The Japanese government is actively working to restore drug discovery capabilities, aiming to create a revitalized ecosystem that can contribute to domestic and global drug development.
However, these efforts continue to be undermined by remaining constraints on Japan’s rewards for innovation in its drug pricing system – even for novel drugs in key areas like rare diseases and pediatrics, where Japan clearly wants more research and development and faster deployment of innovative remedies.
The Asia Group (TAG) assesses that strict cost disclosure requirements, especially the “zero co-factor” rule under the cost-based price calculation method, directly undermine the government’s goal of bringing innovative new pharmaceutical products to the Japanese market, including the targets laid out in the Japanese government’s five-year plan for the development and approval of pediatric and rare disease drugs.
The Japanese government should consider either adjustments to these rules or introducing an entirely new way of pricing and rewarding innovative medicines to adequately reflect these products’ value at launch. Such changes will facilitate innovative medicines’ faster entry into Japan, ultimately benefiting patients and contributing to the revitalization of Japan’s drug innovation ecosystem.
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Japan’s Drug Innovation Incentive Policies: Policy Challenges Undermine Desired Goals (ENG)
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