Billionaire Mikitani’s Kenko Sues Japan Government on Drug Curbs

Kenko.com Inc. (3325), a unit of billionaire Hiroshi Mikitani’s Internet retailer, said it filed a lawsuit against the Japanese government to fight restrictions on the online sale of some drugs.

The government’s ban is “unconstitutional,” and the lawsuit was filed at the Tokyo District Court, Rakuten Inc. (4755) unit Kenko said in a stock-exchange statement yesterday. The cabinet approved a bill yesterday that would limit some sales.

The filing came after Mikitani, the 48-year-old head of Rakuten, threatened legal action against the government and said he would step down from a key government council if Prime Minister Shinzo Abe pushed forward a bill that would prevent Internet sales of 28 drug products. The Kenko suit and online drug sales will be handled according to the law, said Chief Cabinet Secretary Yoshihide Suga at a press conference.

“It will be fought in the lawsuit,” the cabinet secretary said.

The possible resignation of Mikitani, one of Japan’s leading entrepreneurs, would be a blow to the image of Abe as he pushes legislation for his growth strategy through the current Diet session. Rakuten spokesman Daisuke Nakane declined to comment on Mikitani’s possible resignation from the council.

Japan’s government has proposed restricting some online drug sales even after the Supreme Court in January allowed resumption of Internet sales.

The Japan Pharmaceutical Association, representing about 100,000 licensed pharmacists, had opposed online sales, saying they increased risks that users would experience side-effects.

Kenko.com in January won a lawsuit seeking the Japanese government’s withdrawal of a ban on selling over-the-counter drugs online. Kenko lost about 500 million yen ($5 million) in annual sales, or 30,000 orders, in 2009 when the government ordered it to stop sales of over-the-counter drugs, the company has said. Mikitani has a net worth of $7.7 billion, according to the Bloomberg Billionaires Index.

To contact the reporter on this story: Yuki Yamaguchi in Tokyo at yyamaguchi10@bloomberg.net

To contact the editor responsible for this story: Stephanie Wong at swong139@bloomberg.net

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