Japan’s government has sounded the alarm over the United States’ most-favored-nation (MFN) drug pricing policy, warning it risks worsening the country’s longstanding struggles with its drug lag problem. Officials fear that as pharmaceutical companies grow more cautious about entering the Japanese market, where prices could potentially be used as a reference point for US price negotiations, clinical trial activity may decline, and Japanese patient access to new therapies could suffer.
The concern is already showing up in practice. Nine drugs that received marketing approval in Japan since the MFN policy was announced in May 2025 have yet to receive national health insurance pricing within the standard 60-to-90-day window, with some companies adjusting their launch timing amid the uncertainty.
Adding to the pressure, Japan’s current pricing rules penalize manufacturers that disclose less than 50% of their production costs by stripping away any price premiums. Policymakers are now debating whether to ease that rule. The country’s reimbursement council, Chuikyo, is expected to take up the issue in future deliberations. Japan has pledged to engage in ongoing dialogue with the pharmaceutical industry as it weighs its response.
Written by: Ames Gross – President and Founder, Pacific Bridge Medical (PBM)
Mr. Gross founded PBM in 1988 and has helped hundreds of medical companies with regulatory and business development issues in Asia. He is recognized nationally and internationally as a leader in the Asian medical markets. Mr. Gross has a BA degree, Phi Beta Kappa, from the University of Pennsylvania and an MBA from Columbia University.