Meiji Seika Pharma Expands Global Reach with Breakthroughs in Antibiotics, Vaccines and Emerging Markets

Japan is widely recognized for its highly advanced pharmaceutical industry, supported by a strong scientific foundation, a rigorous regulatory framework, and a deep commitment to safety and quality. In recent years, Japanese companies have increasingly focused on innovation in areas such as regenerative medicine and treatments for rare diseases. From your perspective, what do you see as the core strengths and distinctive qualities of Japan’s medical industry on the global stage?

Mr.Nagasato: The most fundamental strength of Japan’s pharmaceutical sector lies in its robust scientific foundation. That emphasis on science, coupled with our tradition of precision and quality, is something that has historically distinguished Japanese industry as a whole.

That said, I have been working in this industry for 43 years, and during that time the landscape has changed dramatically. When I first joined, pharmaceutical exports ranked just behind the automobile industry as one of Japan’s strongest export categories. In fact, at that time, Japan exported more pharmaceuticals than it imported. Today, however, the situation is the opposite: pharmaceuticals now rank among the highest imports, second only to energy. That dramatic reversal underscores just how much ground Japan has lost in terms of global competitiveness.

One reason for this shift is Japan’s regulatory environment. Our approval system is extremely complex and time-consuming, which often means that even Japanese companies choose to seek approval for their products first in the United States or Europe. Another factor is drug pricing. Japan has a system in which drug prices are strictly controlled under national health insurance. This has created significant challenges both for domestic companies and for global players seeking to operate here.

For instance, we often hear criticism about “drug loss” or “drug lag,” where innovative new medicines are either difficult to introduce or withdrawn because the pricing system makes them unsustainable. What is especially unusual in Japan is that, even during the patent-protected period, when sales exceed a certain scale, the price can be forcibly reduced. On top of that, cost-effectiveness evaluations are applied after launch, meaning that if a product is deemed not sufficiently cost-effective, its price is again lowered. This creates an environment where global companies worry that securing approval in Japan will effectively devalue their product worldwide.

Another challenge is demographics. Japan once benefited from a growing population, which expanded both the healthcare system and the pharmaceutical market. But today, our society is aging and shrinking. There are fewer people paying into the health insurance system, and more elderly people drawing from it. Since most pharmaceutical expenditures are funded through public insurance and government resources, this demographic shift puts immense pressure on sustainability. Developing and reimbursing high-priced, cutting-edge drugs becomes increasingly difficult under such constraints.

Japan still boasts world-class universities and outstanding academic research. But what we often lack is the effective translation of this research into industry. In the U.S., venture capital plays a major role in funding translational research and commercialization. In Japan, this cycle is slower, investment is more conservative, and expectations for return are often limited. As a result, innovation has lagged behind.

The government has recognized this issue and is beginning to take steps to address it. But the reality is that global innovation is advancing rapidly, and Japan is struggling to keep pace.

Mr. Kobayashi: To add some context, I would emphasize that Japan’s universal health insurance system has long been one of the best in the world. Whether you are the Prime Minister or an ordinary citizen with very little income, you can access essentially the same high-quality healthcare. That is something rare and remarkable globally, and it served us well for decades.

Thirty years ago, when the population was growing, this system was financially sustainable and created a favorable environment for pharmaceutical innovation and growth. But as Mr. Nagasato described, the demographic reversal—fewer payers, more beneficiaries—has created a critical imbalance.

So while our strengths in quality, science, and stability remain, the challenges of regulation, pricing, and demographics are reshaping the market in fundamental ways.

One pressing challenge in global healthcare is antimicrobial resistance (AMR). Some estimates suggest that if left unchecked, AMR could cause up to 10 million deaths annually by 2050. Your company has a long history in antibiotics and has been actively working on next-generation drugs to combat resistance. How are you approaching this urgent issue, and what specific innovations are you pursuing?

Mr. Kobayashi: Meiji Seika Pharma has been deeply engaged in the fight against infectious diseases since our founding after World War II. In 1946, we started our pharmaceutical business when we began producing penicillin—an essential antibiotic that was life-saving for Japan’s population at the time. Infectious diseases have always been part of our identity.

Today, antimicrobial resistance（AMR） is an increasingly global problem. At present, the number of patients is still relatively small and limited to certain countries, but resistance is steadily spreading. We see this as an urgent area for innovation.

In particular, the emergence of bacteria resistant to carbapenem antibiotics, which are used to treat severe infectious diseases, has become a serious global public health issue related to AMR. To address this, our company is developing a new β-lactamase inhibitor called OP0595. OP0595 is expected to be used in combination with existing β-lactam antibiotics that have already been marketed and proven effective in restoring and enhancing their antibacterial activity. This combination is anticipated to be a promising treatment for infections caused by bacteria resistant to carbapenem antibiotics. We have obtained encouraging data from a global Phase 3 clinical trial. Our goal is to make this product available worldwide, not only in the Japanese market.

The challenge, however, is not only a global public health issue—it is economic one as well. The cost of developing anti-AMR drugs is extraordinarily high, but the sales potential is limited because these medicines are used only when resistance is present, which is, thankfully, still relatively rare. This creates a paradox: companies are asked to invest heavily in drugs that may be used sparingly. As a result, many large pharmaceutical companies have withdrawn from the research and development of anti-AMR drugs.

I believe this is an area where governments must step in. Just as with COVID-19, where governments funded vaccine development and stockpiled doses, we need similar mechanisms for AMR. National governments—and ideally, international coalitions—should share the burden of development costs and commit to purchasing and stockpiling these critical drugs in advance. Waiting until AMR has become a full-blown crisis will be far too late.

Turning to vaccines, the COVID-19 pandemic was a wake-up call for the world. It not only underscored the importance of vaccine development but also catalyzed unprecedented public-private partnerships and accelerated innovation in areas like mRNA technology. How did the pandemic affect your company’s vaccine strategy, and how do you see your role in meeting global vaccine needs in the future?

Mr. Nagasato: The pandemic was indeed transformative. It showed us the importance of speed. The faster you can develop and deploy a vaccine, the more lives you save. That urgency is now ingrained in how we think about infectious disease response.

Messenger RNA (mRNA) technology in particular proved to be a breakthrough. It allows us to read the genetic sequence of a virus and design a vaccine rapidly. While there are still challenges—especially around safety and delivery systems like lipid nanoparticles—we see enormous potential in applying mRNA not only to COVID but also to future threats.

Looking ahead, I believe influenza represents the most serious looming danger. There are many strains, particularly Type A influenza, and they mutate rapidly. Unlike COVID, where the spike protein was a clear target, influenza presents multiple antigens—hemagglutinin and neuraminidase—that change frequently, making it extremely difficult for vaccines to keep pace. That is why we are working toward what we call a “universal influenza vaccine”—one that could provide broad protection against multiple strains.

We are pursuing this goal through both internal R&D and global collaborations. For instance, we have partnerships with institutions in Boston and with Ose Immunotherapeutics in France, whose unique technology targets internal viral proteins such as nucleoproteins. We believe these collaborations, alongside our own development programs, will help us prepare for the inevitable next pandemic threat.

In your midterm strategy, you identified overseas expansion as a key growth pillar. Currently, overseas sales account for around 12% of your revenue, and you have set a goal of increasing that to 25%. What specific strategies and markets will be critical to achieving this?

Mr. Kobayashi: Japan’s domestic market is facing long-term demographic decline. By 2045, the senior population will peak and then begin to contract, meaning growth opportunities will increasingly come from abroad.

Our focus is on high-growth regions where populations are expanding and healthcare spending is rising—particularly ASEAN, India, and eventually Africa. We have had a presence in Indonesia and Thailand for more than 50 years through our subsidiary Meiji Farma, manufacturing and selling antibacterial drugs. That long-standing footprint gives us a strong base.

In India, we operate a 100%-owned subsidiary, Medreich Limited, focused mainly on generics. India also provides an important platform for future expansion into Africa, including potential exports of our innovative drugs.

We see ASEAN and India as our most immediate opportunities, with Africa as a longer-term frontier. In these regions, not only will patient populations grow, but healthcare budgets will increase significantly—likely two to three times within the next decade. That combination of volume and value is where we expect to achieve sustainable overseas growth.

Finally, I’d like to ask each of you a more personal question. Imagine we repeat this same interview on your final day as Chairman and President. Looking back, what would you hope to have achieved?

Mr. Kobayashi: Our shared ambition is for Meiji Seika Pharma to become the leading supplier of vaccines and infectious disease treatments in Asia. In many parts of Asia and Africa, infectious diseases remain a major threat, and vaccine coverage is still inadequate. If we can establish ourselves as the most trusted partner in these regions, that will be both a growth driver for our company and a meaningful contribution to global health.

I will not be Chairman forever, but I would like to leave the company at the close of what I see as “Phase One” of that journey—well on the way to securing that leadership position.

Mr. Nagasato: For me, success will be defined by the global recognition of our innovations. We have several important products in development that I believe can transform our company’s standing.

One is nacubactam, an antibiotic designed to combat AMR, that we hope to see adopted worldwide.

The second is our dengue-fever vaccine. Dengue fever is spreading across Asia, South America, Africa, and other regions, and an effective vaccine is urgently needed. Our candidate, KD-382, showed good immunogenicity and tolerability in a Phase I trial in Australia and is expected to become the only vaccine that raises antibodies equally against all four serotypes with a single dose. With support from AMED/SCARDA and Japan’s Ministry of Health, Labour and Welfare, we will be conducting Phase II and Phase III trials in fiscal 2025.

The third is our mpox vaccine. Only two companies in the world—including ours—have succeeded in developing a third-generation attenuated live mpox vaccine. Our immediate goal is to obtain WHO pre-qualification (PQ).

If these three products succeed, Meiji Seika Pharma will no longer be seen as only a Japanese company—it will be a recognized global player. That transformation is what I hope to see by the end of my tenure.