Global Warming - Pharmaceutical Executive

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Global Warming
The Japanese Pharma League has spent almost $50 billion in a whirlwind year of foreign deals. But as the case of Astellas illustrates, becoming a global player in a game of catch-up will cost more than just money


Pharmaceutical Executive


Coming of Age

But there's more to going global than buying biotechs, as Astellas showed by moving its global development headquarters to North Deerfield, IL, the old Fujisawa US base. "It was critical [for us to] get to the major pharmaceutical market in the world," says Fitzsimmons. "We also did it to have closer relationships with FDA, to tap into US and European talent, and to build on our two decades of infrastructure here."

In the 1980s, Fujisawa was the first Japanese pharma to have a small top-to-bottom organization (R&D, sales, legal, compliance) in the US, according to Morrison & Foerster's Michael Braun, who did legal work for the company. "Basically, the Japanese companies did not have the confidence that they could establish infrastructure in the US to compete adequately."

As a result, they depended on the sales muscle of US pharmas to market their drugs—an arrangement that proved incredibly lucrative for the Americans. For example, in the early '70s, a Japanese team at Sankyo made one of the industry's most profitable discoveries: the $26 billion statin class. To sell their statins in the US, Sanyko and Shionogi used the marketing clout of Bristol-Myers Squibb and AstraZeneca, respectively, and were content to pocket a small percentage of the profits. Under similar agreements, Takeda's Actos (the top-selling diabetes drug) is copromoted by Eli Lilly, and Otsuka's Abilify (for schizophrenia) is copromoted by BMS.

"Until recently, they were satisfied to take the proverbial 10 percent and leave the rest to the Western companies doing the selling," says IMS's Hill. "There was no pressure. They just focused on their home market and thought, 'The US market is too different—we can't figure it out.'"

But now there is pressure. "There has been a definite change in the Japanese companies' involvement in the copromotion of their products," says Frost & Sullivan's Daniel Ruppar. "They are now interested in having more control over their products and building up sales forces."

That's why it was so significant when Takeda announced in March that it was ending its involvement in TAP Pharmaceuticals, the company's 30-plus-year-old joint venture with Abbott, widely viewed as one of the most successful joint ventures in US business history. TAP's end symbolizes for many the end of Japanese pharmas' dependence on US multinationals.

"The Japanese companies are coming of age," says Morrison & Foerster's Mark Wicker. "They're announcing that they can and will compete in the world market by selling their drugs themselves rather than relying on Western companies."


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