Japan’s Biopharmas Respond to Price Cuts with Plans for Innovation, Expansion

Print 21 March 2016
Richard Smart / Life Sciences Connect

Japanese biopharmaceutical companies are bracing for tough years ahead, as cuts in the costs of medicine at home and issues of getting new drugs to the market begin to bite. For some, the response is to step up development of new drugs.

Executives at Roche AG’s Japanese subsidiary Chugai Pharmaceutical Co. Ltd., said they anticipate tepid growth over the next three years, due to an expected three-year price revision for drugs by the Japanese government. However, the company aims to get back on the growth track from fiscal 2019 by getting new drugs to market.

“We are deeply concerned about the Japanese pricing rule which drastically cuts down the drug price simply by the amount of sales,” Chugai’s head of media relations, Koko Harada, told BioWorld Today. Under the Japanese government’s plan, drugs that face cuts in price are those that are selling well.

“It is crucial for pharmaceutical companies to be rewarded adequately for innovation not only to further strengthen the entire Japanese pharmaceutical industry but also for the benefit of Japanese health care,” said Harada. “Our goal is to countermeasure these issues by developing innovative drugs.”

The drugs under development at Chugai include emicizumab and atezolizumab. Emicizumab, which improves clotting functions to reduce bleeding, is currently in global phase III clinical trials.

“The expected filing timeline in Japan is 2017,” said Harada. Atezolizumab, which makes cancer cells vulnerable to the body’s immune system, is being developed with partners including parent company Roche, which owns about 60 percent of Chugai’s outstanding shares.

For the October-December 2015 quarter, Chugai logged ¥500 billion (US$4.2 billion) in sales and an operating profit of ¥87 billion.

Another Japanese firm, Sumitomo Dainippon Pharma Co. Ltd., is struggling at home as sales of established products decreased and sales growth for new drugs disappointed.

In the U.S., however, the company sees promise in Latuda (lurasidone HCl), an antipsychotic agent. Sales of the drug grew 30 percent in the U.S. market last year to $729 million.

“We are on track for sales of more than $1 billion,” said Hiroshi Nomura, senior executive officer, adding that there are challenges ahead for the company as well.

“The external environment has changed since last year. Internally, not all the study results are good, for example, for Latuda and some other products. Because of that, some of our launch plans have been revised. We need to review our plan.”

Nomura did not set a date for announcing any revisions to the company’s plans.

Hiroshi Noguchi, a representative director at Sumitomo Dainippon, said that progress was being made on getting its drugs dasotraline and SUN-101 to market. Dasotraline treats attention deficit and hyperactivity disorder (ADHD); SUN-101, which treats bronchoconstriction in patients with chronic obstructive pulmonary disease, is being developed by subsidiary Sunovion Pharmaceuticals Inc., of Marlborough, Mass.

“The study of SUN-101 is ongoing, and will take some time,” said Noguchi. “But the results should be available in fiscal 2016 . . . perhaps around summer. On dasotraline, the final stages of the study are ongoing; it will take time to announce the results.” Noguchi said that they are unlikely to be announced in the next fiscal year, which ends March 31, 2017.

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