OUR TOBACCO BUSINESSIn our pharmaceutical business, we aim to deliver innovative
drugs to patients safely, securely, and in the shortest timepossible. As this business has a direct impact on human healthand life, we not only strictly comply with all laws, regulations,and industry codes, but are also guided by a strong sense ofethics and responsibility. This is particularly the case in areas
such as clinical trials and promoting drugs, as well as animal
testing and managing chemical substances.
While JT focuses on R&D, our pharmaceutical subsidiary,
Torii Pharmaceutical, produces and promotes drugs in Japan.
Outside Japan, we do not have a sales function, but we dolicense drugs to other pharmaceutical manufacturers.
In 2018, we started to develop a sustainability strategy for ourpharmaceutical business.

OUR PHARMACEUTICAL BUSINESS VALUE CHAIN *Clinical trial
participants& institutions

Joint
researchpartners

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*

1

Factory“Torii Pharmaceutical”

3

Contracted
factories

Wholesale

OUR CUSTOMERSAND CONSUMERS

OUR COMPANYOUR SUPPLIERS

Suppliers

Research &development

PHARMACEUTICAL BUSINESS

Licensepartners

2Sales & promotions
Warehouses“Torii Pharmaceutical” “Torii Pharmaceutical”

Medicalinstitutions
and patients

This diagram represents the value chain of products manufactured and/or developed by JT, and sold and promoted by Torii Pharmaceutical.

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Educating employees
We strictly adhere to specific processes to ensurethat our pharmaceutical business activities are always
carried out in a responsible and appropriate way.
We provide e-learning to help employees understandthe importance of drug safety and quality assurance.
In 2018, all of the approximately 800 employees inour pharmaceutical business completed the course.

Employees based at JT’s Central Pharmaceutical
Research Institute regularly attend educational
programs in areas such as ethics, animal testing,managing chemical substances, and environmentalmanagement. This helps keep their skills andknowledge up to date.

Ensuring ethical integrity
Our research activities are carried out in an
ethical manner and comply with all relevant laws,regulations, and industry standards.
We have established in-house regulations on
animal testing, based on government legislation.
Our Institutional Animal Care and Use Committee
ensures that we follow the ‘3R’ concept: Replacing
laboratory animals with other research materials
where possible; Reducing the number of animals
used; and Refining tests so that animals do not suffer
unnecessary pain and distress. We carry out periodic
in-house inspections and assessments to ensurethat we comply with regulations. Our animal-testing
practices are certified by the Japan Health Sciences
Foundation, an external authority.
When utilizing human tissue samples, our Ethical
Review Committee, which follows the relevantJapanese guidelines and consists of both internal andexternal members, examines the ethical justificationand scientific validity of the research.

Our chemical management system covers every
aspect of the chemical handling process, fromthe moment we take delivery of the chemicals,
through to their storage, use, and eventual disposal.
It also provides employees with vital information,such as how much remains of the chemical, andthe most up-to-date safety data sheet for eachsubstance. Employees are regularly made aware ofchemical safety risks. Torii Pharmaceutical separates
chemicals into categories requiring different levels ofmanagement, and has specific rules and proceduresaccording to the characteristics and safety risks ofeach category of chemicals.

Quality assuranceof pharmaceuticalproducts
We have developed our own guidelines on how
to conduct annual inspections to ensure that ourproduction methods fully comply with government
recommendations. Since 2017, for our own factoryand half of our contracted factories, we have been
carrying out annual inspections that fully adhere tothese guidelines, and there were no discrepancies in
the annual inspections in 2017. In 2018, we started
following our own annual inspection guidelines forthe rest of our contracted factories as well.

Responsible
promotion of drugs
Torii Pharmaceutical has its own code of practice on
the ethical promotion of prescription drugs, based on
the code of practice of the Japanese Pharmaceutical
Manufacturers Association (JPMA). Medical
Representatives (MRs) of Torii Pharmaceutical provide
and gather information on drugs to/from healthcare
professionals, and run monthly training programs
to ensure adherence to this code. Through internal
communications, we provide relevant and detailed
information to our MRs to keep them up to date withthe latest promotional guidelines. We also conduct
training sessions, which include case studies ofviolations that have occurred in Japan and important
points to consider when providing lectures formedical personnel.

We publish quarterly clinical development status
updates on our website.
In 2018, we spent 37 billion Yen on R&D.

PHARMACEUTICAL BUSINESSTransparency ofcontributions
In order to develop more effective drugs, we build
partnerships with research institutes, universities,
and medical institutions. When we make financial
contributions to our partners, we strive to ensuretransparency by disclosing these payments on ourwebsite.

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