Expat Experiments in London Fuel Drug Sales in Japan
Tadasuke Takahashi, a London hair stylist, supplements his income by taking part in medical studies that offer him about $1,000, bento box meals of rice and fish, and Japanese comic books during a 6-night hospital stay.
During his time in London clinics, Takahashi, 33, takes experimental drugs so researchers can determine if his reaction is any different than that of Caucasian volunteers. These overseas tests are part of an effort by Japan’s government and the pharmaceutical industry to speed up approvals in a market where a complex regulatory process had delayed treatments for an aging population for years after U.S. and European clearance.
The changes are now yielding results. They have spurred double-digit growth in sales for Pfizer Inc. (PFE) and GlaxoSmithKline Plc in Japan, as the debt crisis depresses revenue in Europe and growth slows in the U.S.
“It has been a terrific two years for Pfizer Japan, as we have had over 20 submissions” for approval, said Jorge Puente, president of Pfizer’s Asia Pacific and Canada regions, in an interview. The country’s drug regulator “has become flexible, in my experience, and is open to engage in discussions to try to understand the position of the company.”
Demand for diabetes, cancer and dementia treatments is rising in Japan, the world’s most rapidly aging nation with people 65 or older representing 23.3 percent of the population, according to a government report. Growing social acceptance of medical treatment for mental illnesses is also driving sales of depression and schizophrenia drugs, according to market researcher IMS Health Inc., which says Japan will remain the world’s second-largest market behind the U.S. in 2015.
Revenue at New York-based Pfizer, the market leader, rose 11 percent to 576 billion yen ($7.3 billion) in Japan last year as the overall market grew 6.9 percent, according to IMS. Glaxo’s Japan pharmaceutical sales jumped 28 percent last year, a trend that continued in the most recent quarter ended March. The London-based company recorded the steepest growth in sales last year among the top 20 drugmakers in Japan, IMS said.
Sales there will help drugmakers offset a decline in Europe, whose share of spending on medicines will drop to 19 percent in 2015 from 27 percent in 2005, Danbury, Connecticut- based IMS said. Glaxo’s sales fell 4 percent in the region and were unchanged in the U.S. last year. Pfizer’s European sales dropped 5 percent, while U.S. sales slid 7 percent.
Revenue is rising in Japan because the government is trying to get its aging citizens access to the latest treatments as their health declines. Lawmakers implemented a pricing program that pays more for new medicines that offer a significant improvement in patients’ quality of life and health compared with older therapies. In another change, drugmakers can avoid repetition of expensive studies by recruiting expatriates like Takahashi, a native of Nagoya in central Japan, from London to Hawaii, speeding approval times.
“The Japanese government in the last ten years or so has made it so drugmakers now go through a much less onerous process to get approval,” said Jonathan MacQuitty, a Menlo Park, California-based partner at health-care venture capital firm Abingworth. “That has coincided with Asia becoming a more important market, where growth is going to occur.”
Abingworth invests in SFJ Pharmaceuticals Inc., which helps companies including Pfizer introduce drugs in Japan.
Under a pricing program that began in 2010 and was renewed in April, new medicines that offer a significant benefit to patients over existing treatments may command a price as much as 120 percent higher than those of older drugs, according to Alan Thomas, director of Japan business planning and analytics, for IMS.
Japan’s biennial price-cutting plan also was revised, resulting in more than 400 compounds receiving lower price reductions or being exempted this year under a new set of criteria, Thomas said.
Before regulatory reform in Japan, U.S. and European drugmakers conducted the three required phases of clinical trials in Western countries. Once approved in those markets, companies had to repeat the entire process in patients in Japan, creating a “drug lag” and ballooning costs, said Robert DeBenedetto, chief executive officer of San Francisco-based SFJ Pharmaceuticals. That lag was as long as nine years after U.S. and European clearance, IMS said.
The trials had to be repeated because of concerns about side effects in Japanese, who tend to have lower body weight and may require lower doses than Caucasians, said Colin Vose, who led strategic business development for Japan and South Korea from 1999 to 2005 at Quintiles Transnational Corp., the biggest provider of testing and drug-trial services.
That changed in 1998, when Japan accepted the concept of bridging studies, which pave the way for clinical data gathered in one country to be used in regulatory filings in another. Bridging studies are small trials that observe both healthy Japanese participants and Caucasian subjects to study whether there are any differences in how a drug is processed in the body.
Hammersmith Medicines Research, a London hospital center, recruits expatriates like Takahashi, the hair stylist, for bridging studies. Takahashi is monitored for adverse reactions at the hospital while he watches television shows and reads books in his native language.
“I do this two or three times a year,” Takahashi said in an interview. “I know there are risks, but most of these drugs have already been tested in Caucasians, so I’m not too worried.”
If a bridging study shows the drug’s safety is equivalent in both Japanese and Caucasian people, those results can supplement data from trials done in other countries to avoid repeating mid-stage studies in Japan. Late-stage trials are still required to be conducted in Japan for most therapy areas, according to IMS.
“That has allowed us to reduce the regulatory package that is needed and to reduce costs,” said Klaus Beck, head of research and development in Japan for London-based AstraZeneca Plc. (AZN)
Japan’s example may have implications for drugmakers trying to expand in China, whose regulatory guidelines will probably evolve in a similar fashion to its neighbor, according to Quintiles’ Vose.
“One would hope we will have learned by our experiences in remodeling the way we’ve approached Japan,” Vose said.
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