This review aims to provide an overview of the conventional methods of projecting the supply and demand for physicians in scientific as well as political contexts, then to summarize four projection studies conducted in Japan, and to draw lessons for the analytic framework and models to be adopted in future research. Referring to Bärnighausen and Bloom (2011), four types of approach are found, namely, the need approach, demand approach, service target approach, and population ratio approaches. These were developed in 60s and 70s, and continue to be applied today. For demand projection, the framework proposed by the Organization for Economic Cooperation and Development sets out five determining factors for physician demand, namely (1) population size, (2) current utilization patterns, (3) change in utilization patterns, (4) changes in health service delivery systems, and (5) GDP/health expenditure growth, all of which except for GDP growth were incorporated into previous studies conducted in Japan. Compared to demand projection, supply projection depends on the entry rate of physicians, which is regulated by the national licensing exam, expected career length, labor participation rate of women physicians, and country-specific factors such as immigration rate and other sources of the medical workforce (e.g. physician assistant). As the review found, the estimated results for the demand/supply projection of physicians are highly dependent on model assumptions that should be selectively adopted based on the context of current healthcare systems, advances in medical technology, measures that secure medical quality, and political factors. It also concludes that future estimations based on the utilization of projected services (e.g., need approach and service target approach) should be undertaken to address changing technologies and health transitions. It concludes that critical and academic arguments over adopted models and assumptions should be encouraged to refine the scientific validity of projections of physician demand/supply in Japan.

The Japanese public health insurance system covers virtually all approved pharmaceutical products under price regulation. However, a conflict exists between policies designed to secure financial sustainability and those designed to provide and maintain incentives for vendors to invest in research and development (R&D) for economic growth. In this paper, we examine how to best balance these two opposing goals. By referring to the discount rate concept, which is commonly used in corporate decision-making on R&D investment, we estimated the policy impact of a newly introduced public payers' drug-pricing system in Japan called "Drug Price Premiums for Promoting the Creation of New Drugs and Eliminating Off-label Drug Use".

Based on the assumption that there would be no net increase in the financial burden on public payers as a result of a system change (hereinafter referred to as "budget neutrality"), we tested which of two alternative policies, namely, price reductions after the launch of generic products or reduced price premiums, would be more effective in resolving conflicting policy goals, and how the estimated results are affected by discount rates, the economic properties of medicines and other policies.

Our numerical simulation showed that (1) under the former type of system reform, the rate of reduction in a firm's R&D incentives when the financial burden of public payers is decreased by 1 % is almost half of that under the latter type of system reform. (2) This tendency becomes even stronger when the discount rate is higher. The simulation results did not change with parameter values related to the major economic properties of medicines and other policies.

"Prevention" for a healthy life has recently received considerable attention in Japan. The Ministry of Health, Labor and Welfare (MHLW) in Japan considers preventive activities as not only a tool for reducing medical cost but also a means to improve productivity and private investments. Especially, MHLW focuses on the prevention of lifestyle-related diseases because these diseases are one of the biggest factors inhibiting healthy life expectancy and raising medical costs.

This paper attempts to measure the preventive efforts against lifestyle-related diseases. This helps in answering a few critical questions. What kinds of factors are crucial to determine the optimal expenditure on prevention and the effect of these factors, and what is the value of preventive activities to maximize our utility? Using a representative agent model as a base, we construct a model where the morbidity of lifestyle-related diseases in old age is a function of the preventive expenditure when this agent is young.

We extend a Lucas tree economy wherein several identical (in terms of preference and income) agents live for two periods (young and old) to a decision model for preventive activities. Agents earn income in each period and divide their income into preventive activities and consumption in young age. We assume that the preventive activities lead to a reduction in the spread of lifestyle-related diseases. Hence, healthy agents can enjoy consumption in old age. However, agents must spend much money on medical costs when they contract lifestyle­related diseases.

Our main results showed that income in young age, medical costs in old age, copayment rate of medical expenses in old age, and marginal effect of the preventive effort to lower morbidity have positive effects on the level of expenditure on prevention. In contrast, income in old age has a negative effect. We also found that if we assume that income in old age would be half of that in young age and copayment rate of medical expenses in old age would be equal to 0.3, the optimal preventive effort in young age is positive only when the marginal effect of preventive care exceeds 0.3.

We provide the following policy implications with regard to the copayment rate of medical expenses. First, an increase in the copayment rate of medical expenses in old age could be justified only if preventive actions undertaken during youth have a significant effect that lowers the morbidity rate in old age. Second, if social consent cannot be obtained on an increase in the copayment rate of medical expenses in old age, the government prefers to employ technical approaches to effective prevention, such as investments in medical research, public awareness campaigns, and improved accessibility to sports facilities that promote preventive behavior during youth.