Cablegate: Hhs Acting Deputy Secretary Hargan's Meeting with Japanese

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PP RUEHHM RUEHLN RUEHMA RUEHPB RUEHPOD
DE RUEHKO #3456/01 2100046
ZNR UUUUU ZZH
P 290046Z JUL 07
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 5929
INFO RUEHZN/ENVIRONMENT SCIENCE AND TECHNOLOGY COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 8093
RUEHRL/AMEMBASSY BERLIN 1295
RUEHFK/AMCONSUL FUKUOKA 2283
RUEHNAG/AMCONSUL NAGOYA 1335
RUEHNH/AMCONSUL NAHA 4708
RUEHOK/AMCONSUL OSAKA KOBE 5881
RUEHKSO/AMCONSUL SAPPORO 3057
RUEHRC/USDA FAS WASHDC 8508
RUEAUSA/DEPT OF HHS WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEAIIA/CIA WASHDC

UNCLAS SECTION 01 OF 02 TOKYO 003456

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HHS FOR OGHA STEIGER, HICKEY AND WADWHA

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E.O. 12958: N/A
TAGS: TBIO KSTH ECON PREL SOCI EAGR JA
SUBJECT: HHS ACTING DEPUTY SECRETARY HARGAN'S MEETING WITH JAPANESE
HEALTH MINISTER YANAGISAWA

TOKYO 00003456 001.2 OF 002

1. (SBU) Summary: On July 10, Department of Health and Human
Services (HHS) Acting Deputy Secretary Eric Hargan met in Tokyo with
the Japanese Minister of Health, Labor, and Welfare, Hakuo
Yanagisawa. After a brief discussion of beef imports and food
safety issues, they exchanged views on fostering innovation in
Japan's pharmaceutical and medical device sectors. In a candid
conversation, Acting D/S Hargan and Minister Yanagisawa agreed that
Japan must deal with structural obstacles in its health system to
reap greater benefits from innovation, and Acting D/S Hargan offered
to assist Yanagisawa in these efforts in any way that would be
useful. End summary.

Beef Imports and Food Safety
------------------------------
2. (SBU) On July 10, HHS Acting Deputy Secretary Eric Hargan met
with Japanese Minister of Health, Labor, and Welfare (MHLW) Hakuo
Yanagisawa. Acting D/S Hargan began by thanking Yanagisawa for the
relaxation of import inspection requirements for U.S. beef, and said
he looked forward to further relaxation so the Japanese public could
enjoy more American beef. Acting D/S Hargan asked Yanagisawa to
share Japanese perspectives on dealing with food safety issues with
China. Yanagisawa responded that Japan has been dealing with the
issue of chemical residues in Chinese food imports for many years,
and has developed a framework to respond to the situation. He
mentioned that media reports of food safety difficulties in the
United States were helpful reminders to step up the Japanese system.

Innovation in Japan's Drug and Medical Sector
---------------------------------------------
3. (SBU) Acting D/S Hargan turned to Japan's initiative to foster
greater innovation, and noted that one would expect more innovative
drugs and medical devices from a country with many of the world's
leading scientists and technology companies. With unexpected
candor, Yanagisawa responded that Prime Minister Abe's "Innovation
25" initiative includes a plan to develop Japan's growth potential
in drugs and medical devices, to help Japan to recover "lost ground"
in these markets. He noted that Japan's global share of these
markets is only 16 percent and that much of the problem can be
attributed to the slow drug-approval process, the inability of
innovators to recoup the costs of research and development, and
administrative burdens that hinder foreign direct investment in the
pharmaceutical and medical device industries. Acting D/S Hargan
agreed that government controls play a key role in getting or
preventing innovation from getting to market and that the U.S.
Administration is striving to shorten the time it takes for
innovative products to reach the market without compromising safety.

4. (SBU) Pointing to the example of Australia, Acting D/S Hargan
noted that many of these structural obstacles can be overcome, but
that countries such as Germany have also lost ground because of
onerous requirements that hinder innovation. Yanagisawa agreed that
Germany's reference-price system has discouraged innovation, and
added that Japan's pricing system has also been a disincentive to
innovation in Japan, though not to the extent as in Germany. Acting
D/S Hargan concluded his comments by noting that public-private
sector dialogue was important,
and that transparent dialogue with industry allows discussion of key
issues earlier in the process. He added that a discussion on
generic drugs could also be central to reducing costs in the
Japanese system, and offered any assistance Yanagisawa would deem
useful. Yanagisawa assured Acting D/S Hargan that Japan is making
efforts to reward innovation and increase the share of generic drugs
on the market, but that the introduction of such changes needs to be
gradual, so as not to "shock" Japan's domestic pharmaceutical
industry. Yanagisawa thanked Acting D/S Hargan for his time, and
indicated he very much valued these types of discussions with the
U.S. Government and would welcome advice on these issues.

5. (SBU) Meeting participants:

U.S.:

TOKYO 00003456 002.2 OF 002

Ambassador J. Thomas Schieffer
HHS Acting Deputy Secretary Eric Hargan
Brian Harrison, Confidential Assistant to the HHS Deputy Secretary
Nina Wadhwa, HHS Office of Global Health Affairs
Toby Wolf, EST Officer (notetaker)
Mikako Sano, Scientific Affairs Assistant

Japan:
Minister of Health, Labor, and Welfare Hakuo Yanagisawa

Toshiyasu Ikenaga, Director, International Planning Office,
Minister's Secretariat, MHLW

Dr. Tokuaki Shobayashi, Infection Control Planning Director,
Tuberculosis and Infectious Diseases Control Division, Health
Service Bureau, MHLW

Dr. Eiichi Seki, Director, Blood and Blood Products Division,
Pharmaceutical and Food Safety Bureau, MHLW

Toshiyohi Tominaga, Planning Director, Evaluation and Licensing
Division, Pharmaceutical and Food Safety Bureau, MHLW

Dr. Hideshi Michino, Director, Office of Import Food Safety,
Inspection and Safety Division, Department of Food Safety, MHLW

6. (U) The HHS delegation has cleared this message.

SCHIEFFER

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