Over the last several years, Incubate Coalition Japan (ICJ) has remained committed to its mission of promoting policies that empower life sciences innovators to build a thriving ecosystem in Japan. We believe that for Japan to remain globally competitive in this industry, it must strengthen business, investment, and policy ecosystems that attract and support life sciences innovators from start-ups to major large manufacturers.
Therefore, our network of investors in Japan, Europe, and the U.S. are concerned by the government’s decision to proceed with price cuts to patented medicines in the FY2025 drug price revision. While we appreciate efforts to address healthcare costs, such efforts cannot upend the already fragile innovation ecosystem in Japan. Predictable pricing and reimbursement policies that appropriately value innovation are critical to attracting large-scale investments into Japan and, in turn, reversing the drug loss.
As investors, we evaluate the entire market landscape when deciding where to allocate capital, and predictable, pro-innovation pricing policies are key to maintaining confidence in Japan's market. However, the FY2025 drug price revision – along with ongoing discussions to possibly apply additional price cuts to patented medicines through cost-effectiveness evaluations and market expansion repricing – only fosters uncertainty. Unpredictability in this area would negatively affect the funding required to bring transformative treatments to patients and pose challenges for start-ups and bioventures striving to innovate within Japan's ecosystem.
Similarly, clarity around the newly-proposed “Drug Discovery Support Fund” can help ensure its success alongside private capital markets that are necessary to meet the scale of investment required. We look forward to working on this concept with our experience to ensure that a voluntary, accessible fund adequately promotes competition and protects innovation.
As we recently noted in Nature, Japan’s biopharmaceutical future lies in encouraging investment into its world-class science. ICJ encourages the Japanese government to continue working closely with stakeholders to pursue policies that attract and sustain capital, which, alongside a strong manufacturer research and development presence, can ensure Japanese global leadership in the life sciences and benefit the country’s patients. As the voice of the investment community in Japanese life sciences, we will continue to work with policymakers to realize this potential.
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