Impact of Japanese drug price reductions, by P Reed Maurer

Outside observers have long predicted the mandated price reductions of drugs will kill the Japanese pharmaceutical industry, reduce the motivation to introduce new drugs, and stifle innovation, says P Reed Maurer, president of International Alliances Limited, and a pharma industry watchers who has lived and worked in Japan since 1970.

In reality, top tier companies have ample cash to acquire product assets from outside Japan, the pace of new drug introductions is increasing, and there are more new drug ideas in Japan than there is funding to develop these “seeds” into proven drugs.

Why are prices reduced?