Japan Plans on Revising Drug Pricing Timeline

In late 2016, Japan’s Central Social Insurance Medical Council (JCSIM) special committee on drug prices proposed to reduce the time between price revisions for pharmaceutical products. Currently, price revisions are conducted every two years, but the JCSIM is pushing to review drug prices annually. The Ministry of Health, Labor, and Welfare suggests lowering the price of medications only when they are approved for new indications. The increase in usage would compensate for the price drop, which would minimize losses for drug makers.  The Ministry would also like to cut prices partly based on comparisons to foreign drug markets. Currently, the Ministry can only compare Japan prices to overseas products when pricing newly approved medications.

Both pharmaceutical companies and the Japanese Pharmaceutical Manufacturers Association (JPMA) heavily oppose the proposed changes, stating that this would limit interest in the drug market and the availability of drugs. Instead, the JPMA proposes a focus on ensuring drugs are prescribed appropriately, while reducing waste. PhRMA and EFPIA, JPMA’s counterparts in the US and Europe, also agreed with opposing these new changes. Patrik Jonsson, PhRMA’s head of the Japan-based executive committee, stated that Japan’s pharmaceutical market risks losing one third of its value in the next ten years if the government implements the proposed price control policy.