Joint Statement by the Pharmaceutical Manufacturers' Associations of Japan, the U.S., and Europe
Opinion on the 2025 Mid-Year NHI Drug Price Revision and National Strategy

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November 15, 2024
Japan Pharmaceutical Manufacturers Association (JPMA)
Pharmaceutical Research and Manufacturers of America (PhRMA)

EFPIA

Japan The

Japan Pharmaceutical Manufacturers Association (JPMA), the Pharmaceutical Research and Manufacturers of America (PhRMA) and the European Federation of Pharmaceutical Industries and Associations (EFPIA) represent the world's leading research-based innovative pharmaceutical companies operating in Japan. We congratulate Prime Minister Shigeru Ishiba on the inauguration of his new government and express our views as follows from the perspective of realizing a healthy society with longevity through the research, development, and stable supply of innovative new medicines.

We have been expressing our concern for almost a decade that the environment of Japan's drug discovery innovation ecosystem has been put at a competitive disadvantage due to repeated changes in NHI drug price calculation rules and annual NHI price revisions for new drugs in the patent period. Japan now faces the return of drug loss as R&D investment continues to stagnate. Against this backdrop, we welcome the NHI drug price reform for fiscal 2024 (FY2024), which was decided in December 2023, as an important step in reversing the negative policy trends that have been in place.

However, in order to transform itself into an internationally competitive drug discovery innovation ecosystem, Japan must not stop and never backtrack on its reforms. Therefore, with this goal in mind, we believe that the following policies should be prioritized in any decisions the government makes later this year.

Opinion 1: Abolish the mid-year revision and stop regressing on system reform

The 2024 NHI drug price reform has improved the criteria for application of the additional payment for new drug creation, etc., and has increased the possibility that drug prices will be maintained during the patent period for drugs to be launched in the future. However, approximately half of innovative drugs are still subject to annual NHI price reductions.

Despite this situation, the government is considering expanding the rules applicable to mid-year revisions (e.g., cumulative deductions for additions to new drug creation, etc., and market expansion reimbursement) and expanding cost-effectiveness evaluation. Such policies that discourage innovation go against the positive momentum of the FY2024 (2024) NHI drug price reform and should never be implemented. Instead, we believe it is time for Japan to reaffirm the need for a drug pricing system that encourages innovation and patient access.

Opinion 2: Formulate a new national strategy for the innovative drug industry under a cross-ministry organization

With the right policies and plans in place, Japan has the potential to attract R&D investment in the innovative pharmaceutical industry, both domestic and foreign, that will prevent drug loss, regain global leadership in drug discovery, and spur economic growth. This will require bold national strategies and innovation-driven reforms to ensure that all components of the drug discovery innovation ecosystem are functioning.

Achieving this will require strong leadership from the Japanese government and cooperation with industry. To this end, we recommend that next year's public-private council, under a permanent, cross-ministry organization, establish a national strategy and KPIs, as well as a forum for regular and fruitful discussions with innovative pharmaceutical companies in Japan and abroad. We look forward to contributing as partners to the Government of Japan in achieving our common goals.

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Organization Profile

Japan Pharmaceutical Manufacturers Association (JPMA)
The JPMA is a voluntary association of 70 R&D-oriented pharmaceutical companies (as of October 1, 2024). established in 1968, the JPMA has contributed to global healthcare through the development of innovative new drugs for ethical drugs under the motto "Realization of Patient Participatory Medicine".
The Pharmaceutical Manufacturers Association of Japan (PMAJ) is engaged in a multifaceted program of activities to solve various problems common to the pharmaceutical industry, to deepen understanding of pharmaceuticals, and to promote international collaboration. In particular, we are working for the sound development of the pharmaceutical industry by strengthening our policy formulation and advocacy activities, addressing internationalization, and enhancing our public relations structure.

Pharmaceutical Research and Manufacturers of America (PhRMA)
PhRMA represents the world's leading research-oriented innovative pharmaceutical companies focused on developing innovative medicines to transform lives and create a world in which people can lead healthy lives. PhRMA works for solutions that enable patients to access and enjoy the healthcare they need to prevent, treat, and cure disease. In the last 10 years, PhRMA member companies have invested more than $800 billion in research and development of new treatments and cures.

European Federation of Pharmaceutical Industries and Associations (EFPIA Japan)
Established in April 2002, EFPIA Japan (https://efpia.jp/) is comprised of 23 European R&D-oriented pharmaceutical companies operating in Japan. EFPIA Japan's mission is to "contribute to Japanese healthcare and patients through the early introduction of innovative medicines and vaccines".

Reference

Joint Statement of the three pharmaceutical organizations of Japan, the U.S. and Europe

2024 Back to News Release

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