Pharmaceuticals
Overview
JT is committed to the research and development of world-class, innovative drugs.
Our pharmaceutical business aims to create innovative, original drugs to support patients in theshortest time possible.
As this business has a direct impact on human health and life, we not only strictly comply with all laws,regulations, and industry standards, but are also guided by a strong sense of ethics and responsibility.
This is particularly the case in areas such as clinical trials and promoting drugs, as well as animal
experiments and managing chemical substances.
JT concentrates on R&D, while Torii Pharmaceutical Co., Ltd. is in charge of manufacturing, sales, andpromotion in the Japanese domestic market. Outside of Japan, we do not have a sales function, but we
do license drugs to other pharmaceutical manufacturers.

Our pharmaceutical business value chain** This diagram represents the value chain of products manufactured and/or developed by JT, and sold andpromoted by Torii Pharmaceutical. In 2020, the JT Group will stop manufacturing operations of its
pharmaceutical products in its own facilities and outsource all of them to contracted factories.

Pharmaceutical business sustainability strategy
Throughout 2019, our pharmaceutical business held numerous discussions on sustainability and set
out three focus areas. The mission of the pharmaceutical business is to create innovative, original
drugs to support patients in the shortest time possible. In view of this mission, we have selected‘products and services’ and ‘product safety and responsibility’ as our focus areas. As talentdevelopment of our employees is essential to rst-in-class drug discovery, we have selected ‘people’ as
our focus area. In total, we have set ve speci c targets for these pharmaceutical business focus
areas.
These will provide a solid basis for measuring and benchmarking our sustainability performance, andsupport the sustainability of the JT Group. We will be updating our progress regularly, as we strive tocontribute and ful ll our commitments that we have made to our stakeholders and to ourselves.

Pharmaceutical business sustainability strategy- Focus areas, aspirations and targets

Read more about the JT Group sustainability strategy.
Read more about our Group-wide initiatives in the Investing in people and Environment sections.

Pharmaceuticals andsustainability
The mission of our pharmaceutical businessis to create innovative, original drugs tosupport patients in the shortest time possible.
Read more

Copyright© Japan Tobacco Inc. All rights reserved.

Pharmaceuticals and sustainability
Educating

EthicalQuality

Promotion

Transparen

employees

integrity

assuranceof drugs

cyEducating employees
We strictly adhere to speci c processes toensure that our pharmaceutical businessactivities are always carried out in aresponsible and appropriate way. We provide elearning to help employees understand theimportance of drug safety and quality
assurance. All of the employees in ourpharmaceutical business complete a
mandatory e-learning course every year.
Employees based at JT’s Central Pharmaceutical Research Institute regularly attend educational
programs in areas such as ethics, animal experiments, managing chemical substances, andenvironmental management. This helps to keep their skills and knowledge up to date.

R&D that ensures 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 experiments 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 Re ning experiments to prevent animals from suffering unnecessary pain and distress. We
carry out periodic in-house inspections and assessments to ensure that we comply with regulations.

Our practices are accredited by the Japan Health Sciences Foundation
lists all accredited facilities on its website, an external authority which.

When utilizing human tissue samples, our Ethical Review Committee, which follows the relevantJapanese guidelines and consists of both internal and external members, examines the ethicaljusti cation and scienti c validity of the research.
Our chemical management system covers every aspect of the chemical handling process, from themoment 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, and the mostup-to-date safety data sheet for each substance.
Employees are regularly made aware of chemical safety risks. Torii Pharmaceutical separates
chemicals into categories requiring different levels of management, and has speci c rules andprocedures according to the characteristics and safety risks of each category of chemicals.
We publish quarterly clinical development status updates on our website. In 2019, we spent 33.2 billion
Yen in our R&D activities.

Quality assurance of pharmaceutical products production
We have developed our own guidelines on
how to conduct annual inspections to ensurethat our production methods fully comply withgovernment recommendations.
We began implementing these inspections inselected factories in 2017 and no issues wereidenti ed.
Since 2018, we have been steadily expanding
the scope and now it covers 100% of our own
factories* and contracted factories. We willcontinue to operate these guidelines.

*In 2020, the JT Group will stop manufacturing operations of its pharmaceutical products in its own facilities
and outsource all of them to contracted factories.

Responsible promotion of drugs
We have our own standard on the ethical promotion of prescription drugs, based on the guidelines onsales information provision activities by the Ministry of Health, Labor and Welfare.
Medical Representatives (MRs) of our subsidiary company Torii Pharmaceutical Co., Ltd. provide andgather information on pharmaceutical drugs to/from medical professionals appropriately, and regularly
participate in training programs to ensure adherence to these guidelines. Through internal
communication, 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 of violations that have occurred inJapan and important points to consider when providing lectures for medical professionals.

Transparency of partnerships
In order to develop more effective drugs, we build partnerships with research institutes, universities,
and medical institutions. When we make nancial contributions to our partners, we strive to ensuretransparency by disclosing these payments on our website.

Case studies

Case study

For the Patients Project
We have an internal educational activity to foster employees’ ethicalawareness and sense of responsibility towards saving patients.
We offer this program continuously, both internally and externally, byengaging in dialogue with medical experts. Every year, around 10
employees participate in this program as a facilitator and learn more
about patients’ medical needs.
Their knowledge and ndings will then be shared across our business
operations through reporting sessions and/or internalcommunication.

Case study

Patient input informs clinical development
As part of our ongoing clinical development efforts, we gathered input
from patients in the form of a ‘patient’s voice’ program, and in thespirit of continuously improving the patient experience. We conducteda survey among patients who had participated in our clinical drug
trials* to measure their satisfaction. In 2019, approximately 150
patients agreed to take part in the survey.
The survey consisted of a face-to-face interview and a questionnaire.
The interview was designed to evaluate the patient experience andgauge how patients felt during the clinical trials. For example, we
asked about the quality of guidance delivered at the beginning of thetrial and about the usability of any patient tools they had used, e.g.
informed consent form and patient reported outcomes. The
questionnaire asked about their expectations of the medical experts incharge of the trials and what information they had needed orrequested before the trial started.
We want our clinical trials to be developed in line with patient
feedback; this will make it easier and more satisfactory for patients
who are interested in clinical trials to con dently take part.

* Clinical trials
Tests performed on humans at the nal stage of pharmaceutical development in order to collect and/or
assess data concerning the results of a clinical study, including data on e cacy and safety. Human clinical
trials are mandatory for 'candidate drugs' to be approved by governments.

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