Life Science
Government Initiatives

In 2021, the Japanese government's Growth Strategy set forth a policy to promote the introduction of ICT and other technological innovations in the medical, nursing care, and healthcare fields¹⁶ , and since then, the government has been promoting the establishment of a data utilization infrastructure and the use of AI in the life sciences sector.

The significant progress can be seen in developing a data utilization infrastructure through the amendment of the Next Generation Medical Infrastructure Act in 2023 (Figure 3). Since 2023, it is expected that the use of medical data by private companies will increase, as "pseudonymized medical data," which has more information than anonymous data, can be used for drug approval and processed medical data, and NDB (National Database of Health Insurance Claims and Specific Health Checkups of Japan) can be analyzed in a consolidated manner. As of September 2023, data on electronic medical records, Comprehensive Assessment System (DPC) surveys, and receipts were provided to private companies and academia in 30 projects.¹⁷

Going forward, further improvements will be made to promote an environment for using NDB, including making NDB sample data available, facilitating data access (applying for online remote access), and expanding the functions of the Healthcare Intelligence Cloud (HIC).¹⁹

Regarding the use of AI, six priority areas for promoting AI development have been selected, by the government with the aim of solving problems in the health and medical sectors while leveraging Japan's strengths in medical technology (Figure 4).²⁰ Measures to promote AI development, including the use of big data and infrastructure development for cloud environments specifically for AI development, are being implemented in each healthcare area.

In addition, projects related to the utilization of data and AI ("Medical Device and Healthcare Project" and "Genome and Data Infrastructure Project") are being promoted in the government's Healthcare and Medical Strategy, and a budget has been requested for FY 2024 as well. ²¹

Since 2022, the government has been working on the implementation of an emergency approval system and the simplification of reviews for expediting approval timelines of Software as a Medical Device (SaMD) which is expected to significantly reduce the sales and distribution time of pharmaceuticals and medical devices.

Since the partial revision of the Pharmaceuticals and Medical Devices Act in FY 2022, an emergency approval system was established to allow approval of all pharmaceuticals, including those not yet distributed overseas, to be approved in Japan if their efficacy is “estimated” (Figure 5).²² Vaccines that have not yet been tested or therapeutic drugs that have not yet undergone large-scale testing are expected to be approved once their safety is confirmed, thereby promoting the development and distribution of pharmaceuticals in Japan.

The number of items granted special approval for emergency was eight until 2022. Among these, seven special approvals were granted for COVID-19 vaccines and antibody drugs, all of which were from foreign companies. As for the emergency approval, one drug related to the COVID-19 virus was approved for production and marketing nine months after the application was made (Figure 6).²⁵

On the other hand, the regulatory reform implementation plan, approved by the Cabinet Office is working towards implementing an early approval for SaMD. It is expected that the time and financial burden of development and marketing will be reduced as measures such as reducing the review period for regulatory approvals and allowing medical data collected in the medical field to be submitted as a substitute for clinical trials are being considered.²⁶ As of the end of March 2023, there were a total of 211 SaMD approvals²⁷, but the number is expected to increase further with the introduction of the early approval. 

The Japanese government is promoting the development of new innovative drugs and modalities and implementing initiatives such as improving the investment environment, promoting the development of new drugs, and eliminating off-label uses of drugs.

In the Pharmaceutical Industry Vision announced in 2021, a policy for promoting public support, external funding, joint development, and drug discovery research support to improve the investment environment for innovative drug development was established.²⁹ For FY 2024, a budget has been requested to promote the commercialization of pharmaceuticals that meet the needs of medical facilities, and pharmaceutical R&D are being promoted primarily in the fields of next-generation cancer medicine, pediatric, rare diseases, and emerging and re-emerging infectious diseases.³⁰

In addition, to develop efficient and effective new innovative drugs, the Price Maintenance Premium (PMP) to promote the development of new drugs and eliminate off-label uses of drugs, was revised in 2023 to provide a respite from drug price reductions for new drugs without generics. In this system, to consider innovation, additional payment for promotion of new drug development, and elimination of off-label uses of drugs (additional fee for new drug development, etc.) will be temporarily and specially increased to make it comparable to the previous drug prices.³¹

This system serves as an incentive for foreign companies and is an important factor in stimulating R&D investment in Japan. The top companies that are subject to this system, including many others, are Novartis Pharmaceuticals Corporation (Switzerland), Sanofi (France), Janssen Pharmaceutical (Belgium), and Pfizer (U.S) (Figure 7).

For innovative drug discovery, efforts are being made to promote the establishment of an innovation ecosystem through collaboration among pharmaceutical companies, academia, and startups. The Ministry of Economy, Trade and Industry (METI) and the Japan Agency for Medical Research and Development (AMED) are focusing on providing support to pharmaceutical startups because most new drugs are developed by them and they have succeeded in developing vaccines against the COVID-19 virus.³³

For example, Strengthening Program for Pharmaceutical Startup Ecosystem, started in 2022, is a system in which AMED grants subsidies to pharmaceutical startups for the development and commercialization of drugs. Under this system, investment by a nationally recognized venture capital (registered VC) is a requirement. Several foreign companies, such as F-Prime Capital Partners (U.S.), Newton Biocapital Partners (Belgium), and Eight Roads Capital Advisors Hong Kong Limited (Hong Kong), have already been selected as registered VCs, and are expected to promote global drug development involving foreign companies.³⁴

In addition, the government is encouraging startups, promoting dialogue between biotechnology startups and investors, and strengthening cooperation among consulting services that support startups in the healthcare sector, including pharmaceuticals and medical devices.³⁵

In addition to national initiatives, proactive efforts are also evident in the regions. Regional initiatives are underway to form a science, technology, and innovation center that leverages the unique characteristics in life sciences, healthcare-related industries, etc., and integrates related industries and human resources³⁶, and the center is working toward attracting foreign companies in the life sciences sector.

In particular, in Open Innovation Kawasaki and the Kobe Biomedical Innovation Cluster, several foreign companies related to pharmaceuticals, biotech, drug discovery, medicine, etc. have entered the market and are actively working to attract foreign companies. The Biologics Center for Research and Training, operating in the Kobe Biomedical Innovation Cluster, has a business alliance with Thermo Fisher Scientific Inc. (U.S) and is working diligently to develop human resource training programs for the development and manufacture of CAR-T cells.³⁷

Besides the science, technology and innovation center, global center are also being formed to strengthen startups in the bio-industry and life sciences.

As part of the bio strategy, formulated to realize the world's most advanced bio-economy society, the global bio community, promoted by the government, aims to build a strategic value chain involving diverse entities from R&D to commercialization. It is expected that the global center will attract human resources, investment from Japan and overseas, and supply products or services in each market area to expand the biotechnology market. In 2022, Greater Tokyo Biocommunity (GTB) and Biocommunity Kansai (BiocK) were selected as global biocommunities in the Kanto and Kansai regions, respectively.³⁸ The fact that private investment in GTB has reached about 3.3 billion USD* (500 billion JPY) (2021-2023)³⁹, and about 100 research institutes, companies, and government ministries/agencies in Japan and overseas have been registered as collaborating institutions of BiocK indicates a strong interest in these facilities.⁴⁰

In addition, the Cabinet Office has selected sites for the startup ecosystem, and three global sites (Startup Ecosystem Tokyo Consortium, Central Japan Startup Ecosystem Consortium, and Osaka-Kyoto-Kobe Consortium) are engaged in initiatives related to life sciences and healthcare. In these areas, the startup ecosystem is designed to attract outstanding foreign companies.⁴¹