Product-Quality, Human-Resource, and Social Initiatives
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- CSR-related Activities
- Product-Quality, Human-Resource, and Social Initiatives
Product Quality Initiatives
Adopting more effective measures for the manufacturing management and quality control of pharmaceutical products
In response to recent quality issues in the Japanese generic drug industry, the Daito Group has adopted more effective measures for manufacturing management and quality control. The two pillars of these measures are establishing a quality assurance system and fostering the corporate culture of putting quality first (“quality culture”), which provides a foundation for the quality assurance system. We aim to build a solid system through a mutual complementary relationship between the two pillars.
- Mechanism for reliably preventing an unintended mixture of different ingredients
- Mechanism for preventing malicious misconduct or careless errors
- Systems for management members to supervise quality control and for keeping in contact with client companies
- Adoption of international standards for manufacturing management and quality control
- Enhancement (and integration) of the Daito Group’s manufacturing management and quality control
Human Resource Initiatives
Human resource development
We recognize the importance of appropriate human resource development and employee capability building as measures to enable every employee to demonstrate their talent fully and ensure both our business growth and greater employee satisfaction amid our efforts to implement the current Medium-term Management Plan.
As a tool for that purpose, we offer various training programs to employees, with the belief that it is important to actively provide them with opportunities for capability development.
(1) Creating and launching a new personnel system
Since June 2020, we have made significant strides in our efforts to revise our human resource (HR) system. Key changes from the previous model include HR framework revisions (rating reevaluations, etc.), adoption of new assessment criteria (introduction of competency evaluations), and clearer definitions for promotion criteria.
After conducting interviews with various departments within the company and making careful adjustments, we finalized the specifics of the new HR system and launched its full-scale implementation in June 2023. We aim to bolster talent development by providing functional training and education based on the job requirements of the new HR system.
(2) Implementation of the Career Path Program
We are committed to helping our employees build their careers and develop skills by revitalizing interpersonal interactions. In line with this commitment, we implemented an Internal Recruitment System and a Secondment System as part of our career path program in June 2024.
(3) Current Company-wide Training System
Our present training framework only covers position-based training implemented company-wide. Each position is designed with specific themes and objectives, as shown in the diagram below.
(Diversity training and mid-career training are conducted across all positions.)
(4) Identification of Future Issues
- Regarding rank-specific training, we plan to enhance the content of training in the future.
- While job-based training is also currently provided in such forms as OJT at a departmental level, we will introduce Company-wide training tools to enhance our job-based training, including e-learning, in the future.
Themes and purposes of rank-based training
- Diversity training is provided to middle-ranking employees (from assistant team leaders to acting section managers) with the aim of creating a favorable environment for diversity promotion.
- Mid-career training is provided to full-time employees who joined the company sometime during the previous year (this includes contract employees promoted to full-time positions) to help them understand the policies, management philosophy, HR system, competencies, and their required responsibilities at Daito.
Work Style Reforms
Improvement of the work-life balance
Daito aims to create a more comfortable workplace environment by improving employees’ work-life balance through such measures as reducing long working hours and helping employees work while looking after their children or other family members. We mainly implemented the following human resource initiatives:
(1) Helping employees work while looking after their children or other family members
Leave systems:
- At Daito, childcare leave, family care leave, and leave for nursing care of sick children are available to employees.
- Users of family care leave and leave for nursing care of sick children can choose the unit of their leave period from one day, half a day, and one hour.
- Daito allows employees to take leave for nursing care of sick children for a larger number of days and during a longer period than legally required.
- [Legal requirement]:
- Five days a year in the case of an employee with one preschool or younger child or 10 days a year in the case of an employee with two or more preschool or younger children
- [Daito]:
- Six days a year in the case of an employee with one elementary-school or younger child or 12 days a year in the case of an employee with two or more elementary-school or younger children
- From April 2022, revisions to the Childcare and Family Care Leave Act will be implemented in stages, and a system of "postpartum paternity leave" will begin in October 2022. At our company, we are also promoting the creation of employment and workplace environments that make it easier to take childcare leave, and are working to prevent female employees from leaving their jobs due to childbirth and childcare, and to encourage male employees to take childcare leave.
Short working hour systems:
- Daito has two different short working hour systems: one for employees who need to look after their children and the other for employees who need to look after other family members.
- Daito provides child-rearing employees with reduced working hours beyond the legally mandated period.
(Under Japanese Law): Until the child reaches 3 years old ⇒ (Daito): Until the child reaches the start of 3rd grade of elementary school.
(2) Other measures
- Encouraging employees to take paid leave
- Providing employees with telecommuting options to account for the Coronavirus Pandemic
Promotion of diversity
We believe that we must promote the diversity of our organization in order to continue to expand our business and enhance our corporate value amid the diversification of market needs and people’s lifestyles. Through the following measures, the Daito Group strives to create a workplace environment where all of our employees, who have diverse backgrounds, can work comfortably and demonstrate their talent fully.
(1) Empowering female employees to demonstrate their capabilities
- The Ratio of female employees in management positions: In line with the enforcement of the Act on the Promotion of Women's Active Engagement in Professional Life, we set the targets indicated on the right to Promote the Appointment of Female Managers and Support the Active Participation of Female Employees. As of Q1 2024, the ratio of female managers at Daito stood at 12.0%.
-
Through career training for female employees to develop managerial positions (section manager and above), increase the ratio of female employees in managerial positions to 20% (by the end of April 2026) .
- Gender wage gap: The table below shows the Wage Gap Between Male and Female Employees for Q1 2024. We intend to reduce such wage disparities in the future.
Gender pay gap (%) *1, 2
| All workers | Regular employee | Part-time and fixed-term workers | |
|---|---|---|---|
| Daito Pharmaceutical Co., Ltd. | 79.4 | 80.8 | 81.5 |
| Former: Daiwa Pharmaceutical Co.,Ltd. (before merger) | 75.6 | 73.4 | 58.5 |
- (Note) *1 Each of these figures indicates the percentage of the amount of salary paid to women versus that paid to men set as 100.
- *2 These figures are calculated based on the provisions of the Act on the Promotion of Female Participation and Career Advancement in the Workplace (Act No. 64 of 2015).
(2) Promoting the environment of people with disabilities
For Q1 2024, we took several concrete steps to accomplish this goal. On top of our ongoing information-gathering initiatives, we took in a disabled person under trial employment at our Quality Control Department, and, at the request of the Toyama Vocational Center for the Disabled, we invited three job coaches for on-site training at our workplaces. As of Q1 2024, the employment rate of persons with disabilities at Daito was 1.78%.
(3) Promoting the employment of elderly people
Following the implementation of the Revised Act on Stabilization of Employment of Elderly Persons, we have raised our mandatory retirement age from 60 to 65, effective Q1 2021. We have also offered to rehire employees who wish to continue working until 70. (Effective April 2023, the age limit for the rehiring was raised from 68 to 70.) As of Q1 2024, we had two elderly employees within the applicable age range who requested to continue their employment.
④ Implementation of Diversity Training
We invited experts to speak at our Diversity Training seminar in August 2024.
This training program was conducted for employees (a mix of male and female employees) who have been with Daito for 15 years. It was designed to promote a better understanding of diversity and make the participants aware of their unconscious biases (unconscious assumptions and prejudices). A group discussion was held following the lectures about personal and social biases toward women's activities.
We will continue to provide this type of training in the future to foster a corporate culture that respects diversity.
Promotion of health and productivity management
Health and Productivity Management is the practice implemented by businesses to manage the health of their workforce based on a strategic managerial perspective. We at Daito firmly believe that providing an environment conducive to our employees' physical and mental health contributes to improved productivity, reduced employee turnover, and a positive corporate image. This philosophy has led to our longstanding initiatives in health and productivity management. Below is a summary of our key initiatives.
(1) Physical health
- Mandatory Health Checkups: We require all employees to undergo annual health checkups to ensure regular assessment of their well-being and that they continue working in good health. As of Q1 2024, Daito's medical checkup rate was 99.0%. (Excluding employees on leave, the examination rate is 100%.)
- Employees found to need reexamination as a result of medical checkups are prompted by HR & General Affairs to undergo further tests.
- The Company also requires employees who worked overtime 80 hours or more a month to be interviewed by an industrial physician within a certain period after that month.
- All employees practice radio calisthenics before beginning work every day.
(2) Mental health
- Appointing staff as a contact for mental health consultation: The General Affairs and Human Resources Department serves as the contact for mental health consultation.
- Professional counseling services: We have been employing the services of a professional industrial counselor since December 2020. Counseling sessions are available once a month at Daito's in-house health center. All employees can use this service with the prior application.
- Implementation of Stress Checks: We conduct annual stress checks for all employees to detect early signs of mental health problems and prevent any such illnesses from occurring. As of Q1 2024, 88.0% of Daito employees have taken the checkups. We will continue to encourage employees who have not yet taken the check to do so.
- Utilizing a local reinstatement support center: The Company utilizes the reinstatement support program provided by the Toyama Vocational Center for Persons with Disabilities in order to help employees on leave due to mental health problems return to work.
③ Initiative under the Healthy Company Declaration program
- In April 2020, Daito acquired a Step 1 certificate under the Healthy Company Declaration program run by the Japan Health Insurance Association. The Company renewed the certificate in April 2023.
Healthy Company Declaration:
This program certifies companies that have declared that they will make Company-wide efforts to enhance the health of employees and have achieved a certain level of results to be excellent companies in health enhancement. There are two grades of certification: Step 1 (silver) and Step 2 (gold).
We intend to work towards acquiring Step 2 Certification by addressing the following issues.
- Installation of health monitoring devices in suitable locations throughout the company, including in the newly constructed facilities (AEDs already installed).
- Establishing a more effective Mental Health Committee
- Establishing a PDCA cycle geared toward becoming a healthier company
- Timely follow-up in response to health checkup results (e.g., recommendations to undergo testing)
Social Initiatives
Current situation in the Japanese pharmaceutical market
Our recognition of the situation
(1) Promoting the use of generic drugs:
Recent government measures to promote the use of generic drugs have been implemented to optimize medical care costs. While the original 80% generics volume share target has largely been achieved, new targets such as reaching an 80% or more volume share for generic drugs in all prefectures by the end of FY2029 and reaching a 65% or more value share for generic drugs by the end of FY2029 have been announced. With these targets in sight, the generic drug market is expected to experience steady growth.
(2) Annual revisions to National Health Insurance drug prices
NHI (National Health Insurance) drug price revisions have traditionally been revised once every two years. However, FY2021 saw the adoption of annual NHI price revisions to ensure that prices accurately reflect current market prices and reduce the burden on the Japanese public. In addition to the above, each company's manufacturing costs have significantly been affected due to the recent surge in raw material prices and exchange rate volatility. While special measures have been taken to raise NHI drug prices for items that have become unprofitable due to soaring material costs, the pharmaceutical industry is still expected to continue facing considerable headwinds from harsh market conditions.
(3) Measures to ensure a stable supply of pharmaceuticals:
The supply of pharmaceuticals has been in short supply since the end of 2020 owing to supply stoppages and shipment restrictions on many items following the quality control issues at generic drug companies. In response to this situation, the Ministry of Health, Labour, and Welfare (MHLW) has requested industry-wide cooperation to ensure a stable supply of pharmaceuticals, has conducted surveys, and has publicized the supply of these products. The FY2024 reform of the NHI drug price system will also incentivize companies that contribute to ensuring a stable supply of generics with favorable NHI drug pricing. This environment thus places immediate pressure on each company to ensure a stable supply of quality pharmaceuticals.
(4) Implementation of the Elective Care Scheme for LLPs
October 2024 marked the implementation of the Elective Care Scheme for LLPs (Long-Listed Products, also known as off-patent brand-name drugs) - a system under which patients co-pay for a portion of the difference between LLPs and generic drugs as an Elective Care expense. The scheme is projected to facilitate increased use of generic drugs by encouraging the shift from long-listed products to generics.
Initiatives
We will continue to invest in expanding our production capabilities to meet the demands of our diverse clientele and ensure a stable supply of pharmaceutical products.
Regarding our major capital investments in API, the construction of the Seventh API Building was completed in May 2022. This facility began commercial manufacturing of APIs in January 2023.
As for formulation-related investments, the Tenth Formulation Building was built in December 2023 due to growing product demand and the influx of contract projects. This facility commenced commercial production in August 2024. Moving forward, we have made plans to improve operating efficiency and contribute to improving the stable supply of pharmaceuticals.
For both APIs and formulations, we intend to continue our endeavors to reduce manufacturing costs and ensure stable product supplies by improving operating efficiency within the Daito group and strengthening ties with the companies in our organization.
Our corporate culture places utmost importance on quality assurance. To guarantee the integrity of our products, we will commit to strengthening management practices through thorough manufacturing and quality control in our daily operations and by implementing proactive measures to address any issues that require review and improvement.
Setting sights on the future, we will be pursuing the bolstering of our R&D capabilities through completing our Integrated Research Center in March 2024. This center was built to deal with the growing diversity and number of analytical instruments needed to meet the increasingly demanding quality standards and to enhance the efficiency of R&D endeavors.
Respect for human rights
Our recognition of the situation
In recent years, corporate activities based on their respect for human rights have been a focus of the heightened expectations and interest of the international community. This situation has been increasing the importance of a company’s commitment to fulfilling its responsibility for respecting human rights throughout its entire value chain.
Initiatives
We have formed a policy to uphold human rights that considers factors such as the international community. We will continue to fulfill our commitment to uphold human rights for all of Daito Group stakeholders through the thorough dissemination of our internal and external policies as well as stepping up our initiatives.
Response to Climate Change
Our recognition of the situation
We have made significant strides in implementing a clean energy-oriented industry and social structure that does not emit greenhouse gases (GHG) to counter climate change and working toward achieving a carbon-neutral society by 2050.
Initiatives
As a main part of our efforts to reduce GHG emissions, we are introducing environmentally friendly facilities and buildings and installing solar panels. Moreover, from a long-term perspective, we are analyzing the impact of climate change on our business with a view to incorporating the analysis results into our subsequent management strategy.
Establishment of a sustainable supply chain
Our recognition of the situation
Amid the global trend toward sustainable development of society, companies are strongly required not only to prevent themselves from infringing human rights or causing environmental problems but also to seek cooperation from their suppliers in fulfilling their social responsibility throughout the entire supply chains.
Initiatives
Given that an increase in the number of our suppliers and changes in the external environment are predicted in the future, we will promote our initiatives for sustainable procurement in order to enhance our social and environmental commitment and realize sustainable procurement throughout our supply chain.