Japan’s Reimbursement Mechanism for Pharma Products — Stronger Than Before

Japan’s reimbursement mechanism for innovative pharmaceutical products

Japan is one of the countries that determines reimbursement pricing of pharmaceuticals the fastest. It updates its formulary four times a year, making its pharmaceutical market quite lucrative.

The country’s healthcare landscape and reimbursement pricing policies are changing rapidly. The reimbursement framework is being changed to a value-based one through the implementation of incremental cost-effectiveness ratios (ICERs) and cost‐effectiveness assessments (CEAs). In this insight paper, we cover the following:

  • Japan’s governing bodies and reimbursement mechanisms and policies
  • New health technology assessment (HTA) method — cost-effectiveness assessment
  • Parameters used for reimbursement pricing
  • The Japanese government’s mechanism(s) for controlling drug pricing
  • Recent examples of price cuts and price increases

Key Takeaways

  • Reimbursement pricing assessment takes 60 days or a maximum of 90 days from market authorisation to patient access.
  • Considers average of foreign reference pricing from the US, the UK, Germany and France as one of the benchmarks for setting reimbursement price
  • Provides price maintenance premiums to support innovation in drug discovery
  • Cost‐effectiveness assessment (CEA) is conducted only for highly innovative and financially impactful drugs
  • Implements CEA method to adjust prices post-launch, it happened for the first time in 2021
  • Shifted drug price revision from biennial to every year, where the NHI list price is corrected using actual purchase/market prices Some of the products price increased by +20% during 2020 price revisions (Faslodex and Dupixent)

Originally published at https://www.acuitykp.com.

Author

Raghu Patale serves as Delivery Manager leading the Life Sciences Corporate Strategy Research and Consulting vertical. His responsibilities include thought leadership, setting up new client engagements, client management, and generating business insights. He has over 10 years of experience in conducting life science research as a competitive intelligence and strategy consultant. He has supported a wide spectrum of client engagements focusing on competitive intelligence, therapy area research, market opportunity assessments, M&A support and report writing in oncology and other therapy areas for US, EU5, and Asian geographies.

Prior to this, Raghu was a Group Manager, leading the Pharma Practice at Evalueserve. He holds a Master’s degree in Pharmaceutical Sciences from the National Institute of Pharmaceutical Education and Research (NIPER).

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We write about financial industry trends, the impact of regulatory changes and opinions on industry inflection points. https://www.acuitykp.com/

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Acuity Knowledge Partners

Acuity Knowledge Partners

We write about financial industry trends, the impact of regulatory changes and opinions on industry inflection points. https://www.acuitykp.com/

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