Value Creation Process｜Sawai Group Holdings

Healthcare corporate group that develops sustainably alongside society

As the leading generic drug company, we strive to provide a stable supply of high-quality generic drugs and support the healthy lives of people. We are also taking on the challenge of evolving into a general healthcare company by developing new businesses.

Social issues

Rising medical expenses: Japanese medical expenses are growing yearly as Japan’s society grays. In fiscal 2021, they reached ¥45.0 trillion, an increase of almost 1.5 fold compared to fiscal 2000.
The Hyper-aging society: Around 30% of the Japanese population is 65 or older. It is forecast that by 2070, 1 in 2.4 Japanese will be 65 or older.
Need for affordable and safe drugs: To reduce medical expenses, the Japanese government is working to promote greater use of generic drugs, touting the goal of “share (volume of) generic drugs for all prefectures of 80% or more by the end of fiscal 2029.”
Stable supply of drugs: There continues to be a shortage of pharmaceuticals, which protect the health and life of Japanese, and a particularly important issue is eliminating the shortage in the supply of generic drugs.
Increasing interest in QOL: As we enter an era of the 100-year life, there is growing interest in healthy life expectancy, when people are healthy, and quality of life (QOL).

Management capital(Input)

Financial capital: Our basic policy is to maintain the optimal capital structure that ensures financial soundness and flexibility while increasing capital efficiency.
Manufactured capital: The Group boasts one of the top production systems in the industry with one of the largest total grounds area in the industry.
Human capital^*: We are working to secure and train outstanding talent with diverse ways of thinking under the basic human resource philosophy of “fostering and leveraging the individual.”; *Total for Sawai GHD, Sawai Pharmaceutical, Medisa Shinyaku, Kaken Shoyaku, and Trust Pharmatech.
Intellectual capital: By utilizing both talent with extensive experience in patent invalidation trials and proceedings and internal and outside databases, we implement a sophisticated patent strategy.
Social and relationship capital: We have received strong support from pharmacists as the no. 1 generic drug maker.; *2023 Research by Nikkei Drug Information

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Business activities

Generic drug business
New businesses

As the leading generic drug company in Japan, we strive to provide a stable supply of high-quality generic drugs and support the healthy lives of people. We possess a production system that ensures a stable supply, conduct R&D to create value-added products, assure the quality of those products, and provide accurate information. Through all these activities, we aim to provide quality generic drugs.

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(as of March 31, 2024)

Research and development

Formulation technology capabilities based on human assets with expertise in API properties and formulation technology: One of our strengths is our formulation technology capabilities that make it possible for us to gather the latest API and formulation information from throughout the world and conduct development in line with international harmonization. In addition, we are working to accumulate and expand our formulation technology by actively taking on the challenge of research that is tied to future development topics. We are also striving to provide drugs that meet the needs of all patients and healthcare professionals through SAWAI HARMOTECH_®, a series of formulation technologies born from these initiatives. Defined as technology that fosters a sense of safety and indicates peace of mind, the new technology brand QualityHug_® is selected as a novel technology that provides peace of mind regarding one’s own medications and life.
Ability to undertake research and analysis of original drug patents: By utilizing both talent with extensive experience in patent invalidation trials and proceedings and internal and outside databases, we implement a sophisticated patent strategy. To respond to new issues, we work with patent attorneys to develop an optimal patent strategy. In recent years, we have been keeping an eye on intellectual property trends in the U.S. and Europe and leverage those trends for our IP strategy for Japan.

To find out more (Sawai Pharmaceutical website)

Research and development(Japanese Language Website)
Employee interview: Thoughts on formulation(Japanese Language Website)
SAWAI HARMOTECH_® (PDF: 1,127KB)
QualityHug_®(Japanese Language Website)

Procurement

Strong new product API research and procurement abilities: As for APIs used in new development, we undertake various activities such as searching for APIs throughout the world, examining production facilities, quality, etc. When conducting analysis and trial production of pharmaceuticals using API samples, we use APIs that meet our own standards, which are even higher than those of the Ministry of Health, Labour and Welfare. The API Sourcing Group provides support for research and procurement through its specialists in purchasing, including members with experience at new drug manufacturers and API trading companies, and knowledge of formulations.
Selection and procurement of raw materials with primary emphasis on quality and safety: We confirm that API manufacturers’ quality management systems meet Sawai standards by inspecting their factories and checking that manufacturing is conducted in an appropriate environment and there is appropriate analysis of quality controls. We also release information on the country and factory where APIs are manufactured to provide healthcare professionals with peace of mind. To achieve stable procurement, we are actively introducing multisourcing for API procurement.

Production and reliability assurance

Manufacturing know-how for high-mix, low-volume production: To produce various types of generic drugs using the same machinery, it is vital to possess know-how regarding preventing the mixing of principal ingredients. For tablet presses that form granules into tablets, it takes almost one whole day to switch between products, and Sawai ensures safety by validating each cleaning procedure. This know-how related to validating unique generic drug production processes and managing production makes it possible to conduct high-mix, low-volume production and ensure quality.
Becoming a trusted company: We are working to nurture a culture that values legal compliance and quality by designating the third week of each month legal compliance week and providing all employees, including officers of the various Sawai Group companies, with opportunities to continue their study of such topics as Act on Securing Quality, Efficacy and Safety of Products Including Pharmaceuticals and Medical Devices (PMD Act), GQP^*1/GMP^*2 ministerial ordinances, production controls, and quality controls.
We aim to become a trusted company by realizing an open, honest organizational culture through compliance education and similar activities.; *1Criteria for checking whether a company's manufacturing factory or contracted manufacturer is conducting proper manufacturing control/quality control

*2GMP (Good Manufacturing Practices), international standards related to production and quality control for drugs.

To find out more (Sawai Pharmaceutical website)

Quality controls(Japanese Language Website)
Production system(Japanese Language Website)
Sawai Now—Sawai Pharmaceutical, an industry leader(Japanese Language Website)
Employee interview: Quality management at factories(Japanese Language Website)

Sales and marketing

Provision of accurate information: We provide information to patients and healthcare professionals through three channels—approximately 370 medical representatives (MRs); the Medical Information Center, an inquiry desk open 24 hours a day, 365 days a year; and a website. In addition to undertaking activities to provide accurate information to all healthcare professionals, MRs collect and compile information on side-effects and safety of drugs.
Extensive product lineup: Our lineup of products offered by our Japanese Group companies extends to about 800 products. Another of our strengths is our ability not only to collect and provide information on various diseases and in a wide range of fields but also to broadly meet the treatment policies and needs of healthcare professionals, which is possible because we market numerous products, is another strength of Sawai Group.
MRs acquire a broad range of knowledge through ongoing training because they handle numerous products. On account of our continuing training for MRs that covers various products, MRs can acquire extensive knowledge. It is precisely because of our wide lineup of products, that we can propose multiple drugs to treat the same disease and more concomitant drugs.

To find out more (Sawai Pharmaceutical website)

Providing information(Japanese Language Website)
Employee interview: Providing information on medical devices(Japanese Language Website)

In addition to the core generic drug business, we are working to foster new businesses, including a digital and medical devices business, in order to achieve sustainable growth for the Group. As a general healthcare group that provides healthy lives, we continue to take on the challenge of contributing to the healthy lives of people in a range of fields, from pre-symptomatic illness and prevention to treatment to provide a range of new options in addition to drug treatments.

Digital medical devices business

We will provide a neuromodulation device and treatment app (DTx) as new treatment methods, and a PHR management app as a health management tool.

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(Integrated report webpage)
Health food business

By expanding our business to the pre-symptomatic illness and prevention fields, we will provide products that support longer healthy lives.
New drugs businesses

By making the most of our formulation technology capabilities, we will provide new treatment opportunities, such as those for rare diseases (orphan drugs).

To find out more (Sawai Pharmaceutical website)

Pre-symptomatic illness and prevention and new treatment areas(Japanese Language Website)

Business results(Output)

In fiscal 2023, the final year of the Medium-Term Business Plan START 2024, we were able to increase our share of the Japan generic drug market and revenue and dramatically grow operating profit. In addition, we increased our production capacity to 20.5 billion tablets through strategic investments for future growth, which included capital expenditures. At the Sawai Group, we believe that a healthy society and its sustainable development are the foundation of why we exist. As part of social infrastructure, we aim to continue to coexist and evolve with society by continuing to provide a stable supply of high-quality generic drugs and generate sustainable growth.

Revenue: ¥176.9 billion (actual for FY2023) | Operating profit: ¥18.6 billion / Core operating profit: ¥23.9 billion (actual for FY2023) | ROE: 6.6% / ROIC: 4.8% (actual for FY2023) [Generic drug business] Production volume: ¥15.9 billion (actual for FY2023) | New products: 10 products (actual for FY2023) | Patent applications: 30 (actual for FY2023) [New businesses] Non-invasive neuromodulation device: Acquired manufacturing and marketing approval (first in Japan) (actual for FY2023) | NASH* treatment app: Launched phase 3 trial * Non-alcoholic steatohepatitis (actual for FY2023)

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Value provided to society(Outcome)

The Sawai Group’s corporate philosophy is “always putting healthier lives first,” which embodies our desire to contribute to the health of even more people as a healthcare group that continues to develop with society. Based on this corporate philosophy, we will provide the value of “healthy lives” by improving healthcare access, contributing to healthcare financing, contributing to extension of healthy life expectancy, and developing talent.

(actual for FY2023)

Improving healthcare access: We strive to improve access to medical care by developing and providing a stable supply of high-quality generic drugs that boast high value added.
Contributing to healthcare financing: We contribute to the solution to the social issue of growing medical expenses by manufacturing and selling highly-quality generic drugs that boast high value added at a low price.
Contributing to extension of healthy life expectancy: We will also contribute to the extension of healthy life expectancy through not only our generic drug business but also new businesses, such as digital medical device business.
Developing talent: We are focusing on fostering talent that support sustainable growth. We are also striving to provide female managers with ongoing training by promoting flexible work styles.

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Financials: Other
ESG Data
Sawai Now—Sawai Pharmaceutical, an industry leader (Sawai Pharmaceutical website)(Japanese Language Website)

Desired state

In the Sawai Group Vision 2030, we tout The World We Want to Build and Our Ideal State as our vision for the Group as we move toward 2030. Based on the corporate philosophy of always putting healthier lives first, we will continue to provide a stable supply of high-quality generic drugs and contribute to solutions to social issues and society’s development by providing products and services in several fields, including the field of disease prevention and diagnosis, in order to embody those two ideals.

[Sawai Group Vision 2030] The world we want to build: A world where more people can receive healthcare services and live a full life with peace of mind among society | Our ideal state: A company with a strong presence that continues to contribute to people’s health by providing a multifaceted mix of products and services based on scientific evidence that meet individual needs

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About UsValue Creation Process

Research and development

Procurement

Production and reliability assurance

Sales and marketing