Optimizing drug pricing and reimbursement in Japan : discussion with examples from the United Kingdom and other countries

Abstract

In recent years, an increase of medical expenses has become one of the major themes of political discussion. In order to maintain the National Healthcare Insurance system, it may be necessary to review the current drug pricing and reimbursement system.

Almost all drugs approved by Pharmaceuticals and Medical Devices Agency are listed for Japan's National Healthcare Insurance. However, regulatory approval and insurance coverage are fundamentally different concepts. In other words, even if safety and effectiveness of a drug were approved, there is also the option of not providing it under the National Health Insurance scheme. In Japan, it is not permitted to provide national healthcare services alongside with private healthcare service. The reimbursement rate is also fixed at 70% under the National Healthcare Insurance Service. Such a uniformed provision system greatly contributed to improving the population health, but with medical needs becoming more diverse, it may be time to consider a more flexible system. There are many examples of flexible reimbursement systems, such as French system, which changes the reimbursement rate depending on the nature of the drug.

Reforming the drug pricing system is also being actively discussed. Although some patients are discouraged from using the best treatment due to the financial burden, high drug prices motivate pharmaceutical companies to develop new drugs and to enter the Japanese market. In Japan, the price of a new drug is determined based on the price of a similar drug, or on the development costs when there are no similar drugs. Additional benefits, such as clinical benefits and benefits to Japanese society, are added to the base price. In contrast, in many countries, such as UK's Quality Adjusted Life Year, only the health benefits to patients are taken into consideration as the value of a drug.

In order to maintain the sustainability of Japan's medical system and satisfy the diverse needs of people in modern society, further discussion is needed of the possibility of flexible reimbursement systems with appropriate incentives to enable efficient allocation.