Why the Pharmaceutical Industry is Booming in Japan - SPONSOR CONTENT FROM THE GOVERNMENT OF JAPAN

March 12, 2018



Older people need more medicine. That rule of life is no secret to pharmaceutical companies across the globe. Many also realize that Japan’s rapidly aging population presents a unique business opportunity. Japan remains the world’s second-biggest pharmaceuticals market, behind only the United States and China. The Japanese market also is expected to grow annually. The lessons learned there will be critical as the population grows older in many other markets.

To address the needs of Japan’s aging population, the government is responding is easing several life science regulations and accelerating approval of innovative new drugs in a campaign to promote current pharma companies, both domestic and foreign, and to attract new companies to the Japanese market. The changes are all related to “Abenomics,” named for Prime Minister Shinzo Abe’s plan to match economic growth with innovations in health care. If the nation can promote a healthy life expectancy, Abe believes, health care costs for an aging citizenry will not rise as fast as they have in the past.

“Japanese leaders recognize the importance of encouraging medical innovation,” Eli Lilly and Co. chairman and CEO David A. Ricks told a Tokyo audience recently. “Our company appreciates the progress we have seen under Prime Minister Abe’s leadership.” Specifically, there have been a slew of recent changes in regulation and law. The so-called Strategy of Sakigake package approved in 2014 accelerates drug and device approvals and cuts review times. In some cases, premiums will maintain prices of newly developed drugs. Other changes are designed in part to promote the development of drugs and other solutions for difficult diseases or health care problems. These various programs already have benefited many companies, including Pfizer, Bayer, Novartis, Merck, and Ricks’s own Eli Lilly.

The biggest change for pharma in Japan was the 2014 revision of the nation’s keystone pharmaceuticals law, renamed the PMD Act—for pharmaceutical and medical devices. Japanese officials proudly say some drug approvals in Japan are now faster than in both Europe and the U.S.—a marked change from the days when Japan was seen as a difficult market for foreign companies.

The PMD Act and other changes that accelerate regulatory approval for some drugs and devices have triggered a number of partnerships, licensing deals, and research collaborations in Japan with companies with existing business there and from companies rushing to take advantage of Japan’s rich and growing market.

Examples abound. Germany’s Borhringer Ingelheim started a research collaboration with Kyoto University to develop drugs to fight hearing loss, and Eli Lilly partnered with National Cancer Center Japan on stomach cancer research. A joint venture between the U.S. firm Amgen and Astellas Pharma of Japan led to the approval of Amgen’s Repatha drug for the treatment of high cholesterol. The German firm Bayer, which has a long history in Japan, also earned recent headlines for establishing its new open innovation center, Innovation Center Japan, in Osaka. The center even decided to open its own satellite office on Kyoto University’s campus in what Bayer hopes will be a pattern for other academic partnerships—and even for other companies.

“Today’s pharmaceutical companies need highly specialized knowledge and technology in order to produce a constant stream of innovative drugs, but it is hard for a single company to do it alone,” said Dr. Shunichi Takahashi, head of Bayer’s Innovation Center Japan. Underscoring this concept, Bayer plans to open a incubation lab for life science startups in Kobe later this year to promote partnerships with universities and local research organizations.

“We are eager to help form and grow the ecosystem for start-ups,” Dr. Takahashi said. “We will do this by creating an environment that gives them access to state-of-the-art research. We hope that our efforts in this regard will not only support Bayer’s business but also help strengthen the foundation of science in Japan.”

Find more at Japan.go.jp/abenomics.










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