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:

  1. 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.
  2. 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.

Recent Posts

TAG Senior Advisor Mark Linscott Outlines US-India Relations and the Need Find Common Ground
If they can do this on the bilateral front, why can’t they find paths forward on a more regular basis ...
アジア・グループ(The Asia Group) 、デジタル部門を新設
華盛頓特區 / 香港 – 2024年2月15日 – 美商亞洲集團(The Asia Group,TAG)非常高興在此宣布,本集團正式成立一個全新的「數位部門」,旨在幫助我們的客戶更全面地瞭解並掌握印太區域飛速發展的各項數位政策及其對不同產業產生的深遠影響。。
The Asia Group Launches Digital Practice
Washington, D.C. & Hong Kong | February 14 – The Asia Group (TAG) is excited to announce the launch of a Digital Practice to help ...
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.

"*" indicates required fields

1Personal Details
2Questionnaire & Application Materials
3Voluntary Self Identification

Personal Details