In Tokyo, BIO CEO Jim Greenwood acknowledged Japan’s remarkable progress in biomedical innovation but warned that recent actions by the government to artificially lower prices on successful therapies could cost the country more than it saves in the long run.
Remarks Prepared for BIO CEO Jim Greenwood
Tuesday, March 14, 2017
Welcome to our 14th BIO Asia International Conference. It’s truly a pleasure to be with you in Tokyo this morning. I’m proud to be CEO of the world’s largest biotechnology trade association. We are a truly global association with members working together, partnering together, and innovating together in 30 countries. But Japan is uniquely important –to the future of the biopharmaceutical industry and to the future of global health….
BIO Asia is our longest running international conference – and that’s no accident. Everyone now agrees: Japan has become one of the world’s truly elite biotechnology hubs. Your companies are working to heal, feed and fuel the world. Our industry is the future, and together, our countries are leading it. So thanks to each of you for the work that you do and for the hope that you deliver that, one day, we might put a stop to suffering and hunger and environmental decline.
We are honored to have as our keynote speaker this morning Vice Minister Baba from the Ministry of Health, Labour and Welfare. Vice Minister Baba was kind to meet with our delegation yesterday. The Ministry has laid out an ambitious vision in its Comprehensive Strategy for Strengthening the Pharmaceutical Industry. It is establishing clinical innovation networks. It is championing efforts to support patients with intractable diseases. And it is supporting our industry’s work to prevent pandemic influenza and address antimicrobial resistance. Thank you, Vice Minister, for your leadership.
Yesterday, a delegation of BIO Board members and I met with several senior Japanese policy makers to talk about ways we can work together. Japan and America share a number of common challenges. We both have large, aging populations placing a real strain on our health care systems. We both have brilliant innovators who are developing therapies unimaginable 10 years ago, who face pressure to innovate tomorrow’s cures with yesterday’s reimbursement systems. We both have government officials who understand the importance of value-based payment arrangements, but who must still be persuaded that value should drive private negotiations – not government price controls. And finally, we both have investors who are eager to make risky bets on new miracle cures as long as our governments don’t make policy choices that feed uncertainty and price instability.
I served in the United States Congress for 12 years. Now I’ve been the CEO of BIO for 12 years. One central lesson that I’ve learned about our industry is that biotech companies simply cannot thrive without a healthy ecosystem. That ecosystem must be equally supported by 3 groups: innovators, investors and institutions.
First, you need innovators to apply their deep scientific knowledge to solve the problems of the modern world. Second, you need investors, because the most brilliant ideas won’t become actual products without the buy-in of the investor class. Finally, you need institutions committed to creating sound policy and smart regulations.
Japan has all of these ingredients and that’s why you have made so much progress in the last few years. It’s why you’ve become a global leader in regenerative medicine. It’s why you’ve been able to eliminate what was once a six-year drug lag compared to the United States and get cutting-edge therapies to your patients sooner. It’s why you’ve built a world-class regulatory standard on par with and in some ways superior to the U.S. and the EU.
Policy makers across the world can learn a lot from what has been accomplished here. But friends are candid with one another, and we must acknowledge that we have hit some bumps in the road. In our meetings yesterday, we had an honest dialogue about how the investment and research community is reacting to emergency repricing measures. We discussed the signal being sent by the plans to reform Japan’s pricing system, such as new annual price revisions. And we talked about our industry’s need for predictability and transparency. We shared the America model of looking to the generics markets for savings, so innovators have the resources and revenues to research new breakthroughs. Yes, budgets must be balanced annually. But sometimes, the prudent decision is for budget officials to look beyond one-year savings.
In America and Japan, when our elected leaders overrule the markets and cut medicine prices for political reasons … this means less revenue, less investment, less innovation, and less economic growth. And who suffers in the end? The patients who are desperately hoping for new medicines.
As an industry, we must encourage our leaders to take a long-term view. Incentivizing innovation and solving major societal health care problems will save more money in the end. New treatments prevent surgery. They prevent hospitalization. They prevent visits to the doctor. Innovation saves lives. And it saves societies billions of dollars in avoided health care costs by ending disease and keeping people healthier for longer.
I’m appreciative that we agreed to continue this important dialogue. Industry and government must work together to strike the right balance between promoting innovation and containing costs. Working together, we can deliver the world’s most cutting-edge medicines to Japan’s patients in the quickest time frame possible, and we can ensure the Japanese biopharmaceutical sector realizes its extraordinary potential.