TOKYO – Japan's Prime Minister Shinzo Abe is counting on a program of "three arrows" to continue revitalizing his country's economy. The first two arrows in his quiver are massive monetary easing and targeted fiscal support. The third, and possibly the most important arrow in the long term, is a series of structural reforms. High up on the list of the reforms is a somewhat radical shift in the way Japan approaches medical and biotechnology research.

Despite having the second largest market in the world in many areas of health care, Japan's system of innovation is beginning to show cracks. It often takes years for patients to gain access to the latest drugs and products, and research funding is typically inefficient and does not translate well into marketable products.

"One of the main challenges going forward is figuring out ways to have Japan learn a bit from the U.S. on how to put together money, technology and marketing expertise into an equation that is effective in creating more new business, and growth in start-up and innovative business," said Kurt Tong, deputy chief of mission at the U.S. embassy in Japan. "It's clear that the Abe administration is looking into the biotechnology industry as one of the main frontiers for putting together the pieces which will help create more jobs and more innovative economic benefit going forth."

A key piece of this reform is a plan to build Japan's own National Institutes of Health (NIH). The plan was submitted to the National Diet in March. The NIH would be a funding agency with a goal to push large-scale programs to help with the development of new drugs and innovative medical technologies. The new NIH is on schedule to become reality by the spring.

"The law will be passed in April or May," Toshio Miyata, executive director of Japan's Health and Global Policy Institute, told BioWorld Today.

Research funding in the area that the NIH would cover is quite fragmented in Japan. The Ministry of Education, Culture, Sports, Science and Technology funds basic research. The Ministry of Health, Labor and Welfare funds clinical research. The Ministry of Economy, Trade and Industry is in charge of industrial applications. The problem is that these areas of responsibility often overlap, which often leads to waste. The new NIH would have overall responsibility for the three areas and would, if it works according to plan, provide a more efficient path to funding medical research in Japan. Under the current plan, the Japanese NIH will adopt the centralized control structure of the U.S. NIH and enhance management of research funding.

The U.S. NIH is the largest source of funding for medical research in the world. It funds thousands of scientists around the world. It includes 27 institutes and centers focused on different diseases or areas of health.

The Office of the director at the U.S. NIH is responsible for setting policies, planning, managing and coordinating the programs and activities of the various institutes.

"The Japanese NIH will contain departments of strategy of translational research, [intellectual property] support and data quality checks," said Miyata. "Program directors will advise on funding."

One of the goals of this new Japanese NIH is to boost the number of clinical trial applications even if some of the country's life science stakeholders have expressed concerns that Japan's NIH will not share the commitment to basic research of its peer in the U.S. But Miyata said that there is no need to worry about this particular issue.

"They worry about the decreasing of the basic medical science. In fact, the government will not decrease the budget for basic research," said Miyata.

But not everyone agrees on the similarities between the U.S. and Japanese versions of the NIH. Tong, for one, said the Japanese and U.S. institutes would end up being quite different.

"What [Japan's NIH] really means is improved coordination between the various ministries that do health-related research in Japan to have better decision-making among them in terms of what researches are being funded," Tong said during the 11th BIO Asia International Conference in Tokyo last week.

"I'm told that Japanese universities are being more entrepreneurial themselves and allowing their researchers to have a stake in the results of the research like the U.S.," Tong said.

And the plan for the NIH takes this into account. Universities with medical research institutes such as the University of Tokyo, Tokyo Medical and Dental University and Sapporo Medical University will work closely with the NIH once it's established.

"In Japan, we already have six national centers, and many universities. These institutes and the Japanese NIH's strong cooperation will be expected," Miyata noted.

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