New Vision for the Pharmaceutical Industry Announced

The changes in the environment surrounding the pharmaceutical industry since the formulation of the Previous Vision have been examined from various perspectives and have been described in the documentation of the New Vision. The New Vision states that, over the past five years, there has been a rapid advance in the globalization of the pharmaceutical industry and intensification of business mergers and acquisitions. And yet there has been no increase in international marketing of new drugs from Japan, and there is an increasing gap between Japan and the West in terms of the scale of research and development expenditure; and for these and other reasons, the international competitiveness of the Japanese pharmaceutical industry is not improving. Moreover, the delay in launching of new drug products of foreign origin onto the Japanese market, the so-called "drug lag," has become an even more conspicuous problem. The size of the Japanese pharmaceutical market, which about 10 years ago was approximately 20% of the global market, has now shrunk to just 10% of the global market. The international appeal of Japan's drug discovery environment and medical drug market has also fallen. In the New Vision, the pharmaceutical industry of Japan has been declared to be in a crisis situation. In order to escape from these circumstances, there is an urgent need to strengthen international competitiveness and eliminate drug lag, and it is stressed that, in order to achieve these goals, the promotion of innovation is a major policy issue that needs to be addressed.

JPMA considers that the primary causes behind the current crisis are Japan's drug price system, delays and increased costs for clinical trials, and delays in the new drug approval process, and we have been repeatedly requesting the government to make improvements.

At the same time, the Japanese pharmaceutical industry is expected to not only improve its international competitiveness, but also to make various social and international contributions, such as by developing and delivering low-profit but important drugs (drugs for treating intractable diseases for which no treatment yet exists, orphan drugs, vaccines, etc) and other drugs to meet the needs of Japan and other Asian countries, carrying out humanitarian aid projects for developing countries, conducting crisis management initiatives for dealing with new strains of influenza, and providing other such contributions. The matter of international contributions of the pharmaceutical industry is also frequently debated by the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA), and even greater contributions will be expected of the industry in the future.

To ensure the sustainability of medical insurance financing and in order to achieve appropriate evaluation of innovative new drugs, the promotion of generic drug and non-prescription drug (OTC drug) use is a serious issue, and the New Vision includes descriptions not only of the future shape of the pharmaceutical industry, but also of the future shape of wholesale and retailer businesses. The principal issues for wholesalers are assurance of stable drug supply, promotion of IT system use, strengthening of information functions, and establishment of independence. The principal issues for retailers are fulfillment of the roles of community-based health stations, conformity to medical system reforms, and reinforcement of the functions of family pharmacies (Figure 1).

Figure 1. Key Points of the New Vision for the Pharmaceutical Industry (PDF60.2KB)

We have advised the government that for the pharmaceutical industry to escape the current crisis, from the perspective of promoting drug R&D and innovation, we must strengthen our international competitiveness through strategic business practices, such as mergers and acquisitions or alliances, and careful selection and focusing for new drug creation. If, through such practices, we can adjust to a new stage of international competition, expand the industry to an appropriate scale, pursue areas in which we can become global leaders, and expand competitive product lines, then we will be sufficiently capable of challenging global industry leaders. Of course, Japanese pharmaceutical businesses endeavoring to expand global activities should engage in those practices described above, and each should exert its own efforts to increase its international competitiveness, but the government's support in improving infrastructure is essential, and the combined efforts of both industry and government will strengthen the international competitiveness of the pharmaceutical industry.

It is stated in the New Vision that the role of the government is to improve the governmental systems that contribute to industry expansion, eliminate conditions and factors that conflict with the principle of market competition, creation and subsequent share of knowledge in areas not pursued by private enterprise due to poor profitability and those of drug R&D that the industry is incapable of producing due to competition, and support operations deemed necessary from a national strategic position. The government considers that, in order to strengthen the international competitiveness of Japan's pharmaceutical industry and expand it as one of the country's growth-driving industries, and in order to provide the Japanese public with medical drugs of the highest standard in a speedy manner, there needs to be a collaboration of government, industry, and academia throughout the preclinical and clinical stages of drug development, as a national project. The government also believes that if the pharmaceutical industry can make a great leap forward by following the government's 5-year Action Plan, then Japan will have adequate potential to become a global leader in new drug development, equal to the leading western nations. These announcements are welcome news to the pharmaceutical industry, which has great hopes for the progression of government-industry dialogues. Showing high expectations in the pharmaceutical industry, the government has suggested that it is not implausible that Japan could come to produce at least a fourth or third of all new active drug substances, and it has stated that its goal is for Japan to become a major center for new drug development in the world. Furthermore, the government hopes that at least 1 or 2 of Japan's pharmaceutical companies will grow to become a global mega pharmaceutical company.

The pharmaceutical industry can not only contribute to the improvement of the national standard of public healthcare, as a leading industry that is focusing on making Japan an intellectual property power, it can also contribute greatly to the economic growth of the nation. The Japanese pharmaceutical industry must follow the government's policies and engage in business operations that will enable Japan to survive as one of the few medical drug-producing nations in the world (Figure 2).

Figure 2. Future Vision of the Pharmaceutical Industry (PDF31.7KB)

The New Vision comprises a variety of initiatives, such as those shown in Figure 3, which have been derived from government-industry dialogues and the results of both the 5-year Plan for Clinical Trial Activation and meetings of the Committee on Speedy Provision of Safe and Effective Drugs, and have been formulated with a view to the shape of the pharmaceutical industry 10 years from now. These initiatives will be carried out as an action plan over the next five years, the designated "focal period for innovative drug discovery." In a comparison with the Previous Vision, the New Vision states details on R&D support, promotion of clinical trials and clinical research, improving the speed and quality of the approval review process, the proper state of the drug price system and drug benefits, and the shape of the generic drug market.

With regard to the drug price system, as this will be debated by the Central Social Insurance Medical Council, only the issues and problems regarding the system have been mentioned in the report of the New Vision.

Figure 3. Basic Concepts behind the Pharmaceutical Industry Policies (PDF50.5KB)

Prior to the public announcement of the New Vision, on July 30 of this year, a meeting between the MHLW and representatives of relevant industries was held to discuss the vision for the pharmaceutical industry. At the meeting, opinions were voiced by the Federation of Pharmaceutical Manufacturers of Japan (FPMJ), JPMA, the Ethical Pharmaceutical Manufacturers Association (EPMA), the European Federation of Pharmaceutical Industries and Associations (EFPIA), the Pharmaceutical Research and Manufacturers of America (PhRMA), the Japan Self-Medication Industry (JSMI), Japan Pharmaceutical Wholesalers Association (JPWA), and other parties. JPMA President Hatsuo Aoki expressed the opinion that, as the establishment of a platform for promoting new drug discovery and a drug pricing system that properly evaluates new drug innovations will likely become focal items of the New Vision, the achievement goals of each initiative should be clarified and follow-up and evaluation of the progress of initiatives should be conducted each year. He further stated the need to evaluate the initiatives of the past 5 years and their outcomes. The opportunity for including this last matter in the New Vision already passed, but it will likely be announced in the near future.

Follow-up of each of the initiatives of the New Vision will be conducted at the discussion meetings of the Council on Promotion of Pharmaceutical Industry Policies, as heretofore, and will now also be conducted as part of the Government-Industry Dialogue Meetings for Innovative New Drug Research".

The reasoning behind the 5-year Action Plan is that, in order to rapidly provide patients with superior-quality new drugs, there needs to be an increased incentive for Japanese pharmaceutical companies to carry out new drug R&D and marketing at a pace equal to that of American and European drug companies, and the Japanese market must be made more attractive to foreign businesses. Thus, it is necessary to establish in Japan a drug-discovery environment that is contributive and favorite to simultaneous global development, and the domestic market environment must also be improved by employing a system for appropriate evaluation of innovative new drugs and other measures. JMPA considers that, to put these ideas into shape, it is necessary to carry out the various measures described in the action plan unfailingly, at an early stage, and we will carefully monitor the progress of these initiatives and present opinions and requests to the government as circumstances require.