Industrial Policy Committee
Interview with Chairman Iwashita

The Industrial Policy Committee has jurisdiction over a very wide range of areas involving the pharmaceutical industry. These range from the creation of new innovations to drug access issues such as drug lag and drug loss, as well as the NHI drug pricing and taxation systems that are indispensable for the promotion of the industry.

Among these diverse topics, the NHI drug pricing system is seen as an important issue. The NHI drug pricing system is nothing less than "the market itself" for the pharmaceutical industry. The reimbursement price of prescription drugs is determined under the public insurance system, and the way this system is implemented greatly influences the management of companies and, ultimately, the growth of the industry as a whole. Over the past 10 years, the market has grown at an average annual rate of about 0.4%, remaining almost flat. This figure is even lower than the rate of increase in prices, and it can be said that the pharmaceuticals market is in effect diminishing.

One of the most pressing issues to be addressed in the NHI drug pricing system is whether the value of highly innovative drugs is being properly evaluated. A system is needed to ensure that the price of innovative new drugs is commensurate with their value and is maintained during the patent period, which will encourage investment in innovation and lead to the creation of new drugs.

Under the "category-based drug price system," revisions must be considered for each category. NHI prices for innovative new drugs should be maintained, while those for long-term listed drugs and generics should be revised. For basic drugs, many of which have already undergone repeated revisions and are no longer at the stage of going down, drug prices need to be maintained based on a different approach than that for innovative new drugs.

Further discussion is needed on the cost-effectiveness evaluation system. At the start of the cost-effectiveness evaluation system, there was a lengthy debate, and the system was introduced with the understanding that it would be applied only to drugs that were subject to a supplemental drug price and whose sales exceeded a certain level. Therefore, we view the ideal form of the cost-effectiveness evaluation system as still under consideration. There are discussions about expanding the scope of price adjustment and the items subject to price adjustment, but it will be necessary to develop the system after carefully examining whether the current system is really functioning.

The Pharmaceutical Manufacturers Association of Japan (PMAJ) has formulated the "PMAJ Industry Vision 2035" as a vision for the future, which states that the industry should "contribute to people's health and economic growth. In order to realize this vision, the Industrial Policy Committee will promote multifaceted efforts.

First and foremost, it is essential that the Japanese pharmaceutical market itself be attractive and grow sustainably. Of course, it is necessary to consider the balance with social security expenses, but from the viewpoint of industrial promotion, the point that the market should maintain a certain growth rate is a point that we would like various stakeholders in society to understand. This is in line with the spirit of "co-creation" that the Pharmaceutical Manufacturers Association of Japan (PMAJ) upholds, and it is important to build a consensus through dialogue.

Next, we need to build an ecosystem to further enhance Japan's drug discovery capabilities. We no longer live in an era in which a single pharmaceutical company alone can create innovative drugs. Universities, research institutes, and start-ups with original ideas are important players in future innovation. In order to draw out their potential and bring it to fruition in the form of concrete drug discovery, the public and private sectors must collaborate and come up with an appropriate mechanism.

Another important theme is to design a system that supports the foundation of the industry. Expansion of the R&D tax system to encourage companies to take on new challenges, as well as policies from the perspective of economic security that can respond to contingencies such as pandemics, are also essential to the realization of our vision.

Going forward, we will take over the industrial vision formulated during the former president's term, and work to make a variety of policy proposals that embody and flesh out that vision in our discussions. We will engage in careful discussions with you all and work to contribute to the development of the industry.

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