Report from Japan

After a series of government reforms that are appealing to both domestic and foreign players, the Japanese pharmaceutical market is making a comeback.
Aug 02, 2012
Volume 36, Issue 8

In March 2012, Pfizer Japan, a subsidiary of Pfizer US, set up a Rare Disease Division with the objective of becoming a global leader in treating rare diseases. China's Beijing Genomics Institute (BGI) in the Yantian District of Shenzhen, formed BGI Japan in Kobe, in September 2011, to increase its range of partners and to conduct joint research with Japanese companies. Golden Biotechnology Corporation in Taipei, Taiwan, established a Tokyo-based subsidiary in April 2011 to push out its proprietary health supplements. And the list goes on.

The well-established Japanese pharmaceutical market continues to attract extensive foreign interest and investment. Alan Thomas, director of business planning and analytics at IMS Japan K.K., says: "An increase in chronic disease, such as diabetes and cardiovascular related, and the number of treated patients within these diseases continues to see expanded access to pharmaceuticals. Additionally, an increase in specialty-related disease areas, such as oncology and osteoporosis, drives growth with increased use of biologics and specialty pharmaceuticals. With these emerging and expanding disease areas, the number of innovative treatment options available is also improving."

Japan's stagnating economy and aging population have urged the government to reshape healthcare policies that favor the entry of foreign firms. The agency has taken steps to shorten the drug-approval process and facilitate easy access to better treatment options. The median drug approval has fallen from 22 to 15 months in the past two years; and the approval time for products under priority review has dropped from 15 to 9 months.

The government is considering "a compassionate use" system that allows seriously ill patients to use drugs yet to be approved for use in Japan. This program is meant for patients who have not responded to standard treatments and where domestic options are unavailable. The government is also looking to allow health insurers to shoulder some of the costs incurred by patients under this system. Japan has spent time examining the sector's clinical trials and pricing as well, and under new initiatives, the increased acceptance and use of global clinical-trial data has reduced cost and sped timelines. The so-called "clinical triangle" comprising of China, Korea, and Japan, also helps to reduce development time in Japan because of the additional trial data available. In addition, the extension of Japan's "premium for development of new drugs and elimination of off-label use" is applicable to the National Health Insurance (NHI) price revisions established in April 2010. Under this system, manufacturers are encouraged to develop new drugs and provide additional information for existing ones when products are eligible for a lower NHI price revision.

Recently, the government shifted its focus to generic drugs with the goal of increasing market share to 30% by 2013 in a bid to address to the country's overburdened healthcare system. To dispel the common public perception that generic drugs are inferior, generic drugs and their active ingredients are placed under rigorous quality control. Generic-drug manufacturers are required to supply all of the strengths and dosage forms of the branded version. The Ministry of Health, Labor, and Welfare (MHLW) also requires manufacturers to supply strengths of the same dosage form as those of the branded products, and that the generic versions be a perfect match to the branded products.

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