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 The plans, which follow drastic price cuts for two blockbuster
drugs, have been opposed by drugmakers worried about hits to revenue
and who argue that frequent reviews will stifle investment by
creating greater uncertainty over pricing.
They also come amid a backlash against the high costs of a new wave
of medicines for cancer and other serious diseases. U.S.
president-elect Donald Trump has promised to "bring down drug
prices", while a number of European countries have taken a hard line
on treatments deemed not to offer value for money.
Japan, the world's third-largest market for prescription medicines,
said it now plans to review its official pricing every year instead
of once every two years and will expand the scope of the review to
include all prescription drugs.
Previously the government only reviewed drug prices where there was
a large discrepancy between the official price - which determines
how much medical providers are reimbursed by the National Health
Insurance system - and the actual price used when drugmakers sell to
wholesalers.
"The new regulations...will reduce the burden on the public while
also improving the quality of healthcare in the country," Chief
Cabinet Secretary Yoshihide Suga told reporters.
The government spent 7.9 trillion yen ($67 billion) on prescription
drugs in the last financial year, and the change reflects a economic
advisory panel recommendation that such a move could save 190
billion yen a year in healthcare costs.
Details of the review criteria will be determined next year but
market participants said they were drawing some comfort from
comments by Health Minister Yasuhisa Shiozaki that while the scope
of the review had been expanded, it did not mean across-the-board
cuts.
"We regret the introduction of the annual re-pricing and the nature
of the process – it was a hurried process that didn't allow the sort
of consultations we would like to have seen," said Simon Collier,
director general of the Japan branch of the European Federation of
Pharmaceutical Industries and Associations.
He added that he expected some impact on drug prices but hopefully
it would not be enormous.
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IMPACT ON GENERICS, BIG SELLERS
The next review under the current system will occur in 2018 and
annual reviews will take place after that.
The most impact is likely to be seen in generic drugs, which have
big gaps between official prices and market prices, and on drugs
that are rapidly adopted after approvals for new indications as
those prices may now be reviewed four times a year, said Atsushi
Seki, an analyst at UBS Securities.
"This could be painful for the industry if price cuts are
implemented in a way that is a penalty for success. It could be that
foreign drug makers will be discouraged from embarking on lengthy
clinical trials," Seki said.
It was not immediately clear if more drastic cuts for blockbuster
drugs would be in the offing.
Last month, the government halved the price of cancer drug Opdivo,
developed by Bristol Myers Squibb Co and Ono Pharmaceutical Co, on
fears that a rapid uptake of the medicine would prove an intolerable
burden on the healthcare system.
The cut brought Opdivo, which has been approved in Japan for
advanced melanoma, non-small cell lung cancer and kidney cancer,
more into line with pricing in the United States.
Earlier this year, the government also cut the price of Gilead
Science Inc's hepatitis C drug Sovaldi by about a third.
Other measures being considered by the government to reduce costs
include restrictions on some medicines to patient groups who show
the best response or to certain specialist centres.
The government has asked industry bodies to draw up such guidelines
for Opdivo and similar medicines as well as for Amgen Inc's Repatha,
a potent but expensive cholesterol fighter.
(Reporting by Ritsuko Shimizu; Additional reporting by Linda Sieg,
Naomi Tajitsu, Izumi Nakagawa, Marika Tsuji and Taiga Uranaka;
Editing by Edwina Gibbs)
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