Rebirth Tokyo 1986

Chapter 343 Let's just come together!

The next morning, Takeshita Masato hurriedly arrived at Seikai Life.

Good morning, President!

"Hello, President!"

"Well, hello everyone."

Although he was a little anxious, he remained calm and composed in front of his employees.

There's no way around it; as a company boss, your every move will be scrutinized and interpreted by your employees.

If he shows any signs of anxiety, it can easily be misinterpreted as the company being in trouble, causing a lot of discussion within the company.

Therefore, many times, it's not that company leaders don't want to show more emotions, but rather that they simply can't and dare not do so.

After politely responding to the greetings from several administrators, Masato Takeshita walked unhurriedly to the chairman's office.

"Just let them know, have President Kobayashi come over for a short meeting."

"Hi!"

As the founder of the group, Masato Takeshita has a separate office for each subsidiary, as well as a dedicated secretary to handle simple matters.

For example, Lin Qingqian's Japanese friend is currently working as her full-time secretary at Xinghai Capital.

Soon, Hiroaki Kobayashi hurried into the office.

"Come, sit down, and have some tea."

"Yes, thank you, Chairman."

After having a simple cup of tea and chatting about some company matters, Masato Takeshita finally got down to business.

Did you see yesterday's news?

"Yesterday's news? Sorry, I was having dinner with a Walmart distributor last night."

Hiroaki Kobayashi lowered his head, looking like he was waiting for criticism.

"It's nothing, I was talking about this, the Japanese health insurance."

The young man waved his hand and then handed the newspaper on the table to his boss.

"I saw the news about the fixed-amount medical insurance system for the elderly in the newspaper this morning."

Japanese people love reading newspapers; almost every household subscribes to them and reads them before breakfast to stay informed about recent major events.

"That's right, this is it. Do you have any thoughts?"

Masato Takeshita plans to temporarily place the medical department at Seikai Residence, and then operate it independently once it reaches a certain scale.

"Does the chairman mean we should enter the pharmaceutical industry now?"

"Yes, that's what I meant."

"Well, the current domestic environment isn't very favorable for the medical industry, is it?"

As the head of a company, one must pay attention to both domestic and international situations. Hiroaki Kobayashi is also well aware of the current predicament of the medical industry.

He worries that in order to maintain the affordable healthcare system, the government will cut more ties with pharmaceutical companies in the future.

"I'm planning to enter the hospital industry, not the pharmaceutical industry, so why should I worry about these things?"

"Hospital?"

"That's right, it's a hospital."

The young man then confidently explained why he was optimistic about the development of private hospitals.

"Come on, let's look at the latest medical policies formulated by the government."

"The idea is good: set a standard, and then everyone follows that standard, thereby reducing treatment costs."

"But in reality, this policy is simply not feasible and will only lead to large-scale losses for public hospitals."

Leaving aside the complexity of elderly patients' conditions, even if every disease could be quantified, doctors would incur varying medical costs due to differences in their individual skill levels.

If quotas are imposed and egalitarianism is adopted, the end result will be a lose-lose situation for both hospitals and patients.

Does this mean that in the future, only hospitals that save money will be kept, while those that spend a lot of money will be discarded?
That makes absolutely no sense.

After hearing his chairman's explanation, Kobayashi Hiroaki suddenly understood.

"President, I understand. Now is indeed the best time to enter the hospital system."

"With the current policy of limiting medical expenses for the elderly, hospitals may initially continue to use the same treatment methods out of conscience."

"But faced with insufficient funding and the trend of cutting employee bonuses, they will definitely use ineffective and inexpensive drugs."

Doctors are human too, and they also need to consider their own livelihoods. Even if a few doctors persist, they cannot stop this trend.

Masato Takeshita nodded. "That's right, and not only that, we can also easily poach the hospital's pillars."

Many reforms that seem like good things eventually come at a heavy price.

Before Japan's healthcare reform, there were only 2000 medical accidents per year.

After the medical insurance reform, the number of medical accidents rose sharply, exceeding 1.6 in 1996 and later easily surpassing 2.

Unfortunately, in 1996, Japanese pharmaceutical companies only had a 4% profit margin. As for the low-priced generic drug industry, it suffered losses for three consecutive years.

Faced with such a difficult situation, pharmaceutical companies have no choice but to resort to unethical means to make money.

Ultimately, bad money drives out good, and pharmaceutical companies that used high-quality raw materials went bankrupt, leaving only those that used inferior raw materials.

These low-quality medicines will ultimately affect consumers.

It's fair to say that ordinary people who initially supported the tiered pricing policy for pharmaceuticals and the policy of replacing drugs with generic ones have ultimately regretted their decision.

The increasing number of medical accidents has also had two serious consequences for hospitals.

First, it makes conscientious doctors feel uneasy.

They know that cheap, substandard drugs are harmful, but in order to prevent the hospital from losing money, they have no choice but to use these shoddy drugs.

Second, it creates tension in doctor-patient relationships.

Because of the widespread use of substandard drugs, too many patients have experienced treatment accidents, which naturally leads to great dissatisfaction among the public.

Doctors, as those directly responsible, are the ones most affected.

In such a cruel situation, it is difficult for a doctor with a conscience to remain calm, and he will feel a deep sense of guilt.

Once this emotion arises, it will cause people to become alienated from the hospital.

At this point, as long as Xinghai Life demonstrates respect for talent and attaches importance to medical health and safety, it can poach a large number of renowned doctors.

After all, for them, where they go to treat patients doesn't matter, so why not go somewhere that makes them feel at ease?

Doctors who are not so lofty and whose thinking is closer to that of ordinary people will also be the main group leaving the profession.

Nobody wants to be bothered by patients all the time; what if a serious accident happens?
For example, they might cut off your arm or beat you up.

In addition, their income will increase after they enter private hospitals.

This is also a major characteristic of private enterprises: talented people generally earn more.

It can only be said that Japan's one-size-fits-all strategy of tiered price reductions for pharmaceuticals and its strategy of replacing drugs with generic drugs are truly ruthless.

It not only destroyed its own world-leading medical industry, but also caused countless people to lose their health and even their lives.

Hiroaki Kobayashi naturally understood this simple principle.

He said with some delight, "While it's not right for us to gloat, this is indeed our best chance. If we miss this major hospital disruption, it will be very difficult for us to get back in."

Takeshita Masato looked somewhat wistful. "Yes, we really did make a bit of a profit from this disaster."

"But there's nothing we can do about it; it's the trend of the times, and we can't change it. We might as well build the hospital as soon as possible and save more lives." Hearing his chairman say this, Kobayashi Hiroaki nodded in agreement.

"Yes, that's all we can do."

The two were only momentarily moved by the situation, and quickly put those feelings behind them, starting to plan how to open a hospital.

"We are newcomers to the healthcare industry, so we must make a splash."

With a wave of his hand, Masato Takeshita continued confidently, "We'll open one in each of Tokyo's 23 wards. Don't worry about spending money; we have plenty of resources."

Other markets don't matter, but the Tokyo market must be captured.

This place has the most wealthy people and concentrates a great deal of Japan's wealth.

"Isn't this a bit too much?"

"Not many. If I weren't worried about a shortage of doctors, I would have liked to open 5 in Osaka, 5 in Yokohama, and 3 in Kobe..."

The 1990s were a period of rapid development for private hospitals in Japan. The number of private hospitals across Japan more than doubled in a short period of time.

Twenty-three hospitals may seem like a lot, but it's just the beginning.

"I understand. So, do pharmacies and the pharmaceutical industry also need to get involved?"

Influenced by his own chairman, Hiroaki Kobayashi subconsciously wanted to develop the entire medical industry chain.

"Pharmacies really need to speed up their expansion; there should be at least three in major cities."

Japan's healthcare reforms led to a market flooded with substandard drugs, which undoubtedly harmed the public. However, as time went on, Japanese pharmaceutical companies also quickly faced repercussions.

Japanese people no longer trust domestically produced medicines and prefer to spend money to buy imported medicines at full price.

According to statistics, starting in 1997, the sales of Japanese pharmaceutical companies experienced negative growth for five consecutive years, while the annual growth rate of the imported drug market exceeded 10%.

At that time, Japanese pharmaceutical companies accounted for only 20% of the high-end drug market in Japan, and this percentage continued to decline year after year.

The situation in the field of new drug development is even worse.

Japan's top ten pharmaceutical companies are not even as good as Pfizer in the United States.

If the Japanese government hadn't later corrected these mistakes, pharmaceutical companies would have almost missed the era of biopharmaceuticals.

It can be said that Japan's healthcare reform has directly led to a lose-lose-lose situation.

First and foremost, the people.
Ordinary people with limited funds can only endure substandard drugs and treatments, which worsens their health.

Ordinary people with some spare money need to pay expensive treatment costs, which can easily lead to them falling back into poverty due to illness.

After all, drugs from both private hospitals and foreign pharmaceutical companies are very expensive.

Only a few wealthy people might not care about these things. Because they have always used the best medicine and sought out the best doctors.

Secondly, pharmaceutical companies,
The government's tiered drug price reduction plan and generic drug substitution strategy have caused pharmaceutical companies' profits to plummet. Only the top-tier pharmaceutical companies, and the most unscrupulous ones, can survive.

This has resulted in two serious consequences.

On the one hand, pharmaceutical companies lack the funds for innovative research and development in biopharmaceuticals, or even if they have the funds, they dare not conduct such research.

After all, the mandatory price reduction policy every two years will only turn the research and development of new drugs into a business with meager profits, or even one that may inadvertently result in losses.

According to statistics from the US FDA, during this period, Japan had only 6 new drug applications, while the US had 100 to 200.

The difference is so great that it's hard to believe.

With fewer new drug development projects, the domestic and international market share naturally shrinks. Decreased sales further reduce pharmaceutical companies' R&D investment, creating a death spiral.

On the other hand, the market is flooded with substandard generic drugs, which has caused public trust in domestically produced drugs to plummet.

People stopped buying these junk items, and small and medium-sized pharmaceutical companies struggled to survive, leading to numerous bankruptcies and closures.

Finally, there is the government.
Pharmaceutical companies are unable to develop new drugs, resulting in lower sales and profits.

As a result, tax revenue from the pharmaceutical industry has also decreased.

Especially in the latter half of the 90s, a large number of pharmaceutical companies went bankrupt.

The government is not only facing declining tax revenue in the healthcare sector, but also has to shoulder the responsibility of providing relief to unemployed workers.

In the end, the Ministry of Health, Labour and Welfare did save hundreds of billions of dollars, but it also crippled the healthcare industry.

The money saved is far less important than the normal development of the healthcare industry.

If Japan's medical industry develops healthily and in an orderly manner, it can easily earn back hundreds of billions of dollars through new drug research and development.

It's important to know that the global pharmaceutical industry was worth nearly $9000 billion in 2010. If Japanese pharmaceutical companies could capture just 20% of that market, they would have a market share of nearly $2000 billion.

From the perspective of later generations, it can be said that...

The Japanese government has essentially lost the big picture for a small gain, suffering a double loss.

What's infuriating is that the Japanese government wasn't short of money at the time.

The annual investment in rural revitalization plans alone amounts to tens of billions, and sometimes even hundreds of billions of US dollars.

Even a small portion of this money could promote the healthy development of the healthcare industry.

As a result, in an attempt to save a little money, they almost destroyed their own pharmaceutical business in the 1990s.

What's even more infuriating is that the rural revitalization plan has produced countless idiotic projects, such as building a road for every convenience store, resulting in a significant waste of infrastructure funds.

It can be said that this policy has only a minimal impact on local areas. On the contrary, it has enriched the construction industry and local civil servants.

Yes, thanks to Japan's large-scale rural infrastructure policy, the Japanese construction industry quickly recovered and even reached new heights.

In terms of personnel alone, the number has increased by about one-third.

Although Xinghai Construction is a newcomer, it has managed to get a share of the market thanks to the strength of the Xinghai Group.

However, Xinghai Construction is relatively small in scale, and due to excessive investment in fixed assets last year, it did not make a profit.

However, the Ministry of Health, Labour and Welfare is brain-dead, so naturally, it's an opportunity for wealthy companies like the Xinghai Group.

Without the Ministry of Health, Labour and Welfare's questionable actions, how could Xinghai Group have entered the medical industry?

As Japan's healthcare system gradually collapsed, pharmacies experienced explosive growth.

After all, only here can the Japanese people buy safe and reliable medicines at high prices.

Such a great money-making opportunity should naturally be seized as soon as possible.

After listening to his chairman's instructions, Hiroaki Kobayashi quickly wrote them down and couldn't help but ask again.

"What about the pharmaceutical companies?"

The core of the healthcare industry has always been pharmaceutical companies; a healthcare group without pharmaceutical companies will only be a peripheral entity.

"I'd like to do that too, but most top-tier pharmaceutical companies can hold on, so let's wait and see."

The pharmaceutical industry is different from other industries; most small companies can only produce generic drugs.

This technology is too basic; there's absolutely no need to acquire it.

Only top-tier pharmaceutical companies are the targets that young people should aim for.

As for small companies conducting innovative biomedical experiments, Japan simply doesn't have them right now; the environment isn't there.

However, the fact that other companies are not doing this presents an opportunity for Xinghai Group.

With that in mind, Masato Takeshita decisively changed his attitude and said, "In that case, we'll first acquire a mid-sized pharmaceutical company, and then quickly set up our own biomedical research and development laboratory."

"When top-tier pharmaceutical companies can no longer hold on, it will be a perfect opportunity to seamlessly take over."

Upon hearing the young man say this, Kobayashi Hiroaki immediately became excited.

He responded excitedly, "Yes, Chairman!"

(End of this chapter)