Regarding the FY2025 (Reiwa 7) Drug Price Revision
December 25, 2024
Japan Pharmaceutical Manufacturers Association
The Central Social Insurance Medical Council has recently finalized the “Outline of the Reiwa 7 Drug Price Revision.”
The Japan Pharmaceutical Manufacturers Association (JPMA) has been working to address various challenges with the aim of creating a virtuous cycle in which the strengthening of Japan’s drug discovery capabilities and the appropriate evaluation of innovation reinforce one another.In this context, this past summer, the government designated the pharmaceutical industry as a growth and core industry for Japan, and initiatives to strengthen drug discovery capabilities as a national strategy were launched. The JPMA welcomes this policy and has called for the steady implementation of various measures that continue this momentum.
In particular, regarding the FY2025 drug price revision (interim revision), we have argued that it would put the brakes on the momentum of the FY2024 drug pricing system reform—which shifted toward evaluating innovation—and that, given environmental changes such as soaring prices, a weak yen, and rising wages, the conditions are not right for its implementation.
However, under the recently announced “Outline of the Reiwa 7 Drug Price Revision,” drug price revisions will be implemented for the eighth consecutive year since fiscal year 2018. Furthermore, even for pharmaceuticals still under patent protection, products with an average deviation rate exceeding 5.2% (or 0.75 times the average deviation rate) have been designated as subject to price revision.Furthermore, even though this is not a biennial revision, a “cumulative deduction of the New Drug Creation, etc. Surcharge”—which is not linked to actual market prices—will also be implemented. While some measures, such as the “surcharge at the time of drug price revisions,” should be viewed positively, the 246.6 billion yen reduction in drug costs across the entire pharmaceutical sector will place a significant burden on pharmaceutical companies.
At a time when Japan is striving to transform itself into an innovation-driven nation, and as pharmaceutical companies’ enthusiasm for development in Japan is growing—with some already beginning to reevaluate their development plans or deciding to pursue domestic development—it is truly regrettable that such a negative policy has been adopted. Furthermore, we are concerned that this may set back efforts to eliminate drug lag and loss.The JPMA will continue to advocate for the abolition of the mid-year revision.
The JPMA will continue to contribute to healthcare in Japan and around the world through the development of innovative pharmaceuticals. We ask for the continued understanding and cooperation of all stakeholders.