Exclusive: Japan Pharma entering a new era

If you believe you know all there is to know about Japan’s pharma market, it is time for a refresher course. If you are convinced the Japan pharma market never changes, you are about to be labelled hopelessly out of date, says P Reed Maurer, long-time Japanese industry watcher and president of International Alliances Limited.

The signs of change are coming from multiple sources. Here are a few of the most obvious ones:

* Late last year a high ranking official in the Ministry of Health stated companies who are not developing innovative products should consider getting out of the pharma business. This is remarkable because for the past 50 years the Ministry was a staunch advocate of supporting and encouraging all companies irrespective of size or new drug development capacity. The analogy was to a convoy of ships. Big ships, small ships, fast ships, slow ships - all moved at the same speed in the same direction.

* During the discussions leading up to the April 2016 price revisions, the Ministry of Health finally caved in to pressure from the Finance Ministry to cut the reimbursement prices of so called long listed drugs. These old drugs provide a stable source of revenue and profit to firms who lack a portfolio of new drugs. Furthermore, incentives to prescribe and dispense generic drugs are beginning to pay off in higher market shares at the expense of older drugs.

* The infamous drug lag in terms of regulatory review and approval has been eliminated, thus prompting companies to develop and launch their drugs in Japan simultaneously with other major markets. These actions reward innovation while penalizing old technology. Other actions by the government are increasing the odds of new drug ideas getting through the risky phases of early development.