Strong IP Waiver Opposition
BY IAN HAYDOCK
Three groups representing the domestic and multinational research-based pharma industry in Japan present a unified position as they call for policy changes they see as providing the right environment for investment, innovation and a sustainable healthcare system.
As discussions around an updated government policy road map for the sector begin, the three main groups representing the innovative pharma industry in Japan have presented a united front in again calling for reforms to the country’s drug pricing and wider healthcare system.
The joint wish list puts the greatest emphasis on the creation and maintenance of an operating environment conducive to investment in innovation and broader reforms to realize efficiencies and cost savings in the health system besides regular drug price cuts.
The three groups – JPMA, PhRMA and EFPIA – had individually covered much of the ground they went over in an evening online media conference in Tokyo, held shortly after the latest in a series of “Kanmin Taiwa” (public-private dialog) meetings with the government over industry-related issues.
But it was significant for them to come together at a time when Japan is seen by the research sector as continuing a string of policy changes over the past few years detrimental to companies’ propensity to invest in bringing new drugs to the Japanese market, given what they view as increasingly uncertain commercial returns.
They said changes are needed to ensure Japanese patients’ access to effective new therapies and the realization of the wider economic benefits associated with a strong healthcare system amid a rapidly aging society. For multinationals at least, one challenge is to ensure Japan remains firmly on headquarters’ radars, particularly amid the rapid growth and positive regulatory changes that have taken place in China.
The groups repeated their mantra that policy predictability and stability are prerequisites, especially around reimbursement pricing under the national health insurance system.
While dialog around the industry road map is welcome, the industry groups have long been calling for holistic healthcare reform discussions involving all stakeholders, including patient groups, but were given just three minutes to state their positions at the recent dialog session.
Kicking off proceedings, the president of the Japan Pharmaceutical Manufacturers’ Association, George Nakayama, again called for the reintroduction of the price maintenance premium (PMP) system. Introduced on a trial basis in April 2010, this originally exempted all new drugs from Japan’s regular biennial price cuts until patent expiry, effectively maintaining initial reimbursement prices.
However, changes made in April 2018 significantly narrowed the scope for eligibility, limited the premium to only the first three best- or first-in-class products or similar products launched within three years, and adopted a new “company scoring” system to decide eligibility.
In addition, there was a shift towards annual (rather than the regular biennial) regular price revisions based on actual market prices, expanded repricing of big-selling drugs, and the adoption of a trial cost-effectiveness assessment scheme. The first of the “off-year” reductions was implemented this April.
Nakayama, a former CEO of Daiichi Sankyo Co., Ltd., said the PMP system had been highly effective in helping overcome the lag in development and approvals in Japan versus other major markets, as it provided an attractive pricing incentive to developers. Since the loss of the scheme, it has become “more difficult to recoup investment during the patent period.”
The benefits of the PMP program were also borne out by hard data presented by EFPIA (the European Federation of Pharmaceutical Industries and Associations) in 2019, showing the median delay in approval applications in Japan had fallen by more than 36 months. (Also see "EFPIA Wants Continued And More Inclusive Japan Policy Dialog" - Pink Sheet, 27 Sep, 2019.)
Heike Prinz, chairperson of EFPIA’s Japan arm, was of the view that “Japan must be positioned as a priority market by headquarters” but stressed the European group is “seriously concerned” about declining investment due to what it sees as a deteriorating policy environment.
Prinz pointed not only to the loss of the PMP but to other repeated pricing policy changes, and the often short lead times for these. The start of off-year annual price adjustments “is of great concern,” particularly as the cuts are targeting a broader range of products.
The right balance is needed in any new program of reforms, given these have long focused on the reduction of drug costs, even though these are “are actually well under control” and account for only around 20% of Japan’s total healthcare costs, observed Prinz, president and CEO of Bayer Yakuhin Ltd. in Japan.
“There is also a need to look at the remaining 80% for efficiencies,” she told the meeting, a view echoed by James Feliciano, chairman of the Pharmaceutical Research and Manufacturers of America’s (PhRMA) Japan-based executive committee.
He observed that fully 78% of the savings to the Japanese health system over the past six years had come solely from drug price cuts.
The three groups did not provide detailed suggestions for how savings elsewhere in the system could be realized but Feliciano, who is country president of AbbVie Inc., touched on the adoption of new technologies, digital approaches and use of over-the-counter products where appropriate.
Japan’s clinical data requirements and regulatory processes have come under a renewed spotlight because of the slow approval and roll-out of COVID-19 vaccines, due in part to the need to conduct local studies and go through standard (albeit expedited) regulatory procedures.
Around other topics, Nakayama touched on the vaccine situation in Japan – which has been slow to approve and roll-out coronavirus vaccines - by noting that the country did already possess expertise in mRNA even before the pandemic. (Also see "Japan Approves First Coronavirus Vaccine But Hurdles Ahead?" - Scrip, 16 Feb, 2021.)
As of the date of the briefing (17 May), only one vaccine (from Pfizer Inc./BioNTech SE) had been approved in Japan, which has just started inoculating the over-65 age group (following healthcare and other priority workers) and has so far given first jabs to only around 3% of its population.
This is the lowest within the OECD countries and compares with the roughly 30% that are already fully vaccinated with second doses in the UK.
Prinz pointed to a need to improve trial costs and processes around multinational clinical trials in Japan, and for local trial centers to remain competitive given the rising challenges from the rest of Asia.
“There is still a requirement for data in Japanese patients,” she noted, calling for better use and acceptance of data from other Asian countries and elsewhere.
In his remarks, Nakayama pointed to a related need for more comprehensive genomic data, citing the Genomics England initiative, a government-owned company set up to sequence the genomes of 100,000 NHS patients with rare or infectious diseases or cancer.
While there are already several such initiatives underway in Japan, Nakayama said these would help better elucidate any differences in the Japanese population that could inform policies on the need to assess racial differences in clinical development programs and the regulatory system.
Amid the global debate on the waiver of intellectual property related to COVID-19 vaccines prosed by the Biden Administration, the JPMA’s position is that further expansion in production capacity at existing manufacturers is the best and fastest way of addressing shortages and ramping up global supplies.
Nakayama said the Japanese association is “seriously concerned” about the idea, which remains to be discussed at the World Trade Organization. “It will not lead to third parties manufacturing an equivalent high-quality and effective product,” he warned, “and may actively delay supplies and so would not be solution to the global vaccine shortage.”
If “copy” vaccines were allowed by reducing IP protections, additional clinical trials would be required to confirm the safety/efficacy of these, given that they would be similar only and not exact copies. “This would prove more time-consuming in the end,” the association head said.
EFPIA’s Prinz concurred, saying the waiver would mean “a diversion of resources to less efficient supply chains.” (Also see "Biden’s Vaccine Donation Plan Emphasizes American Production, Not IP Waivers" - Pink Sheet, 17 May, 2021.)
In a panel discussion at the briefing, Nakayama also cautioned that “another pandemic is sure to come”, while antimicrobial resistance is increasing. “The best thing is to prepare during normal times by supporting innovation and R&D, rather than reacting to a crisis.”
Prinz highlighted the multiple cross-border collaborations there had been by European vaccine developers, with the pandemic showing that much of the innovation around vaccines has come from smaller biotech companies (such as BioNTech).
“We need an EUA type of system in Japan to support faster approvals.”
Pharma Power Japan Barely In COVID Vaccines Race. Why?
Despite having multiple world-class pharma companies and innovative research, Japan is notably absent as a source of candidate vaccines for the coronavirus. The pandemic is again throwing into sharp relief past and present challenges around the country's vaccines sector.
Japan has one of the largest single-country pharma markets in the world, a handful of major R&D-based companies with multiple innovative drugs sold around the globe, and a record of innovation that stretches back decades and includes multiple blockbusters.
So why, as the first approvals for other developers start to come through globally, is the country barely moving the needle when it comes to coronavirus vaccine activity?
The answers are multiple and complex.
First of all a quick snapshot of where the supply situation stands. Of the nearly 120 vaccines against COVID-19 which Biomedtracker shows are currently in global development, only one from Japan is at present among the just over 50 already in the clinic.
If it were relying solely on domestically developed and manufactured candidates to protect its citizens, it would probably be well into 2022 until the country’s first inoculations become available, and then only in limited quantities.
Correctly judging this is unacceptable to the majority of the public wanting their lives to get back to normal – and probably with an eye on moving ahead with the delayed Olympics next year - the national government has turned instead to the now well-known major international developers. Pfizer Inc./BioNTech SE, AstraZeneca PLC/University of Oxford and Moderna, Inc. have already contracted to supply doses sufficient to cover Japan’s 126 million population.
The first two have signed up for a total of 240 million doses, while Japan’s leading pharma firm Takeda Pharmaceutical Co. Ltd. – which itself has long-standing vaccine experience - will distribute 50 million doses of Moderna’s mRNA vaccine mRNA-1273, starting in the first half of 2021, with the US firm to make the finished product.
It currently looks like doses of the Pfizer/BioNTech vaccine BNT162b2 for 60 million people will be supplied by the end of next June, helped by results from a 160-patient confirmatory trial being run by Pfizer in Japan. AZ started back in August a similar 250-patient local trial to support its candidate.
That same month, Takeda also reached an alliance with Novavax, Inc. for the clinical development, manufacturing and commercialization in Japan of NVX-CoV2373, Novavax’s COVID-19 vaccine candidate, with funding from the Ministry of Health, Labour and Welfare. The aim is to build capacity for over 250 million doses of the vaccine per year.
Another major Japanese firm that has long been present in the sector, Daiichi Sankyo Co., Ltd., began discussions with AZ in June for the “stable supply” in Japan of the UK firm’s recombinant adenovirus vector vaccine AZD1222. Its Daiichi Sankyo Biotech subsidiary intends to formulate the product for Japan, using its existing flu vaccine facilities.
In all, Japan has set aside a total of JPY671.4bn ($6.44bn) in an extraordinary budget for its coronavirus vaccine supply program, and under a special bill passed in late October revising the existing vaccines law, the jabs will be made available at no out-of-pocket cost to all recipients, with the usual prioritizations.
In echoes of the country’s past experiences with vaccines, the government has also agreed to indemnify suppliers from having to pay compensation from any adverse effects proven to be related to the vaccines.
So, there may be plenty of activity around securing supplies, but this exclusively relies on foreign originators.
Leading the modest R&D efforts underway at home is mid-sized biotech Anges, Inc., which joined the development fray early after the pandemic took hold but only just started in early December a 500-patient Japanese Phase II/III trial with its plasmid DNA-based candidate, currently expected to be completed next March.
The company is partnering with Osaka University and Japanese biotech group Takara Bio Inc., along with Brickell Biotech, Inc. of the US, but a larger Phase III trial is expected to start only next year, with Anges saying recently it will probably have to include other Asian sites given a likely lack of enrollees at home. The first late-stage data will probably not emerge until calendar Q3 of next year.
The other R&D players include Daiichi Sankyo, which has said it prioritizing work on a prototype mRNA vaccine DS-5670 in an alliance with the University of Tokyo and the Japan Agency for Medical Research and Development (AMED), making use of the company’s proprietary nucleic acid delivery technology. In this case, the current expectation is to move into clinical studies in Japan around March 2021.
Shionogi & Co. Ltd. has also said it is moving ahead with the development of potential coronavirus vaccines and is working with acquired Japanese vaccines venture UMN Pharma, Inc. on an rDNA candidate using a baculovirus expression vector system. This is currently expected to emerge with supporting clinical data in the first half of next year.
The only other runner appears to be Meiji Holdings’ KM Biologics operation, which has said it has started work on an inactivated vaccine with several partners, including the National Institute of Infectious Diseases, and plans to launch large trials around next spring. KM took over certain pharma operations of Japan’s Chemo-Sero-Therapeutic Research Institute (Kaketsuken) and has been focusing on flu vaccines.
Takeda, which has a long-standing presence in basic vaccines in Japan, does now see novel vaccines as a business pillar and is nearing the first filings for its novel dengue candidate TAK-003. It is also working with Zydus Cadila on a chikungunya vaccine and given the Indian firm has completed Phase II dosing for its own DNA COVID-19 vaccine, any expansion of this alliance is also being watched.
It is therefore clear that, while there is some R&D activity going on in Japan, the original research (as opposed to supply alliances) remains very limited in scale and is occurring on timelines well behind those of both the major western developers and the multiple Chinese firms already forging ahead with final-stage trials.
One limiting factor has certainly been trial recruitment challenges due to the relative lack of COVID-19 patients in Japan - something cited both by Anges in deciding to expand its Phase III program outside the country and by Fujifilm in the delays of local trials with its antiviral favipiravir earlier this year.
(There had been around 179,900 reported SARS-CoV-2 cases in Japan as of mid-December, and the per capita infections and death rates remain lower than many other major countries.)
But set against this, there are very few hurdles on the regulatory side, as Japan’s drugs regulator, the PMDA, the health ministry and AMED have all been publicly and highly supportive of research. Concrete evidence of this came in the expedited approval given earlier this year to Gilead Sciences, Inc.’s antiviral remdesivir, which was reviewed and cleared in a matter of days.
Other state funding (besides for the big supply deals) has also been readily available and used to support technology transfers, establish cold chain infrastructure and scale-up manufacturing capabilities.
A deeper look reveals long-standing historical and policy factors that have hampered Japan’s overall capacity for developing and commercializing innovative vaccines, and which are again showing up amid the pandemic.
Critics have long seen the country’s smaller domestic manufacturers as being protected from competition by the government’s reluctance to pursue imports of basic vaccines, enabling them effectively to rely on regular supplies of older products to national immunization programs. This in turn can be said to have stunted the development of innovative platform technology.
There have been attempts to form new entities, notably the 2012 agreement between GlaxoSmithKline plc and Daiichi Sankyo to form the Japan Vaccine Co. Ltd. joint venture. But this was dissolved around two years ago and its commercial activities moved back to the respective companies in April 2019, in light of what the partners said were “changes in the Japan vaccine business situation.”
Meanwhile, the national program itself, first developed post-war in the late 1940s, has long been seen as comprising a much more limited range of vaccines versus other developed countries - again effectively limiting the development of general capabilities and capacity in the national vaccines sector.
Haemophilus influenzae type B (Hib) vaccines, for example, began to be routinely made available in Japan as late as 2008, and then only after a long battle faced by Sanofi Pasteur as the first foreign vaccine supplier in the country, and with the products available initially only on the private (self-pay) market.
Despite some improvements in the scope of available and reimbursed vaccines in the years since, the “vaccine gap” in Japan, as illustrated by the Hib case, and challenges in securing reimbursement under the National Health Insurance scheme, continue to be long-standing concerns for the big multinational vaccines producers.
An apparent policy de-emphasis within the government of vaccines in general also seems to have been related to a number of successful and high-profile public lawsuits brought against the state in the 1990s, over claimed side-effects from MMR (measles, mumps and rubella) vaccines.
In addition, compensation claims related to Japan’s high rate of hepatitis infections - attributed in part to the re-use of needles in post-war mass vaccination campaigns – provides another background factor.
Considering this history, perhaps it’s not surprising that government policy and administrative support in recent years has pivoted much more towards regenerative medicine and cell therapies, notably those related to induced pluripotent stem (iPS) cells following the Nobel Prize win in 2012 by pioneer Shinya Yamanaka.
Besides these factors influencing the development and capabilities of the industry – and as now reflected in the current state of play on coronavirus vaccines - other historical factors may be behind the Japanese public’s sometime skeptical views on, and willingness to receive, vaccines in general.
A 1994 revision to the Preventative Vaccine Law made many jabs voluntary rather than compulsory, meaning that younger generations may have become less familiar with the concept of inoculation than their parents.
The many parents who have experienced the complicated, multi-dose and multi-visit schedule required for the inoculations required by law for newborns under the age of one may have been put off in general, especially as catch-ups outside this schedule must be paid out-of-pocket. (One reason for the demanding schedule was the lack of combination vaccines common elsewhere.)
Relatively recently, in 2013, there were other high-profile cases, covered extensively in the national mass media, of unexplained side-effects recipients and their families said were linked to the administration of the then new to Japan human papillomavirus vaccines Cervarix (from GSK) and Gardasil (Merck & Co., Inc.).
The general pain syndrome was investigated by the PMDA, which said it was of unclear pathogenesis but that a link with the vaccines could not be ruled out. What is clear is that the cases did nothing to reassure an already cautious public.
Whether these hesitancy factors will play out for the new COVID-19 vaccines, despite the promised zero out-of-pocket cost, remains to be seen.