The government decided on its basic policy on the drastic reform of the drug pricing system on Dec. 20, the main feature of which is reviewing official drug prices once a year instead of the current once every two years. This will make it easier to narrow the gap with market prices, resulting in a reduction in medical spending. The government opted for the yearly review despite strong opposition from the Japan Medical Association and the pharmaceutical industry, so the success of the reforms will mostly depend on the concrete policies to be adopted from now.

Minister of Health, Labor, and Welfare Yasuhisa Shiozaki, Chief Cabinet Secretary Yoshihide Suga, Finance Minister Taro Aso, and Economic Revitalization Minister Nobuteru Ishihara agreed on the basic policy at a meeting on Dec. 20. This will be presented to the meeting of the Council on Economic and Fiscal Policy on Dec. 21, while the Central Social Insurance Medical Council will be responsible for drawing up the details of the new system.

Annual review of drug prices will begin in FY18. (Abridged)