Corrections or additions?
This article by Barbara Fox was prepared for the October 3, 2001
edition of U.S. 1 Newspaper. All rights
Rising Sun in Princeton
The United States represents a pot of gold for any
pharmaceutical firm, and for many of them, New Jersey is the end of
the rainbow where that pot sits. Pharmas from around the globe are
setting up shop here to tap the United States market, the largest
in the world. That’s a big plus for the 80 Princeton-area companies
that serve the pharmaceutical industry, particularly the clinical
research organizations (CROs) that shepherd drugs through the testing
Japanese companies are among the most eager to relocate here. Half
of the 40 Japanese firms that opened pharmaceutical offices in the
United States have come to New Jersey. Though northern New Jersey
has been the preferred location, these companies began to filter into
Princeton several years ago. Takeda America was the first big one;
it was at the Carnegie Center from 1993 to 2000. Recently Akros Pharma
and Kyowa Pharmaceutical moved to the Carnegie Center. Very new here
are Ono Pharmaceutical at Princeton Pike Corporate Center, and Teijin
America in Alexander Park. Also, an American firm, North
Quintiles, has opened a Japanese desk at Princeton Overlook.
Japan is well represented for the usual good reason: An office here
helps Japanese firms set up business deals in an area rich with
companies. "This is the lifeblood of research throughout the
says Bill Healey, executive vice president of the HealthCare Institute
of New Jersey. "The Japanese pharmaceutical industry over the
last 15 years has made a conscious decision to come to New Jersey
because of all the possible partnerships New Jersey brings to the
The climate for bringing new drugs to market is better here than in
Japan for three other good reasons, financial, cultural, and
Japan’s pharmaceuticals, as it turns out, operate under very different
rules in their home country, and they like working here better.
For starters, the Japanese model for financing drug development is
unlike the American one. "In Japan, ethical drugs are paid for
by taxes," says Tetsushi Inada, president of Kyowa
"It is a different business game. The price in Japan is decided
by the government and not by the market."
In Japan, which has universal health insurance, the government pays
for all prescriptions, says Takahiko Iwaya, director of the health
and welfare department of the Japan External Trade Organization
In contrast to the United States, where pharmaceutical companies must
merge to survive in the open market, small companies in Japan manage
to stay in business thanks to the government assistance. In addition
to about 100 big firms, Japan has 2,000 smaller ones, some very local,
having only one or two products in a very specific area, says Iwaya.
Pricing is different also. In the United States, when an old drug
goes off patent, its price falls and it must compete with generic
look-alikes. But in Japan, partly because of the insurance
policy, the drug price doesn’t go down very quickly. Old drugs fetch
higher prices than they would in America. And brand-new drugs are
not marked up as high as they are here. "Relatively speaking,
drugs can be sold longer in Japan than in the United States,"
says Iwaya. "Some people say the smaller and less strong drug
companies can survive better in Japan under this system."
"For 10 years the ministry tried to change the system," Iwaya
says. Putting low prices on new drugs does not promote investment
Cultural differences add to the financial ones. Like any drug, new
Japanese drugs on their way to market in the United States must go
through rigorous clinical testing by the Food and Drug Administration.
"In Japan, the culture and the religion make it very difficult
to try a new approach," says Kyowa’s Inada. "Americans have
more open minds about participating in clinical evaluation of
"It is said that, in Japan, people don’t want to take big risks
in any activity," says Iwaya. "There is no economic incentive,
so not as many people want to take the risk of participating in
Another area in which the cultures clash is on how to
treat terminally ill patients. Aggressive "long shot"
at the end of life are not as common in Japan, where making the
feel comfortable is more likely to be the standard.
Just running clinical trials is also more difficult in Japan, and
not only because they have to be repeated in the United States. When
investigators assign patients to clinical trials, they must be sure
that the group getting the drug to be tested is identical to the
group. "Because the United States is a country where there is
a mixture of many different cultures," says an insider, "it
needed stringent regulations. In the past, Japanese regulations were
less stringent but everybody was supposed to do the same thing.
years ago, Japan adapted the international regulations, and Japanese
investigators — and patients — are taking time to adapt to
Before, patients did not have to sign "written informed
forms to enter a drug trial. Arrangements were more informal. Now
administrators must make a lot of effort to get patients to join.
"There is more paperwork, more guidelines, and perhaps some
says the insider. Frustration with the additional red tape slowed
down the pipeline.
Says Inada: "The hospitals here have better infrastructure; they
have the doctors willing to run the clinical trials."
Among the prominent Japanese companies in New Jersey is Eisai, which
came to Teaneck in the late 1980s (www.eisai.com). Sankyo is in
Yamanouchi in Paramus, and Daiichi in Woodcliffe Lakes. Mitsubishi
has a pharmaceutical division, Mitsubishi Chemicals, in Warren
Other companies in New Jersey, according to the state commerce
are Ajinomoto, Asahi Berr Pharmaceutical Company, Dainippon, Fuji
Chemical Industries, Kirin, Kissei Pharmaceutical, Marubeni
Nippon Chemiphar Co., Suntori, Taisho Pharmaceutical, and Tanabe
Here are the Japanese companies in Princeton.
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