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Japan to lower drug prices to reduce medical costs

  • December 17, 2020
  • , Jiji Press , 5:20 p.m.
  • English Press

Tokyo, Dec. 17 (Jiji Press)–Japanese Finance Minister Taro Aso and health minister Norihisa Tamura agreed Thursday to reduce state-set prices of prescription drugs if their actual costs are over 5 pct lower.


The price cut is expected to curb the government’s spending on medical costs by about 100 billion yen.


Reduced prices will cover 12,180 prescription drugs, or 69 pct of all items, lowering medical expenses for prescriptions and prescribed drugs by some 430 billion yen.


The agreement was reached at the two ministers’ negotiations on a related funding request under the government’s draft budget for fiscal 2021, which starts in April next year.


Meanwhile, Aso and Tamura agreed to raise fees paid to elderly nursing care service providers by 0.70 pct.


They also agreed to limit the increase in social security costs in fiscal 2021 to around 350 billion yen, lower than the increase of some 410 billion yen estimated for fiscal 2020. The revision of the official prices of drugs and other measures are expected to help curb the growth of social security spending.


Of the total national medical expenses of 43 trillion yen, costs for prescriptions and prescribed drugs account for a little over 20 pct. Currently, the government shoulders about a quarter of all medical expenses.


Until now, the government revised official drug prices every two years in principle, together with medical fees.


But it decided to review official drug prices every year, starting from the revision for fiscal 2021, with the aim of having medical bills more closely reflect actual prices, thereby reducing burdens on the people.


The shift to annual revisions was led by Yoshihide Suga, the current prime minister, when he was chief cabinet secretary.


The cut in prescription drug prices will reduce medical bills paid by patients, but is likely to have negative effects on the finances of medical institutions and drugmakers.


Considering the effects of the novel coronavirus crisis, the government plans to implement a mechanism of keeping the size of the drug price cut 0.8 percentage point smaller than under usual rules.


The hike in elderly nursing service fees for fiscal 2021 is aimed at helping service providers that are struggling due to the impact of the coronavirus epidemic.


The nursing service fees are reviewed every three years in principle.


The 0.70 pct increase includes a 0.05 pct hike for introducing coronavirus countermeasures.

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