Japan’s pharmaceutical market is caught between two competing priorities—controlling rising healthcare costs and maintaining an environment that fosters innovation. While recent drug pricing reforms have introduced incentives for early market entry and expanded premium eligibility, continued price cuts and unpredictable revisions are raising concerns about drug lag and market stability. The FY2025 off-year price revision, implemented despite strong opposition, has escalated drug pricing into a trade issue, drawing international attention. As Japan looks ahead to the FY2026 reforms, policy discussions will be critical in shaping the future of pharmaceutical innovation and market predictability.

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