Expectation for innovative drugs R&D in Japan

MHLW’s perspective

Toshihiko TakedaDirector, Economic Affairs Division,

Health Policy Bureau,The Ministry of Health, Labour and Welfare, JAPAN

Feb 26, 2008

Prime Minister Abe’s Policy Address to the Diet (Sep. 29, 2006)

“I will channel in new vitality to the Japanese economy through the power of innovation and openness. Aiming at the creation of the innovation that contribute to the growth, I will have a range of prospects up to 2025 in medicine, engineering, information technology, and a variety of other fields.”

“Public-private dialog for innovative drugs”

MHLW started the Ministers-Industry meeting for ensuring the occasion of communication for creation of innovative drugs between the public and private sectors.

ParticipantsThe Minister for Education, Culture, Sports, Science

and Technology, The Minister for Health, Labour and Welfare, The Minister for Economy, Trade and Industry

Pharmaceutical Industry CEOs(including EFPIA company CEO)

Presidents of Medical Universities and Medical Institutions

Japanese R&D ability is the 3rd in the world

United States39

UK14

Swiss12

France5

Denmark3

Sweden3

Germany3

Other3

Origins of the drug that ranked within top 100 in 2004Source: JPMA, Office of Pharmaceutical Industry Research

Japan13

95

71

54 52

10596

56606043

63

722

500504497

414361

438424463

391406

0

50

100

150

200

250

300

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

0

100

200

300

400

500

600

700

800

Number of Notified Clinical Trials

（Source;：MHLW）

Year

Initial CT notification

CT notification

New GCP promulgation

New GCP Enforcement

Initial CT Notification

CT Notification

CT Activation Plan

Status of launch period in major countries

1,416.9

620.1 583.1 537.9 511.8 504.9

915.1

0

500

1,000

1,500

Japan France Germany Sweden Swiss UK USA

Source：Japan Pharmaceutical Manufacturers Association, Office of Pharmaceutical Industry Research

DAYS

The average delay between world first launch and the launch in each coutries of new drugs is 1,416.9 days in Japan and 504.9 to 915.1 days in other countries.

1) Concentrated Research FinancingPrioritization and expansion of budgets related to the development of pharmaceuticals and medical devices Creation of organizations to moderate the focal R&D by business-academia-government collaborationsDeliberations on the improvement and enhancement of the R&D tax system

2) Nurturing Ventures, etc.Expansion of research fundsMore common use of facilities/equipment, etc.Development of a system to support commercialization, utilization of retired human resources, improvement/ development of hotlines, etc.Deliberation of support for application feesDeliberation on measures to invigorate the delivery of medical device materials/parts

3) Improvement of the Clinical Research/Trial EnvironmentPromotion of international clinical trialsDevelopment of 'medical clusters' that promote clinical and practical research through close cooperation between business, academia and government, primarily centering on the National Center for Advanced and Specialized Medical Care, in order to address conditions that significantly affect the national populace Development of translational research centers, centers for regenerative medicine and the clinical research systemCentralization of clinical trial sites, creation of networks and increased use of IT with a primary focus on the medical clustersDevelopment and securing of physicians as well as HR able to support clinical studiesEfforts to improve the assessment of clinical achievements by physicians, etc.Promotion of rationalization of clinical research regulations

6) Appropriate Assessment of Innovations

Deliberation on more appropriate assessment of innovative pharmaceuticals in relation to the drug pricing system, etc.

4) Collaboration with AsiaPromotion of joint research on important diseases/conditionsJoint research on methods to utilize data gathered in East Asia

Overview of the 5-Year Strategy for the Creation of Innovative Pharmaceuticals and Medical Devices

5) Faster and Better ReviewsShortening of the time to launch a new drug by 2.5 years (elimination drug lag)Doubling in the number of new drug review staff (in 3 years by 236) and improve the review qualityClarification of the ideal review process and review standards as well as improvement of GCP utilizationCreation of guidance on international clinical trials, implementation of a priority clinical trial consultation system Deliberation on the introduction of joint clinical trial consultation by review authorities in Japan, Europe and the U.S. Promotion of clinical trial/research rationalization and simplification, while maintaining the safety of medical devicesExpansion and improvement of medical device review staff Improvement in the operation of medical device GCP

To provide our populace with access to the best

pharmaceuticals/medical devices in the world

To boost the pharmaceutical/medical device industry to become the driving

force of Japan's growthMeasures aiming for development originating in Japan and Japan’s participation in simultaneous

global development

April 2007Ministry of Education, Culture, Sports, Science and Technology, Ministry of Health, Labour and Welfare, Ministry of Economy, Trade and Industry

7) Public-private dialogue Intensified collaboration between related ministries, research institutes and industries

Implementation of regular public-private dialogue

3) Improvement of the Clinical Research/Trial Environment

– Promotion of international clinical trials– Development of 'medical clusters' that promote clinical and

practical research through close cooperation between business, academia and government, primarily centering on the National Center for Advanced and Specialized Medical Care, in order to address conditions that significantly affect the national populace

– Development of translational research centers, centers for regenerative medicine and the clinical research system

– Centralization of clinical trial sites, creation of networks and increased use of IT with a primary focus on the medical clusters

– Development and securing of physicians as well as HR able to support clinical studies

– Efforts to improve the assessment of clinical achievements by physicians, etc.

– Promotion of rationalization of clinical research regulations

5) Faster and Better Reviews

– Shortening of the time to launch a new drug by 2.5 years(elimination drug lag)

– Doubling in the number of new drug review staff (in 3 years by 236) and improve the review quality

– Clarification of the ideal review process and review standards as well as improvement of GCP utilization

– Creation of guidance on international clinical trials, implementation of a priority clinical trial consultation system

– Deliberation on the introduction of joint clinical trial consultation by review authorities in Japan, Europe and the U.S.

– Promotion of clinical trial/research rationalization and simplification, while maintaining the safety of medical devices

– Expansion and improvement of medical device review staff– Improvement in the operation of medical device GCP

6) Appropriate Assessment of Innovations

- Deliberation on more appropriate assessment of innovative pharmaceuticals in relation to the drug pricing system, etc.

（２） Human Resource Development for Clinical Research

（３） Public Promotion of Clinical Trial and Encouraging Participation

10 Centers of Excellence that are able to plan and manage multi-center trials30 Core Trial Centers that are able to perform trials smoothly

training provision for MDs、CRCs、Bio-statisticians、Data managers, etc.

improve patient volunteers’ ease to participate in trialsimprove patient’s incentive to participate in trials

（５） Othersreview GCP Ordinance and Clinical Research Guideline for international

harmonization and patient protection

（４） Efficient clinical research management and sponsors’ ease

harmonize administrative document formatsstreamline administrative work share between hospitals and sponsorsimprove transparency of hospitals’ research capacity

New 5 Yearly Clinical Trial Activation Plan MEXT / MHLW

March 2007

（１） Clinical Study Infrastructure Building

Centers of Excellence (COEs) and Core Trial Centers (CTCs) System

Assign intensive human resources for clinical research to 40 COEs and CTCs 40 to intensify technologies and to train staff

In collaboration with 8 TR centers designated by MEXT, create nation wide system to perform international trials efficiently and rapidly

Performance metrics are introduced (COEs & CTCs) to assess improvement over 5 years period （examples）

・ Period of administrative procedure・ Cost to be paid based on contract･ IT platform for CRF･ Common Document format introduction･ Number of clinical papers･ Number of visit required for sponsor to contract

According to New 5 Yearly Clinical Trial Activation Plan, the conference was set up to promote communication and consolidation among COEs, CTCs and other related organizations.

COEs CTCsTR

centers

Reps. & working level participants

（Secretariat）MHLW R&D Division（Participating Agencies）

MHLW National Hosp. Div.MEXT Medical Education Div.MEXT Life Science Div.

【Agenda】

・Updates of each institution

・Challenges to implement 5 yearly plan

･Others

Conference of Clinical Research Institutions治験中核病院・拠点医療機関等協議会

(Collaboration org.)・Japan Medical Association CCT・Japan Pharmaceutical Manufacturers Assoc.・Federation of Japan Medical Devices Assocoations.

Human Resource Development for Clinical Trials

Proper Job Treatment・ Rewarding salary for clinical research

Proper evaluation of clinical research

• Take into account of difficulties (to be a first authorship, to earn numbers of papers)

• Take into account of achievements with research public grant and CTs

MHLW、MEXT & other professional society convene one-week training course

Salary levels are often defined to the level of co-medical qualification, such as pharmacist or nurse, not necessarily depending on individual capability

5,000 Clinical Research Coordinators completed Training Course(1998-2006)

・Human Resource Development for CRCsTrial Supporting S

taffC

linical Researchers

・ Few chances of training for MDsKyoto Univ. (Master for Clinical Research Course), Centers of Excellence (Keio Univ., Kitasato Univ., National Cancer Centers)

・Lower job incentives for MDs to be clinical researchers

Lack of career ladder model Lack of appreciation

Career Ladder Development• securing research job for clinical

researchers at Centers of Excellence

• Human resource exchange between PMDA and clinical institutions (better treatment for ex-reviewers of PMDA)

• MD-PhD course development

• Support Master course for clinical research

Lower job incentive for staying as CRCs

Motivation!!

〈Present〉 〈Challenge〉

○Train human resources in-house and in the institutions in the net work○ Strengthen IRB capacity○ Consolidate data management system○ Plan, Do, Assess clinical research

Core

COE

FY 2007 Budget for Clinical Trial Activation

Institutions to be supported（competitive application）

○ Promote trials of new drugs/devices to satisfy medical need in Japan

○ Promote international multi-centered trials to ensure timely access of patients Alliance with related trial

sites and accumulate trial subjects

Goal

Ensure timely access to new drug from clinical trial stage（satisfy unmet needs）

Promote innovation of new drug

○Secure Recruiting CRCs and other trial supporting staff

○ Support promotion of common IT plat home

Timely introduction of innovative and safe drug and devices to the patients and public

Expedite trial performance

Total 750M¥/year

Improving infrastructure

Core

COE

Networking core and major clinical trial sites

Institutional reinforcement of staff and IT environment to support trials

Build site networking to accumulate subjects →cost down and speed-up

Centers of Excellence 10

Core Trial Centers 30

total 1,000M¥/year

10 Centers of Excellence30 Core Trial Centers

Train and secure clinical research staff• In addition to Training Courses for Beginner CRCs, those

for advanced CRCs, Local Data Managers & IRB members are newly launched.

• Developing and operating the portal site for clinical trial data bases on the website of National Institute of Public Health.

• Disclosing information on CCRC & MTI (e.g., number of research staffs, trial results, frequency of IRB.)

Enlighten public & promotion of volunteer for clinical trials

Improve efficiency of trial operation & lighten sponsors’ burdens

・ Uniforming documents’format used in clinical trials, etc.

Action plan (5 Yearly Activation Plan )

Research Grant adapted to clinical research

• Long term research grant for clinical trials; ex. 5 years period

• Appropriate screening/review system• Lift limitation to outsourcing activities

(monitoring, subject enrollment) • Allow expenditure for Consultation for protocol

development & data analysis

Other Promotional Measures

IT infrastructure and standardization

• System harmonisation for efficient exchange of Clinical Reporting Forms and other data among institutions (completed among COEs & CTCs network in Dec. 2007)

• IT infrastructure platform development for medical infoirmation

Public research grant should be adapted to clinical research

Short grant terms

Limitation of expenditure

Not adequate support for clinical research centers

Belated IT infrastructure

〈Present〉

〈Challenges〉

Problems

Hosp.

Clinical research beds

Facility/equipment

Collaborative lab. for companies

Accelerate innovative clinical research with industry

Common use of facility & equipment necessary for drug production, tissue engineering, other experiments and analysis

Collaborative R&D among medical, industry & academia (bed side development of innovative product)

Clinical research staff, research coordinators, technicians, IP experts, Regulatory professionals

1. Close medical collaboration with industry/academia to promote clinical research and study○ Promote industrial R&D based on medical needs

○ Develop innovative products through clinical application

○ Apply innovative technology to early phase clinical research

○ Share technology and train human resources through collaborative research

2. Activation of industry environment by promoting collaboration with biotech companies○ Provide functions for biotech company incubation

Total R&D capacity building for innovation

Mechanisms to provide innovative seedsClinical/industry collaborationAnticipation

National Medical Centres etc.

５

Medical Research Cluster Project（NEW）FY2008 Budget request 18.00M$

4 centres from FY2008

Main Points of New Drug Industry Vision

• Research trends in life sciences • Further globalization• Increase in M & A• Expansion of related industries

Changes in environment

ChallengesO No increase in global competitiveness O Global competitiveness of drug discovery

environment and market per se (=globalattractiveness) also on the decline

critical situation

Drug Industry - Realities and challenges

Vision of Industry and Measures for Government Implementation (Action Plan)

Vision of industry10 years on

Action Plan< 5-Year Intensive

Period >(2007 ~ 2011)

Follow-up of measures

‘Public-Private Dialogue for

Innovative Drug Discovery’

Vision of Pharmaceutical ManufacturersOn the basis of drug cost increases in line with national healthcare expenditure, in 2015 and 2025 the future drug market could respectively be 1.3 times and 1.7 times that of 2005 .

Ongoing new drug development, innovation, efforts at global expansion are required for the drug industry to keep up with this rate of increase

Given industry progress in line with the ‘5-Year Strategy for the Creation of Innovative Drugs and Medical Devices’, Japan too could easily become a new drug development base alongside Europe and the US

Ongoing new drug development, innovation, global expansion require

a certain corporate scale

There are limits to the conventionalglobal mega-pharma model (repeat mergers,

concentration on development of major products)

New stage of global competitionCompetitive Industry

At least 1/4 ~ 1/3 of new active ingredientsfrom Japan is not impossible !

１． Appropriate evaluation of innovative drugsRaise in major premiums.

２． Change in the comparator pricing methodComparative drug will be chosen among patented drugs which is within ten

years in sales since their first launch.

3. Changes in the cost calculation methodIn calculation method, profit rate will be average profit rate (currently 19.2%)

plus or minus 10% point

Before 2002Reform

After 2002Reform

Reform in 2006

Reform in 2008

Innovation premium ４０％ ４０～１００％ ５０～１００％ ７０～１２０％

Usefulness premium（Ⅰ）

１０％ １５～３０％ ２５～４０％ ３５～６０％

Usefulness premium（Ⅱ）

３％ ５～１０％ ５～２０％ ５～３０％

Pediatrics premium － － ３～１０％ ５～２０％

Evaluation of innovation in the drug price system reform in FY 2008