Japan Takes Steps to Rein in Prescription Drug Costs

According to statistics from Japan’s Ministry of Health, Labor and Welfare (MLHW), spending on prescription drugs in Japan rose by almost 10% during fiscal year 2015. During that period, overall healthcare spending in Japan grew by less than 4%. Underpinning the rise in prescription drug spending were several recently approved and highly expensive drugs, such as Gilead’s Harvoni, Bristol-Meyers Squibb and Ono Pharmaceutical’s Opdivo, and Amgen’s Repatha.

The Ministry of Health Labor and Welfare (MLHW) has put forward a variety of cost control measures in response to this sharp increase in prescription drugs costs. The MLHW has set a target for 80% generic use by the end of the decade (the current figure according to them is 63%, up 5% from a year ago). Despite these MHLW figures, most drug experts in Japan today say generic use is only around 40% of the total drug market.

Among healthcare industry opinion leaders, there has been discussion of introducing cost-benefit analyses (i.e. healthcare economics) in determining eligibility for government healthcare. In other words, in the future the consumption of expensive medications by the elderly might no longer be fully supported by the Japanese government.