The Pharmaceutical Industry at a Glance Characteristics of New Drugs Approved in Japan -Characteristics of New Drugs Approved in Japan - Survey and Analysis from the Perspective of NHI Drug Price Calculation Status, etc.

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Kumi Yoshino, Senior Researcher, Pharmaceuticals and Industrial Policy Research Institute
Takahiro Shiraishi, Senior Researcher, Pharmaceuticals and Industrial Policy Research Institute

SUMMARY

1. Introduction

In recent years, many drug development projects have become globalized and are now conducted not in a single country but in multiple ^countries1). Against this backdrop, various systems have been established to promote early development in Japan in order to speed up access to new drugs for domestic patients. For example, the NHI ^system2), which includes pioneering drugs (Pioneering Drug Designation System), consolidation of the need for Japanese Phase I studies when participating in international joint clinical trials, and an increase in the number of designated drugs for rare diseases, as well as the NHI drug price ^system3), which includes an additional fee for pioneering and rapid introduction of new drugs. On the other hand, discussions continue to be held on the early development of innovative new drugs in Japan.

In this report, we surveyed the drugs containing new active ingredients that have been approved in Japan in the past from several perspectives and analyzed their characteristics. We hope that this analysis will help in the consideration of how to create an environment that encourages the early development of new drugs in Japan in the future.

In this paper, "Japan Prior Approval" is defined as a new drug that is listed in the Central Social Insurance Medical Council (hereinafter referred to as "Chuikyo") ⁴⁾ as the country of first approval (including cases where multiple countries are listed) when the drug is newly listed as a drug containing a new active ingredient.

Survey Methodology

For drugs containing new active ingredients listed as new drugs from April 2018 to November 2024, information on drug prices at the time of listing (calculation method, additional fee for usefulness, additional fee for promotion of new drug creation and resolution of off-label drug use, etc. (hereinafter "additional fee for new drug creation, etc.") and appeals) and whether the drug is designated as a drug for rare diseases were collected from the "New The information was obtained from the "List of New Drugs " ⁴⁾, materials at the time of NHI drug price ^{revision5) , and} interview forms for each drug. The same ingredient and the same dosage form were analyzed as one product. Domestic and foreign capitalization of manufacturers and distributors was determined based on the location of their headquarters and investors, based on each company's website and other information. One company with 50% domestic and 50% foreign capital was excluded from the analysis as it was unknown.

The NHI drug price system is reformed every two years, and various changes are made each time, but in FY2018, there were particularly large changes as part of the fundamental reform, especially in the system of supplemental payments and supplemental payments for new drug creation, etc. ⁶⁾ Therefore, in order to analyze characteristics including various supplemental payments such as supplemental payments, it is necessary to restrict the analysis to those listed after the FY2018 fundamental reform. In order to analyze the characteristics of the various additional systems, such as the supplemental payments, we determined that it is necessary to limit our analysis to those products that were listed on the market after the FY2018 fundamental reform. In addition, since the applicability of the additional payment for new drug creation, etc. at the time of listing became described in the Chuikyo materials after listing in August 2018 ^,7) it was not possible to tabulate all of the data in the survey based solely on the Chuikyo materials. Therefore, in this report, the applicability of the drugs listed before that time (April and May 2018) was determined based on the list of additional new drug ^items8) at the time of the FY2019 NHI drug price revision.

The status of overseas approvals and development was investigated based on "Tomorrow's New Drugs (Technomic Production)" and interview forms for each drug (as of December 2024). Only the status of approval for the same indication was examined separately for Europe and the U.S. versus non-Western countries, and no distinction was made between Europe and the U.S. and non-Western countries for the rest. For other information, no distinction was made between Europe, the U.S., and non-Europe/non-U.S. Other information was not distinguished between Europe, the U.S., and non-Europe/non-U.S..

Although "prior approval in Japan" can be defined in various ways, in this report, we based our judgment on the data provided by the Chuikyo in order to conduct more analysis from the perspective of drug prices. In other words, even if a drug has already been approved overseas for a different indication, it is treated as "Japan Prior Approval" if it is listed as "first approved in Japan" in the Chuikyo data, and the analysis of "Japan Prior Approval" in this report is based solely on the definition in the Chuikyo data. The status of overseas approvals is also uniform as of the time of this survey (December 2024), and does not represent the status after a certain period of time from the time each drug was listed on the market. Therefore, it should be presented in advance that there are many aspects of the approval status of individual items that are not generally comparable.

Next, the analysis is presented in 2-1 to 2-3.

2-1. NHI Calculation Status, etc.

The main methods of calculation that are applicable to drugs containing new active ingredients and subject to the supplemental fee are the Comparison of Similar Drug Efficacy Method (I) and the Cost Approach. In addition, we analyzed the characteristics of items approved in advance in Japan by examining orphan drugs, the capital of the manufacturer and seller (domestic or foreign), and the applicability of the additional fee for usefulness and the additional fee for new drug creation, etc. We also examined the status of NHI price negotiations by investigating whether or not appeals were filed.

2-2. target patients and diseases

Based on the data from the Chuikyo, we analyzed the characteristics of the Japanese drug items approved before the NHI approval in Japan by examining the peak number of eligible patients for each drug and the target diseases (by drug class).

2-3. Overseas Status

The availability of overseas approval information and development information as of December 2024 for the Japanese drug items with prior approval in Japan was also examined. We also investigated whether the presence or absence of overseas approval and development information makes a difference in the applicability of the new drug creation benefit at the time of listing.

Results

3-1. Drug Price Calculation Status

(1) Calculation method

The survey on NHI drug price calculation methods for drugs containing new active ingredients that were listed from FY 2018 to FY 2024 (April, May, August, and November for FY 2024) showed no significant difference in the ratio of NHI drug price calculation methods between Japan and overseas prior approvals (Figure 1). (Figure 1) The percentages of cost accounting, similar drug effect comparison (I), similar drug effect comparison (II), and others (special exceptions, etc.) were 29% and 30%, 62% and 64%, 8% and 6%, and 1.4% and 0.5%, respectively, in the Japanese and overseas market, respectively. The following survey focused on items calculated using the cost accounting method and the similar drug effect comparison method (I), which are considered more likely to be applicable to innovative drugs among these calculation methods, and investigated the characteristics of items approved prior to the Japanese approval.

(2) Designation of drugs for rare diseases, capital of manufacturers and distributors (3) Additional fee for usefulness, additional fee for new drug creation, additional fee for pioneering drugs

For drugs containing new active ingredients listed in FY2018-2024 (April, May, August, and November for FY2024), we investigated the ratio of orphan drugs in Japan prior approval and overseas prior approval by calculation method (cost accounting method and similar drug effect comparison method (I)), and found that similar However, a breakdown of the percentage shows that more than half (61%) of the drugs with overseas prior approval were orphan drugs, while less than half (33%) of the drugs with Japan prior approval were orphan drugs, showing a large discrepancy (Fig. 2-1). The percentage of domestic- and foreign-owned companies in the Japanese and overseas marketing authorization categories based on the location of their headquarters, investors, etc., was surveyed, and the percentage of domestic-owned companies was higher in the Japanese marketing authorization category than in the overseas marketing authorization category in both calculation methods (Figure 2-2). Figure 2-2).

(3) Additional fee for usefulness, additional fee for new drug creation, additional fee for pioneer

The percentage of companies that applied for the Additional Allowance for Product Use and the Additional Allowance for New Drug Creation tended to be higher in the cost accounting method than in the similar drug effect comparison method (I), and in the overseas prior approval method than in the Japanese prior approval method (Figures 2-3 and 2-4). The "additional fee for new drug creation, etc." was almost exclusively for items that were approved before the Japanese market, with a particular tendency for the cost accounting method, but only one item was approved before the Japanese market (Figure 2-5).

(4) Appeals

The percentage of appeals was higher for items calculated using the cost accounting method with prior approval in Japan than for other items (Figure 2-6). Furthermore, when the contents of the appeals were checked by the Chuikyo data, 3 out of 4 (75%) of the items included claims regarding the calculation method, additional fee, and additional fee for new drug creation, etc., in the case of the cost accounting method approved prior to Japan, and 2 out of 3 (67%) in the case of the similar drug effect comparison method (I), while in the case of the cost accounting method approved prior to overseas, 2 out of 4 (50%) and 2 out of 3 (67%) in the similar drug effect comparison method (II) were claimed to have been caused by the same drug effect comparison method (Figure 2-7). In the case of the overseas advanced costing method, 2 out of 4 (50%), and 5 out of 9 (56%) in the similar drug effect comparison method (I) (Table 1, Supplement 1). The items that did not include claims concerning the calculation method, addition, and addition for new drug creation, etc., included claims concerning the submission of additional data on cost, inter-specification ratio, calculation method of daily drug price, generic standards, etc.

3-2. Target Patients/Diseases

(1) Number of eligible patients

In order to examine the characteristics of the target diseases of the Japanese preapproved products, we compared the projected number of patients for whom the market size was forecasted in the Chuikyo documents. The projected number of patients is the peak number of patients in Japan who will receive the drug at the time the new drug is listed on the market. The results of the survey in terms of orphan drugs and calculation method showed that for orphan drugs, the median number of patients (regardless of calculation method) tended to be lower in the Japan-front run than in the overseas front run, while for non-rare drugs, the median number of patients (regardless of calculation method) tended to be higher in the Japan-front run than in the overseas front run (Figure 3 Figure 3-1). Next, in order to examine the effect of distributor capital on the number of patients, we examined the number of patients in terms of orphan drugs and distributor capital. However, foreign-affiliated companies tended to have fewer patients in the Japanese market than in the overseas market (Figure 3-2). For drugs other than those for rare diseases, the number of patients tended to be higher for those with a Japan lead-in than for those with an overseas lead-in, regardless of whether the company was a domestic or foreign-affiliated company (Figure 3-2).

(2) Drug Classification of Target Disease

Given the different trends in the number of patients for drugs approved in the Japanese market for orphan drugs and other drugs, we next investigated the efficacy ^{categories9) of the} target diseases. First, for new active ingredients as a whole (all drug classes), the percentage of Japan Prior Approval was 19% for orphan drugs (Japan Prior: 18 items, overseas Prior: 76 items) and 28% for non-rare drugs (Japan Prior: 49 items, overseas Prior: 124 items). In the major category, the highest percentage of orphan drugs approved in Japan was for Class 4 (Class 400 series: drugs for tissue cell functions, 33%), followed by Class 1 (Class 100 series: drugs for the nervous system and sensory organs, 22%), Class 3 (Class 300 series: metabolic drugs, 23%), Class 4 (Class 5), Class 6 (Class 7), Class 8 (Class 9), and Class 10 (Class 11). 300 series: metabolic drugs, 20%). Among drugs other than those for rare diseases, the most common type of drug approved in Japan was Class 3 (Class 300: metabolic drugs, 55%), followed by Class 2 (Class 200: drugs for individual organs, 38%) (Fig. 3-3).

The survey on the percentage of Japan-precedence for drugs in more detailed categories (intermediate categories), limited to those with a total of 10 or more approved items, showed that the percentage of Japan-precedence was the highest for drugs in Orphan Disease Category 42 (Drug Class 420: drugs for oncology, 38%) (Table 2, Supplemental 2). On the other hand, 39 (Classification number in the 390s: other metabolic drugs, 58%) were the most common non-rare disease drugs, followed by 21 (Classification number in the 210s: drugs for the circulatory system, 31%) with the highest percentage of Japan firsts. As shown above, oncology drugs tended to have a high percentage of Japan lead in rare disease drugs (rare disease: 38%, other: 16%), while other metabolic drugs (rare disease: 24%, other: 58%) tended to have a low percentage of Japan lead in rare disease drugs.

3-3. Overseas Status

(3) Additional fee for efficacy system and additional fee for new drug creation etc. (4) Additional fee for pioneering drug (5) Appeal

As for the overseas situation, 57% (12/21) of the products in the cost accounting method and 65% (30/46) in the similar drug effect comparison method (I) had the same ingredients approved in one of the overseas countries as of December 2024, and 76% (16/21) in the cost accounting method if unapproved but for which development information is available are included. In the case of the similar drug effect comparison method (I), 89% (41 items/46 items) of the total number of drugs were unapproved but for which development information was available (Fig. 4-1). In both calculation methods, the percentage of overseas approval at the time of the survey tended to be higher for Japan-precedented orphan drugs than for non-Japan-precedented orphan drugs.

Next, we examined the applicability of the addition of new drug creation benefit at the time of listing by overseas approval status, and found that 67% of the Japanese orphan drugs approved overseas as of December 2024 were eligible for the addition of new drug creation benefit under the cost accounting method and 53% under the similar drug effect comparison method (I), while those not yet approved overseas were eligible for the addition of new drug creation benefit under the cost accounting method and 53% under the similar drug effect comparison method (II), respectively. In contrast, 67% of those not yet approved overseas fell under the cost accounting method and 56% under the similar drug effect comparison method (I), indicating that there was no difference in whether or not the addition to new drug creation, etc. was applicable depending on the overseas approval status at the time of the survey (Figure 4-2). Furthermore, when we focused on items that had not been approved overseas and had no development information, 4 out of 5 (80%) of the items in the cost accounting method and 3 out of 5 (60%) of the items in the similar drug effect comparison method (I) qualified for the addition to new drug creation, etc. (Table 3).

Summary and Discussion

This paper investigates the characteristics of Japan's prior approval for drugs containing new active ingredients listed from April 2018 to November 2024. Since there was no significant difference in the ratio of drug price calculation methods between Japanese and overseas prior approval (Figure 1), we conducted a survey from multiple perspectives on items calculated using the Comparable Drug Efficacy Comparison Method (I) or the cost accounting method.

First, there was no significant difference in the percentage of orphan drugs between the Japanese (24%) and overseas (27%) preapproval systems in the similar drug effect comparison system (I), but in the cost accounting system, more than half (61%) of the overseas preapproval systems showed a large discrepancy, while less than half (33%) of the Japanese preapproval systems did (Figure 2 Figure 2-1). It is possible that there is some reason why the ratio of orphan drugs in the Japanese market, where the cost accounting method is assumed, is lower than in the overseas market. Although it is difficult to determine the cause because a detailed survey was not conducted in this report, the fact that there tends to be a large number of domestic-capital manufacturing and marketing companies for products approved before the Japanese approval (Figure 2-2) suggests that the number of companies working on rare diseases for which there are no existing treatments in Japan may be higher among domestic-capital companies than among foreign-capital companies. As a result, we examined the possibility that the number of companies engaged in rare diseases for which there are no existing treatments in Japan is higher among foreign-affiliated companies than among domestic companies. As a result, 33% (5 items/15 drugs) of the domestic firms were engaged in orphan drugs in the cost accounting method and the Japanese market, and 62% (16 items/26 drugs) were engaged in the overseas market, while 40% (2 items/5 drugs) were engaged in the Japanese market and 62% (23 items/37 drugs) were engaged in the overseas market (Supplement 3). The trend was almost the same as when no distinction was made between domestic and foreign capital (33% for Japan-precedence and 61% for overseas-precedence, Figure 2-1). From the above, factors other than the capital of the manufacturer and distributor (domestic or foreign) are considered important. For example, global development may be more likely to progress in terms of securing the number of participants for clinical trials for diseases with a small number of patients for which there are no existing drugs, research on pathogenesis mechanisms may be more advanced for diseases with a global patient population, and drugs for rare diseases may be more profitable in terms of drug prices and other factors. There is also the strategic aspect that drugs for rare diseases are developed first in foreign countries from the viewpoint of profitability such as drug prices.

For both the additional fee for usefulness and additional fee for new drug creation, the percentage of cases falling under this category was smaller in the case of Japanese approval than in the case of foreign approval (Figures 2-3 and 2-4). For example, there is a possibility that the additional fee for usefulness is more likely to be applied to overseas drugs (e.g., international collaborative trials are more likely to generate evidence due to their larger scale, including the number of trial participants, or overseas drugs are more likely to be recommended by overseas guidelines at the time of approval in Japan), or that the additional fee for usefulness is more likely to be applied to drugs approved before the Japanese approval, or that the additional fee for usefulness is more likely to be applied to drugs approved before the Japanese approval. ), or there may be a greater number of companies overseas than in Japan that can work on breakthrough new drugs. The number of Japanese first approval was higher in the cost accounting method than in the similar drug effect comparison method (I). This was due to the fact that one of the requirements for the designation of pioneering drugs as "those that are scheduled to be applied for approval in Japan ahead of the rest of the world or at the same time" is that "the date of application in the first country shall be the starting date, and applications filed within three months from the date of application shall be considered as simultaneous applications". This was due to the fact that the application date of the first country is the starting date and the application within three months from the same date is regarded as a simultaneous application.

The percentage of appeals filed for items approved prior to Japan and calculated based on the cost accounting method was higher than for other items, and more than half of the appeals were related to the calculation method, additional fee, and additional fee for new drug creation, etc. Therefore, the percentage of appeals filed for items that were approved prior to Japan and calculated based on the cost accounting method was higher than for other items. Therefore, it is possible that there is a discrepancy between the NHI price calculations assumed by companies and those presented at the first NHI drug price calculation organization for items approved prior to Japan, which are calculated based on the cost accounting method, compared to other items.

The survey on the number of patients was analyzed separately according to whether or not an orphan drug is designated as an orphan drug, assuming the possibility that the figures may differ significantly depending on whether or not the drug is designated as an orphan drug. A comparison of the number of patients administered at the peak of the market size forecast in the Chuikyo document shows that the number of patients administered for orphan drugs tends to be lower in the Japan-first market than in the overseas-first market, regardless of the calculation method, while the number of patients administered for non-rare disease drugs tends to be higher in the Japan-first market than in the overseas-first market, regardless of the calculation method (Figure 3 Figure 3-1). In addition, when the effect of the capital of the manufacturer and distributor was examined, the number of patients was almost the same as in the analysis by calculation method, with the exception of "Orphan drugs by domestic companies" (median of 100 patients in both cases), in which the number of patients was small for both Japan and overseas lead-in, while for drugs for rare diseases, the number of patients in Japan lead-in was smaller than that in overseas lead-in, while for drugs for non-rare diseases, the number of patients in Japan lead-in was larger than that in overseas lead-in, regardless of calculation method. For other than rare disease drugs, the number of patients who received the Japanese brand was larger than that of the overseas brand (Figure 3-2). The above suggests that the characteristics of diseases that are more likely to be approved in Japan may differ between drugs for rare diseases and non-rare diseases. The results of the survey on the percentage of drugs in the target therapeutic areas showed that oncology drugs were more likely to be approved in Japan for orphan drugs (orphan drugs: 38%, others: 16%), while the opposite was true for other metabolic drugs (orphan drugs: 24%, others: 58%), indicating that the percentage of drugs approved in Japan for orphan drugs varies depending on whether the drug is designated as a drug for an orphan disease or not. The percentage of Japan-first drugs tends to differ depending on whether the drug is designated as an orphan drug or not.

The overseas approval status is based on a uniform survey as of December 2024 and includes drugs that have been approved in Japan for less than one year, so it may be an underestimate. If we include those that have not been approved but for which development information is available, the percentage is more than 75%. Although there may be some debate as to whether this percentage is high or low, the same percentage of drugs that had not yet been approved overseas as those that had been approved overseas was also classified as an addition to the new drug creation category, and even drugs that had not yet been approved overseas and for which no development information was available accounted for more than the same percentage as those that had already been approved overseas. In addition, even drugs that had not been approved overseas and for which no development information was available, the percentage of such drugs was at least as high as that of drugs approved overseas.

Drugs approved only in Japan are sometimes considered "country drugs" and not so important as "new drugs that are not accepted overseas " ^{10, 11)}, but based on the results of the analysis in this paper, for drugs containing new active ingredients calculated under the cost accounting method or the similar drug effect comparison method (I), the following two types of drugs are considered "country drugs": "drugs approved only in Japan" and "new drugs that are not accepted overseas". However, based on the results of the analysis in this paper, it is considered that the situation of "approved only in Japan" alone does not directly lead to the judgment of "not applicable overseas" or "less useful than those already approved overseas".

In addition, there are considered to be several intractable rare diseases for which the number of patients in Japan is larger than in Europe, the U.S., and other foreign countries. Although this is not an exhaustive survey, it is limited to the introduction of case examples, we have surveyed diseases that were first reported in Japan or whose etiologic genes were ^{identified12)}, are designated as intractable diseases or chronic pediatric diseases, and are reported to have more patients in Japan than in Europe or the U.S. by the Intractable Disease Information ^Center13), the Information Center for Chronic Pediatric ^Diseases14), and articles. The following table shows the number of such diseases that are recognized in Japan (Table 4). The realization of therapeutic drug development for such diseases that are considered to have a small number of patients overseas is likely to require prior development and approval in Japan. In fact, in November 2024, a therapeutic drug for the diseases listed in Table ⁴¹⁵⁾ was newly listed, but it was approved in Japan first (based on the cost accounting method).

The development of therapeutic drugs for the above-mentioned intractable and rare diseases is expected to be extremely difficult due to various hurdles in terms of technology and cost, and various measures, including R&D support and a drug pricing system after launch, are considered necessary to promote therapeutic drug development. Therefore, it is considered important to create an environment that facilitates the development and approval of new drugs in Japan regardless of their approval status overseas, not only for the rapid introduction of innovative new drugs to Japan, but also for the promotion of the development of therapeutic drugs for diseases for which the number of patients in Japan is larger than that overseas.

Conclusion

In this report, we defined new drugs that were first approved in Japan in the Chuikyo data as those with prior approval in Japan, and surveyed and analyzed them in terms of NHI drug price calculation, characteristics such as target diseases, and overseas status. As a result, it was found that there were differences in trends between Japan-precedence and overseas-precedence for various items, including orphan drugs, additional fee for usefulness, additional fee for new drug creation, and implementation of appeals. In addition, it was found that the same percentage of items that had not been approved overseas as those that had been approved overseas at the time of the survey were subject to the Additional Allowance for New Drug Creation, etc. at the time of listing on the market. In addition to the rapid introduction of innovative new drugs into Japan, it is hoped that an environment will continue to be created that facilitates the development and approval of new drugs in Japan, regardless of their approval status overseas, in order to promote the development of therapeutic drugs for diseases for which the number of patients in Japan is larger than that overseas.

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