Japan has great strengths in drug discovery, from R&D to manufacturing. But for Mayu Yoshikawa, the inability to commercialize research outcomes is concerning. “Drug discovery isn’t just about supporting researchers, it’s about getting global VCs to invest,” she said. For that, Japanese startups need to be “global by design” from the get-go. World-class management and governance should help reduce the risks inherent in science.

As competition from China intensifies, a paradigm shift has become increasingly urgent. “Big Pharma is buying innovation from China,” noted Osamu Okuda. Still, the global trend toward decoupling from China could spell opportunity. Japanese researchers’ tenacity and sincerity and the weak yen are big pull factors. With Japan unable to compete with the United States and China in funding or talent headcount, Kotaro Funato wants the country to collaborate with global players to establish a unique, essential role in the global drug-discovery ecosystem.

Ironically, the same universal health coverage that leads to drug loss by keeping prices low means that Japan has a trove of data that could power AI-driven drug discovery. “A public-private AI platform would be a major competitive advantage,” said Hiroyuki Uchiyama. The government is establishing transparent policies and tax breaks in a bid to attract overseas talent and investment, noted Hiroya Hirose.

In certain areas, like cell therapies, Japan is already a frontrunner. Building an implementation platform and sorting out pricing issues would build trust and encourage greater VC participation here, according to Ken-ichiro Hata.

“Japan has huge potential. Our presence faded due to a lack of agility — but it is agility that will determine our future success,” said Toshio Fujimoto.

Can Japan design systems capable of adapting to a rapidly changing macroeconomic environment characterized by fiscal constraints and rebalancing to accommodate MFN pricing demands? The time has come to discuss what constitutes priority and non-priority medical care. “Discussions on the limitation of provision will have to take place. We will have to learn to say no,” said Ataru Igarashi. France, where the government reduces the reimbursement rate for non-essential treatments, was put forward as a possible model. While agreeing on the need for change, Shinsuke Amano stressed the “need for discussion and communication with patients.”

Japan has just emerged from three decades of deflation and, as Takeshi Annaka pointed out, new perspectives are needed in an inflationary age. Since, however, health insurance is mandatory, public opinion must be taken into consideration. People need to perceive the value of innovation before being willing to pay for it. Given the almost miraculous efficacy of new biologics, the idea that innovation must be paid for should be the starting point for social security systems, Amano argued. Masanobu Saito emphasized the need to secure sustainable financing for healthcare innovation, including exploring the use of tax revenues to complement National Health Insurance funding.

While pharmaceutical companies are using AI for drug discovery and to accelerate clinical studies, regulatory organizations have not necessarily kept pace. “Institutions and systems must align themselves with advances in technology,” said Akira Kanehisa.

Noriko Hattori emphasized that the MFN-induced rebalancing of prices could also be an opportunity. If Japan can leverage its academic and research strengths to attract investment, it can build a new win-win ecosystem that combines innovation and access.

A new and globally competitive innovation ecosystem will be needed to sustainably reap the benefits of Japan’s high level of medical innovation. This, Hirokazu Shimoda explained, is a top priority for Japan’s Agency for Medical Development (AMED), emphasizing the government’s consistent commitment to the sector across multiple premierships.

Startups, as Wataru Akahata observed, play an essential role in this ecosystem, shepherding drugs from basic research to clinical trials. However, developing appropriate human capital remains challenging. “We have many medical researchers in Japan, but relatively few people with expertise on the business side,” explained Yoshiki Sawa.

When a team to commercialize a Japanese discovery cannot be assembled locally, one option is to headhunt it entirely from overseas. “‘Buying time’ like this will let us stay in the race,” said Shinichiro Komoto. Hitoshi Iikura suggested that Japan could leverage its relatively inexpensive tertiary education to accelerate the cultivation of talent locally, offering incentives for international students studying in Japan to stay and contribute to the ecosystem after graduation.

As new modalities emerge, Japan’s manufacturing infrastructure will also need reinforcement. Foreign capital will be essential. Fortunately, the competition for international investment is not necessarily a race to the bottom. “Investors want geopolitical security and safety, too,” said Hiroo Igarashi. “With the right investments, Japan could lead the G7.”

Citing Denmark’s experience in securing benefits from lowered obesity rates, Emil Kongshøj Larsen suggested that Japan could win support for public investment through similar success stories in signature areas like elder care. “I think Japan has the components that it needs,” said Larsen. “The only question is how quickly it can get started.”