Why the Japanese Don't Export More Pharmaceuticals: Health Policy as Industrial Policy

Yakuji Kogyo Seisan Dotai Tokei Nenpo (Pharmaceutical Industry Production Statistics Annual), (Tokyo: Yakugyo Keizai Kenkyujo, various years).

Yakuji Handobukku '89 (Phamaceuticals Handbook '89), (Tokyo: Yakuji Jihosha, 1989), p. 78.

Heins John , “Take Two of These and Call Tokyo in the Morning,” Forbes, March 24, 1986, p. 179.

Shah Hemant K. , “Globalization of the Japanese Pharmaceutical Industry,” Nomura Research (New York, NY: Nomura Research Institute (America), n.d.).

Rawwas Mohammed Y.A. Smith Mickey C. , “Making Way for the Japanese,” MM&M (August 1988), pp. 9–37.

Dibner Mark D. , “Biotechnology in Pharmaceuticals: The Japanese Challenge,” Science, 229 (1985): 1230–1235.

Hiroyuki Kosuge Masaharu Shimoji , “Wagakuni no Kokusai Kaihatsu Ryoku” (Our Country's International Development Capacity), Iyaku Jyanaru (Medical Journal), 19 (1983):723–730.

Messina Chris , “Rising Pharmaceutical Force,” High Technology Business (April 1989), p. 14.

Friedman David , The Misunderstood Miracle: Industrial Development and Political Change in Japan (Ithaca, NY: Cornell University Press, 1988), pp. 3–6.

Ibid.

Johnson Chalmers , “The Japanese Political Economy: A Crisis in Theory,” Ethics & International Affairs, 2 (1988):82.

Additional information on these nine patterns appears in an Appendix available from the author.

Hisashi Hasegawa , Iyakuhin, Sangyo no Showa Shakaishi (Pharmaceuticals: Industry's Showa Social History), (Tokyo: Nihon Keizai Hyoronsha, 1986), pp. 67, 71.

Organization for Economic Co-operation and Development, The Pharmaceutical Industry: Trade Related Issues (Paris: OECD, 1985), p. 45.

Ibid.

Toshihiko Suguro , Iyakuhin Sangyo (Pharmaceutical Industry), (Tokyo: Kyoikusha Shuppan, 1987), p. 19.

Scrip's Pharmaceutical Company League Tables, 1985–86, in Nihon Seiyaku Kogyo Kyokai Choki Vijion Kenkyukai (Japan Pharmaceutical Manufacturers Association Long-Term Vision Research Group), Wagakuni Seiyaku Sangyo no Choki Vijion to Kihon Hosaku (Long-Term Vision and Basic Policy for the National Pharmaceutical Industry), (Tokyo: Nihon Seiyaku Kogyo Kyokai, July 1985), p. 139.

Yakuji Kogyo Seisan, various years.

Ibid.

Maurer P. Reed , Competing in Japan (Tokyo: The Japan Times, 1989), pp. 140–146; and Kenkyujo Yano Keizai (Yano Research Institute), cited in Seiyaku Nihon Kyokai Kogyo (Japan Pharmaceutical Manufacturers Association), Data Book 1987 (Tokyo: JPMA, 1987), p. 34.

Hasegawa , op. cit., p. 15.

Iyakuhin Seizo Shishin (Pharmaceutical Production Guide), (Tokyo, 1952), pp. 181–182.

Hasegawa , op. cit., p. 103.

Report on Medical Equipment and Pharmaceutical Market-Oriented Sector-Selective (MOSS) Discussion (Washington, D.C.: U.S. Department of the Treasury, 1986).

Social Security Council, Iryo Hosho Seido ni Kansuru Hokoku (Recommendations on the Medical Security System), (Tokyo, 1956).

Steslicke William E. , “Development of Health Insurance Policy in Japan,” Journal of Health Politics, Policy and Law, 7 (1982): 197–226.

Campbell John C. , “Free Medical Care for the Elderly in Japan,” Pacific Affairs, 57 (1984):53–64.

Broida Joel H. Maeda Nobuo , “Japan's High-Cost Illness Insurance Program, A Study of its First Three Years, 1974–76,” Public Health Reports, 93 (1978):153–160.

Taro Takemi with Jiro Arioka , Nihon Ishi Kai Jitsuroku (Japan Medical Association True History), (Tokyo: Asahi Shinbunsha, 1983), p. 36.

Ibid., pp. 33–36.

A MHW survey estimated that in 1987 in physician clinics an average of 37% of total revenue derived from pharmaceutical sales, yielding an average monthly margin of 700,000 yen ($4,800 at ¥ 146 = $1). “Yakka Saeki, Nen ni Itcho Sanzenoku En,” (Doctor's Margin, 1.3 trillion yen a year), Asahi Shinbun, November 9, 1989, p. 1.

What constitutes “over” prescription remains controversial in Japan, as elsewhere, and represents an important topic for research, especially the connections between economic incentives and prescription patterns. While the Ministry of Health and Welfare has data on this topic, showing how prescription patterns have changed in relation to price cuts in the 1980s, little information has been made publicly available. See Ministry of Health and Welfare, Kosei Hakusho (Health and Welfare White Paper), (Tokyo: MHW, 1983), p. 65.

Relman Arnold S. , “Doctors and the Dispensing of Drugs,” New England Journal of Medicine, 317 (1987):311–312.

Asahi Shinbun, November 9, 1989, op. cit.

Ohnuki-Tierney Emiko , Illness and Culture in Contemporary Japan (New York, NY: Cambridge University Press, 1984), pp. 207–208.

Nihon Seiyaku Kogyo Kyokai, Choki Vijion Kenkyukai, op. cit., p.178.

Koseisho Yakumu Kyoku , Saikin no Yakumu Gyosei (Recent Pharmaceutical Administration), (Tokyo: Yakumu Kohosha, 1987), pp. 81–83, 370–373.

Ibid., p. 81.

Bureau Pharmaceutical Affairs , ed., Standards & Certification Systems Concerning Drugs in Japan (Tokyo: Yakugyo Jiho Co., 1988), p. 19.

Taro Takemi , “The Medical Practitioner of Japan” (Tokyo: Japan Medical Association, 1970); and Steslicke , op. cit., p. 207.

Abe M.A. , “Hospital Reimbursement Schemes: Japan's Point System and the US DRG,” Medical Care, 23 (1985):1056.

HealthEcon, The European Community: Still a Competitor in the World Pharmaceutical Market of Tomorrow? (Basel: HealthEcon, Ltd., February 1983).

Chew Robert Smith George Teeling Wells Nicholas , Pharmaceuticals in Seven Nations (London: Office of Health Economics, May 1985), p. 45.

Hasegawa , op. cit., pp. 97–98.

A list of total sales of ethical drugs in Japan by company for 1986 showed the first foreign-owned firm ranked at number 11, with only three foreign-owned firms in the top 20. See “Iyaku Rankingu” (Pharmaceutical Ranking), Deiteruman (Detailman), September 15, 1987, p. 55.

Encarnation Dennis , “Cross-Investment: A Second Front of Economic Rivalry,” in McCraw Thomas K. , ed., America Versus Japan (Boston, MA: Harvard Business School Press, 1986), p. 137.

Nikkei Sangyo Shinbun, May 17, 1989, p. 17.

Nikkei Sangyo Shinbun, May 18, 1989, p. 15.

Hasegawa , op. cit., p. 150.

Narin Francis Frame J. Davidson , “The Growth of Japanese Science and Technology,” Science, 245 (1989):600–605.

The Growth of the Pharmaceutical Industry in Developing Countries: Problems and Prosects (Vienna: United Nations Industrial Development Organziation, 1978).

Shah , op. cit., p. 1.

Hitoshi Yamamoto , Shogaikoku no Iyakuhin Kenkyu Kaihatsu Shien Seido (Pharmaceutical R&D Support System in Several Foreign Countries), (Tokyo: Kosei Kagaku Kenkyu Hokokusho, March 1986), p. 41.

Ibid.

Dibner , op. cit.

Iyakuhin, Iryokikai nado no Kenkyu Shinko Seido no Sosetsu (Establishment of Research Promotion System for Pharmaceuticals and Medical Devices), (Tokyo: Ministry of Health and Welfare, 1987).

Samuels Richard J. , “Research Collaboration in Japan,” Working Paper 87–02, Cambridge, MA: M.I.T.–Japan Science and Technology Program, 1987.

Yoshikawa Aki , “The Other Drug War: U.S.-Japan Trade in Pharmaceuticals,” California Management Review, 31/2 (Winter 1989):76–90.

Dickson David , “Japan's Human Frontiers Program Advances,” Science, 241 (1988):16–17.

Tomio Takeuchi , ed., Institute of Microbial Chemistry, 1962–87 (Tokyo: Microbial Chemistry Research Foundation, 1987); and Hasegawa , op. cit., pp. 88–89.

Hasegawa , op. cit., pp. 77–79.

Fujii Mitsuru Reich Michael R. , “Rising Medical Costs and the Reform of Japan's Health Insurance System,” Health Policy, 9 (1988):9–24.

C.N. Thompson, Merck Sharp & Dohme International, cited by Sadao Abe , presentation at the International Symposium on “Future Prospects for Medical Care and the Pharmaceutical Industry,” Tokyo, Japan, November 29–30, 1989.

Kenkyukai Yakka Seido , ed., Iryo Seisaku to Yakka Kijun (Medical Policy and Pharmaceutical Price List), (Tokyo: Yakugyo Jihosha, 1987), pp. 113–115.

Kosei Hakusho, op. cit., p. 65.

Yakuji Handobukku '89, op. cit., p. 235.

“Shinyaku Kaihatsu to Kokusaika” (New Drug Development and Globalization), Nihon Yakugyo Shinbun (Japan Pharmaceutical Industry Newspaper), January 12, 1988, p. 6.

“Iyakuhin no Seizo Shonin ni Kansuru Kihon Hoshin” (Basic Policies for Approval to Manufacture Drugs), September 13, 1967, in Yakka Kijun Seido (Tokyo: Yakuji Nihosha, 1987), pp. 157–158; and Hasegawa , op. cit., pp. 105–107.

Interview, July 7, 1988.

Iyakuhin Sangyo Seisaku Kondankai, Saigo Hokoku (Pharmaceutical Industry Policy Committee, Final Report), (Tokyo: Pharmaceutical Affairs Bureau, MHW, October 9, 1984).

Interview, February 1, 1989.

Kenkyusha Shinyakugaku Shudan Gijutsusha , “Iyakuhin no Kenkyu - Kaihatsu - Seisan Shisutemu to Sono Kaidai” (Topics in the Pharmaceutical Research - Development -Production System), in Mamoru Noguchi , ed., Shakai Yakugaku Nyumon (Introduction to Social Pharmacy), (Tokyo: Nan E Do, 1987), p. 155.

Johnson Chalmers , MITI and the Japanese Miracle: The Growth of Industrial Policy, 1925–1975 (Stanford, CA: Stanford University Press, 1982).

Kagaku Gijutsu Kenkyu Chosa Hokoku (Report on the Survey of Research and Development), (Tokyo: Somucho Tokeikyoku (Statistics Bureau, Management and Coordination Bureau), various years).

Reis-Arndt E. , “A Quarter of a Century of Pharmaceutical Research,” Drugs Made in Germany, 30 (1987):105–115.

Data Book 1987, op. cit., p. 52.

Takashi Seo , Iyakuhin (Pharmaceuticals), (Tokyo: Nihon Keizai Shinbunsha, 1986), pp. 28–29.

Maurer , op. cit., p. 61.

Ibid., p. 116.

Letter to the author, from Isao Ayaki , General Manager of Pharmaceutical Department, Kureha Chemical Industry Co., Tokyo, September 22, 1989. The efficacy of Krestin has been publicly questioned, and the MHW's reevaluation of this and another anticancer drug has reportedly found them to be ineffective when used alone. See, Masanori Fukushima , “The Overdose of Drugs in Japan,” Nature, 342 (1989):850–851.

Seo , op. cit., p. 59.

Shah , op. cit., p. 2.

Makoto Kando , “Kikanu Koganzai 3000 Oku Shijo no Kai” (The Mystery of a 300 Billion Yen Market of Ineffective Anti-tumor Drugs), Bungei Shunju (September 1988), pp. 278–289.

Masahiko Abe , “Nihon no GCP (Japan's Good Clinical Practice),” in Iyakuhin no Kaihatsu to Gyosei oyobi Rinri (Development, Regulation and Ethics of Pharmaceuticals), (Proceedings of a Symposium by the Institute of Seizon and Life Sciences, Tokyo, July 30–31, 1987), pp. 83–85.

McKinney W. Paul Barnas Gary P. , “Japanese Encephalitis Vaccine: An Orphan Product in Need of Adoption,” Letter, New England Journal of Medicine, 318 (1988):255–256.

McKinney W. Paul Barnas Gary P. , “Japanese Encephalitis Vaccine: Necessary for the Olympics in Seoul?” Letter, New England Journal of Medicine, 319 (1988):251.

Butt J. Ohmi M. , Japan, Pharmaceuticals June 1987 (Tokyo: Barclays de Zoete Wedd, June 25, 1987), p. 14.

“Irish Plant Begins Production,” Yamanouchi Quarterly Nucleus, 10 (Autumn 1988):2.

“Japan Drug Maker to Buy Pharmavite,” The New York Times, December 28, 1988.

Fisher Lawrence M. , “Japan Drug Maker to Buy Shaklee,” The New York Times, March 14, 1989.

“Iyakuhin Sangyo no Kokusaika” (Internationalization of the Pharmaceutical Industry), Yakugyo Jiho (Pharmaceutical Industry News), January 1, 1988, pp. 3–30.

Yoshikawa , op. cit.

Otsuka Pharmaceutical Co., Ltd., Annual Report 1987 (Tokyo: Otsuka Pharmaceutical Co., Ltd., 1987).

“Nichibeio Sanken R&D Taisei no Kyoka Isogu Takeda Yakuhin” (Takeda Pharmaceuticals Speeds Up Strengthening of Japan-US- Europe R&D System), Shukan Diyamondo (Diamond Weekly), January 21, 1989, pp. 86–89.

The World Drug Situation (Geneva: World Health Organization, 1988), p. 38.

“Foreign Companies: The Top 200,” Tokyo Business Today (July 1988), pp. 20–25.

Reich Michael R. Yasuo Endo Timmer C. Peter , “Agriculture: The Political Economy of Structural Change,” in McCraw Thomas K. , ed., America Versus Japan (Boston, MA: Harvard Business School Press, 1986), pp. 151–192.