As the Government of Japan (GOJ) seeks to re-invigorate Japan’s pharmaceutical industry as a sector for innovation and growth, it can make impactful changes to specific pricing policies that will support Japanese patients’ access to the most innovative medicines.
The Asia Group (TAG) has identified two specific pharmaceutical pricing measures that directly undermine the government’s goal of promoting startups and bringing innovative new pharmaceutical products to market. The negative impact of these policies is particularly severe for innovative drugs for rare diseases, for which there are often no alternative treatments:
Strict cost disclosure requirements, especially the “co-factor zero” rule introduced in the cost-based price calculation method in 2022, are effectively canceling out many premiums that were intended to reward innovation and novelty.
Corporate status criteria associated with the Price Maintenance Premium (PMP) system favor companies with a long track record of business in Japan and limit premium benefits for new market entrants.
The intended purpose of these rules is to improve transparency in a product’s total cost and provide incentives for drug launches in Japan. But the two-fold impact of these rules, particularly penalizing new market entrants and foreign entrants, has undermined the intended effect of these measures.
Eliminating these two specific punitive pricing policies represents “low-hanging fruit” for policy change, which can have an immediate impact on the availability of novel drugs, while having a relatively low impact on Japan’s healthcare budget. These changes will stimulate future successful launches and early entrance to Japan, benefitting patients.
George Chen, partner and co-head of digital practice at The Asia Group, says that there has been a clear directive ...
Scroll to Top
You Are Applying For:
TAG Paper: Observations on Drug Pricing and Innovation in Japan
Apply Now
Submit the details below, and our HR team member will get in touch with you shortly.
The Asia Group is an equal opportunity employer where an applicant’s qualifications are considered without regard to race, color, religion, sex, national origin, age, disability, veteran status, genetic information, sexual orientation, gender identity or expression, or any other basis prohibited by law. The Asia Group continually seeks to diversify its staff, particularly to broaden opportunities for individuals from demographic groups that are historically underrepresented in the strategic advisory profession.
Media
Commentary
TAG Paper: Observations on Drug Pricing and Innovation in Japan
Full Paper (English): TAG Paper: Observations on Drug Pricing and Innovation in Japan ENG
Full Paper (Japanese): TAG Paper: Observations on Drug Pricing and Innovation in Japan JPN
Key Findings
As the Government of Japan (GOJ) seeks to re-invigorate Japan’s pharmaceutical industry as a sector for innovation and growth, it can make impactful changes to specific pricing policies that will support Japanese patients’ access to the most innovative medicines.
The Asia Group (TAG) has identified two specific pharmaceutical pricing measures that directly undermine the government’s goal of promoting startups and bringing innovative new pharmaceutical products to market. The negative impact of these policies is particularly severe for innovative drugs for rare diseases, for which there are often no alternative treatments:
The intended purpose of these rules is to improve transparency in a product’s total cost and provide incentives for drug launches in Japan. But the two-fold impact of these rules, particularly penalizing new market entrants and foreign entrants, has undermined the intended effect of these measures.
Eliminating these two specific punitive pricing policies represents “low-hanging fruit” for policy change, which can have an immediate impact on the availability of novel drugs, while having a relatively low impact on Japan’s healthcare budget. These changes will stimulate future successful launches and early entrance to Japan, benefitting patients.
Listen on:
Related Posts
Sophia Gaston talks Trump administration’s approach to AUKUS in Sydney Morning Herald
Dan Kritenbrink interviewed by CNBC on latest US-China relations
Han Lin in the Wall Street Journal: ‘In China, success depends on how fast you can turn the steering wheel’
George Chen on CNBC: Nvidia only has a short time window to sell chips to China