0.2% Matters

While the government decided deregulation of all 11.400 kinds of drug except 28 strong ones, an eminent entrepreneur running an internet shopping site was so frustrated with the result that he would step down as a member of a governmental conference for deregulation. For him, the government had chosen the side of old economy with traditional interests by protecting that 0.2% of all kinds of drug.

The announcement of the government was to make most drugs able to be sold in internet market. Among all, however, five medicines, including four kinds of tablets for erectile dysfunction and one for sterilization, were banned to be sold through internet. Other twenty-three were conditioned to sell after clearing safety assessment for three years. New rule would be adopted next spring.

Hiroshi Mikitani, the chief executive officer of Rakuten, strongly opposed to the decision of the government. “The government is going to a direction totally opposite to reform,” he told in a press conference right after the announcement from the government. He showed his intention to resign his membership of the Industry Competition Convention, one of the key consultative bodies for promoting economic policy of the administration led by Prime Minister, Shinzo Abe. Mikitani also indicated to sue the government through relative company of Rakuten.

In final consideration of this deregulation policy, related ministers agreed with the necessity of pharmacists in selling specific medicines to avoid trouble caused by lack of consultation. Interest groups of pharmacists, cooperating with groups of medical doctors, had been firmly against internet shopping for medicines. Mikitani criticized the connection between medical businesses and the government as a symbol of old business models, calling new policy “irrational.”

The impact of Mikitani’s turning his back to Abe administration should not be underestimated. Deregulation is the core issue of “growth strategy,” which consists of the third arrow of Abenomics economic policy. Mikitani has been a symbolic figure to show Abe’s seriousness in reforming Japan economy into competitive and enterprising structure. With negative image in pharmaceutical reform, it is inevitable that a number of people realize the strategy to be a fiction and recognize the administration as living on the old regulation system. Paralleled with accumulation of national debt and concern on uncontrollable inflation brought by aggressive stimulating policy, the credibility on Abe’s economic policy is getting eroded.