Saturday, April 20, 2024

Chuikyo Unveils Ambitious Reforms to Revolutionize Japan’s Pharmaceutical Industry

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The Central Social Insurance Medical Council (Chuikyo) has unveiled its vision for a transformation in Japan’s pharmaceutical industry. Their goal is to shift from a traditional model reliant on long-standing products to a research and development-centered business model with robust drug discovery capabilities. This move is aimed at addressing the increasing drug lag issue and positioning Japan as a global leader in the first-launch market. Additionally, ensuring a stable supply of medicines is a key objective.

To achieve these goals, Chuikyo plans to introduce new pricing reforms in 2024. These reforms include the implementation of price premiums for drugs launched first in Japan or within six months of their introduction in the United States or Europe. The criteria for awarding usefulness premiums will also be expanded, while corporate indicators will no longer serve as the basis for adjusting price premiums. The government aims to establish a system that maintains the prices of new drugs in alignment with those in comparable countries throughout the exclusivity period.

Japan’s Pharmaceutical Industry 2024 Drug Pricing Reforms

Starting from October 2024, long-term listed drugs will be reclassified as selective treatments. Patients will be required to cover a quarter of the cost difference between the original drug and the highest-priced generic equivalent when more than five years have passed since the introduction of the first generic version or when the substitution rate exceeds 50%.

In the short term, the government plans to reduce drug prices by 0.97% based on medical costs in 2024, resulting in healthcare system savings of ¥120 billion ($838 million). Some concessions on repricing will be made for approximately 2,000 unprofitable products.

Pharmaceutical Industry

Industry Associations Assess Japan’s Drug Reforms

Industry associations like the Federation of Pharmaceutical Manufacturers Associations of Japan (FMPAJ), the Japan Pharmaceutical Manufacturers Association (JPMA), PhRMA, and EFPIA view these reforms as highly significant for facilitating the early introduction of innovative new drugs in Japan. They believe that these changes mark the beginning of Japan’s transformation into a country that prioritizes innovation and enhances patient access to new medicines.

However, these associations, including JPMA, PhRMA, and EFPIA, express concerns about the use of cost-effectiveness analysis for repricing high-priced or budget-impacting drugs. They call for the development of a suitable system that doesn’t hinder innovation.

The industry is eagerly waiting to see if the Japanese government will fulfill its promises to create an ecosystem that fosters the early launch of new drugs in Japan.


Resource: Neil Grubert, December 22, 2023

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