Japan’s Health Ministry Panel Calls for New Pricing Mechanism for Innovative Drugs

Japan has been very apprehensive about the so-called “drug loss” for its citizens. Many new foreign biotech companies seem to be declining Japan’s entrance due to limited reimbursement pricing mechanisms for expensive new products, especially for drugs for children, rare, and intractable diseases. Pricing for drugs in Japan is based on two methods – a cost-based method and an existing comparator method that often does not account for new drugs and the advantages they have.

Thus, this Japanese panel is now discussing a third pricing mechanism detailed as a new value-based drug pricing system. This new system was brought up by the Japan Manufacturers Association (JPMA) and backed by many well-known experts. Other topics the MHLW has requested the panel to discuss include – 1. for drugs to treat orphan, pediatric, and intractable diseases, a price continuation system for innovative drugs, 2. a program where the value of innovative drugs is re-examined after product launch, 3. new ways to fund innovative drugs, etc. Since Japan’s population is getting older very quickly, new Alzheimer’s drugs are top of mind too.