Sawai Pharmaceutical takes a proactive approach toward organizational governance. This carries the twin benefits of raising our corporate value and ensuring we meet our social responsibilities. We recognize and understand our impact on society and the environment, and know our stakeholders and greater society expect us to maintain the highest standards in all our operations.
Sawai Pharmaceutical believes that strengthening corporate governance is essential to building businesses that encourage sound decision-making and operations capable of properly and quickly responding to changes in external environments. We recognize that fair and transparent management is indispensable to realizing sustainable growth and improving our mid and long-term corporate value. Today, we are making efforts to enhance and maintain our corporate governance so we can better address consumer issues, the global environment, community involvement, development initiatives, human rights and labor practices, fair operating practices, and education.
Timely and Appropriate Information Disclosure
Sawai Pharmaceutical has formulated a disclosure policy for the timely and appropriate release of information. This policy outlines the timely and reliable disclosure of company information to market participants, such as shareholders, investors and securities analysts in accordance with applicable laws, including the Financial Instruments and Exchange Act and rules governing the respective securities exchanges.
We promote risk management in a bid to properly respond (evade, transfer, reduce and hold) to various potential risks in business activities. We also effectively manage any potential impact resulting from exposure to these risks and work to minimize the loss of management resources.
|Types of Major Risk||Explanation of Risks|
|Regulatory risk arising from the Pharmaceutical and Medical Devices Law and other regulations||The Sawai Group’s (The Group) activities are subject to regulations such as Japan’s Pharmaceutical and Medical Devices Law, which requires the Group’s places of business to obtain permits, registration, and licenses, as well as submit notifications to regional governments. There remains the possibility that the Group’s operations will be suspended by the regulatory authorities and that permits to manufacture and sell pharmaceuticals could be cancelled.|
|Changes in Japan’s NHI drug price scheme and healthcare system||Previously, the prices of many pharmaceuticals were reduced once every two years based on a survey of actual market prices. There remains the possibility, however, that there will be further changes to the drug pricing system and National Health Insurance for the purpose of reducing medical costs.|
|Lawsuits pertaining to intellectual property||Even after the expiration of substance or use patents on a generic’s originator drug, there are many cases where more than one patent remains. There is the possibility that a lawsuit will be brought against the Group based on these remaining patents.|
|Effects of competition and other factors||In addition to the many companies entering the generic market, the manufacturers of the originator drugs are endeavoring to address the deterioration in market share even after the expiration of their patents by implementing various measures, such as authorized generic drugs*. Depending on the course of events, the possibility exists that the Company may not be able to secure its planned level of sales and profit.|
|Product recalls and suspension of sales||In the case of generic drugs, the risk of unknown serious side effects is extremely small. If new, unexpected side effects emerge, or incidents occur in which ingredients become contaminated with impurities, there is potential for a product recall or sales suspension. Depending on the details of any incident, the Group may have to bear responsibility for product liability.|
|Temporary suspension and delays in production due to natural disasters||The Group maintains production facilities in several regions. In the event of natural disasters or issues that arise because of technical or regulatory matters, production at these facilities may be suspended, and the possibility exists that the supply of products could be halted.
In addition, since some major raw materials are provided by specified external suppliers, there is the possibility that, if supply of those materials were to be stopped because of natural disasters and/or other circumstances, substitutes for those materials would be difficult to source.
|Global business development||The Group evaluates new business development opportunities such as overseas development, capital alliances, and company acquisitions, with market intelligence that, in addition to business profitability, includes the relevant laws and the politico-economic conditions. There is the possibility that, due to unexpected circumstances outside of our original assumptions, the desired effect will not justify the investment.|
|Company acquisitions||On May 31, 2017, the Company acquired Upsher-Smith Laboratories, LLC for U.S.$1.05 billion. As is the case with company acquisitions, the possibility exists that the desired effect will not be obtained. This may be due to factors such as management, environment or business changes, or delays in the progress of the merger or information that did not come to light during due diligence.|
|Information management||The Group holds personal data and trade secrets from inside and outside the Company as well as large amounts of other information. We strive for thorough information management, and have put IT security measures in place, but there is always a possibility for leaks, alterations, and data loss due to system failures or accidents.|
|Other||In addition to the risks given here, the Group faces a range of other risks that may possibly arise. These include financial market conditions, foreign exchange fluctuations, corporate governance, including compliance risks, and various environmental issues.|
*Authorized generics (AG) are generic drugs marketed and sold by a company that has been authorized by the original manufacturer or patent holder to make use of those patent rights.
Promotion of Corporate Culture
Sawai Pharmaceutical is promoting our M1 Project to strive for “Marshalling All Employees’ Efforts to Become No. 1” through the popularization and implementation of its corporate philosophy and Code of Conduct with a view to sharing its vision to follow and promote our company-wide common values. This is a project that shall carry on as permanent company quality improvement activities that will carry on as long as the Company continues to exist.