2. Process and players
Second edition

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Processes and players｜Japan’s government

The Constitution of Japan, created in 1946 and implemented in 1947, laid the foundation for Japan’s parliamentary
system of government. This system is divided into three branches: the legislative branch, the executive branch,and the judicial branch. Power is separate and checks and balances exist between the three branches.
The legislative branch
The legislative branch is comprised of the country’s sole law-making body, the National Diet. The Diet has two
Houses, the House of Representatives and the House of Councilors, both comprised of members elected by the
public. Members of each House are required to serve on at least one standing committee during ordinary sessions,which begin in January and last 150 days, with one extension possible.

© 2019 Health and Global Policy InstituteThe executive branch
The executive branch is comprised of the Cabinet Office, endowed withadministrative authority, and led by the Prime Minister. The House ofRepresentatives nominates the Prime Minister, who is then officiallyappointed by the Emperor and designates the ministers of state whocomprise the Cabinet. The constitution stipulates that the majority ofministers of state be selected from the Diet.1 The Cabinet Secretariat
provides support to the Cabinet and the Prime Minister.
State Ministers remain in office until they are dismissed by the Prime
Minister or the Lower House passes a no-confidence resolution (orrejects a confidence resolution). Within 10 days of the passing of a noconfidence resolution (or a rejection of a confidence resolution) either
the House of Representatives is dissolved or the members of the
Cabinet collectively resign. The Cabinet includes the Cabinet Office,Cabinet Agencies, and 11 Ministries, including the Ministry of Health,Labour and Welfare, and the Ministry of Finance. These central
government offices carry out various policies and draft cabinet bills.2

The judicial branch
The judicial branch is comprised of the Supreme Court and four types oflower courts. The Supreme Court is endowed with the power of judicial
review and ensures that legislation and actions taken by the Cabinet andthe Diet are constitutional. The Supreme Court’s chief justice isappointed by Cabinet nomination and official appointment by theEmperor. The other 14 justices are appointed by the Cabinet. Justiceappointments to the Supreme Court are periodically reviewed inintervals of 10 years, starting with the first general election of House ofRepresentatives following their appointment until the judge reaches the
mandatory retirement age of 70. Appointments may be terminatedthrough a majority vote, although this has yet to happen. Below theSupreme Court are high courts, district courts, family courts, andsummary courts. Most trials involve one to three judges. In 2009,
criminal trials began to include the general public through the use of lay
judges.3＜Column＞Frequent national elections
Japan has frequent national elections.
Including Parliamentary (Diet) elections,
there were 7 elections between 2005
and 2015 – that’s one election every 1.5
years. Lower House elections are held
so frequently (once every 2.5 years overthe past 10 years) that it is notuncommon for Members of the Lower
House to leave office withoutcompleting a full four-year term. In
addition, every three years, an electionis held for half of the Upper House. This
election has significant impact as itserves as a mid-term evaluation of theadministration. Add to this the local
elections held nation-wide every four
years, and the municipal elections
which, in a real sense, are actual
contests between the ruling andopposition parties, and the number ofelections further increases. As a result,the government, the ruling party, andeach political party must pay criticalattention to elections, which leads to acertain level of instability in politics and,what some consider, an easy avenue forthe influential voices of older persons toaffect policy (for this reason, Japan issometimes called a “Silver
Democracy”).

1 Ministry of Internal Affairs and Communications. Types of Elections. (Accessed 30 January 2018) Retrieved fromhttp://www.soumu.go.jp/senkyo/senkyo_s/naruhodo/naruhodo03.html#chapter1
2
Cabinet Office. Pamphlet on the organization and functions of the Cabinet. (Accessed 30 January 2018) Retrieved fromhttp://www.cao.go.jp/about/pmf_index.html
3 Court of Justice. Lay judge system. (Accessed 30 January 2018) Retrieved from http://www.saibanin.courts.go.jp/topics/saibanin_jissi_jyoukyou.html© 2019 Health and Global Policy Institute2.2

Process and players ｜The Policy-making process

Although a significant part of Japanese health policy is dictated by revisions made to the fee schedule, bills passed
through the legislative process form the structural base of policy, including the government budget. The Japanese
fiscal year starts in April and ends in March. The legislative process follows this timeline, with budget bills
prioritized so that they can be passed by the start of the next fiscal year each April. Health legislation and otherbills are submitted to the Diet by either the Cabinet or by members of the Diet.4

Cabinet deliberations
The Cabinet submits bills to the Diet, and barring emergencies, these bills go through a lengthy process of draftingand deliberations that typically include the following steps.5,6
Problem identification and information gathering
Cabinet members survey stakeholder interests and gauge media reports. To inform discussions, they often consult
healthcare practitioners and interview various stakeholders and experts to gather information and sample
opinions.
Cabinet council discussions7
Inside the Japanese cabinet there is a large number of councils on topics ranging from space policy to suicide
prevention. Councils that hear health policy related discussions include standing councils, such as the Social
Security Council and the Committee on Health Insurance, and ad-hoc councils, which are convened to address
matters that require a particular level of expertise or to gather a broad range of opinions.
Evaluation of bills by the Cabinet Legislation Bureau
Prior to being introduced at Cabinet Meetings, bills submitted by the Cabinet are wholly evaluated by the Cabinet
Legislation Bureau. The Cabinet Legislation Bureau conducts preparatory evaluations of bills drafted, as a matterof course, by government agencies and ministries.8
Evaluation of proposed bills by ruling party
The Evaluation Committee of the ruling party, which has usually been the Liberal Democratic Party over the courseof the modern era in Japan, conducts evaluations of bills. Without support from the ruling party, bills will die at
this stage. If the ruling party backs a bill, it is circulated in the Cabinet.
Prior to submission to the Diet, a Cabinet decision on the bill is madeFactors considered in Cabinet decisions include the urgency of the bill and how the bill will fit alongside existinglaws. Once the Cabinet decides to proceed with a bill, the bill will be submitted to the Diet in February or Marchby the Prime Minister.

4

Cabinet Legislation Bureau. How a bill becomes a law. (Accessed 30 January 2018) Retrieved from http://www.clb.go.jp/law/index.html

5 Cabinet Legislation Bureau. How a bill becomes a law. (Accessed 30 January 2018) Retrieved from http://www.clb.go.jp/law/index.html
6 Iwabuchi Yutaka (2013). Handbook of Japanese health policy formulation and structure. Chuohoki Publishing. p.32-41
7 Cabinet Office. Gathering of the deliberative council. (Accessed 30 January 2018) Retrieved from http://www.cao.go.jp/council.html
8

Cabinet Legislation Bureau. From the drafting of a bill to the passing of a law. (Accessed 20 April 2018) Retrieved fromhttp://www.clb.go.jp/law/process.html© 2019 Health and Global Policy InstituteDeliberations in the Cabinet
Other bills are submitted by members of the House of Representatives or by members of the House of Councilors.
In addition to the signature of the member who officially proposes a bill, it must also garner the signature of
approval of at least a set number of other members. The bill is then given to the Presiding Officer of the proposing
member’s House. Once a bill enters the Diet, deliberations take place in both the House of Representatives andthe House of Councilors. Deliberation usually includes discussions in a Standing Committee, question and answer
sessions involving the proposing member or the Prime Minister, and voting at a public hearing or a committee.
Bills which survive these processes may pass into law via one of three paths:
・If at least half of all the members of both the House of Representatives and the House of Councilors vote for abill, it passes
・If one house approves the bill but the other house rejects it, a Conference Committee comprised of members ofboth houses may be called to develop a proposal on which both Houses can agree
・A bill rejected by the House of Councilors after approval by the House of Representatives may still pass if it isapproved once more by the House of Representatives with the two-thirds or more of the members voting in favorof the bill9 (this principle is known as the “superiority of the House of Representatives.” This special privilege exists
because the House of Representatives is viewed as more reflective of national opinion given that terms are shorterand that the House of Representatives may be dissolved at any time at the discretion of the Prime Minister.)Once a bill is approved, the Cabinet informs the Emperor. Following that, the bill must be promulgated into law
within 30 days.
Revision of the system for reimbursement of medical fees
Another important process that shapes health policy in Japan is the revision of the NHI fee schedule. This takes
place once every two years. For further information about this process, please see Cost Control (Section 7.2).

9House of Representatives. The prerogatives of the cabinet. (Accessed 1 February 2018) Retrieved fromhttp://www.shugiin.go.jp/internet/itdb_annai.nsf/html/statics/kokkai/kokkai_kengen2.htm© 2019 Health and Global Policy Institute2.3

Process and Players| Health Policy Players

Health policy in Japan, similar to other advanced countries, is a high-stakes arena involving a variety of
stakeholders. The following is an overview of the main health policy players in Japan.

Central government and administrative agencies
Public administrative agencies supervise and regulate healthcare through control of the health insurance system.
Specifically, government organizations oversee health insurance contracts between the government andhealthcare agencies. This power is provided through the 1922 Health Insurance Act.10 These organizations are also
responsible for regulating pharmaceutical industry practices, including clinical trials, post-market research, andmanufacturing. These regulations are created and carried out by various bureaus in the Ministry of Health, Labourand Welfare (MHLW). For example, the evaluation of new drug and medical device applications is the
responsibility of the Pharmaceutical and Medical Device Agency (PMDA).11

Ministry of Health, Labour and Welfare
MHLW, a Ministry of the central government, was originally established in 1938 as the Ministry of Health andWelfare, and came into its current form after it merged with the Ministry of Labour in 2001.12 As of July 2015,
MHLW includes 16 councils, 8 regional bureaus of health and welfare, a labor department in every prefecture,
incorporated administrative agencies (including PMDA and the National Hospital Organization, which operates
143 national hospitals as external departments), and government-affiliated corporations such as the Japan
Pension Service. In addition, MHLW’s head office houses multiple internal bureaus with various functions. The
main bureaus that influence health policy include the following:13
Health Insurance Bureau: Plays an active role in bi-annual fee schedule revision and supports healthcare system
improvements
Health Policy Bureau: Researches and proposes various policy options in relevant policy areas to respond to thechanging demographic and morbidity profile in Japanese society, including healthcare delivery, staff assignment,
and health technology
Health Service Bureau: Focuses on regional healthcare, health promotion, measures to address infectious
diseases, sanitation, and organ transplantation.
Pharmaceutical and Food Safety Bureau: Establishes policies to ensure the safety and efficacy of pharmaceuticals,
medical devices, and cosmetics. It also establishes regulations for hospitals and supervises blood derivatives. Thisbureau is also charged with addressing the mislabeling of drugs, illicit drug use and stimulants.
Social Welfare and War Victims’ Relief Bureau: Addresses a myriad of social welfare issues including
homelessness and social relief. This bureau also administers services for families affected by World War II.
Health and Welfare Bureau for the Elderly: Promotes policies related to the Long-term Care Insurance System
and welfare services for the elderly in order to support the aging society.
Pension Bureau: Plans and implements the public pension system and corporate pension system.
Labour Standards Bureau: Oversees the health and safety of workers, including working hours, workers’ accident
compensation, and wages.

10 Ministry of Health, Labour and Welfare. Understanding the system of health insurance (Accessed 31 January 2018) Retrieved fromhttp://www.mhlw.go.jp/seisakunitsuite/bunya/kenkou_iryou/iryouhoken/dl/shidou_kansa_01.pdf
11Pharmaceuticals and Medical Devices Agency. Outline of PMDA. (accessed 31 January 2018) Retrieved from https://www.pmda.go.jp/files/000219906.pdf
12Ministry of Health, Labour and Welfare. The beginnings of the Ministry of Health, Labour and Welfare
13 Ministry of Health, Labour and Welfare. Main work (Duties). (Accessed 31 January 2018) Retrieved fromhttp://www.mhlw.go.jp/kouseiroudoushou/shigoto/© 2019 Health and Global Policy InstituteEqual Employment, Children and Families Bureau: Plans policies that support working families and the well-beingof children.

© 2019 Health and Global Policy InstitutePharmaceuticals and Medical Devices Agency (PMDA)
PMDA, established in 2004, is an independent administrative agency14, responsible for evaluating the quality andeffectiveness of new drug and medical device applications, post-market safety, and addressing damages related
to adverse health effects. The agency is comprised of multiple offices, including the Office of International
Programs, which liaises with non-Japanese applicants and inquiries; the Office of Regulatory Science, which works
to build Japan’s regulatory science capacity, and the Office of Cellular and Tissue-based Products, which focuseson biologics and tissue-engineered medical products. Through various policies and organizational strategies,
PMDA has been successful at bringing the average review time of standard review products down from 22 months
in 2008 to 11.3 months as of the end of August 2015. The average review time of priority review products wentfrom 15.4 months in 2008 to 6.1 months in 2012, and as low as 8.7 months as of the end of August of 2015.15

Central Social Insurance Medical Council
The Central Social Insurance Medical Council, or Chu-i-kyo inJapanese, is run by staff of MHLW’s Health Insurance Bureau(HIB) and convenes to advise the Minister of Health, Labour andWelfare on health insurance and health services. The Council
includes representatives from the payer side, the provider side
and academics representing the public interest. While it
conducts various discussions throughout the year, its main role
is to debate and set fee schedule revisions for medical services
and pharmaceuticals and National Health Insurance (NHI) drug
prices.16
Ministry of Finance Budget Bureau
The Budget Bureau (BB) of the Ministry of Finance overseas
subsidies to NHI through its jurisdiction over the national
budget. It is one of the foremost players in healthcare policy.
The subsidies, which are in essence government spending, arecomprised of revenue from taxes as well as funds borrowed by
the government. The BB has the most influence during the biannual fee-schedule and drug-price revision, when it works with
MHLW’s HIB to establish the global rate of price revision. As
stakes are high in this process, revisions involve lengthy
negotiations with a variety of actors.17＜Column＞Lining up from the early morning to
see Chu-i-kyo
Some will say that if there is one terms nonJapanese people should remember related tohealth policy in Japan, it is “Chu-i-kyo,” theabbreviated name for the Central Social Insurance
Medical Council (CSIMC). Chu-i-kyo is the mostimportant government council involved in healthpolicymaking. Every stakeholder in the field
watches the movement of this Council closely.
Regulations stipulate that it publish its meeting
proceedings and that meetings be open to thegeneral public. Chu-i-kyo attracts great attention
once every two years between Fall and February,
just before the fee schedule revision, which takes
place in April. During this short time period,
Council members engage in detailed discussions
around the fee schedule revision. In order to stay
informed of discussions, members of the media,
the pharmaceutical industry, and the healthcare
sector usually line up from the very early morning
to get a ticket to sit in during meetings (tickets arehanded out on a first-come, first-served basis). It
is common to see the Council’s meeting room,
which comfortably seats 10 people, filled withover 100 people up to 3 hours before a meeting isscheduled to begin.

14 Pharmaceuticals and Medical Devices Agency. (PMDA) (accessed 11 October 2017) Retrieved from https://www.pmda.go.jp/about-pmda/outline/0001.html
15 Pharmaceuticals and Medical Devices Agency. Our achievements up until now (2016) and challenges for the future. (accessed 11 October 2017)Retrieved from https://www.pmda.go.jp/files/000215764.pdf
16 Ministry of Health, Labour and Welfare. About the Central Social Insurance Medical Council. (accessed 30 January 2018) Retrieved fromhttp://www.mhlw.go.jp/shingi/2005/03/dl/s0309-4e3.pdf
17Ikegami Naoki (2014）Universal Health Coverage for Comprehensive and Sustainable Development – Synthesis of research in 11 countries. Japan Center

for International Exchange. (accessed 29 January 2018) Retrieved from http://www.jcie.org/japan/j/pdf/pub/publst/1452/1452all.pdf© 2019 Health and Global Policy InstituteThe Liberal Democratic Party
The Liberal Democratic Party (LDP) has been at the forefront of health policy since the end of the occupation by
U.S. Forces in the early 1950s. During that time of political transition, healthcare emerged as a focal point of
debate and the LDP, the ruling party then, took the lead by pushing for universal health coverage, thus garnering
a wide support base. Through amendments to the National Health Insurance Act in 1958, which aimed to expand
health insurance coverage, the LDP established systems of insurance for the unemployed, retired, self-employed
and irregularly employed in every municipality throughout Japan, achieving universal health coverage in theprocess.18 Since then, the LDP has continued to play an active role in health policy through legislative action andpolitical leadership built atop relationships with bureaucratic circles and interest groups. Since the start of Japan’scurrent healthcare system, the LDP has dominated politics and held the majority in the Diet almost the entire time,with the exception of an 11-month period between 1993 and 1994 and the 3 years between 2009 and 2011.

The Japan Medical Association19
Approximately 55% of physicians in Japan are members of the Japan
Medical Association (JMA), by far the most prominent health policy
interest group. The JMA works closely with bureaucrats, government
agencies, and the majority party (which, throughout modern history,
has overwhelmingly been the LDP) to protect physician autonomy andprofessional interests.
The JMA has seats on the Central Social Insurance Medical Council,
which sets the NHI fee schedule. In addition to official appointments,
the JMA regularly issues informal recommendations and engages in
active lobbying, which exerts a strong influence on health policyrelated legislation. However, even when opposed to certain proposed
revisions, it is not uncommon for it to make concessions orcompromises to ensure smooth relations with the government. For
example, during the Koizumi Administration (2001-2006), attempts tointroduce market-based approaches into the healthcare field by lifting
the ban on the mixed billing and approving management of hospitals
by investment institutions were met with major pushback from the
JMA. Although no major reforms materialized, this opportunity forreform did conclude with some minor changes to the existing system.

＜Column＞3 Doctors’ Association
As is the case in other countries, physiciangroups have a large amount of influenceon health policy in Japan. In Japan, theJapan Medical Association, the Japan
Dental Association, and the Japan
Pharmaceutical Association are referred tocollectively as the “3 Doctors’ Association”
because of the unrivaled presence thesegroups have amongst health-relatedorganizations. There are nearly 50 otherprofessional associations, including theJapanese Nursing Association, the All Japan
Hospital Association and the Japan
Pharmaceutical Manufacturers
Association, that work to maintainfavorable relationships with thegovernment and the ruling party in order
to affect the policy environment.

Prefectural governments
The Medical Service Act stipulates that prefectural governments oversee medical facilities and providers within
the prefecture. In contrast with the administrative agencies of the government, which supervise the contracts andpayment systems, prefectural governments monitor adherence to regulations related to the establishment of
medical facilities, staffing, and the management of pharmaceuticals and other products. This role for prefectural
governments was introduced in the 1985 revision of the Medical Service Act. Prefectural governments also havejurisdiction over the establishment of healthcare centers, and measures addressing diseases and sanitation.
Health centers are also established by government-designated cities and special wards.20

18Ikegami Naoki (2014）Universal Health Coverage for Comprehensive and Sustainable Development – Synthesis of research in 11 countries. Japan Center

for International Exchange. (accessed 30 January 2018) Retrieved from http://www.jcie.org/japan/j/pdf/pub/publst/1452/1452all.pdf
19 Ikegami Naoki (2014）Universal Health Coverage for Comprehensive and Sustainable Development – Synthesis of research in 11 countries. Japan Center

for International Exchange. (accessed 29 January 2018) Retrieved from http://www.jcie.org/japan/j/pdf/pub/publst/1452/1452all.pdf
20
Ministry of Health, Labour and Welfare. Regional healthcare. (accessed 1 February 2018) Retrieved fromhttp://www.mhlw.go.jp/stf/seisakunitsuite/bunya/tiiki/index.html© 2019 Health and Global Policy InstituteMunicipal governments
Currently, local governments such as municipal town halls set public health policy related to disease prevention
and family health through community health centers. The 1982 Healthcare for the Aged Act increased municipal
involvement by asking municipal governments to increase health services for the elderly, including healthinstruction and health screenings. The 2002 Health Promotion Act called for municipal governments to actively
participate in community health planning.21

21

Ministry of Health, Labour and Welfare. Health Promotion Act – Background Information. (accessed 1 January 2018) Retrieved fromhttp://www.mhlw.go.jp/shingi/2004/12/dl/s1202-4g.pdf© 2019 Health and Global Policy Institute