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January 20, 2023

Eisai has been engaged in the elimination of lymphatic filariasis (LF), one of the neglected tropical diseases, since 2010. The World Health Organization (WHO) conducts mass drug administration (MDA) campaigns in endemic countries to eliminate LF. Diethylcarbamazine (DEC) tablets, one of the LF treatments, was in short supply globally, and this posed a serious obstacle to the elimination of LF. Eisai is committed to manufacturing and supplying high-quality DEC tablets free of charge through the WHO and is engaged in various activities to eliminate LF.
Ryohei Yanagi and David Freiberg (2022) calculated the social impact of free provision of DEC tablets using the impact-weighted accounting (IWA) method (Table 1 and 2)*.

• *

  Ryohei Yanagi and David Freiberg, Monthly Capital Market” September, 2022, “ESG Accounting for offering neglected tropical disease treatment with price zero -Innovative measurement of product impact accounts in global health”
    (Japanese only)
  Ryohei Yanagi is Visiting Professor of Waseda University and former CFO of °®¶¹´«Ã½. David Freiberg is a founding member of Impact-Weighted Accounting Initiative (IWAI) of Harvard Business School.

Eisai provided 1.6 billion DEC tablets free of charge in 25 developing countries in the five years from 2014 to 2018, which is the period covered by this collaboration. The social impact generated by the free provision of DEC was calculated to be approximately 7 trillion yen (Table 1). This figure was calculated by multiplying the minimum wage by the working hours that can be recovered by patients and those who can avoid infection through drug treatment, multiplying the number of subjects and life expectancy, and taking into account the health care costs that can be saved.

Table 1. Social impact of free provision of DEC tablets

(Unit: Millions of yen)

Source: Yanagi, Freiberg (2022)

• ^*1

  Benefit Cohort 1: People who have avoided infection with LF by reducing the risk population with mass drug administration (MDA)

• ^*2

  Benefit Cohort 2: People infected with LF but were able to avoid aggravation of their condition from asymptomatic to clinical illness

• ^*3

  Benefit Cohort 3: People who have been infected with LF and are in a state of clinical illness but have been able to avoid further deterioration of their condition

In this way, the social impact of our free provision of DEC tablets is estimated to be approximately 7 trillion yen, and if it is divided by the average life expectancy (43 years for Benefit Cohort 1 and 2, and 33 years for Benefit Cohort 3), approximately 160 billion yen was calculated as the annual average social impact by Eisai’s contribution. If this approximately 160 billion yen is added to EBITDA in financial accounting as value creation, our EBITDA would approximately double, suggesting that the intrinsic corporate value will approximately double (Table 2). In product impact accounting, significant corporate value was created by the free provision of DEC tablets, a treatment for the neglected tropical disease LF, and we can say that we were the first in the world to quantify and disclose product impact in global health.

Table 2. Impact-weighted accounting in free provision of DEC tablets (Eisai’s product impact accounting)

(Unit: Millions of yen)

The Premise of Product Impact Accounting

• Social impact of free provision of DEC tablets for five years from 2014 to 2018 based on the contract with WHO was quantified based on the IWA method.
• 1.6 billion DEC tablets were provided for free in 5 years at a total investment (manufacturing cost) of approximately 2.4 billion yen, and were used for MDAs in 25 developing countries in combination with GSK’s LF treatment.

• According to the WHO guidelines, an average of 2.5 DEC tablets are taken per person per MDA (varies depending on body weight), and LF can be controlled by implementing MDA once a year for 5 years. We provided 1.6 billion DEC tablets over five years which were taken by 150 million people. Applying the model of Turner et al.**, we can calculate that 7.6 million people have avoided chronic LF, and 1 billion attacks might have been avoided even in the acute phase of LF based on the number of users.

• The calculation is limited to the countries/regions where MDAs were performed with a combination of two LF treatments, Eisai’s diethylcarbamazine (DEC) and GSK’s albendazole. Assuming that our social impact contribution belongs to a 50:50 ratio, we can say that half of the total impact is Eisai’s social impact creation.

^＊ï·×Turner et al., Infectious Diseases of Poverty (2016) 5:54

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