Japan’s rapidly ageing population has significant implications for its pharmaceutical companies, which they will have to deal with earlier than their counterparts in other developed nations around the world. In addition, the Japanese government tried to pass reforms and laws last year to increase generic drug use by 80% by 2018. Dr Masayuki Mitsuka, CEO, President & RD of Mitsubishi Tanabe Pharma Corp., explains the shifts, challenges and opportunities in the market, the great potential for and importance of international collaborations, and his company’s projected move into the massive US market.
As a leader in the private industry and a Japanese citizen, do you feel as though Japan’s mindset has become more global and the country more open to the rest of the world?
In looking at how the media is covering our dynamics, I think they are very limited and they only focus on one part of the issues. For example, the media is covering a lot of our financial policy and fiscal policy and these are the two main pillars of Abenomics. I think for the Japanese economy to become world class again and to start contributing again to the world, then the third pillar of economics, which is the growth strategy, is the most important thing.
If we compare the three principles of Abenomics to an automobile, the growth strategy would be the engine and the other financial and fiscal policies would play auxiliary roles for the tires to operate.
I think what the economy states as problems or as issues are all the global issues, and it is important to propose this and provide the solutions to those global issues. I do admit that the economy states many global issues within the statement.
How we provide solutions is the most important thing, and the main parties who do that are the private sectors. Whether economics is working or not, it is not a big issue for me personally. I think how companies in the private sector provide solutions to these economic issues is the most important thing.
With the transformation of technology and production values, how is the pharmaceutical sector taking advantage of innovations such as the fourth industrial revolution and the way products are produced, marketed and consumed throughout the world?
This might not be the direct answer to your question but I would like to share with you how our healthcare sector is leaning towards bringing in new business.
Thinking about how we provide solutions to society, the biggest issue that Japan is facing is the super-aging society. When we talk about the super-aging society, of course we are talking about the increased health care cost and that leads to the issue that is currently often talked about, which is the depreciating or lowering of pharmaceutical prices. The issue is not the decrease of pharmaceutical pricing, but how we address this kind of super-aging society issue.
We provide a solution to this with medications, and in this there is information of the patients as well as the chemical substances, and these two are the main products that we provide. However, there is another trend in this area that we have to consider, which is medical ICT, or the information technology that is used in medical arenas as well as the artificial intelligence. How these would be related to the wellbeing of people is what we have to consider.
Specifically, just to give you an example of what we’re doing, the solution that we provide through actual medicine and the solution with the use of information technology are merging into helping the wellbeing of people. I do not know if that could be the fourth way but this is what we are aiming towards.
As you said, the price of pharmaceuticals is going down, and I know that last year the Japanese government tried to pass reforms and laws to increase the amount of generic drug usage by 80% by 2018. Does this create an opportunity for Mitsubishi Tanabe Pharmaceutical to form a public-private partnership with the government in order to help them achieve this goal?
I believe public and private partnership is an indispensable concept when we think about providing solutions to people. I do think public and private partnerships are important and they do exist of course; however, what is even more important are the private-private partnerships with different sectors with different strengths. Personally, I think that is more important. Especially, the partnership between the US and Japanese pharmaceutical companies provides a very important role in the future, because each of us has different strengths.
Japan is actually experiencing problems now that the rest of the world will not face for another 20 years, such as an ageing population like you said. With Japan’s call for pharmaceutical companies to produce high-quality pharmaceuticals, how do you feel as a leader of such a company that it is up to you to make solutions for the ageing population?
In order to provide those, especially for the super-aging society issues, I am thinking of two focuses in providing solutions. The first focus is through the pharmaceuticals themselves. What kind of medicine can we provide in order to help provide solutions? When we look at the healthcare cost distribution of Japanese medicine, most of the costs go to senior patients, who need care throughout the day. If we put all the money into the costs for these bedridden patients, it might not be an appropriate way of seeing it, but it will not be a productive way to provide a solution. I think what we, as a company, have to focus on is the medication to help senior citizens to not enter that bedridden stage. We should focus on how to prolong the period where they are able to be active themselves and do some work that would help them stay in the active state
It is important to provide them with the medication that will keep their legs active. For example, we have a product that is for rheumatoid arthritis and thanks to that many senior citizens can stay active and they can move around. Through that, we are contributing to society by reducing the costs of medical care. We also intend to come up with a painkiller for severe pain that comes with those kinds of conditions. We also intend to provide solutions for such conditions as ALS and MS. Those are all neuro diseases where the patients start not being able to move and then eventually they cannot breathe and they pass away. We have solutions for that as well and those medicines have the effect of prolonging the period where patients can be on their own, therefore reducing the medical care cost.
The phenomenon that is happening here has turned this momentum into something unique, something that is not happening in the rest of the world. I would like to know if this is turning pharmaceutical companies away from only providing painkillers to medical providers and curing diseases? Are you actually improving social standards, standards of living, and contributing to a more sustainable economy in the future?
Another focus that we are working on is the medicare system in each region and we are working to improve the network. In Japan, it is said that there are about 300 medical networks throughout the country. What I mean by the network is that there is a main hospital and then there are practitioners and practicing doctors throughout the town in care centers and pharmacies. What people are talking about these days is how to make the most of these networks and reduce the cost of medical care. For example, if a patient who normally has to stay in a very expensive hospital would be able to go home occasionally, if the network could be improved, thus reducing the cost.
Within our company’s sales and marketing department we have created an Area Marketing Division, where marketing divisions work on those medical networks. They look at the situation and they see how care can be provided with better and less expensive treatment within the set of medical networks. We are trying to come up with a new definition of MRs, medical representatives, who before were only marketing their products and asking the institutions to purchase their pharmaceuticals. Now, we are talking about the new role of the medical representative in providing solutions to patients and how patients can get better care with less cost and a kind of new support system. In order to do this, ICT is indispensable and we would like to alter our ICT systems, so that this can be used in the supportive role and activities of the MRs.
Your new MRs are certainly working. Not only are they contributing to society, but despite new regulations and the decrease in new drug success, Mitsubishi Tanabe Pharmaceutical Company has enjoyed a long period of growth lately and generated 431 billion yen in sales last year. What would you attribute to this impressive growth to despite these challenges?
We have two main pillars in our growth and we are trying to add another pillar to our growth. The first pillar is domestic sales. We have some plastic surgery-related focus and also some neuroscience-related medicine, and those are the main products that we can foresee domestic growth for in the future.
The second pillar that we have for great growth and profitability is the partnership with US companies, and I would like to touch upon that a little later.
The third pillar is the growing market in the United States and we would like to establish our own sales network in the area we have proven to be good at.
Part of your medium-term plan is to invest 200 billion yen in the next four years in order to solidify your position in the United States, where the pharmaceutical market is worth over $400 billion. How are you planning on communicating this expansion to American customers?
I think two things are necessary. One is to bring the products that we are strong at to the United States. In order to speed up the strengthening of the base in the United States we need M&As with strong American companies and those who would be the two wheels of the automobile.
The one thing that we are all focusing on the most is that there is one ALS drug that was approved in Japan and we are trying to bring it to the US market. I have personally received letters from patients in the US to please get approval in the US because there are not so many medical solutions to ALS. So we may be considering acquiring a company that is strong in this neuroscience area. If they are interested in partnering up with us we would love to.
I also read that you all are investing in a new way of reproducing immunizations with tobacco leaf. With investment into this product are you hoping it will impact your footprint in the American market and help get immunizations out to patients in the US?
Yes, absolutely. We are now in Phase 2 of the clinical testing of the influenza vaccine, seasonal flu vaccine, and if approved we hope to bring it to the market within two to three years. You mentioned Prime Minister Abe talking about providing solutions for global health issues, and within that we are developing the pandemic vaccine. This vaccination production with tobacco leaves provides gifts in shortening the production time of vaccines by 1/3 or 1/4. So, there is a potential for this to be a big solution to specific pandemic sicknesses. I have not proclaimed it widely but this is another dream, to be a leader in this area.
How important is it to you to contribute to society with the tobacco leaf and your pharmaceuticals that help people live their lives?
I have had the opportunity to talk to many business leaders here in Japan, but 70-80% of them say that the long-term growth and contribution to society is indispensable. Without that they cannot grow and they are seriously thinking about the contribution to society. I would share with you two of the efforts that we have here are part of the Mitsubishi Chemical Holdings Group, and within that we can measure our contributions to social sustainability. We analyze that and we publish it through many different media.
That consists of three areas: one is how we contributed to the sustainability of the Earth and environment. The second one is how we contributed to the health of people. The third one is called the comfort index, which is about how our product contributed to increasing the comfort of people’s lives. Of course, we have our own health index, just to see how much we contributed to people’s lives through medication as well as vaccines. We have these indexes in our mission and we are striving to increase those numbers in a visible way.
The second thing is our own initiative of Mitsubishi Tanabe Pharma, which is to contribute to universal health coverage, and which was also being talked about during the G7 Summit. Within that there is GHIT, which is Global Health Innovative Technology Fund, and we are providing funds as well as the chemical compounds library. With this initiative, we would like to eventually contribute to the people of Africa.
2016 is a transitional year for the world, especially with the fourth industrial revolution going on and innovations in the pharmaceutical companies as well. If the G7’s world leaders were sitting here right now, what one message would you like to convey to them?
What I want to emphasize is what I previously mentioned: the importance of private-to-private collaboration. In order for that to happen, we need stability in many ways, especially political and cultural stability between nations. It is indispensable for this to happen.
Representing the industrial world, I would like to tell to those ministers to make a stable society. Earlier, I was watching TV and I noticed some good news. As you know, President Obama visited Hiroshima, which had been bombed, and I hear that there were many debates in the United States happening.
There were surveys done in Hiroshima as well, and about 90% of them said that what they wanted the most was for President Obama to visit the museum and work towards a world without nuclear weapons. On the other hand, not many people wanted the apology for the bombing of Hiroshima. That was less than 10%; it was only single digits. So this exemplifies the political and cultural stability between Japan and the United States, and this will help us in creating collaborations with US companies, as well as European companies. I think if we have stability, it will become a base for us to collaborate with many companies.