TOKYO -- Japan's push to triple its stockpile of anti-flu medicine Avigan for coronavirus treatment has proven a challenge as the lack of a raw ingredient from China forces Fujifilm Holdings to switch to a domestic supplier.
The frantic scramble for a production boost has highlighted Japan's heavy reliance on foreign-sourced ingredients as well as the nation's slow drug approval process -- issues both the government and pharmaceutical sector will have to grapple with.
As patents for Avigan have expired overseas, China has already begun producing generic versions for domestic use, making it impossible for Fujifilm to continue sourcing a chemical called malonic acid from that country.
Reports suggest Avigan can prevent the replication of the new coronavirus inside the body. But treating a coronavirus infection appears to require three times more Avigan than the flu, which means the country's stockpile designed for 2 million flu patients covers only 700,000 COVID-19 patients.
Fujifilm has asked Japanese chemical company Denka to manufacture the acid domestically, aiming to boost local Avigan production starting in July. Denka retreated from malonic acid production in 2017, but the company retained its manufacturing sites and can resume output once enough workers are secured.
Kaneka, a Japanese chemical company, also announced on Thursday that it will start manufacturing pharmaceutical ingredients that go into Avigan for supply to Fujifilm in July in response to a request from the latter. Kaneka will strengthen its domestic plant capacity through capital expenditure and securing employees to prepare for production.
The government, eager to build a supply chain at home, acted as a go-between to prod Denka into resming production. Denka says it does not plan capacity increase at this point and will makes future plans based on the production volume of Avigan.
Changing the supplier of a drug material takes time under normal circumstances. "A year or so is needed to confirm the quality of the material [from a new source] and complete registration procedures," said an official at a midsize Japanese pharmaceutical company.
The government appears to have moved quickly to shorten the process to one or two months for Avigan, but a full-fledged production boost is unlikely to start until after July.
Manufacturing costs are expected to surge as well.
Tablets and other nonprescription drugs are produced through chemical syntheses, necessitating the costly treatment of toxic gases and contaminated water.
Processing water discharges for medicines in Japan costs tens or even hundreds of yen per kilogram, reportedly 10 times higher than in China and India. As a result, producing 50 yen (46 cents) worth of drug in Japan could actually cost over 100 yen.
Producing drugs to treat 2 million patients is achievable as long as the raw material is produced at home. But the government will need to set a price consummate with manufacturing costs and keep it at that leve.
Leading anti-flu drug Tamiflu carries a price of about 2,700 yen for two doses daily over five days. If Avigan is priced the same as Tamiflu, a patient will have to pay 8,100 yen because the drug needs to be administered three times more often. For 2 million people, the cost would be 16.2 billion yen, or about $150 million.
Japan's reliance on foreign-made materials is a structural problem. Generic drugs made entirely of materials produced in Japan accounted for only 30% of total shipment value, according a health ministry survey in 2013, while the remaining 70% relied on at least some imported ingredients.
Of the imports, 30% came from India, along with 24% from China and 26% from South Korea. As Japan moves to further reduce government-set drug prices, the percentage of ingredients sourced overseas is expected to increase even further..
Approving Avigan for coronavirus patients could also take time. Though Prime Minister Shinzo Abe intends to have the drug authorized promptly, the health ministry remains cautious. A drug usually requires more than six months to progress from application to authorization.
Though clinical tests on Avigan are expected to be completed at the end of June, an examination of side effects and opinions from experts must follow, a former health ministry official involved in pharmaceutical affairs said, adding that "several months will be needed even for conditional approval."
The COVID-19 pandemic has revealed the fragility of Japan's pharmaceutical supply chain. It is time for the government to introduce a more flexible approach to its pricing mechanism and drug approval process.