Japan Planning to Maintain Pharmaceutical Prices for Innovative Drugs in April 2023

Like most countries, downward drug pricing is the rule of thumb. If there is a discrepancy in Japan between NHI prices and market prices, normally a revision is done. While historically, Japan only adjusted drug prices every 2 years, recently that has changed to every year. Innovative drugs try to maintain their price via the so-called – Price Maintenance Premium (PMP). Under this system, the MHLW grants a supplementary premium to drugs still on patent that have experienced national insurance price reductions. For innovative drugs, the MHLW evaluates each drug product as well as each drug company and puts them into 3 different levels. Normally, the top level (about 25% of the companies) maintain their full price. The bottom 2 levels receive PMP but at a slightly reduced level. For the 2023 drug price revision, the MHLW will allocate more premium to these bottom 2 levels to make their prices closer to pre-revision prices. Additional price increases will also be made for unprofitable products. In the 2024 price previsions, the MHLW will further address these reimbursement issues as well as prices for off-patent drugs.

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.