The Doshomachi area of the city of Osaka has been the home and birthplace of many pharmaceutical companies since the Edo Period (1603-1868), including some of the leading drugmakers such as Ono Pharmaceutical Co.

Long known as a “town of medicine,” Osaka, however, has come to a turning point on whether it can continue to thrive as a “modern medical city.”

That is because pharmaceutical companies often need to deal with the Ministry of Health, Labor and Welfare, so Osaka-based companies are tempted to move their head offices to Tokyo to help speed up the decision-making process where government is concerned. The globalization of such companies is also an issue.

Still, Osaka’s biggest draw for pharmaceutical companies is the easy access to research facilities for the development of new drugs due to the presence of many renowned researchers at universities in the Kansai region.

One notable figure working in the area is Shinya Yamanaka, a Nobel Prize-winning induced pluripotent stem, or iPS, cell researcher at Kyoto University.

Ono developed nivolumab, an anti-cancer drug marketed as Opdivo, jointly with Tasuku Honjo, a distinguished professor of immunology who is also at Kyoto University and a Nobel laureate.

While the patents on Opdivo will expire around 2030, Ono will continue the development of new drugs in Osaka, which an executive said has “sound research environments” and is “attractive in the field of life sciences.”

Also headquartered in the city is Rohto Pharmaceutical Co., which entered the field of regenerative medicine in 2013.

“Kansai is at the front line for regenerative medicine, as in other areas,” said Masako Rikiishi, a Rohto director.

Takeda Pharmaceutical Co., which completed the acquisition of leading Irish drugmaker Shire PLC earlier this year, has already moved mainline operations to Tokyo while keeping its registered head office in Doshomachi.

Sumitomo Dainippon Pharma Co. relocated its corporate planning and other core departments to Tokyo in 2013 to reinforce globalized segments of its business, while Mitsubishi Tanabe Pharma Corp. plans to transfer its management strategy division to Tokyo within a few years to promote its business in the United States.

The domestic market for pharmaceutical companies is shrinking due to revisions of government-set drug prices and the emergence of generics.

“We’ll go downhill unless we globalize our operations,” a Sumitomo Dainippon official said, reflecting the spreading sense of crisis in the industry.

Drugmakers set to continue Osaka-based operations are pinning high hopes on the World Expo to be held in the city in 2025 under the main theme of promoting health care development and longevity.

Aiming to reinvigorate Osaka as a “medical city,” the Osaka prefectural and municipal governments plan to build a research center for regenerative medicine in Kita Ward by October 2023.

While Kyoto and Kobe place emphasis on basic studies, the new center will serve as a hub for the commercialization of research results, a prefectural government official said.

Noting that pharmaceutical companies in Osaka tend to be research-oriented, Tomohisa Ishikawa, head of the Japan Research Institute’s Kansai Economic Research Center, said their study results “will be carried abroad” if their commercialization is delayed.

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