Japan’s Opportunity to Establish a Blueprint for the World: Janssen Japan’s Chris Hourigan makes the case for increased investment in, and access to, innovative medicines as a key solution to countering the costs associated with an ageing population.


Earlier this year, Emperor Naruhito ascended the Chrysanthemum Throne, and Japan entered a new era, known as Reiwa or Beautiful Harmony.


The change of era sparked a period of reflection here in Japan, and that was certainly evident at the Pharma Delegates meeting I recently attended in Tokyo, during which I spoke on a different type of era that Japan has been experiencing in recent years: the Age of Ageing.


Like many highly developed, industrialized nations, Japan’s population is ageing. In fact, Japan has the oldest population of any major economy, a title the OECD expects it to keep until 2050 at least.1 This situation is exacerbated by a declining birth rate – in 2017 there were 31,000 fewer live births in Japan than in 2016.2


These demographic trends mean that Japan’s old-age dependency ratio – the number of over-65s for every 100 people of working age (20-64yrs) – has also been climbing steeply over the last 30 years,1 a situation mirrored in many countries around the world, but few with starker implications than in Japan.


While longer life expectancy can only be good news, it is also true that the increasing costs of supporting these ageing populations are being borne by shrinking workforces.


Japan’s healthcare system faces particular strain in sustainably maintaining high levels of quality care, which is compounded by the country’s relatively stagnant economy and sovereign debt. In my opinion, the key to creating an effective, sustainable healthcare system in the Age of Ageing is to focus on dynamic efficiency – the allocation of resources where they can work hardest for the maximum impact over time – and not just focused on the current system. We must be mindful about future challenges and prepare for these now.


In practice, this requires a pro-innovation policy environment that encourages the development of, and access to, innovative medicines that can deliver healthier, more productive lifespans, while reducing expensive downstream health-related costs.


It is the development of – and access to – innovative medicines that is enabling older people to remain productive, active and engaged members of society

Take cancer, a disease highly associated with ageing. Since peaking in the 1990s, US cancer deaths have dropped by 27 percent,3 with nearly three-quarters of this survival gain attributable to new treatments, including medicines.4 Closer to home, three out of five cancer patients in Japan now survive more than five years, and an incredible 81 percent return to work within 12 months of their initial sick leave. It is the development of – and access to – innovative medicines that is enabling older people to remain productive, active and engaged members of society.


The benefits of innovative medicines do not end there – they can also achieve huge downstream savings by preventing expensive complications associated with chronic diseases like diabetes. The approximate annual cost, for example, of dialysis in a person with diabetes is ¥5,800,000 ($53,000).5 Managing that same person’s condition with innovative medicines so that they never progress to the point where they need dialysis costs just a fraction of this amount – as well as being a far more preferable outcome for the patient.


But there is much left to do. There remain unmet needs in many diseases that are typically related to ageing, and which have high health and social care costs. The societal costs of dementia, for example, are huge, but research into diseases like Alzheimer’s has so far failed to produce effective treatments. The pharmaceutical industry will keep trying to innovate in this area – but it must be supported by a policy environment conducive to those efforts.


Thankfully, here in Japan the government recognizes the importance of innovation in a sustainable healthcare system and has indicated in recent months that it will take further steps to achieve this. This is welcome news.


The biopharmaceutical industry in Japan has the potential to become the country’s largest funder of business R&D, as is the case in the US, where the sector accounts for 17 percent of all R&D spending. In Japan, that figure is currently 11 percent, compared to 29 percent for the automotive industry and 13 percent for electronics.6


In the Age of Ageing, we must do better to attract increased investment in Japan-led innovation. This means making the policy environment easier and less costly to navigate, and ensuring new medicines reach patients faster by further streamlining the approval process and making more flexible use of expedited approval pathways.


The Age of Ageing is a challenge to Japan’s healthcare system, but it is one that can be met with the right strategic approach. Encouraging the development of – and access to – innovative medicines can help keep the population active for longer and save costs in the long-term. To achieve Beautiful Harmony within the healthcare system, we must strengthen the collaboration between public and private sectors, allowing innovation to flourish and providing a blueprint for other countries grappling with the challenges of the Age of Ageing.



1 OECD (2017), Preventing Ageing Unequally, OECD Publishing, Paris.

2 Demographic Statistics from the Ministry of Health, Labor and Welfare. Nippon.com. 2018.

3 American Cancer Society (2019). Cancer Facts & Figures 2019.

4 Seaburv et. al. 2016. “Quantifying Gains in the War on Cancer Due to Improved Treatment and Earlier Detection,” Forum for Health Economics & Policy, De Gruyter, vol. 19 (1).

5 Ministry of Economy, Trade and Industry (2018). Health Management Report.

6 PhRMA analysis of National Science Foundation, National Center for Science and Engineering Statistics, data. Funds spent for business R&D performed in the United States, by source of funds and selected industry: 2013. European Commission, 2016, The 2016 EU industrial R&D investment scoreboard.