Key facts
- New breast cancer and diabetes drugs from Eli Lilly and Novo Nordisk are delayed in Japan due to pricing negotiations.
- A U.S. executive order by President Donald Trump aims to align U.S. drug prices with lower international prices.
- Japanese state-mandated pricing tends to keep pharmaceutical prices low, creating a conflict for foreign drugmakers.
- Eli Lilly's breast cancer drug, Inluriyo, approved in the U.S. in December 2025, has not yet been priced for the Japanese market.
- New drug prices in Japan were approximately 40% of U.S. prices in 2023, according to a PhRMA study.
- Foreign pharmaceutical companies are concerned that pricing policies could hinder their ability to recover development costs.
The release of new breast cancer and diabetes treatments by Eli Lilly and Novo Nordisk has been delayed in Japan due to ongoing negotiations over sales prices. This situation highlights concerns among foreign pharmaceutical companies that Japan's state-mandated pricing system tends to set prices too low, potentially impacting their ability to recoup development costs.
A key factor contributing to the complexity is an executive order signed by U.S. President Donald Trump in May 2025, which mandates lowering the price of drugs sold in the United States to match the lowest prices found in other nations, including Japan. This policy creates a difficult situation for companies like Eli Lilly, whose breast cancer drug, Inluriyo, was approved in the U.S. in December 2025 but has not yet been priced for the Japanese market.
According to a study by the Pharmaceutical Research and Manufacturers of America (PhRMA), new drug prices in Japan have historically been lower than in other advanced nations, averaging about 40% of U.S. prices in 2023. The study also noted that a significant number of new pharmaceuticals sold in the West have not been released in Japan. Despite these challenges, Japan remains an attractive market due to its size.
Industry representatives, such as Hiroo Igarashi, president of Pfizer Japan Inc. and chair of PhRMA’s Japanese executive committee, have called for reforms to Japan's pharmaceutical pricing system, warning of potential negative global impacts. Michinori Naruse, a senior researcher at the Japan Research Institute Ltd., acknowledged that some foreign companies are delaying sales of new drugs in Japan, but cautioned that simply increasing prices might not be a solution given Japan's substantial annual drug expenditure exceeding 10 trillion yen.