Points of View Why do new drugs reach patients 60 days after approval? -The Birth, Current Status, and Future of the 60-Day Rule

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Akiko Yoshida, Senior Researcher, Pharmaceutical Industry Policy Institute

1. Introduction

In Japan, approved new drugs are listed on the NHI drug price list, i.e., covered by insurance, and reach patients in approximately 60 ^days1). Why is this so? In a nutshell, it is because the "60-day ^rule2) " is in place and is being adhered to. As a result, this contributes to the early delivery of approved new drugs to patients.

During the 60 days between approval and the NHI drug price listing, the NHI drug price is determined and listed in the official ^gazette3) so that doctors can prescribe the drug as an ethical drug for use by medical institutions and other medical institutions for reimbursement.

What about other countries? The medical insurance system and the process for determining drug prices differ from those in other countries. However, in many countries, the period of time after approval until a new drug reaches patients is considered to be the period of time until it becomes accessible to the reimbursement ^list4). And the shorter the period, the more desirable it is for patients, and the two are compared in various situations. As in Japan, the average time for a new drug is 120 days (median 50 days) in Germany, 527 days (median 474 days) in France, and 504 days in the European Union, ⁴⁾ which is a social insurance system and equivalent to a universal health insurance ^system5) as in Japan.

The time it takes for a new drug approved in Japan to reach patients is approximately 60 days, which is a world-class speed. Why is it so fast?

In this article, we will examine the background to the 60-day delivery of approved new drugs to patients, the changes before and after the approval, and the recent situation, and consider the reasons for the 60-day delivery time to patients.

Outline of the Japan-U.S. MOSS Meeting and the 60-day rule

According to the minutes of the past Central Social Insurance Medical ^Council6), for new drugs, based on the 1985 Japan-US MOSS consultation, since then, a commitment has been made as a rule (hereinafter referred to as the "60-day rule") that this period from approval under the Pharmaceutical Affairs ^Law7) to NHI price listing should be within 60 days in principle, or 90 days at the latest (hereinafter referred to as the "60-day rule"). The Japan-U.S. MOSS talks are Market-Oriented Sector-Selective ^talks8) held under the Japan-U.S. trade friction, which are translated as "Market-Oriented Sector-Selective talks. In January 1985, at the Japan-U.S. Summit Meeting between Prime Minister Nakasone and President Reagan, the U.S. side identified the following areas in which it expected Japan to open its markets: (1) telecommunications, (2) electronics, (3) pharmaceuticals and medical equipment, (4) forestry, and (5) foodstuffs. (2) electronics, (3) pharmaceuticals and medical equipment, and (4) forest products. In response, bilateral consultations between the vice-ministers of each ministry and the U.S. were to proceed. In the area of pharmaceuticals and medical equipment, a basic agreement was reached on December 11, 1985, after six rounds of consultations (see Fig. 1), which called for simplification and acceleration of the approval review process for pharmaceuticals and medical equipment, as well as "further transparency in the setting of health insurance reimbursement, and a higher frequency and regular listing of new products. The agreement will also consider "establishing procedures to ensure greater transparency in the setting of health insurance reimbursement and to ensure that new products are listed on the market with greater frequency and regularity. As a result, the listing of new drugs, which had customarily been listed about twice a year, with no agreement on how many times a year, was changed to four times a year beginning in FY1986. This was the beginning of the 60-day rule, which was approved at the insistence of the U.S. side, which argued that it was impossible to foresee when an approved drug would be covered by the insurance system. The specific terms of the agreement are as follows: "New drugs will be listed on the NHI drug price list four times a year on a regular basis in accordance with the timing of approval for manufacture or importation so that they will be listed on the NHI drug price list as soon as possible after approval. As soon as possible after approval, in principle within 60 days and at the latest within 90 days. This policy applies to new drugs approved after fiscal year 1986." and has no expiration date.

Currently, the "Handling of Listing of Ethical Drugs on the NHI Drug Price Standards" ⁽²⁾ is issued as a notice by the Director-General of the Medical Affairs Bureau and the Director-General of the Insurance Bureau of the Ministry of Health, Labour and Welfare, stating that "The standard administrative processing period until the listing of new drugs on the NHI Drug Price Standards comes into effect is within 60 days in principle from the approval of such new drugs, or within 90 days at the latest. ⁹⁾ ".

Changes before and after the Japan-U.S. MOSS Conference and the recent situation

Table 1 shows the NHI price listing of new drugs before and after the Japan-U.S. MOSS agreement and in recent years, 30 years after the agreement was reached. In fact, the listing of new drugs has been maintained at regular intervals until recently. In practice, new drugs are listed four times a year in February, May, August, and November. In the year of the revision, the first time a new drug is listed within 90 days, as the February listing is now in April. The average for the most recent seven years of regular new drug listing opportunities was 62 days from approval to listing, including those listed within 90 days.

Table 1 also notes the change in the month of new drug listing at the time of the first mid-year NHI price revision in FY2021 (February 2021 listing was changed to April 2021 listing) and the outlook for the future. Concerns were raised that if the same measures as in FY2021 continue, there will be no opportunity for new drug listing in February of even-numbered years (new drug price listing in the January-March period). In response to this concern, it has been decided that the first new drug listing in 2023 will be in March on a trial basis, but beyond that, there is currently no clarification. In the future, while maintaining the 60-day rule, there may be some minor changes in the months in which new drugs are listed due to drug price reforms and other factors.

4. delay in the inclusion of the rule in the MOSS

Then, to what extent are so-called "delayed drug listing" cases, in which a drug is listed on the NHI drug price list without complying with the 60-day rule?

⁽ Policy Research Institute News No. 6410 ⁾ examines the impact of the FY2018 fundamental reform of the NHI drug price system (hereinafter referred to as the "fundamental reform") on "delayed NHI listing". New drugs (365 components in total, excluding regenerative medicine products) listed on the NHI drug price list during the survey period (7 years from October 2014 to September 2021) were divided into two groups: before (171 components) and after (194 components) the fundamental reform. The results showed that "Delayed listing" increased slightly from 6.4% (before the Fundamental Reform) to 6.7% (after the Fundamental Reform). However, the number of applicable components was small, at 11 and 13, respectively, and no recent upward or downward trend was observed in the annual trends between the two periods.

The reasons for the "delay in listing" cannot be confirmed from the publicly available data. The delay may or may not be due to NHI price negotiations, but since a drug cannot be listed on the NHI drug price list without a price being determined, negotiations may be one of the reasons for the delayed listing. In addition, changes in the rules due to the NHI drug price reform may cause a gap in perception between the two sides during NHI drug price negotiations. In fact, in a case study of a drug listed on the NHI drug list after the fundamental reform, it was reported that the changes made under the fundamental reform (the degree of usefulness of the new drug, the degree of disclosure of the cost accounting method, and the gap with foreign prices) may have contributed to the "delay in listing" of the drug.

The author believes that it is necessary to continue to look at the relationship between drug price reform and "delays in listing" from the perspective of bringing innovative new drugs to the public as soon as possible.

Now, this paper presents an update of the "delayed listing" situation. In the most recent seven-year period (FY2015-FY2021), 23 drugs or 6.6% were "delayed" in being listed on the NHI drug price list. (Table 2) This result shows that many new drugs are listed on the NHI drug price list in accordance with the 60-day rule.

Conclusion

The background of the 60-day rule, which was agreed upon at the Japan-U.S. MOSS meeting, is still strictly adhered to nearly 40 years later and is now firmly established in Japan. Although it is a rule, it is not easy to take root. What is the reason why approved new drugs continue to reach patients in 60 days for such a long period of time?

In the NHI drug price negotiations, which are at the heart of this period, it is essential to eliminate the gap in understanding between the Ministry of Health, Labor and Welfare (MHLW), the regulatory authority, and the pharmaceutical companies as early as possible. Formal negotiations (interviews) on NHI drug prices are limited to two meetings, usually lasting about one hour each. However, early agreement is achieved through a series of informal consultations at an earlier stage in parallel with the NHI review.

In other words, we believe that there is one point that is common to both the regulatory authorities and pharmaceutical companies involved in NHI price negotiations. That is, there exists a clear reason for adhering to the rule of bringing innovative new drugs to the public as early as possible, and there is leadership and habitual behavior on the part of the parties. As a result, it may be more correct to say that the process has been worked out to deliver the product within 60 days.

However, there is one thing that must not be forgotten. There are various changes in the drug price negotiations, the environment, and the drug price system that may also contribute to delays in the listing of drugs. In the area of pharmaceuticals, the number of modalities, innovativeness, and other changes in new drugs themselves have increased in volume, diversity, and complexity, and the factors that determine NHI drug prices are becoming more and more complex. In this context, there will be differences in the content of the 60-day rule between the time when the rule was established, the present, and the future. There may be challenges that cannot be overcome only by the points common to both regulators/pharmaceutical companies (the existence of clear reasons to abide by the rule to bring innovative new drugs to the public as soon as possible, and the leadership and habitual behavior of the parties involved). In such cases, flexible measures to bridge the gap must be considered, while maintaining the timeframe for approved new drugs to reach patients.

For example, with regard to the opportunity and time for official negotiations (interviews), in Germany, four meetings are held, each lasting about four ^hours11). Taking into consideration various changes, if challenges arise with the current formal negotiations (face-to-face meetings) and if they could be a solution, consideration may be given to increasing the opportunities or extending the time within the 60-day period.

In addition, if there are innovations in pharmaceuticals themselves, and if the current process or approach poses a challenge that could be solved, there may be a need to consider introducing a different process or approach within the 60-day timeframe.

From the perspective of achieving both "sustainability of universal health coverage" and "promotion of innovation," as well as "reduction of the national burden" and "improvement of the quality of medical care" that benefit the public, it is expected that necessary reform of the drug pricing system will be implemented in the future. On the other hand, from the public's point of view, we must continue to protect the world-class speed of delivery of approved new drugs to patients in Japan, which is approximately 60 days.

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