Roger Graham, senior vice-president of sales and marketing; Akihiko Matsubara, president; and Robert Desjardins, MD, president
of research and development, converse in the courtyard of their new Paramus, New Jersey facility.
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Paramus Road in New Jersey is a construction zone, filled with cars edging their way past lots slated for shopping plazas,
food joints, and industrial office parks. Along that thoroughfare-near small pharma companies like Faulding and Synaptic and
just a few miles away from Roche-lies Yama-nouchi Pharma America (YPA). Like the environment unfolding around it, YPA is in
the process of becoming.
The company now occupies several floors of a new building, a substantial expansion from one year ago. Weekly management meetings
have given way to daily updates informing executives of the company's latest marketing and execution plans. Industry analysts
from Merrill Lynch, Datamonitor, and Decision Resources, among others, have already published their predictions for competitive
sales.
That is a snapshot of a pharma company in waiting. Having submitted their first new drug application (NDA) to FDA for the
investigational compound YM905, also known as Vesicare (solifenacin), a product to treat overactive bladder, YPA executives
are gearing up for the agency's decision.
At a Glance
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"We're moving full speed ahead with prelaunch preparations," says Roger Graham, YPA senior vice-president of marketing and
sales. "We're excited about the compound and energized by the opportunity. And we don't expect good things-we expect great
things."
Vesicare may be at the crux of Yamanouchi's US expansion plans, but gaining FDA approval for the product is only the first
step.
"The move to contain drug prices in Japan and the strengthening of US and European firms have made the Japanese pharmaceutical
market increasingly competitive," says Akihiko Matsubara, YPA president. "In such a climate, Japanese companies need to capitalize
on global opportunities." Matsubara points out that the course Yamanouchi took, like other Japanese pharma companies before
it, was to establish an independent US marketing and sales organization that allowed for continued growth. By doing so, Yamanouchi
can:
- gain US marketing experience so it can one day market its products without splitting profits with licensing partners
- increase returns on its R&D investments because it will have a US infrastructure from which to launch additional products
- reduce its reliance on the Japanese market
- be considered a global company.
"There is more out there than just marketing in Japan," says Michael Ferguson, a senior analyst specializing in Japanese pharmaceuticals
and biotechnology for Wood Mackenzie. "Japanese companies must sell products in all markets. Global companies have special
opportunities. They are likely to attract more successful products and partners and, by doing that, make more money and profit."
Akihiko Matsubara
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Yamanouchi is not the first Japanese company to set up shop in the United States, but the establishment of its US subsidiary
exemplifies the wider reality of Japanese pharma companies' flight to globalization. However, it learned some lessons from
the companies that came before it, like Fujisawa, Eisai, Sankyo, and Takeda.
"It's interesting that Yamanouchi is going at it alone and not relying on partners," says Joanna Lawrence, a Datamonitor healthcare
analyst. "By forming their own company, they can get the maximum sales profits from every product."
Yamanouchi is similar to other Japanese companies in that it will try to use globalization to carve its way out of the increasingly
hostile Japanese market.
Projected Growth rates, a comparison
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Threatened on Their Own Ground
It used to be easy to run a pharma company in Japan. Before 1983, the Japanese government prohibited foreign companies from
filing new drug applications unless they had a Japanese partner.
"That meant Japanese pharma companies had a conveyor belt of innovative drugs coming in from Western companies to be co-marketed,"
says Ferguson. "They didn't need to sell anywhere else because they were doing nicely."
Groomed by government, the Japanese pharma industry thrived in a system that favored domestic producers, placed enormous emphasis
on safety-sometimes at the expense of efficacy-and, because the government-run National Health Insurance (NHI) picks up the
healthcare tab for the entire population, kept companies insulated from the demands of the market. "Those factors combined
to create an uncompetitive industry," says Todd Clark, president of VOI Consulting and editor of the Pharma Handbook: A Guide
to the International Pharmaceutical Industry.
But megamergers and generic competition spurred western pharma companies' drive for profitability, and they clamored for Japan,
the second largest pharma market, to let them in. With an economic recession in full spate, the Japanese government agreed
to repeal many of its protective restrictions on industry to bring investment into the country from outside, says Clark.
Robert Desjardins, MD
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The Japanese Ministry of Health, Labour, and Welfare reduced the review time for new drug approvals to 12 months. In addition,
it adopted the International Conference on Harmonization (ICH) guidelines in 1998. Under the old rules, companies had to fully
repeat clinical trials with Japanese patients-a major barrier to entry that kept brands like Tylenol out of Japan until very
recently. ICH allowed researchers to use some data from clinical trials conducted in other parts of the world in the Japanese
approval process. Pharma companies needed only to complete a bridging study that showed that the product worked in the population.
"In the early days of ICH, the attitude in the United States and Europe was very skeptical," says Robert Desjardins, MD, president
of YPA's R&D. "We thought, 'There is no way they can implement this stuff. It's going to be hard enough to harmonize Europe
and the United States. There's no way we can harmonize Japan.'
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