As the COVID-19 wave retreats and vaccination accelerates, Japan’s healthcare recovery is on track and will benefit from an expansive budget, with the government committed to financial support and insurance coverage expansion for key groups. Benefiting from such favorable policies, medical institutions will likely maintain revenues above pre-pandemic levels if COVID cases remain under control. Innovative pharmaceutical companies are given a dose of hope by the coming reform to pricing policies to boost innovation, but most of the pressure will be shifted to established medicines. As a result of the budget prioritization and enhanced HTA standards, digitalization in healthcare will accelerate with a newly established Digital Agency, which cements the reimbursement environment for untraditional health technologies, such as software as a medical device.

Our analysts are constantly evaluating changing market and industry trends to ensure you have the most updated and relevant information for your strategic decisions. Keep reading for our analysis of the key trends in Japan’s healthcare sector that you need to pay attention to.

The gradual recovery of the health sector will benefit from the expansionary budget in 2022

The expansionary healthcare budget has provided a basis for healthcare sector recovery, with the government committed to a higher level of support and insurance coverage expansion for children and women. Most medical institutions have recovered to pre-pandemic levels of revenue. Clinical departments will benefit differently from the government support. Pediatrics and OB/GYN will also enjoy expanded insurance coverage.

The Pharmaceutical Industry Vision 2021 will alter the long-term industry outlook

The new pharmaceutical industry vision redefines the role of the industry and resets pricing policies to boost innovation, generating positive responses from industry stakeholders. The CEA reform will provide more clarity on price evaluation procedures and promote the use of CEA in pricing decisions in the future. However, it will most likely increase disparities between drugs and shift pricing pressure significantly to established drugs.

Digital health will attract key funding for the digital transformation in Japan

The newly established Digital Agency sets the stage for digital health development, starting with the rollout of the online confirmation system with “My Number” ID. An expansionary budget and increased support will enable a more positive reimbursement outlook for diverse product lines, such as software as a medical device. The provision of health data for private businesses has prompted public-private cooperation in patient data utilization.

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