Healthcare

August 2002

The Ministry of Health, Labor and Welfare plans to collect some 100,000 types of proteins from patients for five years from next year to assist the development of treatments for cancer, diabetes and other serious diseases. Proteins isolated from legions or blood of patients provide information necessary for developing new drugs. In countries such as Germany and Switzerland, the public and private sectors cooperate to collect large amounts of such proteins. However, Japan has lagged in such efforts, partly because the privacy of patients could be at risk and drug makers have had difficulty carrying out such an undertaking independently. The ministry plans to request 4 billion Yen for the fiscal 2003 budget from the Ministry of Finance to set up a new entity at its affiliate, Japan Health Sciences Foundation. The annual running costs of about 1 billion Yen are to be paid by an estimated 20 drug makers expected to participate in the project. Legions, blood or fluids will be collected from patients mainly at national hospitals after obtaining their consent. Measures will be taken to protect patients' privacy. Many research organizations conduct genetic research to identify proteins linked to certain diseases. The ministry believes research work to be performed on actual proteins will further promote the development of new drugs. (August 18, the Nihon Keizai Shimbun)

Drug makers are poised to spin off their manufacturing operations to take advantage of the revised pharmaceutical affairs law allowing production outsourcing. Through such moves the makers aim to reduce production costs, increasing money for research and development. The revised law, which passed the Diet on July 25, will free drug makers in 2005 from the current obligation to own in-house manufacturing facilities. As a result, Mitsubishi Pharma Corp. will spin off its three domestic plants. Likewise, Tanabe Seiyaku Co. and Shionogi & Co. will consolidate their manufacturing operations for possible spin offs, according to officials of the companies. Industry leader Takeda Chemical Industries Ltd. will lift its outsourcing rate from the current 30% to 70% by 2005 and close its plant in Fujisawa, Kanagawa Prefecture. The companies also expect to reduce their payrolls in line with the realignments. Increased R&D spending alone, however, is not likely to help Japanese drug makers gain an edge over their foreign competitors amid accelerating industry consolidation abroad. Japanese makers' ongoing moves to scale back production instead reflect their efforts to prepare for possible mergers or business integration. (August 15, the Japan times, the Nikkei business Daily)