Japan completed drug pricing reform

Japan’s Central Health Insurance Medical Board (Chuikyo) finalized the will take effect at the beginning of fiscal year 2018 April 1.

In Japan, Chuikyo’s task is to set the prices of medicines in Japan. On February 7, the agency announced reforms that are basically in line with the reforms announced by Japan’s Ministry of Health, Labor and Welfare (MHLW) in November last year.

Specifically, these reforms redefine what drugs qualify for state prices to maintain premiums and thus exempt them from mandatory repricing. Under the new reform package, the designation will be limited to “first-in-class” and two types of “next-in-class” drugs that will be launched within three years of the world’s first drug launch.

Other drugs entitled to premiums include orphan drugs, as well as medications that are required to be developed under the MHLW or drugs developed to eliminate the lag in the drug. Based on the number of clinical trials conducted in Japan, the number of new products launched in Japan in the past 5 years, the number of new products developed under the MHLW disclosure, and the number of products designated as Sakigake, MHLW will limit the number of companies that receive full premiums And the number of drugs.

Prior to this, if the drug market time less than 15 years, and the absence of generic drugs, you can be exempt from mandatory re-pricing. According to the Japan Association of Pharmaceutical Manufacturers (JPMA), drug developers also have to develop drug candidates that “can really contribute to improving the quality of care.”



In Japan, about one-third of the medicines have been awarded price maintenance in accordance with the previous definition. However, according to the American Association of Pharmaceutical Manufacturers and Manufacturers (PhRMA), the new changes are expected to reduce this number by about 35%.

Starting in FY2021, the drugs of choice will be affected by the annual price cuts, not the current biannual price cuts. MHLW will conduct drug pricing surveys over the next three years to determine which drugs will be subject to more frequent repricing.

In addition, the United States will remain one of four countries in Japan’s foreign reference pricing strategy. Last April, the MHLW said outwardly that it was considering removing the United States from the list of reference countries. Under the reforms, WHLW will use the federal reported prices, including the average sales price for Medicare and Medicaid instead of the average wholesale price used previously.

After MHLW submitted its reform proposal to Chuikyo in November last year, PhRMA and the European Federation of Pharmaceutical Manufacturers and Associations issued a joint statement saying they were “disappointed” with the reform. They say the incentives to develop new products in this country will be greatly eroded so that patients’ access to new medicines early will be seriously threatened.


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