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Drug price to reflect its effectiveness; another try for curtailing healthcare cost

  • February 9, 2017
  • , Yomiuri , p. 2
  • JMH Translation

The Ministry of Health, Labor and Welfare reached a decision on Wednesday to introduce a system that reflects cost-effectiveness analysis to drug pricing and the pricing of medical devices. The plan was proposed and approved at a meeting of the Central Social Insurance Medical Council (Chuikyo). The new system will start in earnest from FY 2018, aiming to curb ballooning medical costs by reducing the price of the less effective drugs and devices.


Until now, the prices of drugs and medical devices have been calculated based on the manufacturing cost and the overseas market price.


The recent introduction of a number of expensive drugs and devices has urged the ministry to reconsider the drug/devise pricing method and to improve it by incorporating the results of cost-effectiveness analysis. The ministry has been investigating the possibility since FY 2016. The 13 items that fall within the scope of evaluation are expensive and their sales amounts are large, including the cancer immunotherapy treatment drug Opdivo. Using data provided by manufacturers such as the level of improvement in the patients’ quality of life, cost-effectiveness analysis has already been underway on these drugs.


With the results of the analysis, the ministry will begin designing the actual rules in an experts’ panel in Chuikyo.


The experts’ panel will consider qualifications for receiving cost-effective evaluation, actual evaluation methods and how to reflect the results of analysis in the price, including whether or not the price should be raised for those drugs that prove to be highly effective. The mid-term report will be issued in the summer.


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