Drug dilemma

THE JAPANESE pharmaceutical industry will shrink by 10 per cent in three years because of government plans to tighten price controls, say analysts.

Drug manufacturers in Japan usually offset price cuts by increases in volume, as the process of drug dispensation in the country offered doctors the incentive to prescribe many expensive medicines (Down To Earth, May 31, 1993). This will, however, no longer be possible because the government plans to predetermine reimbursement for various diseases.