At a Central Social Insurance Medical Council meeting held on November 22, the Ministry of Health, Labor and Welfare announced that it would drastically reform the nation’s drug price system. Measures include slashing the prices of drugs that earn more than 35 billion yen annually from additional listed indications after being covered by insurance, which will be adopted gradually from fiscal 2018.

Reforms to the National Health Insurance (NHI) drug price scheme started with the emergence of expensive cancer drugs like Opdivo. Through a special exception, the government cut Opdivo’s price in half in February. However, the pricing system itself will be revisited in case similar responses are needed in the future.

More specifically, for drugs that make over 35 billion yen, the scheme will be adjusted to allow up to four price cuts a year, up to 25% drug price reductions per revision. In addition, the price of pioneer drugs that have generic drugs on the market will be gradually reduced over six years to the same price point as generics. Furthermore, the current biannual NHI drug price revision will be conducted annually from fiscal 2021. The policy to evaluate new drugs mainly on their innovation and efficacy was also added in the Ministry’s reform plan.