Japan’s pharmaceutical industry has been in dire need of a shake-up, and as we continue to grapple with the COVID-19 pandemic, one thing is remarkably clear. It’s no longer business as usual, and we’re enjoying a front-row seat to some very remarkable changes across the industry.
In February 2020, the thought of the Pharmaceuticals and Medical Devices Agency (PMDA) wrapping up a Phase 2 compliance meeting in 2 hours was utterly impossible. Today, that’s the new reality. COVID-19 has triggered a revolution, bringing to light what many of us have thought for years.
The organisations that fail to adapt will quickly fall behind. With the spotlight shining on the current system’s inefficiencies, a digital transformation is no longer an option. New innovations, new ideas, and new approaches to traditional business are already proving a success, and organisations need to change if they want to survive in the new normal.
The lockdowns triggering an entire workforce to start telecommuting was just the beginning. Despite the initial concerns, reluctant healthcare providers now admit they’ve seen efficiency gains and time-saving benefits, with only a minimal impact on productivity. The change is taking a toll on some staff, and it’s important they are also supported with their contingency mental health programs. But what’s most interesting is now that COVID-19 has pushed the adoption of an actual remote workforce, the company-wide benefits of a digital transformation have become impossible to ignore.
As you can imagine, it’s generated a roll-on effect to all other departments, helping to save costs on office rents, utilities, travel perks and even personnel expenses. To the point organisations are now revisiting their internal structure, their teams, and even where they base their operations.
One study on the leading Japanese Pharma companies uncovered they could happily reduce their sales teams by 30% to 40%. I’ve personally spoken to executives in Takeda, Eisai, and Otsuka, and they all agree. A drastic reduction in sales is needed, because, and let’s be honest here. The 60,000 medical representatives employed in Japan’s pharmaceutical industry is rather high.
This change builds on the reduction already seen, as sales teams scaled down following the falling markets and lower drug prices rolled out by the national health system. Generous redundancy packages have been available for staff for years, and this trend will likely accelerate against the rise in layoffs over the months to come. In Takeda, two separate sources have confirmed their sales teams will be reduced, in a shift away from medical representatives to contract sales organisations as Takeda strives to agile against the ever-changing needs of the market.
This flexibility also extends to office space, as Pharma companies follow tech companies like Lenovo. Lenovo has already taken steps to shrink their 6,000 square meter headquarters that has gone barely used in the last five months. Nomura Real Estate also plans to give employees the opportunity to work closer to home. With an expansion to 150 satellite offices by fiscal 2027 into the suburban areas surrounding Tokyo. A six-fold increase from Nomura’s current levels of office space, yet one that avoids the highly-priced commercial buildings downtown.
COVID-19 has the world thinking differently, and for the pharmaceutical industry, it’s more than just the development of new drugs and vaccines. The way the entire industry operates is being reshaped, and a successful digital transformation is fundamental to maintaining a competitive edge. The organisations that can capitalize on this opportunity, will be primed for long-term success.
Has your organisation started thinking differently?