Japan Pharma Association Introduces Bold Policy Measures to Reform Sector

TOKYO, Japan – The Japan Pharmaceutical Manufacturers Association (JPMA) has proposed a new policy for economic and fiscal management and reform in Japan, which is mainly inspired by the effect of the coronavirus pandemic on the healthcare system and pharmaceutical industry in Japan.

The proposal first addresses the immediate need of the Ministry of Health, Labor, and Welfare (MHLW) and the pharmaceutical industry to clear regulatory pathways to ensure the most effective and innovative treatments for COVID-19 are accessible.

JPMA is calling for support for the creation of therapeutic drugs and vaccines, which will require not only ensuring the introduction of new therapeutic agents such as blood products and unapproved drugs, but also drug repositioning.

When it comes to drug repositioning, Japan should “prepare a plurality of repositioning drugs instead of narrowing down the drug candidate to one,” and then streamline drug positioning, including significantly reducing the time required for approvals.

The industry is actively engaging in vaccine development and plans for the implementation of a rapid response system focused on vaccine in R&D are being readied so that Japan will be first to undertake research in vaccines with new technologies.

To accomplish this, it will be necessary for the Government to support the industry as it promotes R&D in the area of infectious diseases. In its policy proposal, JPMA underscored the importance of “Pull-type incentives” to encourage pharma to invest more R&D in therapeutic agents and vaccines.

JPMA explained it is interested in a Market Entry Rewards reward system, Subscription methods, and Market monopoly periods applicable to other products.

“It is possible to introduce the extension system of (4), (iv) purchase guarantee system (stockpiling), and (v) drug price pre-examination system based on drug profile. Since it is difficult to predict when and how much new emerging/re-emerging infectious disease drugs/vaccines will be needed, marketability and profitability are low, and this leads to active R&D and capital investment,” said JPMA.

This will all be manageable under a “tower function” that can centrally manage all treatments and encourage global collaboration and even collaboration among regulatory agencies within Japan.

These are efforts to immediately address the coronavirus, a pandemic which incited problems that cannot be solved overnight. In this case, Japan must recognize the importance of pharmaceuticals and medical technology through tax incentives that support the industry and ensuring a stable drug supply.

JPMA is proposing an expansion of the deduction upper limit measure of 10% for companies with an R&D cost ratio to sales of over 10% by the end of the 2020 fiscal year, and also an extension of the deduction rate of 14% and improvement rate of more than 10% of R&D expenses.

To support the industry, Japan will also need to halt its ad-hoc revision of drug prices, which is due to take effect in 2021; it should instead be implemented in 2023, later even.

JPMA also wants to ensure the industry is prepared to stabilize the drug supply through preparing alternative routes of manufacture, setting up stockpiles, and reducing active substance costs, which does require governmental assistance.

Lastly, going forward Japan needs an innovation platform to maximize rug discoveries in Japan. The three tenants of this include: accelerate efforts for genomic medicine; advance drug discovery basic technology; and develop information structure systems to promote the utilization of real-world data.