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Rakuten CEO slams Abenomics failure over online drug sale limits

42 Comments
By Nathan Layne

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Alllowing drugs to be sold on the internet, legally and without any check, will mean a rise on counterfeit medicines and pontential problems. If Rakuten could be held responsible and paying hefty fines if his customers are found to sell counterfeit medicines, Mikitani would abandon the idea quickly I think. Also, after studying Breaking Bad, I'll be able to run my own meth lab with cough medicines I can order on the web.

-9 ( +6 / -15 )

Alllowing drugs to be sold on the internet, legally and without any check, will mean a rise on counterfeit medicines and pontential problems,

Prescriptions would still be required, just as they are required for online drug sales in other countries. Counterfeiting is not likely to be a big concern in Japan, as existing laws against counterfeiting are already strong. Japan is a small country, and drugs are distributed locally, and the channels can supervised quite easily. The issue most important to drug companies Is losing their ability to fix minimum prices if their products can be sold outside channels they control. Pretty much all companies in Japan engage in price fixing, which is techincally illegal, but is never punished.

It begins to look as though Abenomics was just another pork-laden government boondoggle, and is nothing more than a program designed to profit politicians and the politically-connected. This so-called third arrow was the most important of the bunch, and was the only one which was really neccesary. If it is not implemented, then there was no point in releasing the first two.

Abe needed to implement drastic changes with his last arrow, nothing short of drastic change can stem Japan's slide into oblivion. But then again, probably no amount of policy change can alter Japan's course.

11 ( +17 / -6 )

Hissy fit. It's pretty obvious Mikitani only joined the panel in the first place because he thought he could gain an advantage for his own business.

[Mikitani] further argued that sales over the Internet could in fact be considered safer, because of the ability to track customers and communicate with them via e-mail.

A laughable argument on so many levels.

-3 ( +5 / -8 )

"I'll be able to run my own meth lab with cough medicines I can order on the web."

Whereas you'd be unable to buy the same cough medicine in a store? I don't understand your logic.

7 ( +10 / -3 )

Looks like the TPP negotiations, which are being held in secret, have reached some agreements.

I wonder what else is in store for us?

-1 ( +3 / -4 )

Mikitani is right to highlight any backsliding. The commitment is for deregulation, greater competition, less cosy price fixing - all of which should bring benefits to the consumer. If we can`t get this done for something non-controversial like non-prescription drugs, then what can we get it done for? (I think I know the answer and it is not encouraging)

8 ( +12 / -4 )

Once people see supporters starting to back out of the Prime Minister's economic plan more supporters will start dropping like flies....

5 ( +8 / -3 )

From construction to food the whole place is a rip off. Greedy little fingers everywhere.

8 ( +12 / -4 )

Mikitani's right.

Enough of the price gouging!

10 ( +12 / -2 )

It's personal between Abe and Mikitani - Mikitani wasn't 'health' enough to buy a legislative act in Diet which Abe probably pressured on his men. That's all!

0 ( +2 / -2 )

Japan is not into decline. Its just adjusting. People wont be rich as before. In the end we all will be poor thanks to rich people.

2 ( +4 / -2 )

Mr. Hiroshi Mikitani sounds greedy, arrogant and pompous to me. His opinion about the whole economy (Abenomics) is determined by whether he gets to sell drugs online or not. Thats sad to see. His advice to PM will also follow his own ambitions, its good to have him off the panel.

-5 ( +5 / -10 )

JeffLee: I won't need to move my a** from my desk to buy them.

-1 ( +1 / -2 )

Putting aside the merits of deregulating online drug sales, Mikitani should be off the panel simply because of the huge conflict of interest. He clearly had a personal pony in this race and now that he sees he and his firm won't profit, he takes his ball and goes home.

-2 ( +4 / -6 )

Mikitani should be off the panel simply because of the huge conflict of interest.

What's the difference between Mikitani's interests and the vested interests of LDP croneyism?

9 ( +11 / -2 )

Mr. Hiroshi Mikitani sounds greedy, arrogant and pompous to me. His opinion about the whole economy (Abenomics) is determined by whether he gets to sell drugs online or not. Thats sad to see. His advice to PM will also follow his own ambitions, its good to have him off the panel.

This is completely untrue. Mr Mikitani has personally done more to break the iron grasp which companies and retailers have on the domestic Japanese market than the government itself has. The terms "greedy, arrogant, and pompous" would be better used to describe the drug companies and their tactics to control what you and I have to pay for their products.

Corporate collusion, business "relationships" and price-fixing are business-as-usual in Japan. These practices have caused great harm to consumers and the national economy. Rakuten and a few other companies operate outside this sphere, which is greatly difficult. Mr. Mikitani's presence on the panel gave it a great deal of credibility. This credibility is now gone.

Don't think that this panel was concerned only with the selling of drugs, the panel has oversight on a great deal of Japanese industry. The online drug-sales issue was to be the simplest of the matters to resolve. Failure to resolve this issuee bodes ill for the panel's ability to deal with larger and more important issues which are still pending.

I applaud Mr Mikitani's actions, he at least has the strength to express himself. Were he a typical Japanese business executive, he would have cut a deal with the drug companies and offered to sell their drugs on his site at the prices they set.

But Mr Mikitani's leaving the panel is also alarming, it means he expects Abenomics to be unworkable, and likely to fail.

9 ( +12 / -3 )

Over the counter meds in pharmacies are ridiculously price pumped, and he want to be able to sell cheaper , undercutting the mortar shops... good for him! Ibufropen, online from abroad ( branded ) costs 7usd for 100 tablets which are almost twice powerfull than the 24 tablets for 700Yen here in a pharmacy...

6 ( +9 / -3 )

iichibanNov. 07, 2013 - 09:25AM JST

Mr. Hiroshi Mikitani sounds greedy, arrogant and pompous to me. His opinion about the whole economy (Abenomics) is determined by whether he gets to sell drugs online or not. Thats sad to see. His advice to PM will also follow his own ambitions, its good to have him off the

Not at all, he's one of the few hopes for Japan.

His upbringing and attitude to Japan Inc make him a threat to Japanese ruling elites and he'll probably end up doing a Horie style stretch in the clink.

4 ( +8 / -4 )

Getting a bit too greedy Mr. Mikitani? Perhaps he wants to sell it but not just by you.

-10 ( +0 / -10 )

Is there a large pharmacists lobby, like the post-office lobby of old? It is like the post offices, off-licences, and before Clinton's structural reforms, local Panasonic electrical shops, news paper deliverers, and so many other things. I think it originates in Shinto. People sit in little retail shrines (massha) collecting rent from the stipulated catchment area by having a monopoly on a certain product (category) either by a vertical bond to the supplier (Panasonic/ Asahi) or legal bonds to the government (honsha).

But there are advantages in this way of doing things. Get rid of these monopolies and little shops disappear, and people outside the cities have to use the Net, which is often a tough option for the old. Stuff the old people in the countryside?

Despite the rapid increase in the size of Kantou Kansai Fukuoka in the past 50 years and all the talk of the "depopulation of the countryside" Japan is still less urbanised that many nations. (Last time I looked it was about as urbanised as Ireland but less so than the UK or US).

Is freedom and urbanisation the way forward or can Japan slip in a bit of Japanese compromise and will it help Japanese society? It is clear that Japan's modernisation was not Western in nature. Does it need to Westernise more now? Is there only one, convergent model of modernisation? Hiroshi make-them-speak-English Mikitani thinks so.

1 ( +3 / -2 )

at Dog

"His upbringing and attitude to Japan Inc make him a threat to Japanese ruling elites and he'll probably end up doing a Horie style stretch in the clink."

If this were to be the case, why did he was sitting and cheering Abenomics when things were going his way. Just when he thought things does not seem to be going his direction, he flips his opinion and becomes a rebel and challenges the same elite. That is hypocrisys.

0 ( +3 / -3 )

I'm all for deregulating online sales, but I also understand the concerns the Health Ministry have over allowing stronger drugs sold online.. Personally, I'd like to see it completely deregulated.

2 ( +2 / -0 )

at sangetsu03 "Don't think that this panel was concerned only with the selling of drugs, the panel has oversight on a great deal of Japanese industry. The online drug-sales issue was to be the simplest of the matters to resolve."

I completely agree with what you have said. I also agree with the concept of breaking regulation in the drug market and allowing businesses to participate. But here, he has taken this one simplistic issue as you have mentioned, extrapolated it to the way whole economy is working and given up on the panel that could have done better work with his intellects at work. This is a clear case of conflict of interest.

0 ( +0 / -0 )

I'm actually surprised that so many of the business leaders were stupid enough to believe his economic reforms would work. His ideals are based on the policies of old when Japan had a young workforce that would work for free and had almost monopolized the electronics and car markets internationally. Now, the workforce has aged, the international markets have been taken by other countries and Japan is broke. His policies will push Japan's economy from deflation into depression. Japan's greatest resource is its workforce and he is just exploiting them. Abenomics has been destined to fail from the outset. Yeah, the large corporations are gonna pocket their tax cuts to make them look stronger on paper, but many medium to small companies are gonna fold and send unemployment through the roof cos none of his reforms support employment growth. He is a fool and anybody that believed in him is a bigger fool than he is.

4 ( +5 / -1 )

iichibanNov. 07, 2013 - 11:09AM JST

at Dog If this were to be the case, why did he was sitting and cheering Abenomics when things were going his way. Just when he thought things does not seem to be going his direction, he flips his opinion and becomes a rebel and challenges the same elite. That is hypocrisys.

Not at all. Initially, like a lot of people he took Abe at his word and did believe Abe would introduce structural reform.

However he has since joined the ranks of Globalwatcher and me who always said that Abenomics was the usual LDP policies of pork barrelling and currency manipulation, coated in a different color, and that Abe is part of the problem and not a solution to the problem.

He was man enough to admit he was wrong. It's a pity that some posters on here don't have the cajonnes to admit they were also mistaken about Abe and Abenomics.

1 ( +4 / -3 )

if there was a way to ensure that prescription drugs are being bought and used by the patients they are being prescribed to, i would have no objection. as it is now, there are people on welfare who get their drugs subsidized by tax payers money that go get the same prescriptions filled at several different drug store and then sell the drugs. if you ask me mikitani is just looking to get some publicity and make a buck.

-2 ( +0 / -2 )

if there was a way to ensure that prescription drugs are being bought and used by the patients they are being prescribed to, i would have no objection. as it is now, there are people on welfare who get their drugs subsidized by tax payers money that go get the same prescriptions filled at several different drug store and then sell the drugs. if you ask me mikitani is just looking to get some publicity and make a buck.

If you read the article, you will see that the drugs referred to by Mr Mikitani are not prescription drugs, but regular over-the-counter medicines:

...the health ministry moved quickly to re-regulate online sales of non-prescription drugs in order to set a precedent...

This action in itself is bad, and shows the cozy realtionship shared between the drug companies and the national government.

Now for the full quote:

the health ministry moved quickly to re-regulate online sales of non-prescription drugs in order to set a precedent and stall any momentum toward opening the much larger market for prescription medications, estimated to be worth some 9 trillion yen a year.

In America it is quite easy to buy your medications from an online pharmacy. A prescription is, and always has been required, and these prescriptions are confirmed via email or telephone, whereas handwritten prescriptions are rarely confirmed. The online pharmacy system is no more prone to abuse than visiting a regular pharmacy.

In Japan, the drug companies want to be the sole suppliers and price-regulators, much like the old IJA when it distributed opium to users during the war.

Certainly Mr Mikitani wants to make a buck, we all do. But the current system makes it harder for any of us to do so. The average Japanese person cannot easily start a company or industry without making shady deals with those who currently run similar companies and industries. These deals result in you and I having to spend more of our hard-earned bucks than we otherwise would.

3 ( +5 / -2 )

Sangetsu: glad you read the article, if over the counter medicines are deregulated and anybody can sell them on the net without some sort of licences, there will be a raise in counterfeit medicines. How and who is going to check?

0 ( +1 / -1 )

This article has sadly entirely missed out the main point of this news, resulting in comments which are not based on reality.

The government has announced that drugs switching from prescription to non-prescription status will be banned from online sale for 3 years (down from the current four). Mikitani is arguing that if you can sell a drug online in 3 years time, why not sell it online now? Why is the grace period necessary after the change of status? Clearly, the answer is because the government is trying to protect bricks-and-mortar retailers.

So to review the timeline: [Prescription drug - only available from doctor] > after x years [non-prescription drug - available from pharmacy] > after 3 years [non prescription drug now allowed for online sale] There are exceptions for more dangerous drugs which never reach the third stage.

The article, as it omits the main point of this news, makes Mikitani look bad, as we can see below: "While the medications subject to a ban under the health ministry plan represent less than 1% of the non-prescription drugs available, Mikitani said he would fight on principle..."

However, the 1% here refers those drugs that will not be available online even after the 3 year period has passed. This is not the main focus of Mikitani's criticism.

Isn't Mikitani's point that if the drugs in question have already moved from prescription to non-prescription status, then their safety record should already be well established during the years of sale on prescription? I would be interested to see a more detailed breakdown of the government rationale for the three year wait. It seems entirely illogical and the criticism here of Mr. Mikitani rather unfounded.

And anyway,when one buys an OTC drug at a pharmacist, don't they simply take your money and hand it to you without question or consultation? Why is this safer than online sales? The only argument I can think of off the top of my head is that the chemist could tell if a child is trying to make a purchase, but would allowing online purchases really result in a rush of kids trying to buy OTC products they don't need?

Incidentally, the point about selling the drugs online being safer is, when you think about it, entirely logical. If you just wander in off the street and buy an OTC product from a pharmacy, the retailer has no idea who you are and cannot track you down if they need to issue a post-hoc health warning. In the very unlikely event that a drug sold safely on prescription for years was suddenly found to be unsafe when sold on line, online transactions would indeed leave at least some record of who purchased the drugs, making it easier to address any subsequent issues.

3 ( +5 / -2 )

Having met Mikitani, I can say that he's a smart operator and wants to take a wrecking-ball to Japan's "old guard" because he knows that they can't and won't sustain Japan's economy into the future. Remember, that this is the guy that wants all his staff to speak English with some competency.

He also knows how to get things done about it the Japanese way. He had his own candidate in Japanese elections at one point, who would vote to overturn the drug restrictions, and encouraged the whole company to vote for him (IIRC he never got in) - so THAT'S how dedicated he is to getting this drug law squashed.

He was quite open to having webcams on the Rakuten website with live customer to pharmacist live chat to get around the law or requiring a pharmacist to prescribe drugs (or whatever the detail of the law is), but didn't have much success getting the law changed.

3 ( +4 / -1 )

He quit because he couldn't put his two cents worth in. This is downright selfish benevolence.

-2 ( +1 / -3 )

at dog "However he has since joined the ranks of Globalwatcher and me who always said that Abenomics was the usual LDP policies of pork barrelling and currency manipulation, coated in a different color, and that Abe is part of the problem and not a solution to the problem"

My only point of concern here is that. What exactly was his judging criteria about the health of Abenomics. It was tied to one of the things that would directly affect his net wealth at the end of the day. Direct beneficiaries should never be part of the decision any which ways. How can that be healthy. It is exactly like lobbying for something. I am not judging the merit of his case here as i am not equipped to do that. I think drug deregulation is just a part or deregulation.

1 ( +1 / -0 )

And anyway,when one buys an OTC drug at a pharmacist, don't they simply take your money and hand it to you without question or consultation?

My Japanese pharmacist asks how I've been and makes sure I understand how to use the medicine. So the pharmacist does more than just hand out meds, but that's not to say the online system couldn't do the same.

4 ( +4 / -0 )

Abe's all about protecting his own interests and friends of big old companies

3 ( +3 / -0 )

Just to clarify that in the comment above, pharmacy means drug store selling over the counter medicines without prescription. I would agree with Nessie that the pharmacists selling prescription medicines ask questions, but the drugstore staff certainly don't, the atmosphere is more like that of a supermarket.

1 ( +1 / -0 )

I like buying through online pharmacy. It saves me all the trouble of going to the pharm, and from being a talking topic by the japanese staffs. Some pharmacist here hv such a loud voice i feel stripped naked without privacy. I hope Mikitani san wins the fight!

0 ( +1 / -1 )

after early success in reviving the world’s third-biggest economy through massive monetary and fiscal stimulus measures - ???? since when did printing money and populist rhetoric equal success. Abe simple put a band-aid over a stage iv cancer lesion.

2 ( +2 / -0 )

after early success in reviving the world's third-biggest economy

Actually, he's had no "success" reviving the economy.

What he did was give a nice boost to the stock market and to export-based companies by artificially gutting the value of the yen. But that's not the economy, which is still flatlined. And the large investors or company executives who benefit from that kind of market revival probably don't really need to worry about the economy anyway.

0 ( +1 / -1 )

That's why Japanese economy is stagnant and Korean is taking all the pies from Jap. Corps.

But instead of fixing problems, Abe concentrates on fanning hatred toward neighbors, and stupid Japanese people follow their right wing leader like sheep.

-3 ( +1 / -4 )

And anyway,when one buys an OTC drug at a pharmacist, don't they simply take your money and hand it to you without question or consultation?

If you've ever been to a pharmacy in Japan, you'd know there are different levels of OTC drugs, namely the Dai-2-rui iyakuhin and the Dai-1.

The Dai-2's can be bought without any issues at any time. The Dai-1's can only be bought when a certified pharmacist is present and consults you over the usage of the medication, etc., as the Dai-1's are far stronger than the Dai-2's. What this article is about is allowing the Dai-1's to sold online with diminished regulation.

3 ( +3 / -0 )

[Mikitani] had his own candidate in Japanese elections at one point, who would vote to overturn the drug restrictions, and encouraged the whole company to vote for him

Mmm, sounds like "democracy" at its finest - a politician / lobbyist to do your bidding and the CEO "encouraging" his employees to vote for him. Can't see that there's anything to admire in this.

1 ( +1 / -0 )

@jpn_guy

And anyway,when one buys an OTC drug at a pharmacist, don't they simply take your money and hand it to you without question or consultation?

No, they don't simply take your money and hand it to you. When I purchased Loxonin S I had to wait a few minutes for a pharmacist to come and have a 2 minute discussion with me.

Why is this safer than online sales?

It made no difference to my safety personally, and Loxonin S made no difference to my headache. However, generally speaking, the "personal baton touch" as an integral part of Japanese cultural is itself a kind of holistic medicine. Before you guffaw so hard you choke yourself, please consider the number of people who are going to see doctors just because they need someone to kiss it and make it better.

Nevertheless, from a business efficiency point of view, Mikitani's medicine will break monopolies and undercut price fixing; it is going to help the common person.

1 ( +1 / -0 )

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