Life Sciences Horizons Brochure 2025 - Flipbook - Page 73
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2025 Horizons Life Sciences and Health Care
Japan aims to accelerate regulatory approvals, promote innovation
We anticipate that Japan will become an
increasingly attractive market for innovative
international companies, particularly in the light
of recent proposals and changes to the country’s
regulatory and pricing system.
After a few years of advocacy for suitable pricing (e.g., for the
“price maintenance premium system”) for innovative drugs,
improved commercial predictability, and enhanced transparency,
the Japanese government and regulator appear to be making a
concerted effort to eliminate “drug lag” (i.e., products being
approved and launched in Japan much later than in the U.S. and
Europe) and “drug loss” (i.e., products approved in the U.S. and
Europe but then not reaching Japan at all). The regulator has
introduced various initiatives to incentivize market participants,
which may be partly catalyzed by on-going demographic pressure
and the need for cost efficiencies.
Specifically, in 2024, various changes have meant that, for
example, products benefiting from the price maintenance
premium do not suffer reductions in their list price, and there are
pricing incentives to introduce new drugs to Japan earlier. As a
result, we predict that a range of companies will now be keen to
bring more innovative products to Japan; some commentators are
further predicting a virtuous cycle, especially as the Japanese
government commits more generally to improving the drug
discovery infrastructure in Japan.
Some of the specific areas of improvement include:
a simplification of development requirements;
accepting regulatory applications in English (for applicants not
established in Japan);
accelerating the cycle for regulatory approvals;
establishing a drug development hub to encourage foreign
start-ups to come to Japan; and
an “innovation box” tax break and other financial incentives,
especially for venture capitalists and overseas investors, as the
Japanese government seeks to double private investments in
domestic drug discovery start-ups in the next five years.
Overall, Japanese government initiatives to accelerate regulatory
approvals and assist with regulatory processes are likely to lead to
growth, innovation, and heightened opportunities in the next year
ahead and beyond.
Dr. Frederick Ch'en
Office Managing Partner
Tokyo
