Japan has money, manufacturing might, and the Olympics looming. Why is its vaccine rollout so far behind?

April 23, 2021, 10:41 AM UTC

The Tokyo Olympic Games are 91 days away.

But after nearly a year of preparation for the suspended 2020 Olympics, which were supposed to take place last summer, Japan’s sluggish vaccine rollout has left the vast majority of its citizens unprotected from COVID-19 as the country battles a new surge of infections.

On Friday, Japan’s Economy Minister, Yasutoshi Nishimura, announced that Tokyo, Osaka, and two prefectures will enter a state of emergency starting on Sunday. The country is now recording over 5,000 new cases per day, marking its second-biggest wave of infections after its previous peak in January of this year.

The measures Nishimura announced Friday will be among the most stringent Japan has imposed since the beginning of the pandemic. They will call on large bars and restaurants to close and ban spectators from attending sporting events until May 11.

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The surge in cases prompted Toshihiro Nikai, secretary-general of Prime Minister Yoshihide Suga’s Liberal Democratic Party, last week to question Tokyo’s ability to host the Olympics.

But before the emergency measures were announced, Suga on Tuesday stressed that the policy would not have a bearing on the Summer Games.

“There will be no impact on the Olympics,” he told reporters on Tuesday. “The government will do its best to host the Games in safety.”

Japan has banned foreign fans from attending the Games, and has released a series of rules that aim to prevent athletes, officials, and media members from catching and spreading the virus once they are in Tokyo.

No one attending that Games is required to be vaccinated, but athletes, for example, will be tested for COVID when they arrive and then periodically throughout their stay. They are not allowed to eat or congregate with one another and must avoid physical interactions like high fives and handshakes. Still, experts fear that the measures may not be enough to curb the threat of a superspreader event with tens of thousands of athletes, coaches, and delegates from 93 countries planning to descend on Tokyo in 13 weeks’ time.

The concerns over the Olympics and the recent surge in infections have put a spotlight on the country’s lagging vaccine campaign, which has failed to provide access to vaccines to most Japanese citizens and trails that of other major economies.

Japan, the world’s third-largest economy, does not lack the resources or capacity to purchase, distribute, or even manufacture COVID-19 vaccines. But even with the added pressure of hosting the Olympics during a pandemic, Japan has opted for a slow and steady approach to COVID-19 vaccines that has left the country only marginally less exposed to a virus that forced Tokyo to suspend the Olympics nearly one year ago.

The rollout

Japan officially launched its COVID-19 vaccination drive on Feb. 17, days after approving the COVID-19 vaccine developed by U.S. pharmaceutical giant Pfizer and German vaccine maker BioNTech. It started months after rollouts in countries like the U.S., but officials were optimistic that Japan could catch up.

Japan aimed to vaccinate its 3.7 million health care workers in March, and Suga pledged to secure enough doses for Japan’s 126 million people in the first half of the year.

But as of Wednesday, Japan has administered just over 2 million vaccine shots to its citizens, which translates to at least one vaccine dose for 1% of its population.

The U.S., by comparison, has administered 216 million shots, enough for 40.5% of Americans to get one dose. Other large economies like the European Union, China, India, and Brazil have also surged ahead of Japan in their own campaigns.  

Japan says that supply issues slowed the initial rollout, and it accused European export curbs of delaying Japan’s ability to finalize its distribution plan. The Japanese government did not respond to Fortune’s request for comment on how many doses it has secured thus far.

But others say that Japan deserves at least some of the blame.

Japan’s stringent vaccine regulatory system has approved only Pfizer’s vaccine so far. Japan requires vaccine makers to conduct safety trials in the country before approval. Japan has purchased additional vaccines from the U.K.’s AstraZeneca and the U.S.’s Moderna, but the country’s health ministry has not yet approved either vaccine.

Complicated government bureaucracy may be adding to the problem, says Sebastian Maslow, a Japanese politics expert at Sendai Shirayuri Women’s College in Japan. In January of this year, Japan appointed Reform and Regulatory Minister Taro Kono to handle vaccine distribution, which may have muddled inoculation efforts, says Maslow.

“The creation of a specially appointed minister in charge for coordinating vaccine distribution has complicated the process,” he notes, given that the health ministry is “actually in charge of putting the vaccines into people’s arms.”

“The Suga government’s response has been extremely slow,” says Maslow.

But some of the sluggishness was intentional.

Japanese authorities approved the Pfizer vaccine months after counterparts in the U.S., in part, because Japanese authorities said they wanted to instill as much confidence as possible in a public that is among the most vaccine-hesitant in the world.

A survey published in September 2020 by the Lancet medical journal found that fewer than 30% of Japanese respondents agreed that vaccines were safe and effective, as opposed to over 50% of American respondents.

In recent months, the public appears to have warmed up to COVID-19 vaccines and has grown frustrated by the government’s slow administration of them.

Tokyo University found in a March survey that 62% of Japanese respondents were willing to get a COVID-19 jab. On April 12, Japan’s Kyodo News published a poll of 1,000 Japanese citizens, 60% of whom said they were “dissatisfied” with the government’s vaccine drive, compared with 37% who said they were satisfied with the effort.

Japan vaccine manufacturing

Japan’s reliance on foreign-made vaccines raises the question of why the world’s third-largest pharmaceutical market, which boasts domestic giants like Takeda Pharmaceutical, Astellas Pharma, and Daiichi Sankyo, has not developed its own proven COVID-19 vaccine.

The World Health Organization reports that as of April 20, 91 COVID-19 vaccines have reached human trials around the world. Japanese vaccines account for four of the vaccines on the list, but none of the Japanese firms have completed Phase III clinical trials, the final step before regulatory approval.

AnGes Inc., a pharmaceutical startup that emerged from Osaka University, is the farthest along of any Japanese firm in developing a COVID-19 vaccine. The firm launched Phase II and III trials with its DNA-based candidate in December.

Japanese drugmaker Daiichi Sankyo, which is developing a mRNA vaccine, says that its vaccine will not be ready until April 2022 at the earliest. The Japan Times reports that pharmaceutical industry insiders in Japan similarly do not expect any Japan-made vaccine to be ready until at least April of next year.

Vaccine manufacturing capacity does not appear to be a major hurdle in drug development since Japanese firms have struck large manufacturing deals with foreign drugmakers.

Japanese pharmaceutical firms Daiichi Sankyo, KM Biologics, and JCR Pharmaceuticals are partnering to produce 120 million doses of AstraZeneca’s vaccine annually. The pharmaceutical firm Takeda, meanwhile, is partnering with U.S. drugmaker Novavax to make 250 million COVID-19 vaccine shots in Japan each year.

Maslow says that Japan’s vaccine development system may not be as conducive to driving innovation as those in places like the U.S. owing to a lack of government support.

“Japan has over many years failed to provide sufficient financial support for research and vaccination development,” Maslow says.

To be sure, Japan has granted vaccine makers nearly $3 billion to promote the development of COVID-19 vaccines. But that investment is small compared with the U.S.’s Operation Warp Speed, the program to develop COVID-19 vaccines that received at least $18 billion in government funding.

Japan’s lack of governmental vaccine support can be traced, in part, to a vaccine scandal from decades ago.

In the late 1980s and early 1990s, Japan linked a small number of cases of aseptic meningitis, a flu-like illness, to people vaccinated with a measles, mumps, and rubella (MMR) vaccine, even though the vaccine had proved safe and effective in decades of use around the world. In the early 1990s, three families of children who had severe side effects after receiving the vaccine, including two children who died, won lawsuits that held the government responsible, since it recommended the vaccine. Afterward, Japan discontinued the use of MMR, and it remains one of the only major economies not to use the vaccine today.

The fallout of the MMR and other vaccine controversies stifled Japan’s vaccine development industry and made the government more cautious in its approach to supporting vaccine makers, says Shihoko Goto, deputy director for geoeconomics at the Wilson Center.

When it came to COVID-19, Japan’s wary approach to vaccines led the government and drugmakers to focus on treatment options like Fujifilm’s Avigan flu-fighting drug, which has demonstrated mixed results in reducing COVID-19 symptoms, instead of vaccines.

“Japan’s approach has not been to develop vaccines…and to err on the side of caution,” says Goto. Instead, she says, “they put all their eggs in the cure basket, and that has not really panned out the way they want it to.”

Ultimately, Japan has performed better in battling the virus than many of its peers in the U.S. and Europe. But its lack of speed on developing and rolling out vaccines may prove an Achilles’ heel as it prepares to host the Olympic Games three months from now.

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