Pharmaceutical Association of Japan Press Conference The Pharmaceutical Manufacturers Association of Japan (PALMA) released "Industry Vision 2035" and "PALMA Policy Proposal 2025

On February 26, 2025, the Pharmaceutical Manufacturers Association of Japan (PMAJ) held a press conference at Muromachi Mitsui Hall & Conference (Chuo-ku, Tokyo).

At the same press conference, Hiroaki Ueno, Chairman of the Pharmaceutical Manufacturers Association of Japan (PMAJ), gave a presentation on his vision for the pharmaceutical industry, focusing on the "PMAJ Industry Vision 2035" and "PMAJ Policy Recommendations 2025" released on the same day. Looking back on the events and initiatives that have taken place since he became chairman, he introduced the vision of the pharmaceutical industry 10 years from now (Industry Vision 2035) based on the changes in the environment surrounding the industry, as well as his requests to the government and the efforts of the pharmaceutical industry over the next two years (Policy Proposal 2025) to realize the vision. As a summary, we presented a vision for the future of the pharmaceutical industry as a key industry.

A lively Q&A session was held with 36 members of the press from 21 companies on the day of the event. The following is a summary of Chairman Ueno's presentation and the Q&A session with the Pharmaceutical Manufacturers Association of Japan (PMAJ) executives, including Chairman Ueno.

Chairman's press conference

As a result of those activities, in FY2024, the NHI drug price reform system was revised in the direction that innovation is evaluated. In addition, the government positioned the pharmaceutical industry as a growth and key industry in Japan and clearly stated its commitment to strengthening drug discovery capabilities. However, it has been decided that a mid-year NHI price revision will be implemented in FY2025, amid soaring prices and wages. The same fiscal year is also the first year of the third phase of the Health and Medical Care Strategy, which was recently approved by the Cabinet, and while organizational reform of the Japan Agency for Medical Research and Development (AMED) and other related measures to strengthen drug discovery capabilities are under consideration, these measures must be formulated and implemented in a consistent and continuous manner. Looking back over the past two years, the shift in government policy toward strengthening drug discovery capabilities and evaluating innovation in FY2024 has been a positive trend, but the situation facing the pharmaceutical industry remains challenging, and many issues remain. ( Figure 1)

Figure 1: Recognition of issues at the Chairman's press conference

2. Vision of the Pharmaceutical Industry - Pharmaceutical Association of Japan Industry Vision 2035

Comprised of three pillars under the banner of "Drug Discovery Innovation for Japan and the World

This is the first time in 10 years that the Pharmaceutical Manufacturers Association of Japan (PMAJ) has formulated an industry vision. This vision outlines the vision of the pharmaceutical industry over a long-term span of 10 years, while looking ahead to the environment surrounding the industry 10 years from now.

The new "Industrial Vision 2035" basically follows the current "Industrial Vision 2025," but also takes into account changes in the global, domestic, and medical environments that have occurred over the past decade, as well as the changing role of the pharmaceutical industry. The Pharmaceutical Manufacturers Association of Japan (PMAJ) is an association of pharmaceutical companies located in Japan, so the word "Japan" has been added to the current vision, which is "Drug Discovery Innovation for Japan and the World". We have established the three pillars of "Innovation in Drug Discovery to Deliver to Japan and the World," "Contribute to Japan's economic growth by continuously creating innovation and extending healthy life expectancy," "Contribute to health security by rapidly delivering innovative new drugs to the public," and "Be an industry trusted by society by ensuring ethical standards and transparency. (2) The three pillars of the industry areFigure 2 Figure 4 )

Figure 2: Industrial Vision 2035 - Overall picture

3. Toward the realization of the vision - Pharmaceutical Manufacturers Association of Japan Policy Recommendations 2025

Three Pillars of Policy Recommendations

The Pharmaceutical Manufacturers Association of Japan (PMAJ) has prepared policy recommendations every two years from 2019 to 2021 and 2023, and has now formulated "Policy Recommendation 2025" in conjunction with "Industry Vision 2035" as "recommendations for concrete actions for the next two years to realize the vision.

In order to realize the three pillars of the Industrial Vision 2035, the policy recommendations also consist of three pillars: the first, Innovation, addresses "the importance of strengthening Japan's drug discovery capabilities," the second, Access, addresses "the creation of an attractive Japanese market through appropriate evaluation of innovation," and the third, Trust, addresses "necessary initiatives to solve social issues. Access" and "Trust" corresponds to "necessary efforts to solve social issues" respectively. (See the table below.)Figure 3 )

Figure 3: From Industrial Vision 2035 to Policy Proposal 2025

Strengthening Drug Discovery Capability

The Pharmaceutical Manufacturers Association of Japan (PMAJ) has long emphasized the importance of collaboration among the various players in the "drug discovery ecosystem. For example, in industry-academia collaboration, the key is how to combine discoveries and inventions from academia and link them to drug discovery research by pharmaceutical companies. ( Figure 4 )

Figure 4: Overall picture of measures to strengthen drug discovery capabilities

How to Cross the Devil's River

Currently, the steps of industry-academia collaboration have become very difficult. The reason lies in the "magic river," the large gap between basic research in academia and drug discovery research in industry. With the current diversification of drug modalities and players, the "magic river" lies before the "valley of death" between basic research and the clinical phase, and it is necessary for both academia and pharmaceutical companies to come together to cross this gap. Furthermore, in order to strengthen drug discovery capabilities, it is also necessary for the government to take the lead in developing drug discovery infrastructure and systems. ( Figure 5 )

Figure 5: Toward practical application of basic research in academia

Co-creation" with patients and citizens

Co-creation" with patients and the public is also a key concept in this vision and policy recommendations. There are many opportunities for pharmaceutical companies to "co-create" with patients and the public, such as providing biological samples and data at the research stage, reflecting their opinions in clinical trials, cooperating in improving convenience, and providing post-marketing safety information. The Pharmaceutical Manufacturers Association of Japan (PMAJ) will continue to improve patients' access to clinical trial information and promote dialogue and public relations activities with patients and the public. ( Figure 6 )

Figure 6: Importance of patient and citizen participation in drug discovery

Appropriate Evaluation of Innovation

The second pillar of Policy Recommendation 2025 is "Appropriate Evaluation of Innovation. In order to bring innovative new drugs to the Japanese people as quickly as possible, the Japanese market must be attractive enough for the rapid introduction of new drugs. The three conditions for this are that the market as a whole must be a growing market, the NHI pricing system must be structured to promote innovation, and the system must be highly predictable in terms of business decisions (Figure 7). ( Figure 7 )

Figure 7: Toward a More Attractive Japanese Market

Rethinking Sealing.

Regarding the first point, "being a growing market," the global pharmaceutical market is rising steadily, but in Japan the market has reached a plateau. This is due to the current "ceiling" that allows only the growth of social security expenses equivalent to the aging of the population and does not allow growth due to high prices or the sophistication of medical care. However, the recently formulated "Third Health and Medical Care Strategy" clearly states that "the sales of pharmaceuticals in the Japanese market should be on an increasing trend. The strategy also states that "the market for pharmaceuticals in Japan should be on an upward trend. From now on, in addition to the aging of the population, the system should be able to reflect "the sophistication of medical care," "price trends and response to wage increases," and the efficiency of medical costs should be considered throughout healthcare, including the promotion of DX and the review of benefits and burdens. ( Figure 8 )

Figure 8.

A highly predictable system that enables the evaluation of the value of innovative new drugs

Regarding the second point, "appropriate evaluation of the value of innovation," the current NHI drug price calculation system includes two methods: the comparable drug price method, which refers to the prices of existing similar drugs, and the cost accounting method, which calculates costs by accumulating costs. Many of the recent innovative new drugs have been calculated using the cost-accumulation method, as there are no existing drugs to compare them with, partly due to the diversification of modalities. However, the value of such drugs cannot be adequately evaluated by accumulating costs. Therefore, as a new evaluation method, we are considering expanding the scope of application of the similar drug effect comparison method by flexibly determining the similarity of drugs according to disease and formulation characteristics. In the future, we will also consider a method in which companies themselves present the value of their pharmaceutical products and discuss them based on this value.

Regarding the third issue, "Establishment of a highly predictable NHI drug price system," in addition to annual NHI price revisions for eight consecutive years, the expanded rules for market expansion reimbursement have been introduced and immediately applied with each NHI price reform, making it difficult to evaluate the business potential of a product after its launch. Furthermore, there is a move to expand the cost-effectiveness evaluation system to be introduced in FY2019. The Pharmaceutical Manufacturers Association of Japan (PMAJ) believes that the government should change the patchwork measures that have been taken so far and promote a fundamental review of the system. (SeeFigure 9 )

Figure 9: Expansion of the similar drug effect comparison method through flexible selection of similar drugs

4. Future Vision of the Pharmaceutical Industry

As a key industry in Japan

In order to continue to generate innovation at a rapid pace, it is important to have an industrial policy in which both the mechanism for the creation of innovative new drugs and the mechanism for the evaluation of innovation in terms of NHI prices are linked and circulating. As a high value-added industry, the pharmaceutical industry will continue its efforts to become a key industry in Japan by supporting the country's declining birthrate, aging society, and accelerating population decline. ( Figure 10 )

Figure 10. as a key industry in Japan.

5. main questions and answers

Strengthening Drug Discovery Capability

A2: To put it simply, a key industry is an industry that is needed in the world. The three elements are "extension of healthy life expectancy of the people," "health security" such as medicines and vaccines that protect the nation and its people from a health perspective, and "contribution to the growth and development of Japan" based on innovations and intellectual property originating in Japan and going global from an industrial perspective. We believe that the pharmaceutical industry is a good match for resource-poor Japan.
A3: We believe that individual companies are participating in the university and regional ecosystems, but as an industry group, we are considering providing support from a broad perspective, dealing with the national government and other organizations. For example, we believe that it would be difficult for an industry group to consider cross-cutting issues and solutions, such as what kind of results could be achieved by having people from the pharmaceutical industry join AMED.

On the state of social security

A4: In recent years, social security expenditures have been compressed in the same manner as in the past, despite the fact that government revenue has been increasing. The fiscal authorities say that they are taking into account rising prices and wage increases, but the degree of consideration is not apparent. First of all, we would like to discuss with stakeholders and make a concrete appeal for the next full-scale revision in FY2026.
A5: Assuming that universal health insurance is maintained, the question is what should be covered by insurance within a certain financial resource. The general idea is to maintain public assistance for high-cost medical care, while light medical care should be paid for by individuals. It is also true that if this issue is not resolved, Japan's medical environment will collapse. It is necessary to hold a national discussion to further resolve this issue.

Revision of the NHI Drug Price System

A6: We believe that the similar drug effect comparison method is one way to increase predictability compared to the cost accounting method. Even if there are no existing similar drugs, if more cases can be compared, including medical technology, we believe that the level of the similar drug effect comparison method will be raised and the effectiveness of drugs can be more widely demonstrated.

Impact of the U.S. Trump Administration

A7: A 25% tariff on pharmaceuticals has been announced. Pharmaceutical tariffs were first imposed in the Uruguay Round in 1994. ^{_{The tariffs on pharmaceuticals were eliminated in the Uruguay Round in 1994.}} If tariffs are imposed, the development of medicines, especially those for intractable diseases and rare diseases, will stagnate, and medicines may not reach all of mankind. Since no specific policy has been issued at this time, we are closely monitoring the situation.

Q&A session

(Nobuyuki Kobayashi and Akiko Fujiwara, Industrial Policy Committee)

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