In November 2012, the Ministry of Health and Welfare introduced the “Emergency Over-the-Counter (OTC) drug”, allowing the sale of 13 types of medicines—either urgently needed or suitable for self-medication—outside pharmacies. As a result, the sale of emergency OTC drugs became permitted at authorized outlets such as convenience stores. In the same year, over 70% of convenience stores transitioned to becoming sellers of safe essential medicines. Previously, outlets that had no substitute relationship with pharmacies became eligible to sell medicines, which led pharmacies to experience an unexpected exogenous shock. This study empirically examines the price competition effects on safe essential medicines sold in pharmacies, which were subjected to increased competitive pressure due to the sudden emergence of new competitors following the introduction of the “Emergency OTC drug”. The analysis data was constructed by combining the “DASOBI OTC Drug Price Survey” provided by the Ministry of Health and Welfare with the “Pharmacy and Emergency OTC store standard data” provided by the Ministry of the Interior and Safety. The analysis was conducted using the Difference-in-Differences method with a continuous treatment. The results revealed that prices decreased by 1.1% to 2.6% as competitive pressure per unit increased. This highlights the importance of deregulation in lowering barriers to entry and encouraging competition by attracting new entrants, which in turn lowers product prices.