Information Message from the President of the Pharmaceutical Manufacturers Association of Japan
My name is Kenshi Kinoshita, and I was appointed Chairman of the JPMA Board of Directors at the 268th JPMA Assembly and the 569th JPMA Board of Directors Meeting held on May 25, 2023. Please accept my warmest regards. For about 38 years, I have worked as a national public servant in the Ministry of Health, Labor and Welfare, the Cabinet Secretariat, the Cabinet Office, the Prime Minister's Office, and the Prime Minister's Office. Among these, the most memorable time was when I was the Director of the Economic Affairs Division of the Medical Affairs Bureau of the Ministry of Health, Labour and Welfare, where I had the opportunity to work and think together with the people in the industry.
I felt a great deal of discomfort with the situation in which the difference in NHI drug prices was customarily positioned as a source of funding for adjustments. It goes without saying that the core of medical care is the technology of diagnosis and treatment, but the reality is that effective treatment cannot proceed without pharmaceuticals. Is it the government's desire to see drug prices fall every two years then and every year now, thereby reducing motivation for drug discovery and development in Japan? Whether it is a domestic or foreign company, the goal of policy should be to create an environment where new drugs can be delivered to patients in a timely manner.
Kenshi Kinoshita, President, JPMA
Unfortunately, however, the alarming trend began gradually before I became the Economic Affairs Section Chief in the summer of 2008. It was the withdrawal of some foreign companies' research facilities from Japan. The reasons for this are based on the corporate strategies of individual companies, of which I am not aware, but from the perspective of a country where prices are maintained during the patent period, the unique Japanese system of reducing drug prices with each revision and lowering them when sales increase due to additional indications, etc., was a factor that reduced the attractiveness of Japan. I believe that this is one of the factors that have reduced Japan's attractiveness. This was one of the reasons why Japan's attractiveness was reduced. The industry proposed a "special exception for maintaining NHI drug prices" out of a sense of crisis that innovative new drugs would no longer be produced in Japan if the current situation continued. As a result, we were able to implement on a trial basis from FY2010 the "Additional Allowance for New Drug Creation, etc.," which would add a certain amount to the market price based on the patent term under certain conditions.
However, as you are aware, the Japanese drug pricing system has been transformed considerably since its inception due to repeated revisions since then, and it has gone beyond drug lag to drug loss.
The report of the expert panel of the Ministry of Health, Labour and Welfare published on June 12, 2023, clearly analyzes this situation and outlines the future direction of the system. The stage then shifts to the Central Social Insurance Medical Council (Chuikyo). Under the leadership of the JPMA's new chairman, Hiroaki Ueno, I am determined to pursue the JPMA's vision of strengthening drug discovery capabilities, including ideal drug prices, and to make concrete the proposals made by the JPMA to date. At the same time, we believe that it is necessary to discuss the organization of the JPMA, including how it should be organized.
We are determined to move flexibly to enhance the JPMA's presence and to respond to the severe budgeting situation at the end of the year.
I look forward to the guidance and cooperation of all our member companies.