Transforming Japan's Pharma Industry with Global Partnerships

At the French Japanese Business Summit, Iwaaki Taniguchi, Executive Vice President & CFO of Chugai Pharmaceutical, shared his perspective on how Japan’s pharmaceutical industry is transforming to global expansion and improving innovation through collaboration across universities, pharmaceuticals, and ministries, while focusing on advancements such as biologics and global partnerships.

The globalization of the pharmaceutical industry is a big challenge to Japan because of the vast Japanese market. Japanese pharmaceutical companies continue to rely solely on the domestic market. However, future growth comes from outside Japan. The pricing of drugs in Japan is less dynamic than in the United States or other regions of the world. So, expanding and growing their international presence is essential for Japan. Collaboration across universities, pharmaceuticals, and ministries remains critical for new drug creation. Academia is the root of new drug discovery. Collaborating with academia is crucial, and the government also provides financial and non-financial support to academia.

Role of Startups in Advancing Japan's Drug Discovery

Japan’s government has started a new initiative called Drug Ecosystem, which revitalizes the ecosystem across universities, pharmaceuticals, and ministries in Japan. Moreover, the government is taking initiatives to expand the overall biopharma industry. The Japanese pharmaceutical industry has realized the importance of collaboration, partnering with companies that have excellent technology. Even if they are not part of big pharma, biotech companies and startups can develop innovative technology.

The future key challenge for Japanese companies is to internalize and gain access to innovative technology possessed by other companies. Chugai launched the Chugai Venture Fund, which is small but strategic. Innovation has helped expand the avenues for drug discovery. An important strategic priority includes how to access great local talent or how to access a great local startup. We cannot rely solely on internal resources for drug discovery efforts. However, it aims to access local biotech in the Boston area, a hub for the drug discovery ecosystem and an important access point for Chugai, provided it maintains a presence there.

Impact of Technology on Pharma Innovation

There are three categories: modalities in drug discovery, platform technology, and small molecule technology. However, our strength lies in antibody technology, which is similar to a biologics approach. We focus more on resource allocation to antibodies and biologics. We have introduced mid-size molecule technology, which is in between small molecules and antibodies. However, mid-size technology has two aspects: small molecules and antibodies. We now have three modalities, and we follow a balanced approach. An important balance is required, and it is crucial to focus on the sustainability agenda, including carbon emissions, as well as access to medicine and global health. The disparity between developing countries and developed countries is significant. It is important to focus on the wealth of developing countries or underprivileged countries.