Joint Statement by Three Pharmaceutical Associations from Japan, the U.S., and Europe
Opinions on the FY2025 (Reiwa 7) Interim Drug Price Revision and the National Strategy

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November 15, 2024
Japan Pharmaceutical Manufacturers Association (JPMA)
Pharmaceutical Research and Manufacturers of America (PhRMA)
European Federation of Pharmaceutical Industries and Associations (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 would like to congratulate Prime Minister Shigeru Ishiba on the launch of his new administration. From the perspective of realizing a society of healthy longevity through the research, development, and stable supply of innovative new drugs, we hereby express our views as follows.

Statement

: For nearly a decade, we have expressed concern that Japan’s drug discovery innovation ecosystem has been placed at a competitive disadvantage due to repeated changes in drug pricing calculation rules and annual price revisions for new drugs during their patent terms.Japan is currently facing a resurgence of “drug loss” as investment in research and development continues to stagnate. Against this backdrop, we welcome the drug pricing system reform for fiscal year 2024 (Reiwa 6), decided in December 2023, as a crucial step toward reversing the negative trend of past policies.

However, in order to transition to an internationally competitive drug discovery innovation ecosystem, Japan must not halt its reform efforts and must never take a step backward. Therefore, with this goal in mind, we believe the government should prioritize the following policies in the decisions it will make in the second half of this year.

Opinion 1: Abolish the Mid-Year Revision and Stop Backtracking on System Reforms

The FY2024 (Reiwa 6) drug pricing system reform improved the eligibility criteria for the New Drug Creation Surcharge, increasing the likelihood that drugs to be launched in the future will be able to maintain their drug prices during the patent term. However, the situation persists where approximately half of innovative drugs remain subject to annual drug price reductions.

Despite this situation, the government is considering expanding the rules applied in the mid-year revisions—such as the deduction of cumulative amounts under the “New Drug Creation, etc. Surcharge” and market expansion reassessments—as well as expanding cost-effectiveness evaluations.Such policies, which hinder innovation, run counter to the positive momentum surrounding the FY2024 (Reiwa 6) drug pricing system reform and should under no circumstances be implemented. Instead, we believe it is time for Japan to reaffirm the need for a drug pricing system that promotes innovation and patient access.

Opinion 2: Formulation of a National Strategy for the Innovative Pharmaceutical Industry Under a Cross-Ministerial Organization

With the right policies and plans, Japan has the potential to prevent “drug loss,” regain global leadership in drug discovery, and attract domestic and international R&D investment in the innovative pharmaceutical industry to drive economic growth. To achieve this, a bold national strategy and reforms that foster innovation are necessary to ensure that all elements of the drug discovery innovation ecosystem function effectively.

Achieving this will require strong leadership from the Japanese government and cooperation with the industry. Therefore, we propose that next year’s public-private council establish a permanent, cross-ministerial organization to formulate a national strategy and key performance indicators (KPIs), as well as create a forum for regular and fruitful discussions with innovative pharmaceutical companies both in Japan and abroad.We are committed to contributing as a partner to the Japanese government to achieve our shared goals.

　

Organization Overview

Japan Pharmaceutical Manufacturers Association (JPMA)
The JPMA is a voluntary association comprising 70 research-and-development-oriented pharmaceutical companies (as of October 1, 2024).Established in 1968, the JPMA has contributed to global healthcare under the motto “Realizing Patient-Centered Healthcare” through the development of groundbreaking new prescription drugs.
JPMA carries out multifaceted initiatives, including addressing common issues facing the pharmaceutical industry, promoting a deeper understanding of pharmaceuticals, and fostering international collaboration. Furthermore, it is committed to the sound development of the pharmaceutical industry, particularly through strengthening policy formulation and advocacy, responding to globalization, and enhancing public relations efforts.

Pharmaceutical Research and Manufacturers of America (PhRMA)
PhRMA is an organization representing the world’s leading research-and-development-oriented, innovative pharmaceutical companies. PhRMA member companies are focused on developing innovative medicines to transform people’s lives and create a world where everyone can lead healthy lives.PhRMA works to find solutions that ensure patients have access to and can benefit from the medical care necessary for the prevention, treatment, and cure of diseases. Over the past 10 years, PhRMA member companies have invested more than $800 billion in research and development for new treatments and cures.

European Federation of Pharmaceutical Industries and Associations (EFPIA Japan)
Established in April 2002, EFPIA Japan (https://efpia.jp/) comprises 23 European research-based pharmaceutical companies operating in Japan.In 2023, the combined sales of its member companies accounted for approximately 28% of the Japanese pharmaceutical market. EFPIA Japan’s mission is to “contribute to healthcare and patients in Japan through the early introduction of innovative medicines and vaccines.” EFPIA Japan aims to strengthen dialogue with policymakers to improve healthcare in Japan.

Reference

Joint Statement by Three Pharmaceutical Associations from Japan, the U.S., and Europe (English Version)

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