Japan Continues to Support Better Drug Pricing and Speeding Up of Regulatory Approvals

As noted in our newsletter over the last year, Japan’s MHLW has tried to partially correct the Japan drug lag problem by allowing for higher prices for innovative drugs. Under the 2024 drug pricing reform, the MHLW has continued to support the Price Maintenance Premium (PMP), increasing it in some cases, and has also initiated the early launch program to benefit innovative drug makers. This program encourages the introduction of drugs in Japan either first or shortly after their global launch.

In addition, while in the past the Pharmaceutical Affairs and Food Sanitation Council would give official Japan drug approval after the review of specific advisory panels only 4 times per year (March, June, September, and December), now they will give approval about 3 weeks after each review. This new policy was outlined in a notification on April 24 and will start on January 1, 2025. Since drug reimbursement is typically determined by Chuikyo within 60 to 90 days after official approval, faster approval of drugs will lead to quicker allocation of reimbursement.

While these positive steps are being implemented, the MHLW has also outlined that off-patent brand name drugs will be facing a new health coverage policy. On April 19, the MHLW said that close to 1,100 drugs and about 450 APIs will see new health coverage. In short, from October 1 onwards, there will be new coverages for these off-patent drugs under “elective care” where patients will need to pay 25% of the difference of the price cap of the off-patent drug versus its generic competitor.