Japan's effort to rein in soaring health-care costs threatens to become a source of tension in economic relations with the U.S. after running into opposition from the American pharmaceutical industry.
While the U.S. Commerce Department sees Japan's drug market, the world's third-largest, as the top near-term growth opportunity for its pharmaceutical exporters, the view from Tokyo is of crippling medical bills as the ranks of the elderly swell and the working-age population declines.
With this in mind, Japan's health ministry is looking into reviewing drug pricing annually, instead of every second year as is the case now. The most recent review helped the government shave ¥150 billion ($1.4 billion) from its ¥10 trillion in spending on medicines in the 12 months through March, according to the Finance Ministry.