Manufacturing

Initiatives under the medium-term business plan

Establish a new manufacturing structure by constructing the Takaoka Plant

To increase production of ethical drug products, we needed greater production capacity and, in September 2022, began construction of the Takaoka Plant, which commenced operations in April 2024.

Plans call for the plant to produce mainly generic drug products. In addition to manufacturing high-volume products, the plant is being equipped to respond flexibly to small-lot manufacturing of many types of products. With an annual production capacity of roughly 2 billion tablets (solid formulations taken internally), it is a facility where GMP levels can be raised further. We are working to improve manufacturing efficiency by reducing some operations, eliminating others, and pursuing labor savings to facilitate stable supplies and low-cost manufacturing. In addition, the plant will reduce our environmental impact by actively utilizing renewable energy sources. The plant’s commencement of operations completes our four-plant manufacturing structure.

The construction of the Takaoka Plant, an important project for the Kyorin Group, was made a priority because it will lead directly to growth of the generic drugs business. First, we intend to bring outsourced manufacturing in-house and build a structure for increased production of priority (generic) products and the mucoregulating drug Mucodyne, then aim for full production as the main plant for generics at an early date.

Quality issues with ethical drug products including the discovery of contamination by foreign substances in generic drugs led to insufficient supplies of generics, which became a social issue. With operations begun at the Takaoka Plant, we have built a stable supply structure for increasing our production capacity of generics and other products.

Raising GMP levels and expanding environmental considerations

We are working to further strengthen and solidify compliance with laws and regulations related to manufacturing and quality control, as well as our quality control structure, to promote stable supplies of safe and reliable products. The Takaoka Plant is a facility where GMP levels can be raised further.

For the environment, in addition to being designed to significantly reduce CO₂emissions compared with those at the other manufacturing centers, the plant aims to lessen its environmental impact by proactively using clean energy sources including liquefied natural gas (LNG) and renewable energy sources like hydroelectric power. We are also working to introduce labor savings in various operations to improve manufacturing efficiency.

Improve reliability and maintain product quality

In recent years, quality requirements for products have become more stringent. In response, we are working to maintain quality through various approaches, including cross-facility reciprocal audits of GMP, reinforcement of data integrity (framework ensuring data is complete, consistent, and accurate), regular training and testing of employees, and the use of video to teach standardized operations.

In these ways, we are working relentlessly to provide products that earn the confidence of medical practitioners and patients.

Increase production efficiency to improve cost competitiveness

We are working to establish a manufacturing structure that ensures stable supplies of new and generic drugs and low-cost production.

During the production process, we utilize various practices to improve manufacturing quality, including enhancing manufacturing technologies and acquiring new technologies. Going forward, we will strive to improve manufacturing efficiency by appropriately deploying resources and improving processes to ensure low-cost operations and increases in production volume.

In these ways, we will solidify our structure to improve cost competitiveness.

Overall optimization of our manufacturing system

Using the unique features of the three original plants, we have pursued optimization by aligning products to be manufactured with manufacturing sites to maximize our product supply capacity.

At the Noshiro Plant, we have been adding manufacturing equipment and strengthening human capital (securing and training human resources) while manufacturing new drugs as well as high-volume generics, with a focus on tablets and capsules.

The Shiga Plant has a high percentage of subcontracted manufacturing sourced from outside the Group, including drugs for the Japanese market sold by foreign pharmaceutical companies. We are proactively promoting subcontracted manufacturing to make it a reliable subcontracting plant.

The Inami Plant primarily handles generic drugs and also manufactures solid formulations taken internally and eyedrops.

These three plants are working to raise GMP levels and maintain and improve quality-control systems, while establishing PIC/S GMP compliance and building a supply system for both domestic and overseas markets.

With a four-plant structure including the Takaoka Plant, we will work to raise productivity even higher and ensure even greater reliability.

Supply chain management (SCM)

We are creating a system to monitor and control supply chain disruptions by visualizing supply chains from upstream raw materials and manufacturing of pharmaceutical ingredients to final product manufacturing and supply. We also aim to build resilient supply chains to respond flexibly to recent environmental changes.

Our pharmaceutical supply chain, which encompasses a wide variety of items including raw materials, intermediates, and pharmaceutical ingredients, is supported by numerous suppliers in Japan and overseas. To continue providing stable supplies without interruption in the procurement chain, we consider it imperative to strengthen relationships with individual suppliers by working closely and sharing information with them. As another risk-hedging measure, we are striving to secure multiple alternative suppliers and various transportation routes in addition to our existing suppliers. We are also promoting compliance in logistics, including imports and exports, to guarantee stable supplies.

For even greater stability of supplies, we are setting appropriate product-specific inventory standards and procurement plans for every product. For products with large fluctuations due to reasons including seasonality or fleeting popularity, we are doing our best to procure supplies flexibly while following daily changes in cooperation with marketing divisions.

Several challenges have emerged in the past few years, including geopolitical risks, exchange rate fluctuations, rising raw material prices due to rising energy costs and semiconductor shortages, and a logistics problem in 2024. Nevertheless, the Kyorin Group will continuously strive to ensure stable product supplies by reducing various risks through production planning and inventory coordination with internal manufacturers and external subcontracted manufacturers, while developing multiple and alternative suppliers and improving logistics efficiency.

Sustainable procurement initiatives

We consider it important to fulfill our social responsibility by striving to provide stable supplies of products. For this, we ask for our suppliers’ cooperation based on their own social responsibility.

To achieve sustainable procurement, we carry out activities with high ethical standards in compliance with the letter and spirit of laws, regulations, and international rules in Japan and overseas.

On-site investigations of suppliers

When selecting a new supplier, we begin transactions only after confirming through an on-site investigation that the supplier has measures in place for issues including legal and regulatory compliance, labor safety, and environmental protection.

We regularly visit suppliers with whom we have business relationships to maintain and enhance product quality and the stability of supplies. When an on-site investigation identifies issues needing correction, we propose improvements, request an improvement plan, and follow up on the improvement status.