As the world’s third largest pharmaceutical market with progressive healthcare policies that allow for the accelerated approval of innovative drugs, Japan remains a very attractive market for foreign companies. CMIC Group is the first company to offer contract research organization (CRO) services in Japan for over 30 years now. With expanded services and industry expertise, CMIC can serve as the ideal partner for foreign companies looking for a leading one-stop service provider to support their market entry and successful growth in Japan, from pre-clinical and clinical, to approval, and sales & marketing.
The Japanese population has the oldest life expectancy in the world, a staggering 85-year average. More than 1/3 of the population is over 65 and there are fewer people of working age now. Can you tell us how, in your opinion, Japan’s demographic decline is impacting the medical sector?
One impact of Japan’s demographic decline on the medical sector has been on the workforce, which is shrinking especially at the younger end of the scale. It will be increasingly hard for us to identify and recruit suitable people with the required expertise. We are trying to adapt our business in ways which may help with this recruitment challenge, but we haven’t yet adopted AI in this field. So how to first recruit, then retain and develop capable staff among the younger generation is a key issue for us. We are looking into new tools and ways to increase our efficiency in this arena.
We're now in the fourth industrial revolution, or ‘society 4.0 in Japan’, and are seeing the rise and mainstream adoption of new technologies such as IoT, AI, and big data. CMIC has recently expanded into the service sector, acquiring the “harmo” brand electronic prescription system from Sony. Can you tell me more detail what the role harmo will have in your existing structure, and what your expectations are for this new business line?
On October 1, 2021, CMIC Group established a new company called harmo Co., Ltd. that is responsible for the digital platform services of the harmo brand, including its electronic prescription record system and its vaccine information management system.
harmo Co., Ltd. is a technology-based company that requires a step-by-step approach for us to best leverage the harmo technology platform. We expect harmo to become a digital platform that serves as a healthcare communication channel, which will be a unique solution within the healthcare industry.
Utilizing the harmo platform we will be able to collect data anonymously on-site, as the management of personal information is a very sensitive area. Once that data is accumulated, it can be utilized in analysis for clients such as healthcare companies, pharma companies, as well as individual members of the public or local governments.
We expect to reach that stage within the next two years. harmo will become a data service provider, which will be a new and unique type of company within CMIC Group. We describe the product as a ‘communication channel’ as it collects data and sends a tailored analysis of that data and essential information to harmo users.
Many technological innovations are now improving the pharma and healthcare industries. We are thinking about how these new technologies can complement the harmo system. I believe we will be making some alliances with tech companies as we cannot do everything we need to in-house.
What impact do you think the COVID-19 pandemic will have in the mid to long term on your company and on the healthcare sector, and how do you envision the future of healthcare in the next 10 years?
The COVID-19 pandemic had a big impact on our business since we could not visit clinics and hospitals and we were concerned there was going to be a decrease in overall sales. However, we were able to conduct off-site monitoring in a ‘virtual’ way and support the trials safely even during the pandemic.
Also, we started a new COVID-19 vaccine support business by sending out qualified nurses and experts with clinical knowledge to help with vaccination effort.
Vaccinations will likely continue over the next two years and there may be other opportunities to support the Japanese medical and healthcare sector. We may also be able to cover other Asian countries. So the pandemic has provided us with some unexpected opportunities in the field of pharmaceutical manufacturing and healthcare services.
And with regards to the next ten years in healthcare, I think it will change a lot because the aging demographic of Japan as we talked about earlier. Demography is a crucial factor as the needs of public health will change and care givers will become more important.
There will also be a stronger focus on prevention, which has already begun. Simply put, if fewer people get admitted to the hospital, public health costs can be reduced. This is particularly important in aging societies.
We believe that personal healthcare focusing on both prevention and treatment will become the standard, which is why we are shifting our business model from PVC (pharmaceutical value creator) to PHVC (personal health value creator).
The CMIC Group, composed of CRO (Contact Research Organization), SMO (Site Management Organization), CDMO (Contract Development and Manufacturing Organization) and CSO, (Contract Sales Organization) help biotech and pharma companies enter the Japanese market for the clinical development and commercialization of their products. CMIC offers a one stop solution covering non-clinical, manufacturing, clinical trial support, registration, sales & marketing to maximize market value in Japan. Can you tell us about the kind of synergies you're able to create between all the different business lines and what benefits those synergies bring to your clients?
Yes, we now have 24 affiliates under the umbrella of CMIC Holdings, nearly all of which are service providing companies apart from OrphanPacific. OrphanPacific is a unique company in our group in the sense that it is a pharma company that develops and sells pharmaceuticals such as orphan drugs whereas the other affiliate companies all provide services.
Having multiple functional service providers does create a number of synergistic effects. For example, there are many collaborative projects between non-clinical organizations and CDMOs. Once a drug is produced and packaged by the CDMO, our non-clinical organizations help them analyze it. They produce trial samples in a seamless way and collaborate closely with clients. This can lead to a reduction in cost for our clients, which is obviously beneficial. This level of teamwork between our companies and clients also allows us to have discussions on critical issues such as CMC quality issues which can help avoid delays in clinical trial timelines.
Your Market Solutions business provides support such as ‘Japan Gateway’ to foreign pharma companies who want to enter the Japanese market. Why do you think that Japan is so attractive to foreign companies and why should foreign firms choose CMIC as their partner?
As the world’s third largest pharmaceutical market with healthcare policies that allow for the accelerated approval of innovative drugs and incentivized pricing, Japan is certainly a very attractive market for foreign companies.
The first hurdle for foreign biotech companies to overcome is the regulatory hurdle including communication with the PMDA (Pharmaceuticals and Medical Devices Agency). Those clients wishing to come to Japan need Regulatory Affairs (RA) support, CMC consulting, or regulatory submissions and correspondence.
We have more than 140 experts working in our RA consulting team who have expertise in strategic planning, preparation of documents, and responses to the PMDA’s queries in the non-clinical, CMC and clinical sectors. They know the regulatory landscape and how to communicate with the PMDA. Our team has a deep understanding of the western cultures and relatively ‘straightforward’ style of doing business. We can also help our clients to have smooth communication with the PMDA by providing interpreters and translators as meetings with the PMDA will only be in Japanese. 20 years of experience dealing with the PMDA has given us significant insights we can pass on to our clients.
Once the regulatory hurdles have been overcome, we can then quickly proceed to the clinical trial phase. With our multiple service capabilities from patient recruitment to clinical trial management and site management, CMIC can help our clients to shorten the overall timeline as we work very closely with both the authorities and our clients. We provide unique solutions for pharmaceutical companies along their entire drug development value chain.
How can a company prove to the authorities that their medicine really does have ‘life changing’ properties?
The idea is to show reports that indicate the scientific, medical, and social benefits of the proposed product.
CMIC has recently launched a business development program specialized in medical MaaS (Mobility as a Service) with Monet. Why did you decide to work with Monet on this project and how do you envision the future of ‘mobility as a service’ type companies in the medical field?
I would say that this is the starting point of a new ecosystem that is a hybrid of two competencies - our expertise in health care, and Monet’s expertise in MaaS. In one sense, it is the product of an aging society and we have been doing some new DCTs (decentralized clinical trials), or so called virtual clinical trials. That way we don't have to send out our CRAs (clinical research associates) to the clinical sites, and doctors don't have to see the patient face to face. They only need to perform virtual medical consultations.
As I mentioned, COVID-19 impacted the medical system significantly. One effect has been that patients don’t feel safe to go see doctors as often as before. On the other hand, older patients may need to make multiple yearly visits to their doctor. We can help them in this scenario, as it will become more common going forward.
There are now drones available for delivering medicine as well. Although such a system isn’t yet in place, we believe it will be in future. Our activity with Monet is just the starting point of a new ecosystem, so we will now be calling on other companies to collaborate with us in solving the problems involved. Together with Monet we will help those companies realize their ideas.
Would you be comfortable with a drone giving you your medicine?
Yes, it’ll be very easy because we won't have to go to the pharmacy or go to the doctor to get a prescription. It will be totally new system.
Can you tell us more specifically what the role of co-creation plays in your business model and what kind of international partners you are looking for?
We have already been working with some foreign partners. We have some joint ventures such as one with Ashfield, which was owned by UDG Healthcare. For us, the most important criteria for being able to work with others are firstly, ‘trust’ between the two companies, especially between senior management. There must be good chemistry in the relationship. Secondly, there should be clear synergistic effects arising from the partnership. That is a crucial point.
Furthermore, I always ask myself what success in a joint venture should look like. Should it be only based on profit, or should it involve some other kind of expansion in the business? These are also important considerations going into a joint venture partnership.
Most companies in the pharma business generally don't get involved in orphan drugs that have such a small consumer base because they're not seen as profitable. Why does CMIC get involved with these orphan drugs and hard-to-treat, chronic illnesses?
Firstly, there are so many rare and intractable diseases in the world for which there is no effective treatment. Due to the small number of patients and profitability, clinical trial often faces difficulties and it has been the issues. With this background, it is socially meaningful that we support the orphan drug development to contribute to the patients and families who are waiting for new treatment.
The perception of orphan drugs has changed over the past 5 to 10 years. In the past they were not viewed as profitable at all, mainly because the national patient number could be quite low, making significant revenue impossible. But the focus of the pharma industry has now shifted away from those particular chronic illnesses to more specialized areas of medicine such as oncology drugs and orphan drugs.
Orphan drugs can attract a high reimbursement price. Here in Japan the national drug reimbursement price system is very robust. If we can propose a new medication and convince the regulatory authorities of its importance and efficacy among intractable patients, it is possible to get high levels of reimbursement.
As I mentioned earlier, we have a unique affiliate company OrphanPacific, which supports orphan drug development and commercialization. Through collaboration between OrphanPacific and other affiliate companies, we can provide seamless support including regulatory consulting and communication with PMDA.
The timeframe for development can also be reduced by skipping some phases of clinical trials due to the highly specialized nature of the target disease. As a result of all this, orphan drugs are no longer considered unprofitable. Even large pharma companies like Pfizer and Novartis are now very much interested in orphan drugs.
Could you tell us more about how your expectations for the Healthcare Revolution 2.0 project have been affected by the COVID-19 pandemic, and looking to 2022 and beyond, some key targets that you’re looking to achieve?
We had three main pillars in our mid-term plan of ’19 to ’21 - the enhancement of PVC (pharmaceutical value creation), further globalization, and the revolution of healthcare.
As far as PVC is concerned, we reached our target in terms of our KPIs (key performance indicators) involving the percentage of projects that are successfully completed with multiple companies within the CMIC group working together.
With regards to globalization, we are still driving progress to serve broader global clients, even though our current affiliate companies in the US and Asia have a limited scale of operational activities.
As for the healthcare revolution, we’ve done quite well over the course of the COVID-19 pandemic in supporting the vaccination effort, and harmo is now an independent affiliate company which kick-started new activities through their R&D efforts. We expect harmo’s new ideas and initiatives are the feature of our mid-term plan which covers years ’22 to ’25.
Healthcare is a major focus for us in the mid-term plan of ’22 to ‘25 as we shift from focusing only on the pharmaceutical industry. This should be a challenging but exciting journey.
You mentioned continued efforts driving globalization. You’re present in at least nine countries already. Is there a particular region that you're prioritizing going forward? What is your expansion strategy?
We need to have further discussions internally about our global expansion plans because the very definition of globalization has been changed by the COVID-19 pandemic. We can now work anywhere with anybody at any time. So in terms of globalization it’s no longer a case of putting pins in maps of foreign countries. We have a strong presence here in Japan and we can conduct global studies and achieve similar levels of expertise as global companies can. However, an alliance or partnership with a strong market player in the same industry located in the USA or Europe could be ideal. The challenge is how to find those global partnerships.
One other point I have to mention about the Japanese pharma industry situation is that the clinical trials market in Japan is now shrinking. Some new trials brought in through our inward projects are now increasing. That means there are still foreign companies from the US and Europe that are very interested in selling or marketing their products here in Japan. So that is the reason we are shifting our activities.
You were appointed COO and President in 2018. Is there a particular objective that you have set yourself during your presidency?
I have several objectives, actually. First of all, there should be more diversity and inclusion (D&I) within the CMIC Group. Innovation is slowed down by a lack of D&I. There are many sides to D&I like LGBT and gender inclusion but first and foremost there should be more female inclusion in the company.
Usually at board meetings I am the only female together with one other female who is an external board member. So that’s 2 women among 11 board members. We have to give women a bigger voice that is listened to by men.
We've done hundreds of interviews in Japan and you're only the fifth or sixth woman we’ve interviewed. What’s it like being a female executive in Japan and how do you think the role of female executives is going to evolve in the future?
Personally, I haven't felt a big difference but maybe it is my intention not to feel it. I want to ask more women in our group to try move up to the senior management level but they are actually hesitant to do so. I don't know their exact reasons for this hesitancy. There may be family reasons or their geographical locations or something like that. I actually had an opportunity to have a lunch meeting with our younger generation CRAs, 60% or 70% of whom are women and who are very talented and active.
That younger generation, around 30 or so years old, have very strong opinions with good backgrounds and intelligence, so why don't they speak out more to their manager or boss or president? That is something to do with Japanese culture and I want to change it but to change a national culture would be very difficult and take too long and I don’t want change at CMIC to take that long. Maybe we’ll bring in new blood. Some global talent to blow a new wind through the company.