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Practicing pharmacists per 100,000 population, 2021: 199
Expenditure on retail pharmaceuticals per capita, USD PPP, 2021
– Prescription medicines: $702
– Over-the-counter medicines: $128
– Total: $829
Expenditure on retail pharmaceuticals by type of financing, 2021:
– Government/compulsory schemes: 72%
– Voluntary health insurance schemes: 1%
– Out-of-pocket spending: 27%
– Other: 0%

Source: OECD (2023), Health at a Glance 2023: OECD Indicators, OECD Publishing, Paris, doi.org/10.1787/7a7afb35-en.

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“Drug costs accounted for 22.1% of all health expenditure in 2013. Although the total drug expenditure has been increasing yearly, its rate of increase is almost the same as the rate of increase in health expenditure (Fig. 5.2). About 800 million prescriptions were written, and about US$ 64.2 billion was disbursed by public health insurance for prescribed medicines (Ministry of Health, Labour and Welfare, 2016a).”

Source: Sakamoto H, Rahman M, Nomura S, Okamoto E, Koike S, Yasunaga H et al. Japan Health System Review. Vol. 8 No. 1. New Delhi: World Health Organization, Regional Office for South-East Asia, 2018.

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“The government sets the prices of all drugs reimbursed by the universal health insurance system with the “fee schedule.” The list of reimbursable drugs includes nearly 16 000 items for oral, parenteral and topical administration.

“For new drugs, reimbursement prices are determined with reference to the prices of similar drugs that have already been approved. If there is no similar drug, the prices are determined based on accounting for material and other costs.

“The reimbursement price used to be revised every two years. The revised price is determined according to market prices during the past two years. To calculate the price, the government is authorized by the Health Insurance Act to conduct a market drug price survey before the revision. This survey is conducted in close cooperation with wholesalers, who submit their transaction records with health care providers. The official reimbursement price is set at the weighted average of the transaction price with an adjustment, which is usually set at 2%. This system reduces the reimbursement prices of all the drugs, and approximately US$ 4.5 billion of pharmaceutical costs are cut at every revision.

“However, in 2017, a new chemotherapy called Nivolumub was released for sale originally for malignant melanoma, costing approximately US$ 336 110/year/person. Its use was then expanded to some types of lung cancer and renal cell carcinoma, and it has started to put severe financial burden on the universal health insurance system. The MHLW [Ministry of Health, Labor, and Welfare] urgently revised the reimbursement rate down to 50%. Since then, the MHLW decided to change the revision schedule from every two years to every year so as to better reflect the market trend and to contain rapid increases in pharmaceutical expenditure. Debate questioning how to balance cost-containment for new medicines while also promoting R&D (i.e., incentives for pharmaceutical companies) has been ongoing.”

Source: Sakamoto H, Rahman M, Nomura S, Okamoto E, Koike S, Yasunaga H et al. Japan Health System Review. Vol. 8 No. 1. New Delhi: World Health Organization, Regional Office for South-East Asia, 2018.

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“In Japan, new drug applications (NDAs) for regulatory approval are sequentially examined by the Pharmaceuticals and Medical Devices Agency (PMDA) and the Ministry of Health, Labour and Welfare (MHLW). Submitted NDAs are reviewed by the PMDA review team for efficacy, safety, clinical meaningfulness, data integrity, and product quality based on the Pharmaceutical and Medical Device Act (PMD Act) in Japan. The PMDA drafts the review report and holds the PMDA Expert Discussion at the end of the review process to hear opinions of external experts from academia. Those that pass the PMDA review are subject to deliberation by the MHLW Pharmaceutical Affairs and Food Sanitation Councils (PAFSC), which comprises the Committee on Drugs and the Pharmaceutical Affairs Council, with members from medical and non‐medical fields. After these procedures, the MHLW legislatively grants approval based on a positive opinion from the MHLW‐PAFSC.

“The approval rates of submitted NDAs vary among regulatory agencies. A previous study reported that the approval rate at the initial review was 85.0% by the U.S. Food and Drug Administration (FDA) and 91.6% by the European Medicines Agency (EMA) for 107 NDAs submitted to both agencies from 2014 to 2016. ¹ Another study reported that, of 912 new drug/biologics license applications approved by the FDA from 2013 to 2018, 117 (12.8%) were not approved at the initial review, received complete response letters, and went through multiple review cycles. ² The EMA published 1,694 public assessment reports for NDAs from 2017 to 2022, of which 1,335 (78.8%) were approved, 53 (3.1%) were refused, and the remaining 306 (18.1%) were withdrawn during the review cycle. ³ The PMDA annual reports indicated that the approval rate of NDAs was approximately 90% in Japan, since there were 2,190 NDAs, 1,952 approvals, one refusal, and 174 withdrawals between April 2004 and March 2023, whereas prior to the establishment of the PMDA in April 2004, there was 140 NDAs, 109 approvals, and 31 withdrawals. ⁴“

Source: Miyazawa M, Tanaka M, Tanaka Y, et al. Concordance Between Pharmaceuticals and Medical Devices Agency Review and Ministry of Health, Labour and Welfare Decision Among New Drug Applications in Japan. Clin Pharmacol Ther. 2025;117(2):544-553. doi:10.1002/cpt.3485

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World Health Systems Facts is a project of the Real Reporting Foundation. We provide reliable statistics and other data from authoritative sources regarding health systems and policies in the US and sixteen other nations.

Page last updated May 21, 2025 by Doug McVay, Editor.