COMMENTARY

Pharmaceutical Partnerships in Japanfor Regulatory and Commercial SuccessDoug Berger, M.D., Ph.D.
Modern pharmaceutical drug development
and commercialization is more and more
dependent on sharing of technology and infrastructure. Partnering is often key forsmall-to-midsize global pharma companies
who do not have a development or commercial organization in Japan as well as for
local Japan pharma who would like to tap
into the global flow of innovation to keepcompetitive on their home turf.
What are some of the fundamentals for aforeign firm to keep in mind in partnering inJapan?
* First, “do no harm”. Confirm that the global productfranchise will not be harmed by safety issues or efficacy
positioning in Japan. Make sure you understand theway adverse events are reported in Japan, and what
other products or medical practice in Japan might put
you at a disadvantage. Have your global safety teamwork closely with the local safety function founded on asafety data exchange agreement.
* Be clear on the type of quid pro quo you wantfrom the relationship. If you want to use the partnershipto help you create a development group by gaining experience in the development of the product, understandthat only the local company will be the sponsor of thestudy unless you have a corporation set up in Japan witha complex infrastructure for safety reporting (both cosponsors need to make and submit the same report witha different electronic signature to the Authority), or you
are willing to pay a CRO handsomely for this service inorder to be co-sponsors.
* If you don’t participate in the clinical development, the key opinion leaders will not see your company as having expertise in the product and therapeuticarea. The clinical development will take a number ofyears and will be the cornerstone for the commercialization phase. If you are really in for the long-run inJapan, then get the buy-in from your Japanese partner’s
development group for some form of co-development
before you sign the licensing agreement. If you don’t
want to go all the way to do co-development, be sure
you specify what kind of joint governance you will request; what kinds of committees will make decisions,
who will be represented in regulatory meetings, whatand when are the requirements for reporting of specificregulatory events, etc.
* What will the dynamics of commercialization
become? You may want the branding of your productto be the trusted name of the local partner; or you may
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want to begin to develop your reputation.
If you really think you have the expertise
and want to translate this into commercial
infrastructure then get the buy-in of yourpartner that it is in their interest to have yourhelp in a 1-brand 2-channel scheme.
* Think out-of-the-box. Only the sponsor company of a trial can have its nameon the protocol and say they are doing thedevelopment vis-à-vis the medical community. If you don’t want to invest in a development group to start you might make a
joint venture for that product, or have your staff seconded to the local partner with business cards that haveboth company’s names. You don’t have to be the sponsor to put on educational seminars for the physicians inJapan or in your home country.
* Engage your partner for the future. Develop
close personal relationships and try to cultivate them tobe partners for future indications and products. Often
the foreign company is confused why their local partner
does not request things that seem “rational” to the Authority. Remember that local companies have a numberof products in development discussions with the authorities in Japan at any one time. They will not likely wantto sacrifice their relationship with the Authority to argue
for some special consideration for your product. Respect this, but at the same time try to engage them in alonger-term relationship that will increase the weight they
will put on your product’s success.
Trouble Shooting Examples (actual cases):
1. You get in the middle of a local turf battle. One
day you find that you have two partnerships in competition in Japan because of global licensing arrangementsthat took precedence.
Think out-of-the-box. Can you bring these competitors together to join marketing forces and expand themarket? Even if one is the market leader in sales volume, this can be a commercial win-win situation, but it
is not an easy pill to swallow for the runner-up partner.
2. Friendly fire becomes enemy fire. In the development phase you and your partner were comrades inarms in getting the drug on the market, but now yoursales force competes with theirs in a 2-brand 2-channel
scheme where your partner does not gain sales from thepromotion of your product.
Your local partner will usually have the larger salesforce. Try to join forces to expand the market even if itmeans helping your former comrade sell more.
PHARMA JAPAN 2096/June 30, 2008

COMMENTARY
3. Your follower compound cannibalizes your leadcompound. Your lead compound is licensed-out topartner A. Your similar follower compound is licensedout a number of years later to partner B for additional
but related indications. The new compound is promoted
both globally and in Japan as superior to the old compound in part because of patent expiry concerns about
the older compound. Partner B’s compound then cannibalizes partner A’s compound when it hits the market.
Don’t let this happen to begin with. Try to help yourfirst partner license-in the follower even if you need tohelp them with front loading costs for a return on investment later. Value your reputation in Japan.
4. Your product is a blockbuster globally but yourpartner is reluctant to push it. The product got caught
in the fire of safety concerns with a similar class of products many years ago and only in Japan. After a number

PHARMA JAPAN 2096/June 30, 2008of years and millions of patients use globally you push
your partner on the rationale to redevelop it but theyresist. They prefer to continue sales of an older but
successful product you licensed to them claiming thatpushing the Authority may lead to the “fire of safety concerns jumping” from the new and unused product to all
drugs for that indication.
You may be able to buy the product back, but heed
the warnings of your partner carefully; the Authority inJapan almost never rescinds a prior safety warning.
Doug Berger, M.D., Ph.D. and Associates
Japan Pharmaceutical Consultants.
www.japanpsychiatrist.com/DrugDev.html
Dr Berger has worked on the clinical and business development of a wide variety of products in Japan overmany years.

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