The Journal The Authority on Global Business in Japan

When AbbVie G.K. President and American Chamber of Commerce in Japan (ACCJ) Governor James Feliciano took the reins of the young pharmaceutical company in 2016, he set into motion a 5-Year Focus that would help guide growth at a crucial time. The results speak for themselves. Today, AbbVie is among the world’s leading players in pharma and has steadily climbed the ladder of great places to work. One year after The ACCJ Journal sat down with Feliciano to learn about the initiative, we catch up with him again as the 5-Year Focus winds down—amid the coronavirus pandemic—to find out what the company has learned and where the path to 2025 is leading.

Tell me about the 5-Year Focus.
This strategic plan, which we launched in 2016, has been all about how you bring together existing initiatives and priorities to create a framework that allows people to understand what the com­pany is aiming for and around which we can communicate. Often, you’re having tremendous success and moving forward as an organization, but you don’t have the framework to track and record that success. The 5-Year Focus allowed us to decide what our priorities were going to be and to track our progress towards those goals.

We had two pillars:

  • Business growth
  • Employee engagement

A lot of the business growth focus was around internally improving our capabilities and the processes, frameworks, and systems we were using to capture and record information. Also how we set key performance indicators and create brand teams—all the nuts and bolts of being a successful business.

We knew that we were going to be launching multiple prod­ucts every year, so we needed better processes for taking the learnings from previous launches and applying those so that we don’t keep reinventing the wheel every time.

Employee engagement was about building the culture to do this. As a new company—we were spun off from Abbott Laboratories in 2013—how do we build the culture and grow very rapidly at the same time? In 2016, we had a team of about 1,000. Now, we’re well over 1,250 and, if you include contractors, who I consider part of the team, the number is much bigger. How do you grow so quickly while still building that culture and sense that we’re creating something together?

Over the course of five years, we have launched many new products and businesses—including our oncology business—and our sales have increased by 50 percent over that period. We had a goal of being a top-20 pharma company by 2020, but we achieved that in 2018. At one point, we had the number-one-selling pharmaceutical drug in Japan for the full year. It was the first time for the organization—and for me professionally—to achieve that. It shows how we’re really having an amazing impact on patients’ lives.

On the employee engagement side, we also created a strong employee value proposition that everyone in the organization believes in. This includes putting structures around work–life balance and creating a new office that is based on a work any­time, anywhere—or activity-based—model.

We created a system called “My Journey, My Choice” that gives employees a lot of flexibility, and we launched Dress for Your Day, which allows you to wear what you want and be who you want to be. Plus, in August, we announced that all LGBT and non-married partners in the AbbVie family now receive the same benefits and recognition as married couples. We are really working on diversity and inclusion in the organization.

Over the past five years, we’ve created this really strong base on which to build, and some of the metrics we’ve seen really reflect the success. In 2016, we were ranked 24th in Japan by the Great Place to Work Institute. This year, we placed 11th—and we’re the highest-ranked pharmaceutical company.

During this time, we’ve become the largest affiliate for AbbVie outside the United States, and our retention rate—the number of employees we keep—has improved dramatically. We’re now in the low single digits in terms of annual turnover, so we’re hiring and keeping really good people. That’s a metric that we look at every month.

A big part of this is the office, which has really changed. We sit where we want, we go where we want. You don’t just sit in your department. At our previous office, we had about 650 people spread across five fragmented offices on different floors. Sometimes you would never see certain people. Now we all mix with each other.

We’re going to have reasonable rules around how we do our jobs, and we’re going to give a lot of responsibility and accountability to the employees.

We also have a really strong training program, and we spend a lot of time training all our people managers how to give feed­back, to coach, and to drive engagement in the orga­ni­zation. These are now clear expectations of people managers. We’re all building this com­pany together and we’re going to become the best company in Japan.

What is the path to 2025?
As we look towards the next five years, how do we take the base we have built and become great? Our goal is to become the best company in Japan as measured by Great Place to Work. We want our employees to be proud to be here and of the job we’re doing. We want them to be proud that we are contributing to society, that we’re bringing cutting-edge innovation and science to patients, that the healthcare professionals we interact with respect and trust us, that we have the patient and their needs in mind and in our heart first, and that we are a company where you can be you—from an LGBT or any sort of personal perspective.

And then, as a pharmaceutical company, there’s the heart of what we’re going to be doing: creating and developing innovative medicines to bring more smiles to patients in need. Right now, we have 80 clinical trials ongoing in Japan. We have one of the most robust pipelines in the industry. AbbVie now ranks as a top-five pharmaceutical company globally, so it’s time for us to be not only a pharma leader in Japan, but also a global corporate leader. That’s our goal—to step up, to take that challenge and responsibility as an organization, and really contribute. We want to be a place where everyone enjoys working and where people want to come work.

What lies ahead in terms of medicines and treatments?
In immunology, we have the best portfolio and our goal is to be recognized as the undisputed number-one leader in the field, the partner of choice with a portfolio that meets the needs of many to most patients. Every therapy that a patient chooses is a discussion between them and their doctor—so it’s about choosing the right therapy for them. Our goal is to have as many options as possible that could potentially be one of those choices. And I think our portfolio certainly is that. We are definitely leaders in immunology, and we are the undisputed leaders in treatment of hepatitis C. Our goal over the next five years is to eliminate hepatitis C from Japan.

We are now launching our oncology business, and we’re looking to be the number-one hematological oncology part­ner. We just did an acquisition on a global basis of Allergan, which, on the pharmaceutical side, has a very strong neuro­science portfolio focusing on things such as migraine headache, for which there is a lot of medical need in Japan. Our goal is to bring a lot of that neuroscience pipeline to Japanese patients over the next five years.

How has the pandemic impacted the office?
Covid-19 has changed the office environment a bit. About 30 percent of employees are back to the office at any time during the week, but on a given day it’s about 15 percent. People are coming in when they need to, but we still have a very large per­centage who are working fully from home. Return to the office is increasing every week, and it’s something that we’re tracking very closely. I think we’re starting to get a level of comfort, but, certainly, as an organization, we’re not demanding that anyone come into the office. We’re still without a vaccine, and there are crowded trains and long commutes. So, safety first: work from home as much as you need to. But the office is open, it’s viable, people are working here, and we’re starting to see a resurgence.

Has the corporate culture been affected?
Every year we hold a series of town hall meetings. In January, we have an all-employee meeting in Tokyo at which we gather the whole company. Then, in June and July, the management team goes to 12 to 15 locations around Japan for smaller sessions with people in their area. This year, obviously, we could not do the town hall meetings in a live setting; we had to do them virtually.

Using Zoom, we were able not only to get everyone together online, but also to do what we always do: have breakout sessions. People went into groups of four or five people, because we’re trying to get feedback from the entire organization on what our priorities should be for Project 2025. We don’t just have the management team go in the back room, we try to really get a bottom-up view so that when everyone sees this next five-year plan they say: “Yes, I remember that, I remember talking about it. Oh wow, my ideas—our ideas—are really included in that. We’re all building this together.”

We’ve found that two-way interaction works well with this technology and we have lots of opportunities for people to send in questions and then go into those breakout rooms. We didn’t simply one-way deliver, where we, as management, just talk. There’s a certain amount of that, of course, in terms of giving our updates, but we’re also looking for feedback and to get people involved. I think that’s what makes it valuable for everyone.

When we looked at our surveys following the town hall meetings—of course, we had about 98 percent of people complete the survey—more than 95 percent felt it was a meaningful two hours, and they understood what we are doing and walked away feeling motivated and informed about where the company is right now.

Everyone knows this is not an ideal situation, but if you put your heart into it—and people are genuine and try, and there’s engagement—even when you’re on a virtual system it can work.

Has the pandemic impacted strategy and operations?
Overall, the business has suffered a little bit. But there are two aspects when you talk about pharmaceutical products. One is that patients who are on treatment aren’t switching as much, because they’re not going to the doctor and are staying on their current medication. The other is interaction with doctors.

When it comes to clinical trials, we are part of global efforts. In general, we continue to move forward, although there have been some slight delays with the clinical trial portfolio development. But we’re seeing that start to pick up again. I think Japan has done a good job with how they’ve managed Covid-19, and how the hospitals put people on a very separate track if they have symptoms. So, we’re seeing things improve.

One area where we saw a big drop—but that is starting to return—is the ability of our sales reps to meet with doctors in the hospital. Especially at the peak of the pandemic, we did not want our reps to be any sort of burden on the hospital system. So, we pulled back completely from visiting. We’re now going back, but only on an appointment basis. Thankfully, when you have new products, doctors want to see you. So, we’re seeing an increase in our interactions with them.

We’ve also moved more to digital. We’re doing online meetings, symposia, and peer-to-peer events with a lot of success. That speaks to the portfolio, because doctors want to talk about innovation, and they want to understand the new data. We have a lot of new things to talk about with them.

All that being said, our overall interaction with doctors has definitely declined, but that’s been industry wide, and we’re about on par with the industry.

Are doctors in Japan adapting to virtual interactions?
Yes. I think that’s been one of the silver linings of the pandemic experience. Doctors are feeling more comfortable with this medium and are interacting with sales reps and medical science liaisons through this digital format, which is great. As we’re launching more and more new products, it will allow us to be more efficient because our teams don’t need to travel around the country all the time. They can be more centrally located and use this format to interact with doctors—especially those in more rural areas. It also allows us to be more real-time. We’re hopeful that this will be the genesis of a new way of interacting with doctors.

How might Covid-19 change healthcare?
Clearly this is going to make the Japanese healthcare system look at digital as a viable option. How do you remotely diagnose? How do you remotely treat? I had the experience in the United States, when I was home for Christmas, of having an online con­­sultation, and then having the doctor send the prescription to a local pharmacy. I never had to go into the clinic.

That kind of telemedicine is not as developed here in Japan, but I think now, through this experience with coronavirus, we have to see it as an option. We go into hospitals and doctor offices now and there are incredibly long lines and waiting. Telemedicine should be an option in Japan. It needs to be seriously considered and reimbursed more broadly.

I think this experience has proven that there is a workaround. If you’re sick, it’s better to stay home. And if there’s a way to interact with the doctor through a telemedicine-type portal, that’s much better. If you have influenza, or you’re feeling terrible, the last thing you want to do is get out of bed and go to a doctor’s office. The Japanese government really needs to look at this moment and say, “Okay, how can we digitize this more?” It lowers the burden for everybody, it lowers the risk to society in general. You don’t want sick people walking around; you want them to stay home.

What are the biggest challenges beyond Covid-19?
For pharmaceuticals, our biggest issue remains the same: How will the Japanese government recognize and reward innovation? That’s always been the issue. When you look at the sustainability of the healthcare system in Japan, over the past five years, 75 per­cent of targeted social security system savings were generated by price cuts to pharmaceuticals. This is no longer a sustainable policy direction. We need to address the underlying causes of increasing healthcare expenditure, taking a holistic approach to generating savings—doing things such as expanding the use of telemedicine and reducing unnecessarily long hospitalizations—all around delivering care more effectively and efficiently.

But how innovation is going to continue to be recognized and rewarded is important. Right now, the transparency and predictability around the Japanese reimbursement system is becoming more and more cloudy. It’s a challenge because we have long runways to develop our pipelines. We have to conduct very extensive clinical trials to get approval in Japan. For many products, the rules are such that we don’t know—at approval, five years from now—how that product is going to be recognized and reimbursed.

As an industry, pharma is bringing a lot of amazing inno­vation to Japan, and we want to continue to do that. Our goal is to have a seat at the table. We want to work proactively with the Japanese government to create a system that is sustainable. We want to have those conversations.

We all want this healthcare system to be sustainable, and we all want Japan to have the best healthcare system in the world, for Japanese patients to have access to the most cutting-edge, innovative technology.

How can the ACCJ help?
On a number of levels, I think the ACCJ’s leadership is both necessary and incredibly fruitful.

You look at the priorities of the chamber and you see the Healthcare and Retirement pillar. The healthcare and financial services industries are coming together to create very forward-looking proposals for how we can potentially unlock value in the financial services sector, as well as drive innovation in the healthcare sector to create that long-term sustainability that matches the demographics of Japan. Bringing these two industries together to have a shared platform is something only the ACCJ can do.

With our access to the Embassy of the United States, Tokyo and the US government—and as we look towards the next round of trade talks with Japan—we hope to have a broader discussion about these issues. Through the hard work we’re doing right now—espe­cially in terms of the Healthcare and Retirement pillar, and within the F500 CEO Advisory Council—we’ve had lots of interactions with some very influential decision-makers and thought leaders in the government. We get that access to have those conversations thanks to the ACCJ, and it’s wrapped in a format that has a seal of approval.

The next initiative for the chamber is around digital, and how we can help Japan take that next step. A big part of that is how we identify digital opportunities and leverage those for healthcare. Japan has a great sense for data collection. We have a very centralized healthcare system that lends itself well to the consolidation of electronic healthcare data. If properly consolidated, the potential impact of using this data to develop better treatment algorithms—and to find the best paths forward for patients—is huge.

I always like to say that pharmaceuticals are not the end all and be all. We’re not the silver bullet. There’s everything around diet, exercise, and lifestyle—as well as all the other interventions we can make, in addition to the right treatment at the right time for the right patient—that creates a healthy society. Japan has tremendous opportunity to leverage data in a meaningful way to truly become global leaders in terms of providing a world-class healthcare system.

Christopher Bryan Jones is Editor-in-Chief of The ACCJ Journal. Originally from Birmingham, Alabama, he has lived in Japan since 1997.
[Digital] will allow us to be more efficient because our teams don’t need to travel around the country all the time.