Japan is the world’s third-largest pharmaceutical market, yet dozens of therapies approved in the United States or Europe remain unavailable to Japanese patients. This phenomenon—often called “drug loss”—exists when drugs approved abroad are neither approved nor even in development domestically. According to government data, by March 2023 there were 143 such drugs, and a striking 86 had no Japanese development plans at all. Further analysis revealed that most of these 86 products originate from venture companies or target orphan and paediatric indications, meaning they lack the commercial scale that attracts large pharma. This disconnect not only highlights a public-health gap but also creates a niche opportunity for agile, mid-sized pharmaceutical firms willing to engage with Japanese regulators.
Understanding the Drug Loss Problem
- 143 unapproved drugs: By March 2023, 143 products approved in the U.S. or EU had not been approved in Japan.
- 86 undeveloped drugs: Of those 143 therapies, 86 had no active development in Japan, indicating a true “drug loss” situation where companies never file for approval.
- Venture, orphan, paediatric: An estimated 72 of the 86 undeveloped drugs were either venture-originated or targeted rare diseases and paediatric conditions. These fields often have smaller patient populations and thus lower commercial appeal for big pharma, explaining why they are underserved.
Why This Is an Opportunity for Mid-Sized Pharma
Several policy changes and initiatives in Japan are specifically designed to attract overseas companies—especially those with orphan, paediatric or niche therapies:
- Regulatory reform: Japan has loosened its requirement for separate Phase I trials in Japanese volunteers. If global clinical data show acceptable safety and tolerability, firms may no longer need an additional Japanese Phase I study, reducing time and cost.
- Premium for rapid introduction: A new pricing incentive allows companies to earn a 5–10% premium if they file for approval in Japan within six months of their first application or approval overseas. This rewards simultaneous or near-simultaneous global launches.
- PMDA’s global outreach: The Pharmaceutical and Medical Devices Agency (PMDA) plans to open a U.S. office to provide free regulatory consultations to foreign biotech firms. Japan has also set up special consultation centres for orphan and paediatric drug development.
- Clear priorities: The Ministry of Health, Labour and Welfare (MHLW) has categorised the 86 undeveloped drugs into four groups (A–D) based on medical necessity. This offers a transparent pipeline of high-impact products for companies to target. Group A drugs have “particularly high” development need; Group B have “high” need; Group C are “low”; and Group D are deemed unnecessary due to existing alternatives or lack of patients.
For mid-sized pharma companies, particularly those focusing on rare diseases or paediatric indications, Japan’s evolving regulatory environment turns drug loss into an opportunity. By partnering with local contract developers or establishing a marketing authorisation holder (MAH), companies can enter a less crowded market, secure premium pricing, and make use of government support programs.
Group A–D Compounds (English names)
Below is a list of all 78 compounds across Groups A–D, presented by category. Brand names are included in parentheses for reference.
Group A – Particularly high development need (14 compounds)
Lumasiran sodium (Oxlumo); Copper (64 Cu) dotatate (Detectnet); Triheptanoin (Dojolvi); Artesunate (Artesunate); Avapritinib (Ayvakyt); Trifarotene (Aklief); Gallium-68 edotreotide (Ga-68-Dotatoc); Lefamulin acetate (Xenleta); Pretomanid (Pretomanid); Brexanolone (Zulresso); Omadacycline tosylate (Nuzyra); Purified fish oil (Omegaven); Gallium-68 dotatate (Netspot); Obiltoxaximab (Anthim).
Group B – High development need (41 compounds)
Ansuvimab (Ebanga); Margetuximab (Margenza); Naxitamab (Danyelza); Atoltivimab + Maftivimab + Odesivimab (Inmazeb); Oliceridine (Olinvyk); Nifurtimox (Lampit); Abametapir (Xeglyze); 18F-Fluoroestradiol (Cerianna); Ripretinib (Qinlock); Amisulpride (Barhemsys); Ubrogepant (Ubrelvy); Lumateperone tosylate (Caplyta); Exem Foam Kit (ultrasound contrast; no single API); Elexacaftor + Tezacaftor + Ivacaftor (Trikafta); 18F-Fluorodopa (Fluorodopa); Bremelanotide acetate (Vyleesi); Solriamfetol (Sunosi); Triclabendazole (Egaten); Calaspargase pegol (Asparlas); Sarecycline hydrochloride (Seysara); Eravacycline dihydrochloride (Xerava); Segesterone acetate + Ethinyl estradiol (Annovera); Revefenacin (Yupelri); Elagolix sodium (Orilissa); Plazomicin sulfate (Zemdri); Lofexidine hydrochloride (Lucemyra); Velmanase alfa (Lamzede); Tezacaftor + Ivacaftor (Symdeko); Angiotensin II (Giapreza); Macimorelin acetate (Macrilen); Secnidazole (Solosec); Benznidazole (Benznidazole); Sofosbuvir + Velpatasvir + Voxilaprevir (Vosevi); Betrixaban (Bevyxxa); Deutetrabenazine (Austedo); Telotristat ethyl (Xermelo); Deflazacort (Emflaza); Plecanatide (Trulance); Eteplirsen (Exondys 51); Lifitegrast (Xiidra); Pimavanserin tartrate (Nuplazid).
Group C – Low development need (11 compounds)
Imlifidase (Idefirix); Bulevirtide acetate (Hepcludex); Fostemsavir tromethamine (Rukobia); Golodirsen (Vyondys 53); Volanesorsen sodium (Waylivra); Rifamycin (Aemcolo); Moxidectin (Moxidectin); Ibalizumab (Trogarzo); Padeliporfin (Tookad); Meropenem + Vaborbactam (Vabomere); Delafloxacin meglumine (Baxdela).
Group D – No development need (12 compounds)
Voxelotor (Oxbryta); Crizanlizumab (Adakveo); Sotagliflozin (Zynquista); Prabotulinumtoxin A-xvfs (Jeuveau); Moxetumomab pasudotox (Lumoxiti); Doravirine + Lamivudine + Tenofovir disoproxil (Delstrigo); Tafenoquine succinate (Krintafel); Ertugliflozin + Sitagliptin + Hydrochloride (Segluromet); Ertugliflozin + Sitagliptin (Steglujan); Lesinurad + Allopurinol (Duzallo); Ferric maltol (Accrufer); Elbasvir + Grazoprevir (Zepatier).