Japan’s MHLW Continues to Push Forth New Increased Drug Pricing Plans

As reported over the last 6 months, Japan’s MHLW is initiating plans to reduce its drug lag and drug loss problems. Accordingly, the MHLW has increased its budget to expedite drug approvals in 2024 and strengthened its price maintenance plan. In addition, on November 10, the MHLW outlined a new drug price premium plan called the “rapid introduction premium”. This new drug pricing premium would be designated for drug products that meet certain criteria like the drug is indicated for priority review or for a drug that is approved in Japan before the West.

Also, at the same session, the MHLW suggested that after the product launch, prices could increase via average foreign price modifications. Currently, post-drug launch, prices in Japan are normally reduced via the cost-based method. Also discussed was the allowance of “usefulness premiums” when drugs are initially priced. Premiums for usefulness would be granted in the case of a novel drug, such as a biologic, or if the drug demonstrated clinical advantages compared to similar products. Additionally, premiums could be awarded if no drug had been introduced in a specific disease category for an extended period.

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.