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Business Policies of the Japan Pharmaceutical Manufacturers Association for Fiscal 2010 (as of January, 20, 2010)

1. Environment Surrounding the R&D-Oriented Pharmaceutical Industry

R&D-oriented member pharmaceutical companies of JPMA have the mission to realize "patient-oriented health care" by promoting innovative research to provide more effective and safer drugs to patients faster not only in Japan but also around the world, and this is also largely expected from the society.
The pharmaceutical industry in Japan is an industry with not only great potential for growth, but Japan is also one of the few countries that have strong research and development capability for new drugs, and therefore the contribution of the Japanese pharmaceutical industry in promoting global public health is large.
On the other hand, member companies of JPMA have long undertaken international and social contribution activities. One of the latest contributions is the financial support for the establishment of the Pharmaceutical Development Support Center in May 2009, which aids early development and approval of novel drugs.
However, the business environment for member companies has turned unfavorable in recent years. Domestically, the growth of the Japanese pharmaceutical market has been slowing due to constriction of the national health budget and the gradual increase of generic market share. Furthermore, the growth rate of the ethical drug market has been stagnant in the global market, particularly in the US.
JPMA is carrying out a wide range of operations and activities in accordance with the 5-Year strategy for Creation of Innovative Drugs and Medical Devices for building infrastructures to improve the environment for both basic and clinical research to support new drug development, which requires vast amounts of human and monetary resources as well as time in the face of declining approval success rates. Although these efforts have helped to advance pharmaceutical research activities, the domestic environment still has not been regarded as advantageous as compared to that in foreign countries.
The national health insurance ("NHI") drug price list is expected to be revised to substantially lower prices in 2010. However, JPMA's proposal for the new drug pricing system to set prices that reward innovation has not been fully accepted by the government.
Furthermore, the "2010 Problem" will hit JPMA member companies hard since the many of the major drugs developed in the 90s are facing patent expiry.
It is also not easy to foresee how Japanese pharmaceutical companies will be affected by the problems of drug access and intellectual property rights in developing countries. These problems became partly evident when the H1N1 virus broke out. The problem of drug access, either delayed or limited, in treating not only diseases specific to developing countries, but also chronic diseases has been recognized as a major challenge to Japanese pharmaceutical companies. Additionally, it is only a matter of time until China, India, and other emerging countries catch up to Japan as powerful competitors.
These major issues for the pharmaceutical industry cannot be resolved by the industry alone. It is imperative to take an in-depth view of the international situation and trends and establish collaborative efforts among governmental agencies, academia, and industry for action as part of the national pharmaceutical industry strategy or economic growth strategy.
Amid the new political climate in September 2009, the Hatoyama cabinet of the Democratic Party started to work with manifesto declarations that set out a 25% reduction of CO₂ emissions, the abolishment of the late-stage medical care system for the elderly, etc. Instantly, the execution of supplementary budgets compiled by the Aso cabinet was partly suspended and the proposed budget estimate for the following fiscal year was reviewed; however, it is not yet clear which direction the new cabinet will take on national healthcare and pharmaceutical policies.

2. Business Policies

JPMA has many issues to tackle in the rapidly changing environment as overviewed above. Social appraisal of the pharmaceutical industry appears to be generally positive, but on the other hand, public concerns about drug safety are becoming more apparent. It is important for the pharmaceutical industry to implement strict compliance with laws, corporate ethics, and with the JPMA Promotion Code to improve further transparency of corporate activities.
As for 2010, member companies, JPMA's committees, the Office of Pharmaceutical Industry Research, and the Secretariat Office will take collaborative actions in order to implement the policies adopted in the 5-Year Strategy for Creation of Innovative Drugs and Medical Devices, and to further assist innovative new drug discovery, and will deliberate actions on the following 5 issues in particular.

  1. Full implementation of the new NHI drug pricing system proposed by JPMA
  2. Reinforcement of the infrastructure for research and development, improvement of the clinical trial system, and request for an accelerated drug review process
  3. Further promotion of international collaboration and cooperation
  4. Development of new strategic approaches towards environmental measures
  5. Promotion of public understanding of the roles of the pharmaceutical industry, e.g., its contributions to public health and national economic growth

3. Business Plans

JPMA will aggressively pursue optimal and practical strategies to deal with a range of issues including the following five major issues:

  1. Full implementation of the new NHI drug pricing system proposed by JPMA
    • JPMA will fortify its efforts to fully implement its proposed new NHI drug price system, adequately handle the discussion of the pricing system-related issues, and improve the drug distribution system, which is closely related to price recalculation of drugs on the market.

  2. Reinforcement of the infrastructure for research and development, improvement of the clinical trial system, and acceleration of new drug approval
    • JPMA will continue to urge the government to implement the following policies and strategies by submitting proactive recommendations and providing cooperative support.
      1. Lead the integrated management of a researchrelated national budget instead of ministry-based budget spending, including a stronger focus on investment for the critical aspects of research
      2. Lead the implementation of the New 5-Year strategy of Clinical Trials developed for the improvement of the clinical trial and research systems in Japan in order to achieve the optimum shortest time to new drugs application
      3. Lead the implementation of the roadmap/annual plan to improve the PMDA's clinical trial consultation services and regulatory approval procedures
      4. Lead the development and implementation of certain policies and strategies for assisting entrepreneurial pharmaceutical ventures to take hold and grow further
    • JPMA will appropriately take part in the national safety assurance measures for marketed drugs in cooperation with the government, medical institutions, and pharmaceutical companies.

  3. Further strengthening of international collaboration and cooperation
    • JPMA will further engage in the support and contribution to the IFPMA and participate in activities for improving intractable issues of drug access and intellectual property rights in developing countries in concert with the activities of international organizations such as the WHO and the WTO.
    • JPMA will cooperate with foreign organizations and governmental bodies on assistance to developing countries based on the Basic Principles of International Cooperation adopted in 2009. Also, JPMA will join collaborative activities among China, South Korea, and Japan and closely observe and support the policy of "the East Asian Community" recently proposed by the Japanese government.
    • JPMA will promote international harmonization of regulatory rules through a broad range of activities at the ICH for global technological advancement, safety evaluation and assurance from the R&D stage through the post-marketing stage, and proper compliance of pharmaceutical companies to the new product quality-assurance system.

  4. New approaches to national environmental measures
    • JPMA will continue to evalute and discuss its contribution to the nation's strict environmental measures, particularly, those for green-house gas reductions.

  5. Promotion of public understanding of the pharmaceutical industry concerning its contribution to public health and the nation's economic growth
    • JPMA will reinforce public relations activities to promote understanding by the general public on not only the importance of prescription drugs but also on social roles of the R&D-oriented pharmaceutical industry (for example, elevation of national standards of public healthcare, enhancement of science level, and contribution to national economic growth).
    • JPMA will exert its utmost efforts to resolve drug lag issues in collaboration with the government organizations and the Pharmaceutical Development Support Center for early market introduction of unapproved new drugs and new indications demanded by patients.
    • JPMA will establish close relationships with the Diet, government, business communities, labor unions, medical associations, mass media, and patient organizations through timely information dissemination and negotiation to obtain understanding of policies recommended and actions to be taken concerning problems and issues that the pharmaceutical industry is facing.

  6. Reinforcement of activities to study and propose pharmaceutical policies and strategies
    • JPMA will establish, as early as possible, a forum for discussion and resolution of the above-mentioned topics and issues among the government, academia, and pharmaceutical industry.
    • JPMA will actively participate in, strengthen policy proposals of, and utilize meetings at governmental pharmaceutical affairs councils, in order to reflect the opinions and ideas of the pharmaceutical industry in government policies.

  7. Other activities
    • JPMA, related committees and the Office of Pharmaceutical Industry Research will steadily carry out activities based on the JPMA's business policies and produce outcomes that will benefit the member companies.
    • The Secretariat Office will continue to take steps to improve working efficiency and rationalize its activities. The Office will steadily implement the work improvement program adopted in Fiscal 2009.
    • The Secretariat Office will determine the feasibility of and study procedures for complying with the new accounting system from Fiscal 2011.

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