TT-414 -- Tamiflu

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A weekly roundup of news & information from Terrie Lloyd.

General Edition Sunday, March 25, 2007 Issue No. 414


- What's new
- News
- Candidate roundup/Vacancies
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On Thursday evening last week, our eldest daughter came
down with a heavy case of the flu. Like all concerned
parents, especially those living in Japan, this meant a
trip to the local hospital's outpatient ward to get some
drugs to relieve the symptoms, particularly her 40 degree
temperature. A 5-minute consultation and 20 minutes for the
tests to come through diagnosed her with Type B influenza,
a nasty variety that if untreated can progress to something
worse quite quickly in children.

The nurse filling out the prescription said that they would
give our daughter Tamiflu. We were concerned at hearing
that, since we'd heard the media reports about the drug
and didn't want to take any chances. But the nurse told us
that the alternative drug was "sold out" because everyone
was looking to switch from Tamiflu. So it was either the
Roche drug, or a high fever and a very distressed child. We
opted for the Tamiflu.

Returning home, we gave our daughter the prescribed dose
and she slept well. The next morning, while at work, I got
an urgent call from my wife. She'd left our now much better
and re-medicated daughter watching TV while taking the
youngest to her Yochien (kindergarten). On returning 20
minutes later, she was shocked to find our daughter walking
around the apartment in tears, crying that she was scared
of all the people running through the apartment. She'd been
looking for a way to escape "them". Of course the apartment
was empty and she was hallucinating.

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[...Article continues]

That personal experience, only last week, woke us up to the
fact that the Tamiflu scare here in Japan is not just the
result of a few borderline kids overreacting to the drug.
This product works really, really well, but the side
effects on little bodies and minds are worrying and anyone
with kids should seriously consider at least closely
supervising their children when they are medicated with
Tamiflu -- or perhaps better still just let that fever run
its course.

Tamiflu is marketed here in Japan for Roche by Chugai
Pharmaceutical. Although it has been used in Japan since
2001, it gained prominence mid-2003 as the only viable
treatment at that time for the H5N1 avian flu. That was
when the first outbreaks in humans were recorded in China
and S.E. Asia, and the Japanese government ordered in huge
quantities of the drug -- given the nation's proximity to
the outbreaks. As a consequence the government now has more
than 25m doses of the drug stockpiled, and apparently has
just ordered another 3m doses. They are Roche's biggest
single customer for the drug.

But it's not bird flu that is driving the market for
Roche/Chugai in Japan. Apparently 35 million doses, 70%
of the world's consumption of Tamiflu, have been prescribed
for ordinary flu sufferers in Japan. In fact, Japanese
doctors have been prescribing the drug at a rate 8 times
that of their US counterparts (6.5m doses in US between
2001-2006). So in that respect, it is no wonder that any
negative effects of the drug are being noticed in Japan

The Health Ministry says it has received 23 reports of
children under age 10 suffering hallucinations, depression,
and other disorders after taking the drug over the last 2
years. As typical parents we haven't thought to contact
the Health Ministry, so it's a fair guess that the
hallucination problem is far worse than the Ministry is
letting on. Indeed Chugai has just submitted a report that
the number is now 81 cases. Either way, Tamiflu is really
potent. As adults, my wife and I both took it last year,
and found that any flu symptoms cleared up within a few
hours. Indeed, after taking it, we both found ourselves
with a feeling of euphoria that made me at least want to
get out of bed and go back to work. Maybe this is the
reason why in some cases, adults who've taken the drug have
died later from pneumonia.

Since 2000, 54 people in Japan have died after taking
Tamiflu. There have been more than 22 cases in the last two
years alone of teenagers and adults jumping off buildings
after taking the drug. On February 28th, the Health
Ministry issued instructions to doctors to stop dispensing
Tamiflu to teenagers aged 10 to 19, but has excluded kids
under that age on the basis that the risk of dying from the
flu is relatively higher than the possible side effects of

Our daughter is 9... We think she is as equally capable of
jumping off the front balcony of our apartment as any
10-year old. The Health Ministry had better wake up real
soon, or they will have another scandal of the same order
as the tainted blood products fiasco of the 1980's on
their hands.

One of the reasons why the Health Ministry has been so slow
in moving against the prescription of Tamiflu, apart from
its obvious efficacy, is that in 2006 it contracted
Yokohama City University Professor Shumpei Yokota to study
whether or not there was a connection between the drug and
the deaths. He concluded that there was no significant
causal effect. However, it has since been revealed since
that Yokota's team was paid JPY10m by Chugai Pharmaceutical
earlier in research grants.

The University of course says that the payments were normal
drug maker payments for studies and not used by Yokota
personally. However, critics are now saying that the study
did not measure the effects of Tamiflu after the critical
first few hours of the first or second dose. Instead it
looked at the rates of abnormal behavior over a seven-day
period -- long after any initial and obvious hallucinatory
effects have past. Whether this period of observation was
skewed on purpose or not no one is saying, but in any case,
the Health Ministry has ordered a second study.

The Tamiflu debacle hasn't gone unnoticed by the markets
and Chugai's stock price is down 15% from early
February. The stock has in particular been dumped by
individual shareholders after the side effects charges came
to light. According to the Nikkei, the company's drug
information center has been flooded with phone calls from
worried parents. Chugai Pharmaceutical sold JPY38bn worth
of the drug in 2006, accounting for 10% of the drugmaker's
total sales.

Interestingly, prescription sales of Tamiflu in Japan were
just JPY13.6bn by value, and the remaining amount of
JPY24.4bn represents stockpiling by the government against
future bird flu outbreaks. This represents a huge
commitment by the government to the drug and we hope
that the Health Ministry's rationale in not taking it off
the market is not because it is better to have a few
suicides than losing millions to the next outbreak of bird

If they were thinking about the national good rather than
a few unlucky individuals -- this would not be the first
time. It would be just too bad if your kid happened to be
one of those inconvenient statistics until the H5N1 plague
actually did happen... if it ever does.

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+++ NEWS

- Banks broaden definition of collateral
- Livedoor sentences decided
- Baidu starts Japan search engine
- Land prices rise first time in 16 years
- Japanese recruiting firms increasing charges

-> Banks broaden definition of collateral

The Financial Services Agency (FSA) has changed its rules
about what banks can accept as collateral for loans. The
FSA is apparently trying to move the nation's banks away
from using just real estate as collateral, and thus avoid
another round of over-exposure per the land bubble of
1990-1991. It has also said that banks can now accept
inventory and raw materials valuations as a basis for
collateral for loans to smaller companies. (Source: TT
commentary from, Mar 24, 2007)

-> Livedoor sentences decided

The Tokyo District Court has fined Livedoor JPY280m and
ex-subsidiary Livedoor Marketing (now Media Innovation)
JPY40m for their parts in the Livedoor securities scandal.
The Livedoor fine is the highest ever levied against a
company for violating the securities laws. The same day,
Livedoor's external CPA accountant and his boss received
suspended sentences. Separately and earlier in the week,
the courts gave suspended sentences to 3 of the 4 Livedoor
execs who were charged along with Horie but who turned
state's evidence. The fourth, former CFO Miyauchi, got
20 months in prison. Like Horie, he is appealing the
sentence and is out on bail. ***Ed: Reading the Japanese
media, the vilification of Horie and co. is complete and
uniform. He didn't repent in front of the judiciary and
he'll be made to pay as a result. It will be interesting
to see how long he can keep making appeals and stay out of
the slammer.** (Source: TT commentary from, Mar 24, 2007)

-> Baidu starts Japan search engine

China's top Internet search engine firm,, has
launched a Japanese search site at Reflecting
its Google-esque influences, the site is very spartan with
a signature panda footprint mark in the middle. The site
seems to work well and creates similar results to the Japan
sites of Google and Yahoo. ***Ed: While this is a small
start by Baidu, we would bet that the company's long-term
goals are much more ambitious. In China, they have proven
adept at re-creating the Google experience and applications
in Chinese. They clearly understand the technology and are
able to roll out new services with surprising speed. The
Chinese desktop search function took only 4 months. This
first foray into Japan appears to be solid and Yahoo must
be watching them closely. (Source: TT commentary from, Mar 23, 2007)

-> Land prices rise first time in 16 years

Land prices in Tokyo rose in 2005 for the first time in 14
years, and now the trickle down effect has started to take
hold elsewhere in the country. The Ministry of Land has
announced that land prices for 2006 rose nationwide for the
first time since 1990. Residential land rose 0.1% and
commercial land by 2.3%. The gains were mainly driven by
rises in Tokyo, Nagoya and Osaka, but also held elsewhere
over the 30,000-location sample. Commercial land prices
were up 9.4% in Tokyo. ***Ed: The Thursday morning edition
of the Nikkei lists a large number of locations and their
average rises. Get a copy if you're interested in price
movements in your area.** (Source: TT commentary from, Mar 23, 2007)

-> Japanese recruiting firms increasing charges

The growing shortage of skilled workers is causing Japanese
mid-tier (not just executive search) recruiting firms to
start increasing their prices for supplying all types of
candidates, from office workers and engineers to
convenience store staff. Typically, Japanese agencies have
been charging 20-30% of the first year's salary as a
search/placement fee. However, Fuji Staff, a major
recruiting company, has said that it will increase this
margin to 35% from April. Recruit Agent already charges 35%
and others are following suit. Recruit Agent is the
nation's leading recruiter, having placed 26,500 people last
year. ***Ed: Foreign recruiting companies have long charged
a minimum 30% placement fee and up to 35% for hard-to-fill
positions. The latest trend is for 2nd tier companies to
charge retainers, once the domain of only the big
multinational outfits. The retainers start at JPY3-6m per
search.** (Source: TT commentary from,
Mar 24, 2007)

NOTE: Broken links
Many online news sources remove their articles after just a
few days of posting them, thus breaking our links -- we
apologize for the inconvenience.


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There is a lot of media coverage of Tamiflu, especially in Japan. The majority of Tamiflu's sales are in Japan. Therefore, it is not unexpected to see a number of adverse events in Japan.

Japanese doctors are more likely to prescribe Tamiflu because cases of influenza-associated encephalitis (inflammation of the brain)are higher in Japan compared to the US and Europe. The reported fatality rate for influenza-associated encephalitis is over 40% and 20% of cases develop neurological complications. (Togashi et al. Pediatr Int. 2000 Epidemiology of influenza-associated encephalitis-encephalopathy in Hokkaido, the northernmost island of Japan. 42(2):192-6.)

Doctors need to balance the risk of developing a potentially fatal case of encephalitis due to complications from influenza against the risk of mood swings and depression that can led to suicide for Tamiflu. In addition, influenza-induced fever can led to abnormal episodes including suicides. Understanding these risks isn't easy and, at present, Tamiflu remains under close scrutiny. Chugai has seen a large dip in sales of Tamiflu, and this reflects the fact that many patients that 'shopped around' for Tamiflu during the Asian Bird Flu scare have been detered by the recent bad press surrounding suicides.

I, personally, would like to see better information about the risks of both Tamiflu and Influenza available. This would allow doctors and patients to make more informed decisions on whether to take Tamiflu or not.