Stricter regulations in Japan may crimp drug innovation

Moves by the Japanese government  to further regulate the healthcare industry may discourage innovation and deny patients access to cutting edge treatments. Japan, with its universal healthcare system, has the world’s longest life expectancy and ranks highly across a number of health metrics. But recent moves to tighten government controls on pharmaceutical prices are concerning. Until 2017, new drugs considered particularly innovative were often protected from price caps. But reforms that year to the way drugs are priced all but eliminated the exclusion, forcing drug manufacturers seeking to market their products in Japan to lower prices, regardless of the costs of developing new medicines.


Meanwhile, Japan’s plan to institute health technology assessment (HTA) systems to determine which drugs are most cost effective could lead to deeper price cuts for pharmaceuticals that do not meet the cost effectiveness metrics Japan sets up. While HTA systems can help government make important decisions in how to allocate healthcare resources, if the NHTA is not designed with sensitivity to innovation, it can harm patient access to new medicines.