How EPNextS Is Driving Innovation in Japan’s Pharmaceutical Landscape Amid Demographic Shifts

One of the biggest challenges Japan is currently facing is population decline. However, Japan is not alone—experts estimate that by 2060, more than 23 developed countries will be dealing with similar demographic challenges. This has led some to suggest that Japan has a unique advantage as a first mover in developing solutions for these issues. Do you agree with that perspective? And among the services or products you’ve developed, which do you believe have the potential to scale globally?

Before answering your question, I’d like to clarify the definition of the term “elderly.” According to the World Health Organization (WHO), “elderly” is a medical term referring to individuals over the age of 65. Based on 2023 data, approximately 25% of Japan’s elderly population remains in the workforce—compared to 18% in the U.S. and just 11% in the U.K. While aging is accelerating in other developed countries as well—Germany, for example, has 30% of its population over 65—Japan currently leads globally, with 35% of its population falling into this age group. This means that, as of 2025, more than one-third of Japan’s population is classified as elderly. And yet, more elderly people continue to work in Japan than in any other nation.

You asked what we can do as a company, but as one organization, there are naturally limitations to the role we can play in providing comprehensive solutions. That said, for us, the increase in the elderly population also means an increase in the number of patients. In Japan, universal health insurance coverage ensures that a high percentage of the population regularly visits medical facilities. On average, people in Japan visit hospitals 11 to 13 times per year— approximately three times more than in the U.S.

With the ongoing population decline, the number of healthcare professionals—including doctors, nurses, pharmacists, and caregivers—will also decrease over time. In response, our mission is to develop more efficient and effective collaboration schemes with hospitals. Even as the overall population shrinks, the demand for medical services will rise as the aging trend intensifies. The impact on companies like ours will therefore be quite different from what’s experienced in industries like manufacturing or construction.

One of the consequences of demographic decline is the loss of skilled workers and growing challenges around passing on expertise. At the same time, rapid technological advancement has created a clear need for reskilling. Your DI Basic Academy is a program aimed at upskilling individuals without medical qualifications for roles in drug information services. By equipping non-medical personnel with the necessary knowledge and support systems, EPNextS is not only strengthening its own workforce but also broadening access to qualified professionals in a highly specialized field. How does the DI Basic Academy support the development of individuals from non-medical backgrounds and help them transition into roles within the pharmaceutical and healthcare support industries?

One of the services we offer is a call center that provides drug information to patients. Typically, these inquiries are handled by licensed pharmacists. However, in today’s tight labor market, hiring enough qualified professionals can be a significant challenge. That’s why we developed the idea of training and nurturing individuals without medical qualifications, bringing them up to a level where they can effectively handle these inquiries under the appropriate framework.

This approach extends beyond pharmacists. Roles such as coordinators and monitors ideally require qualified personnel, but hiring only fully qualified individuals can be prohibitively expensive. What we aim to do is separate the core tasks, allowing us to focus the expertise of licensed professionals where it’s most needed, while training non-qualified staff to a level where they can competently support the operation.

In essence, the core principle of the DI Basic Academy is to upskill unqualified staff so they can perform at a level comparable to qualified professionals. This model helps reduce labor costs while still maintaining a high standard of service and support across the pharmaceutical and healthcare support industries.

Japan’s Sakigake system, introduced under Prime Minister Shinzo Abe, aimed to accelerate the development of innovative medical products. At the same time, there are still challenges—such as visa restrictions—that affect foreign workers who come to Japan for training or to work in roles like call centers. Do you believe the current ecosystem established by the Japanese government is conducive to the growth of the medical industry? And what barriers would you like to see removed or improved to help the industry operate more fluidly?

The Sakigake system was established to support the development of new drugs, and overall, the Japanese government and relevant authorities have provided solid backing for the initiative. In our experience, the system has both positive aspects and some limitations. While it has helped in certain cases, for smaller biotech firms and startups, it can sometimes place a significant burden—mainly due to the pressure and expectations it creates.

This is where we believe we can play a meaningful role by offering support through our contract research organization (CRO) services. However, for many biotech companies, these CRO services can be financially burdensome. Venture capital (VC) can help bridge that gap, but access to VC remains limited and not always straightforward.

In such cases, we believe we can contribute by acting as a connector—linking biotech firms with potential VC partners to help ease their path forward. Supporting these smaller players with both research infrastructure and funding opportunities is one way we can strengthen the broader medical innovation ecosystem.

Foreign biotech companies often face significant hurdles when entering the Japanese market due to complex clinical trial regulations, procedural differences, and Japan’s unique academic framework. To address these challenges, EPS Holdings launched its Innovative Research Organization (IRO) business, offering comprehensive support—including development planning, licensing strategies, and market entry consulting. With full-scale operations now underway, particularly targeting overseas clients, the IRO business is expected to grow into a multi-billion yen venture in the medium to long term. What specific services does the IRO business offer to help foreign biotech companies navigate Japan’s regulatory landscape and successfully enter the market?

We operate under two distinct business models, depending on whether our clients are based in Europe and the U.S. or China and other Asian markets. While the biotech market is expanding in Asia—particularly in China—there are still major differences compared to Western nations in terms of ecosystem maturity and historical development. In many Asian markets, including China, the industry has a relatively shorter history, and in some cases, there isn’t yet a fully developed operation of clinical trials targeting Japan or a clearly defined development and exit strategy.

For foreign companies entering Japan, there's often a noticeable gap in their understanding of local procedures and regulatory requirements. That’s where we come in. Our services align well with their needs, especially in areas such as Japanese pharmaceutical affairs, regulatory compliance, and legal procedures.

When working with clients from Western nations, often the development strategy has already been considered and our support tends to focus more on procedural assistance. However, with companies from China and Asia, wider and deeper involvement is often required—from planning business plans to designing viable exit strategies. We already have a proven track record of supporting Chinese biotech firms entering the Japanese market.

One area common to both client groups is exit strategy planning. When foreign companies enter the Japanese pharmaceutical market, they typically need a market approval holder. There are several pathways to achieve this, including setting up a new legal entity in Japan. We work closely with each client to determine the best option based on their goals and operational model.

It’s also worth noting that while Japan’s pharmaceutical market is sizable—estimated to reach USD 49 billion by 2025—it may still feel limited to some global players, especially when factoring in the complexities of Japan’s insurance system. That’s why, before entering into any contract, we conduct a full cost estimation for development to ensure our clients can make informed decisions about their market entry strategy. Our IRO business provides comprehensive support to clients aiming to succeed in Japan, covering everything from fundraising and research infrastructure to business planning and exit strategies.

Could you share some of your company’s strategies for entering the U.S. market going forward?

Our services are currently focused on the Japanese market, so we don’t have immediate plans to offer services directly in the United States. However, we actively promote ourselves to U.S.-based biotech firms through participation in scientific conferences and exhibitions. We see this as a strong opportunity to increase our visibility and recognition in the global market. By supporting the international development of promising overseas seeds in Japan and Asia, we are strengthening our relationship with U.S.-based biotech firms and approaching the U.S. market as well.

In addition, we recognize the potential of internet marketing and social media to further enhance our international presence, and we plan to leverage these tools as part of our broader outreach strategy.

Are you actively recruiting foreign talent to help support foreign brands entering the Japanese market?

At the moment, we’re focused on increasing our recognition in the global market, particularly among specific target countries. To support this effort, we’re looking to recruit Japanese professionals with substantial international experience—especially those who have spent time in the U.S. or Europe.

We’re also considering hiring individuals from U.S.-based companies who can help us develop our business and build stronger connections with American biotech and pharmaceutical firms.

EPNextS Group has partnered with U.S.-based Frontage Laboratories to strengthen early-phase clinical trial management and streamline drug development through U.S.-Japan collaboration. Can you share how this partnership is helping to address regulatory challenges between the two countries?MHLW recently announced that the “Basic principles for conducting phase 1 studies in Japanese prior to initiating multi-regional clinical trials including Japan for drugs in which early clinical development is preceding outside Japan”. In this guideline, MHLW said that “In principle, an additional phase 1 study in Japanese is not needed”, on the other hand, MHLW also said that “it is desirable to consider measures such as including Japan when the phase 1 study is conducted as an MRCT”. Collaboration with Frontage about early phase clinical trials involving Japanese participants can provide suitable clinical trials for U.S.-based biotech firms to expand their next Phase study with Japanese population data Globally.

Frontage operates a clinic in New Jersey and maintains a database of Japanese candidates eligible to participate in certain studies.

For U.S. biotech companies, having clinical trial data involving Japanese patients significantly increases the perceived value of their product—particularly from the perspective of potential Japanese partners or investors.

Are collaborations like your partnership with Frontage Laboratories something you’re actively seeking more of in the future?

Yes, we are actively pursuing more collaborations like the one we have with Frontage. While our press release focused specifically on that partnership, we already have collaborations in place with other CROs that specialize in specific therapeutic areas.

We see these partnerships as valuable opportunities to create synergies between U.S. biotech companies and Japanese pharmaceutical firms, particularly by leveraging specialized expertise and facilitating smoother cross-border collaboration.

As part of its mid-term management plan, EPNextS has implemented a strategic organizational restructuring to move beyond the traditional CRO, SMO, and CSO framework. The company is now transitioning to a new two-segment structure. What strategic advantages does this new two-segment structure provide compared to the previous model?

We still operate separate entities for CRO, SMO, and CSO services, each with its own sales and profit targets. However, this traditional structure has at times led to a siloed approach. Even when offering clinical trial services to medical institutions and pharmaceutical companies, we’ve faced limitations in presenting fully integrated proposals.

By shifting to a two-division structure—one focused on clinical trials and the other on post-marketing—we’ve moved beyond those organizational boundaries. This restructuring allows us to deliver more comprehensive, client-centric solutions that integrate CRO, SMO, and CSO. It has also improved the internal dynamics of our operations, enabling smoother sharing of expertise, greater workforce mobility, stronger cross-functional collaboration, more optimized pricing, and better information flow.

Separating clinical trials and post-marketing into independent segments also gives us strategic flexibility for future growth, whether through M&A, joint ventures, or capital alliances. This positions us to create new value while remaining agile in a changing market.

The SMO services are unique to Japan. While it’s often said that clinical trial costs in Japan are higher than in Western countries, when looking at labor costs per person, they’re actually lower. What sets us apart is the high level of quality we’ve been able to deliver—something we take great pride in. That said, the Japanese market faces two key challenges: limited clinical sample sizes and overall cost efficiency.

In terms of coverage, we offer unmatched access to medical institutions across Japan. Given Japan’s national health system, the general population frequently visits hospitals, but staff at these facilities are extremely busy. Our role in coordinating clinical trials is therefore critical, ensuring trials can proceed without disrupting day-to-day medical care.

Given the scale of our operations, we’re now aiming to break down the barriers between SMOs and CROs and move toward offering fully integrated clinical trial services. As the only real player operating at this level in Japan, we believe we’re in a strong position to redefine and lead this sector in the years ahead.

EPNextS is a new entity within EPS Holdings, now responsible for overseeing the core business of the EPS Group. As president of EPNextS, what personal goals have you set for yourself to accomplish before eventually passing the baton to the next generation of leadership?

I believe my personal mission is to break away from outdated Japanese business practices, as I see them as one of the biggest obstacles holding back progress in this industry. My goal is to create a more integrated, seamless service model—one that unifies operations and removes unnecessary barriers—so we can better serve clients and drive the industry forward.

For more information, please visit their website at: https://www.epnexts.co.jp/event/en.php

To read more about EPNextS, check out this article about them.