Japan wants pharmaceuticals and advanced medicine to drive its next phase of economic growth. But achieving that goal will require more than increased investment. Japan must overcome a regulatory and drug-pricing system that helped build its pharmaceutical industry after the war but has increasingly constrained its competitiveness.
Prime Minister Sanae Takaichi’s administration approved the Japan Growth Strategy in July, designating 17 strategic sectors. Two concern health and medicine: synthetic biology and biotechnology, and drug development and advanced medicine. The administration has made the latter a particular focus of its economic-growth strategy, seeking to strengthen health and medical security through greater public and private investment.
Yet pharmaceuticals face a problem that many other strategic sectors do not. Japan’s postwar regulatory and official drug-pricing systems were designed primarily to ensure the safety, affordability and stable supply of medicines — not to promote the industry as a strategic economic asset. The challenge now is to align those objectives.
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