Drug pricing system

Published:
The price maintenance premium (PMP), which was drastically revised negatively with the drug pricing system reform in 2018 was slightly revised regarding its product criteria in the pricing system reform in 2020. However, the revision was very limited, and we believe that further revision is necessary to improve the pricing system during the patented period. Additionally, at the off-year price revision of 2021, approximately 60% of the new drugs under patent period was subject to revision and therefore result in a revision with a huge impact to the predictability of drug price post-launch. With these continuous reforms of the pricing system, the attractiveness of the pharmaceutical market in Japan has been declining significantly.

Recommendations

  • Pricing system should have predictability and fairness to enable appropriate evaluation of innovation.
  • Differentiate off-year price revision from the regular biennial price revision and limit the target products to those products with significant deviation rate only.
  • Consider overhaul of the pricing system to a simple, easy-to-understand and transparent one as the current system has become extremely complicated due to repeated revisions.