of unapproved drugs in Japan and their characteristics. One aspect of the "drug lag," "domestically unapproved drugs," showed signs of expansion in the late 2010s, and in particular, how to attract emerging biopharmaceutical companies to domestic development emerged as one issue for solving the problem of domestically unapproved drugs. It was also found that measures are needed not only for anti-cancer drugs, which have a large number of unapproved drugs in Japan, but also for anti-infective drugs and other areas where there are many items for which there is no domestic development information. The following four points were identified as important in resolving these issues: (1) creating an environment that facilitates international joint clinical trials, (2) creating an environment that encourages companies to conduct clinical development in Japan, (3) providing new types of incentives to companies in the area of infectious diseases, etc., and (4) creating an attractive domestic market.

As mentioned at the beginning of this report, many are concerned about a resurgence of a "drug lag" resulting from reduced incentives to launch drugs in the Japanese drug market. If the approval rate of European and U.S. NMEs in Japan continues to decline and the number of unapproved drugs in Japan increases, the public may not have rapid access to innovative new drugs in the future. We hope that a national discussion will be promoted so that an appropriate system that understands the value of innovation and pharmaceuticals will be operated.

Acknowledgements

We received the cooperation of Sadao Nagaoka, Director of the Pharmaceutical and Industrial Policy Research Institute (Professor, Tokyo Keizai University), in the statistical analysis used in this study. We would like to express our deep appreciation for his cooperation.

Supplement 1 Number of unapproved drugs in Japan and domestic approval rate of NMEs in Europe and the U.S.

The data set used for the analysis is as follows: NME approval information for Japan, the U.S., and Europe for the period 2010-2020 was used, and the number of unapproved drugs in Japan by the year of first approval in the U.S. and Europe and the approval rate in Japan for NMEs approved in the U.S. and Europe were tabulated for each survey point (at the end of December of each year). (Appendix Table 1)

Supplement 2: Details of statistical analysis

The logistic curves used in the analysis are as follows. The explained variables (lcy, lag) are the approval rates in Japan per elapsed year (lag) for each year cy (cohort year) in which NMEs were approved in the U.S. and Europe, and the following estimation models are used. The first estimation model is

Lcy _{, lag=b0+b1/(1+exp(b2lag))} (1)

and this is estimated for the first period (t=2010-2014, period=0) and the second period (t=2015-2020, period=1), respectively. In model (1), the initial height of the curve (lag=0) is b0+(b1)/2, and the height at which the curve asymptotes is b0+b1. Since the number of drugs (COHORT_n) on which the values are based for the approval rate differs for each cohort year, we perform a weighted regression analysis to reflect this. In the first semester, the mean cohort_n is 36, and in the second semester it is 44. Although we use all the elapsed years for the first and second terms, they do not differ significantly when standardized to 5 years.

The estimation results are as follows. All estimated coefficients are significant at 1%, and Figure 3 is depicted by the estimated logistic curves. It suggests that the height of the curve is higher in the previous period, both initially and finally.

Due to the limited number of data, it is difficult to test the significance of the difference between the early and late periods for the logistic curves with three parameters each of the above. In the following, we test the hypotheses that b0 is equal and b1 is equal between the earlier and later periods; the difference in b0 indicates whether there is an average level difference in approval rates, while the difference in b1 indicates whether there is a difference in slope as well as a difference in mean. The estimation uses the combined data from the earlier and later periods and introduces a cross term between b0 or b1 and the later period dummy in the estimation equation (its coefficient is b0A or b1A, respectively, which indicates the amount of change in the coefficient in the later period). The elapsed period from the European and U.S. market launch is limited to 5 years for the late period.

The estimation results are as follows.

As the results show, the approval rate significantly declined in the later periods in both models. The first set of estimates shows that the 5% approval rate declined significantly in the late period as an average over the entire period. The second model also shows a 6.9% drop in the final approval rate in the later period and a 3.5% drop in the earlier period. Taking the constraint of matching the elapsed years in the first and second periods, we obtain almost the same results, although the significance is weakened.

Finally, in order to check the robustness of the results, we simply assume a general shape for the expansion curves of approval, which are common to both the earlier and later periods, and test the significance of the difference, assuming that only the level can differ between the earlier and later periods. The estimation is limited to 5 elapsed years.

Lcy _{, lag=} ( _{βlate period*period} ) _{+∑lagβlag*lag+constant} (2)

This model assumes that the height of the curve differs between the early and late periods, but _{only for the late} beta _period.

The estimation results for each coefficient of model (2) are as follows. According to the estimation results, the approval rate is significantly lower in the late period by only 5%, a result almost identical to the first estimation result in Table 3 in the Appendix.

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