The Japanese government plans to adopt a “compassionate use” system, which will allow patients to use medical treatments not yet approved in Japan. This system will be made available to patients diagnosed with advanced diseases that are not responsive to existing domestic treatments, and will permit the use of drugs and medical devices that are either approved in other international markets (i.e. U.S. and/or Europe) or currently undergoing clinical trials in Japan.
Japan has a slow approval process due to strict government regulations. However, two domestic trends in the Japanese medical market—an increasing number of patents expecting to expire and budgetary pressure on the Japanese government to support the healthcare costs of an aging population—have forced the Japanese government to accelerate the market-entry process for foreign pharmaceutical and medical device products.
The Japanese drug market—ranked second behind the U.S. with sales of about $100 billion—is expected to sustain positive growth for the upcoming years. If approved by the Japanese Parliament, the “compassionate use” system will provide a good opportunity for foreign pharmaceutical and medical device companies that wish to establish greater presence in Japan and have approved products in other international markets. A contingent proposal to change the insurance policies so that they cover payments for non-approved treatments will make the Japanese market even more attractive to foreign drug and medical device companies. Because of the high presence of cancer-related deaths in Japan , foreign companies specializing in oncology treatments can be expected to benefit most from this system. The Japanese government’s increased spending on vaccinations—as well as promotion for generic drug substitution (generics are currently 20% of the total drug use)—will also make Japan an attractive market for companies in those segments.