Japan and China Both Initiate Better Price Plans for Innovative Drugs

In an attempt to help innovative drug developers get payback for their R&D efforts to bring new innovative drugs to the market and get compensated fairly, both Japan and China have initiated some new innovative drug pricing plans. In late May, the Japanese PMDA outlined fee reductions for pediatric and orphan drug regulatory consultations to help spark drug development in these sectors. Specific fee reductions were outlined in their announcement. Also, the PMDA has started a new pediatric and orphan drug regulatory affairs consultation center. The fee reductions will begin on July 1 and run through early January 2024. Applicants who want to participate will need to submit applications, and fee reductions will be realized for things like – is a specific orphan drug allowed to apply for priority review, what data needs to be included in the drug application, etc.

In China, the National Healthcare Security Administration (NHSA) issued a – Notice on the Establishment of the Initial Price Formulation Mechanism for Newly Listed Chemical Drugs to Encourage High Quality Innovation –  earlier this year.  The goal of the program is to give innovative drug makers more power in determining their drug prices via self-evaluations. Pharmaceutical manufacturers, medical facilities and industry groups will all participate to determine innovative drug prices based on a number of factors including pharmacology, clinical evidence of safety and efficacy, as well as over 30 other criteria. Scores will be tabulated up to 150 points per drug and manufactures will be awarded points based on drug novelty, new mechanisms of action, etc. Drugs that receive a high score will have specific benefits like an exception from providing detailed pricing of component materials, a simplified application process, etc.

Written by: Ames Gross – President and Founder, Pacific Bridge Medical (PBM)
Mr. Gross founded PBM in 1988 and has helped hundreds of medical companies with regulatory and business development issues in Asia. He is recognized nationally and internationally as a leader in the Asian medical markets. Mr. Gross has a BA degree, Phi Beta Kappa, from the University of Pennsylvania and an MBA from Columbia University.