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 alllaws, regulations, and industry standards, but are also guided by a strong sense of ethics andresponsibility. This is particularly the case in areas such as clinical trials and promoting drugs, aswell as animal experiments and managing chemical substances.
JT concentrates on R&D, while Torii Pharmaceutical Co., Ltd. is in charge of manufacturing, sales,and promotion in the Japanese domestic market. Outside of Japan, we do not have a sales
function, but we do license drugs to other pharmaceutical manufacturers.
※Torii Pharmaceutical Co., Ltd. stopped manufacturing pharmaceutical products in its own factoryin 2020, and now outsources these manufacturing operations to contracted factories.

Our pharmaceutical business value chain** This diagram represents the value chain of products developed by JT, and sold and promoted by ToriiPharmaceutical.

Pharmaceutical business sustainability strategy
Our pharmaceutical business aims to create innovative, original drugs to support patients in theshortest time possible. We are committed to the research and development of world-class,innovative drugs.
In view of this mission, in 2019, we selected the three focus areas below and set five specifictargets for these focus areas. This is the first time we are reporting on our progress towards
achieving these targets.

Focus areas

Products and services

PeopleAspirational goals

We will create innovative, original drugs to support patients in the shortest timepossible.

We will strive to nurture talent development which enables us to create first-inclass (FIC) drugs.

Product safety andWe will strictly comply with all relevant laws, regulations, and industry

responsibility

standards in order to deliver safe drugs to patients.

Our pharmaceutical business is working towards five specific targets in order to meet
the JT Group sustainability strategy.
Respecting human rights
Investing in people
Improving our social impact
Environment

Pharmaceuticals andsustainability

The mission of our pharmaceutical businessis to create innovative, original drugs tosupport patients in the shortest timepossible.
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Pharmaceuticals

Pharmaceuticals

Information byand sustainability

businesssegment pharmaceuticalbusiness-Copyright© Japan Tobacco Inc. All rights reserved.

Pharmaceuticals andsustainability
Educating

EthicalQuality

Promotion

Transparen

employees

integrity

assuranceof drugs

cyEducating employees
We strictly adhere to specific processes toensure that our pharmaceutical businessactivities are always carried out in a
responsible and appropriate way. We provide
e-learning 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 Refining 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.
When utilizing human tissue samples, our Ethical Review Committee, which follows the relevantJapanese guidelines and consists of both internal and external members, examines the ethicaljustification and scientific 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 themost up-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 specific 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 2020, we spent 25.2
billion Yen on our R&D activities.

Quality assurance of pharmaceutical products
production
We have developed our own guidelines on
how to conduct annual inspections toensure that our production methods fullycomply with government recommendations.
We began implementing these inspections
in selected factories in 2017 and no issues
were identified.
Since 2018, we have been steadily
expanding the scope and now it covers
100% of our contracted factories. We willcontinue to operate these guidelines.

Responsible promotion of drugs
We have our own standard on the ethical promotion of prescription drugs, based on the guidelines
on sales information provision activities by the Ministry of Health, Labour and Welfare.

Medical Representatives of our subsidiary company Torii Pharmaceutical Co., Ltd. provide andgather information on pharmaceutical drugs to/from medical professionals appropriately, andregularly participate in training programs to ensure adherence to these guidelines. Through internal
communication, we provide relevant and detailed information to our Medical Representatives tokeep them up to date with the latest guidelines. Furthermore, after completing their initial training,
all Medical Representatives take a mandatory e-learning course once a month.
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 partnershipsIn 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 our website.

Case studies

Case study

For the Patients Project
We have an internal educational activity to foster employees’ ethical awareness and sense ofresponsibility towards saving patients.
We offer this program continuously, both internally and externally, by engaging in dialogue withmedical experts. Every year, around 10 employees participate in this program as a facilitator andlearn more about patients’ medical needs.
Their knowledge and findings are then shared across our business operations through reporting
sessions and/or internal communication.

Case study

Patient input informs clinical development
As part of our ongoing clinical development efforts, and in the spirit of continuously improving thepatient experience, we gathered input from patients in the form of a ‘patient’s voice’ program. Read
more on our progress in 2020:(1) The announcement of our patient’s satisfaction survey
We conducted a satisfaction survey*1 for patients who agreed to participate in our clinical drug
trials*2 in 2019. We then reported the survey results at the 20th Conference on CRC and Clinical
Trials 2020. This allowed us to gather a lot of feedback from medical and pharmaceutical experts
who were at the conference.

*1 In 2019, we carried out a satisfaction survey among patients who had participated in our clinical drug
trials. Approximately 150 patients agreed to take part in the survey.
*2 Clinical drug trials
Tests performed on humans at the final stage of pharmaceutical development in order to collect and/orassess data concerning the results of a clinical study, including data on efficacy and safety. Humanclinical trials are mandatory for 'candidate drugs' to be approved by governments.

(2) Establishment of a project team in clinical development department
When it comes to clinical trials, we understand the importance listening and responding to patients’questions and concerns. With this in mind, we established a project team in our clinicaldevelopment department, which is responsible for all clinical drug trials in our pharmaceuticalbusiness. The new team will play a key role in developing and implementing these trials with a focus
on patient feedback and the overall patient experience.
We want our clinical trials to be developed in line with patient feedback; this will make it easier andmore satisfactory for patients who are interested in clinical trials to confidently take part.

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