Private-sector members of the government’s Council on Economic and Fiscal Policy (Chairman: Prime Minister Abe) will announce a basic policy draft on reforming the drug pricing system in a meeting held on Wednesday. The main point of the policy is to begin implementing price revisions once a year or more. Currently, the government only revises drug prices once every two years. Frequent revisions will provide more opportunities to lower drug prices and will help to curb skyrocketing medical costs.
Many expensive drugs have been put on the market recently. The government initiated the drug pricing system reform to address the rising medical costs that threaten the fiscal wellbeing of the country. The private-sector members of the Council recommend revising drug prices every year, so that drug prices can be set to reflect actual usage and other conditions. In the event that sales of a drug sales rise beyond a certain level because of a sudden and significant rise in the number of patients, the policy calls for the drug’s price be revised “four times a year”.
In order to maintain private manufacturers’ motivation to develop new drugs, the policy draft includes the formal introduction of a system to evaluate factors such as a drug’s contribution to symptomatic improvements. If the drug proves to be highly effective beyond expectations based on the cost, the policy would allow the manufacturer to raise the price.
However, drug manufacturers and the medical community are strongly opposed to revising drug prices once a year out of concern that it will have a negative effect on their international competitiveness and increase their burden in carrying out price surveys.