Skip to main content

Thank you for visiting nature.com. You are using a browser version with limited support for CSS. To obtain the best experience, we recommend you use a more up to date browser (or turn off compatibility mode in Internet Explorer). In the meantime, to ensure continued support, we are displaying the site without styles and JavaScript.

  • Correspondence
  • Published:

Why Japan lacks a vibrant biotech industry

Nature Biotechnology (2024)Cite this article

Subjects

Recent analysis of the biopharmaceutical industry in Japan has emphasized that the lack of a thriving biotech ecosystem in that country is largely due to tight controls on drug pricing1. However, this is only one part of the explanation, and any strategy to promote Japanese biotech must acknowledge the full complexity of the problem. Japan has long punched above its weight in innovative research in biochemistry and medicinal chemistry despite relative government underinvestment compared with the United States and Europe. In the United States, 363 new drugs were approved by the Food and Drug Administration between 2011 and 2021 (ref. 2). The leading country of origin of these approvals was the United States, with 223 drugs, but Japan was the second-leading country of origin, with 33 drugs. Drugs first developed in Japan include statins (Sankyo) and the cancer immunotherapy Opdivo (nivolumab; Ono Pharmaceutical), based on the discovery of programmed death inhibitor proteins by Nobel prize recipient Tasuku Honjo. In the field of biotechnology, Japanese successes include BioWa (acquired by Kirin), a producer of monoclonal antibodies, and Chugai Pharmaceutical, which has the largest bioreactor capacity in Japan and has been fed a steady stream of new drugs from its majority owner Roche.

Yet Japan lacks a home-grown biotech ecosystem. Even the discovery of induced pluripotent stem cells by Kyoto University researcher Shinya Yamanaka has not translated into Japanese leadership in cell therapies. Several factors beyond drug price controls are involved. Although many Japanese pharmaceutical companies have corporate venture capital arms and invest in biotech startups, these investments are mostly in the United States and other regions outside Japan. The same is true of Japanese venture capital investing as a whole. In 2022, this sector invested 120 times more in the United States than in Japan3,4. Japan has simply failed to develop a startup ecosystem, especially in biotech. According to the Global Startup Ecosystem Report 2021 from Startup Genome, Tokyo ranked ninth in the world as a startup hub, below other cities in East Asia, including Beijing and Shanghai4.

This is a preview of subscription content, access via your institution

Access options

Buy this article

  • Purchase on Springer Link
  • Instant access to full article PDF
Buy now

Prices may be subject to local taxes which are calculated during checkout

References

  1. Ezell, S. How Japan squandered its biopharmaceutical competitiveness: a cautionary tale. https://itif.org/publications/2022/07/25/how-japan-squandered-its-biopharmaceutical-competitiveness-a-cautionary-tale/ (Information Technology and Innovation Foundation, 2022).

  2. National Venture Capital Association. Yearbook 2023. https://nvca.org/wp-content/uploads/2023/03/NVCA-2023-Yearbook_FINALFINAL.pdf (2023)

  3. Venture Enterprise Center. VEC yearbook 2023. https://www.vec.or.jp/en (2023).

  4. Startup Genome. The global startup ecosystem report, GSER 2021. https://startupgenome.com/report/gser2021 (2021).

Download references

Author information

Authors and Affiliations

  1. New York, NY, USA

    Mark Kessel

  2. Brooklyn, NY, USA

    Chris Vickrey

Authors
  1. Mark Kessel
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Chris Vickrey
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Mark Kessel.

Ethics declarations

Competing interests

The authors declare no competing interests.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Kessel, M., Vickrey, C. Why Japan lacks a vibrant biotech industry. Nat Biotechnol (2024). https://doi.org/10.1038/s41587-024-02227-x

Download citation

  • Published:

  • DOI: https://doi.org/10.1038/s41587-024-02227-x

Search

Advanced search

Quick links

Nature Briefing

Sign up for the Nature Briefing newsletter — what matters in science, free to your inbox daily.

Get the most important science stories of the day, free in your inbox. Sign up for Nature Briefing