Tuesday, June 18, 2024

Japan’s New Focus on Cost-Effective and Innovative Medicines in Drug Pricing Policy

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Japan’s government is prioritizing a new approach to pharmaceutical policy, emphasizing cost-effective and innovative medicines in the drug pricing system. This shift aims to address the growing ratio of social security benefits to GDP and bolster the international presence of Japan’s pharmaceutical industry.

Senior members of the administration and the Fiscal System Council have advocated for health economic evaluations to play a more significant role in assessing new medicines. Prime Minister Fumio Kishida highlighted the need for reforms to manage the increasing social security costs, emphasizing the importance of innovative and cost-effective drugs. State Finance Minister Ryosei Akazawa supported this view, stating that a data-based system using cost-effectiveness evaluations would promote evidence-based medicine.

Japan’s Pharmaceutical Industry Sets International Ambitions with UHC Knowledge Hub Initiative

The Japanese government has international ambitions for its pharmaceutical industry. Keizo Takemi, the Minister of Health, Labour and Welfare, pointed to opportunities for expansion in the Asia-Pacific region, where ageing populations and changing morbidity patterns present new markets. He announced plans to establish a Universal Health Coverage (UHC) knowledge hub in Japan, in collaboration with the World Bank and WHO, to promote resilient health systems globally. This initiative aims to spread the benefits of Japan’s pharmaceutical innovations both domestically and internationally, fostering a vibrant and healthy society.

Takeshi Saito, the Minister of Economy, Trade and Industry, stressed the need for Japan to develop products and services tailored to a super-ageing population. He emphasized that Japan should also market these innovations globally, positioning itself as a leader in addressing the needs of ageing societies worldwide.

The Fiscal System Council of the Ministry of Finance has proposed several measures to enhance the drug pricing system. These include expanding the scope of target drugs and price adjustments and applying cost-effectiveness evaluation results to reimbursement decisions. The Council suggests differentiating prices for truly innovative drugs from less innovative ones to improve public access to groundbreaking treatments.


Japan’s Fiscal Council Recommends Flexible Pricing and Health Economic Evaluations for Innovative Drug Policies

They also recommend more flexible pricing for paediatric and orphan drugs and considering the prices of generic equivalents when setting prices for new medicines with limited innovation. The Council advocates for incorporating health economic evaluation results into medical practice guidelines issued by academic societies and guidelines for promoting optimal prescribing from the Ministry of Health, Labour and Welfare. This integration aims to ensure that cost-effective and innovative treatments are prioritized in clinical practice.

The pharmaceutical industry has expressed concerns about the routine use of health economic evaluations. They worry that this approach might limit access to new drugs and hinder innovation. The industry argues that a balance must be struck between cost-effectiveness and ensuring access to the latest treatments.

Japan’s new focus on cost-effective and innovative medicines in its drug pricing policy represents a significant shift aimed at addressing rising social security costs and expanding the global presence of its pharmaceutical industry. By integrating health economic evaluations into drug pricing and reimbursement decisions, Japan hopes to promote evidence-based medicine and improve access to innovative treatments. The establishment of a UHC knowledge hub and other international initiatives demonstrate Japan’s commitment to contributing to global health. However, the government must address industry concerns to ensure that these reforms achieve their intended goals without stifling innovation or access to new therapies.

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Resource: trinitylifesciences, May 17, 2024

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