Published: January 3, 2011
TOKYO — When the Japanese government raised the tax on cigarettes on Oct. 1, it could have started a public health revolution in this land of heavy smokers.
The tax increase should also have been a bonanza for Pfizer, the world’s biggest pharmaceutical company, which makes the leading drug to help smokers break the habit.
Instead, it became a missed opportunity.
Despite ample notice of the change, Pfizer failed to produce enough of the drug, Chantix, which is sold as Champix in Japan. When tens of thousands of would-be quitters rushed to their doctors for prescriptions, Pfizer was overwhelmed.
Less than two weeks after the tax increase went into effect, the company was forced to suspend sales of the drug to new patients until it could ramp up production.
Now, with the drug still difficult to get, Japanese health professionals and many of the nation’s smokers are grumbling.
And Pfizer has given up millions of dollars in potential Chantix sales, at least temporarily, at a time when overseas markets are growing in importance. In the United States, prescriptions for the drug plunged after the Food and Drug Administration warned doctors about psychiatric side effects.
“After all that advertising, it turns out they don’t have enough,” said Hiroya Kumamaru, director of the KI Akihabara Clinic in Tokyo, who is turning away patients. His clinic has enough of the drug for only the 80 patients who began their treatment before the supply squeeze. “They should have predicted something like this,” he said.
A Pfizer spokesman in Tokyo, Kinji Iwase, said the company misjudged interest in the drug among Japanese smokers. “An extraordinary number of people decided to quit, and our reading of the situation was off,” Mr. Iwase said. “We expected more demand, but not to this extent.”
Japan has long been a smokers’ stronghold. Cheap cigarettes sold by a government-controlled tobacco company and lax antismoking laws — smokers have almost total freedom to light up at bars, restaurants and even schools and government offices — have long encouraged the habit. About 130,000 people a year die of tobacco-related illnesses in Japan, according to the World Health Organization.
But a growing health consciousness, tighter regulations on tobacco advertising and increasingly strict smoking bans on public transport have contributed to a gradual decline in smoking. The smoking rate for men was 36.6 percent in 2010, 2.3 percentage points lower than a year earlier — though far above the 24 percent smoking rate among men in the United States.
The tax increase, prompted by health concerns as well as a need to raise revenue for Japan’s government, was expected to spur an even more sharp and sustained flight from cigarettes. On Oct. 1, the price of a pack of 20 cigarettes jumped from 300 yen, or about $3.60, to over 400 yen, including 70 yen in taxes.
Ahead of the increase, smokers rushed to stock up; tobacco sales surged 88 percent in September from a year earlier, but slumped 70 percent in October, according to the Tobacco Institute of Japan.
Surveys suggest that many smokers here are looking to quit. In one November poll of 1,110 smokers by Rakuten Research, 13.9 percent of respondents said they had stopped smoking, while 15.5 percent said they planned to stop.
While sales of nicotine patches and smoking alternatives have risen, Chantix seems to be the preference for smokers trying to stop.
Introduced in the United States in 2006, Chantix, which works by blocking receptors in the brain and suppressing the positive feelings induced by cigarettes, was initially seen as a global blockbuster. But reports of possible side effects, including aggression and thoughts of suicide, prompted the F.D.A. in 2009 to require the drug to carry the agency’s strongest warning on its packaging. That set off a sharp drop in sales in the United States.
Since then, Pfizer has tried to emphasize the benefits of quitting smoking over the risks posed by Chantix, and has stressed that further studies are needed to determine whether the problems are caused by the drug itself or are symptoms of nicotine withdrawal.
To make up for lost revenue at home, Pfizer has also looked increasingly to foreign markets. In the first nine months of 2010, while revenue from Chantix in America fell another 16.8 percent to $252 million, sales in the rest of the world grew 22.17 percent to $270 million.
Clearing Japan’s drug-approval process in 2008, Pfizer successfully wooed Japanese doctors to prescribe the drug. Japan’s national health insurance covered 70 percent of the 60,000-yen cost for a recommended 12-week prescription.
To stoke public interest, Pfizer started a major ad campaign, starring the slick Hiroshi Tachi, Japan’s answer to the chain-smoking Don Draper of America’s “Mad Men.” Mr. Tachi declared that Chantix had helped him quit smoking, and posed in posters with a party horn between his fingers instead of his trademark cigarette. Soon, Japanese blogs raved about the new “almighty” drug that would help Japan kick its cigarette habit. (There has been little coverage here of Chantix’s potential side effects.)
By August, Pfizer was selling the drug to about 70,000 patients a month in Japan. But that did not prepare the company for the jump in demand related to the tax increase. In September, prescriptions more than doubled to 170,000, and they rose even more in October.
On Oct. 12, Pfizer announced that it was stopping shipments of its “starter packs,” and instructed clinics to stop accepting new patients.
Reiko Ono, 33, who has smoked for over a decade, was one of the last to secure supplies of Champix at a Tokyo clinic. She has completed eight of the 12 weeks of recommended treatment, and has, until now, resisted the urge to light up.
“It hasn’t been as difficult as I thought,” Ms. Ono said.
But many of Ms. Ono’s colleagues who sought the drug were told to wait, she said. “I’m lucky I moved quickly,” she said.
Particularly irritating to many smokers is that Pfizer had almost a year to prepare for a surge in demand; the tax increase was approved in December 2009.
Pfizer is now reassuring would-be customers that they, too, will soon have access to Chantix. In January, the drug maker says, it will have at least 450,000 starter packs available.
Health professionals say that further reductions in smoking-related deaths will hinge on whether the government levies further taxes on cigarettes, which remain cheaper than in the United States and Europe, and bucks the influence of Japan Tobacco, still half-owned by the Finance Ministry.
The Democratic Party of Japan, which took power after the 2009 elections, has been more proactive in setting a nonsmoking agenda, and some lawmakers are pressing to do much more.
“This is just the first step. An ideal scenario is to raise tobacco prices to as much as 1,000 yen,” a Democratic lawmaker, Yoko Komiyama, said. “Whatever it takes to get more people to quit.”