EFPIA Day 2023 Press Event- Drug Lag/Loss in Japan -October 5, 2023
Takahiko Iwaya
Chair of EFPIA Japan
1Drug lag/loss emerging in Japan
Development status of drugs notapproved in Japan * 2

Impact of NHI Drug pricing system reform 2018 * 1
Changes in priority of the Japanese market
in the drug development and launch# ofcompanies

6Consideration ofpossible postponement
or delay of launch

5542

2

Cancellation of launchHigher Slightly
higher4

6

Postponement ordelay of launch

Local development not yet started

10Drugs approved in US/EU but not in Japan(143 products)

10(Not yet occur)

33

Number of companies impacted on newdrug launches in Japan

NoSlightlychangelowerLower

54Yes

No

1No response

86 products(60%)*1: EFPIA Japan Board Member Companies Survey (September 2022)
Responders: AstraZeneca, GlaxoSmithKline, Merck Biopharma, Novartis Pharma, Sanofi, Bayer, Novo Nordisk Pharma, UCB Japan, Janssen Pharmaceuticals*2: Report of the Expert Review Committee on Comprehensive Measures for Rapid and Stable Supply of Drugs

2

About European Federation of Pharmaceutical Industries and Associations(EFPIA Japan)
Establishment2002Overview

EFPIA Japan represents R&D-based
European pharmaceutical companies
operating in Japan

Mission

EFPIA Japan is fully committed toproviding innovative medications toimprove the health and quality of life(QOL) of patients in Japan.

Member company

23 companies (as of April 2023)

Proportion of EFPIA Japan member
companies sales in the Japanese market(2022)*1

31%
Proportion of Number of Newly Listed
Drugs by EFPIA Japan member
companies (2022) *2

30.5%*1: ca. 3.4 trillion yen (EFPIA Japan survey for 2022)*2: 51 ingredients (EFPIA Japan survey for 2022)

3Reimbursement prices at listing in Japan tend to be lower than thosein Europe and the US
Comparison of new drug prices calculated with the cost calculation method * 1

JPUSUKDE

FR200
US average 168

150

German average 137
British average 110
French average 101

Japan 100

5000A1

B2C3

D4E5

F6G7H8I9J 10K 11L 12M13

N14O15P16

Q17*1: 17 products listed from April 2018 to May 2023, priced with the cost calculation method, for which at least 2 country prices are available for reference (excluding unapproved drugs for which development isrequested by the government)
EFPIA Japan presentation at the 203th Drug Prices Expert Committee Meeting of the Central Social Insurance Medical Council on July 5, 2023

4

Japan's unique pharmaceutical regulations and costs are also
considered to be one of the causes of drug lag/loss
Phase III study costs *1

Cartagena Law example *2(Ratio when the global average of patient unit price is 100)

200

US

Japan

US

150

Products containing genetically modified organismsthat are not pathogenic or proliferative are exemptfrom pre-study environmental assessment.

100

EU500Oncology

Non-oncologyJapanIn both EU and Japan, the above actions arerequired for products containing geneticallymodified organisms.

Percentage of NMEs approved between 2015 and 2020 that received preferential treatment in pharmaceutical affairs * 3*1: Clinical Evaluation Committee, Drug Evaluation Committee, Japan Pharmaceutical Manufacturers Association, “Discussion on optimization of medical institution expenses in clinical trials, ” April 2015;
PhRMA/EFPIA Joint Seminar “In order not to be excluded from global studies: Cost awareness activates clinical trials in Japan ”, October 3, 2020
*2:Tajima G, Huh S, Schmidt NA, Macdonald JC, Fleischmann T, Wonnacott KM. Impact of genetically modified organism requirements on gene therapy
development in the EU, Japan, and the US. Mol Ther Methods Clin Dev. 2022;26:74-83.,*3: Comparison of New Drug Approval Status and Review Period in Japan, the U.S., and Europe | Policy Research Institute News | Pharmaceutical Industry Policy Institute (jpma.or.jp)

5

To solve the drug lag/loss issue, it is necessary to reflect the voices ofpatients in the pharmaceutical affairs system and healthcare policies
Patient's voices *1

I am afraid that I cannot
receive the treatment
developed in Europe and theUS while I am alive...

Many patients in Japan are notaware that drug losses prevent
them from receiving treatment
already available in the world

EFPIA Japan thoughts

We need to rethink for whom innovative drugs andtherapies are originally intended
We believe that innovative drugs and therapies arefor all patients and people in Japan
We should not leave behind the voices of patients
who cannot receive treatment due to drug lag/loss

I want opportunities to deepen my knowledge
and understanding of drug development andhealthcare policies so that patients have equal
discussion opportunities with the government,
academic societies, and people involved in thepharmaceutical industry*1: Interviews by EFPIA Japan with patient organization representatives (conducted in August 2023)

Patients and the public should be made aware of thedrug lag/loss issue. A platform is needed to discussclinical trials and healthcare policies with patients6

Takes long in Japan to implement routine immunization for preventive
vaccines, while access to new therapeutic drugs after regulatory
approval is faster in Japan than in European countries
Pharmaceuticals *1
Waiting time after regulatory
approval (ave. days)

Waiting time after regulatory approval:
The number of days from the date ofmarketing approval in the EU to the datewhen the drug is made available at medical
institutions, etc. (2015 to 2017)

Vaccines *2

Percentage of available drugs(%)

Percentage of available drugs:
Percentage of drugs available to patientsat the time of price listing in the national
health insurance system(as of 2018)*1: EFPIA. (2019). EFPIA Patient W.A.I.T. Indicator Study 2018 Results.
*2: Material of the 32 Health Science Council, Immunization and Vaccine Committee, R&D and Production/Distribution Subcommittee

Routinevaccination

Years taken fromthe start of review

Rotavirus vaccine

Started in 2020

8 years until the start ofroutine vaccination

Mumps vaccine

Underconsideration

13 years

Herpes zoster

Underconsideration

7 years

Triple combination
vaccine(booster dose)

Underconsideration

13 years

Inactivated poliomyelitis
vaccine(booster dose)

Underconsideration

10 years

7EFPIA Japan proposal of solutions to mitigate the drug lag/loss

Drug PricingSystem••••••Regulatory
System•PatientInvolvement••

Introduction of incentives for launch first in Japan prior to other countries
Highly predictable system without risk of sudden change
System in which the value of pharmaceuticals is appropriately evaluated and reflected in drug prices
Maintaining the current mechanism where new drugs are listed and reimbursed promptly after regulatory
approval
Sustainable healthcare systems
Improvement of clinical trial environment in Japan(strengthening international competitiveness of clinical trial expenses, streamlining clinical trial processes,
promoting digitization)
Improvement of local pharmaceutical regulations aiming at further international harmonization andpromotion of further acceptance of overseas clinical study data as NDA dataSignificant increase in the designation of pioneering drugs (currently fewer than that in the US), andintroduction of a new system aimed at earlier initiation of regulatory review and approval for innovative
new drugs that address unmet medical needs
Promotion of patient involvement in discussions to solve issues from development to post-marketing of
new drugs by referring to examples in Europe such as EUPATI (European Patients Academy on
Therapeutic Innovation)

8

EFPIA commitment to solving the drug lag/loss Issue•••••

Drug lag/loss is an issue for all stakeholders involved in healthcare in Japan
To solve the issue, we need to mutually understand the positions of multi-stakeholders in thehealthcare community, including patients, citizens, industries, government, and academia, anddiscuss solutions
EFPIA Japan is committed to leading resolution by working together with our stakeholders

Develop and implement a program to promote knowledge and understanding among patients
through industry-government-academia collaboration
Establish a platform for multistakeholder dialogues and policy proposals for healthcare policy/system

9Thank you10