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:

  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

The Asia Group Announces New Office in Taiwan and Expansion of Japan Practice
Washington, D.C.; Taipei, Taiwan; Tokyo, Japan | June 20 — The Asia Group (TAG) is thrilled to announce the launch ...
TAG Partner and India Practice Chair Ashok Malik Comments on Modi’s Election
“The next five years will make or break India’s manufacturing ambitions,” said Ashok Malik, a partner at the business advisory ...
TAG Partner and India Practice Ashok Malik Writes About How Different a Modi-led NDA Government Will Be From a Modi-led BJP Government
Every election and mandate throw up a unique message from the electorate. Arguments for or against are enticing, but ultimately pointless. The people are always ...
China Outlook: Evan Medeiros on the China’s Complex, Competitive with the U.S. and EU
In this episode of Tea Leaves, TAG President Rexon Ryu and Dr. Evan Medeiros explore the expanding scope of US-China ...
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

Name*
Address*