Drug reimbursement is a key issue in Japan, especially as the country wants to promote innovative therapies and reduce the drug lag/loss there. Over the last few months, the MHLW, Central Social Insurance Medical Council (Chuikyo), the Japan Pharmaceutical Association, and other related groups have been discussing key drug pricing issues.
Generally, drug prices in Japan face downward pressure every two years (and once in a while, even yearly). Several topics, among many others, to reduce drug prices include the following. Japan’s Cost-Effectiveness Analysis (CEA) program now wants drugs with high prices that exhibit no additional benefits versus comparators to have larger price reductions. In addition, the MHLW wants to review the alleged G1/G2 rule, which reduces the prices of some drugs toward generic price levels over 10 years. Proposals include shortening this period for a quicker price reduction.
On the other hand, on a positive note, discussions for increased pricing include the following. Focusing more on price increases due to inflation. The possibility of including Category B drugs in addition to Category A drugs for price protection. A request to have an independent third-party (outside experts) review Japan’s cost-effectiveness system before major changes are made. There was also a request for more “flexibility” in choosing comparators under the comparative pricing system. Finally, a desire not to allow regenerative, orphan, and pediatric drugs to experience downward pricing over time.
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.