Analysis of New Drug Pricing and Reimbursement for Antibody Agents for Cancer Treatment in Japan

Abstract

The price of antibody agents for cancer treatment in Japan has increased significantly in the past few years. This has had a severely negative impact on National Medical Care Expenditure (NMCE), necessitating that drug prices be revised outside the standard schedule. In Japan, new drug prices are calculated based on the cost accounting method if there are no drugs with similar indications and modes of action, and after that the calculated price are reviewed and approved by the Central Social Insurance Medical Council (Chuikyo). We surveyed the Chuikyo reports and the Pharmaceuticals and Medical Devices Agency (PMDA) review reports from Oct 2004 to Aug 2016, and extracted 30 antibody cancer drugs to investigate the factors contributing to the drug price or the total product cost, which makes up a large part of the drug price. We found that a lower peak sales forecast upon submission of an application for antibody drug price by a sponsor was significantly associated with a higher cost for 1-month treatment, while a lower research expense for antibody drug development also showed a significant tendency to increase the cost of 1-month treatment. The former finding regarding the effect of a lower peak sales forecast could be inferred by the cost accounting method, but the latter result regarding the effect of lower research expense could not be fully explained due to the undisclosed breakdown of total product cost. Our results indicated that this missing information would be critical for appropriate drug pricing. To establish fair and clear drug pricing, including that by revised timing, the total product cost (especially the amortized plan of research expense) must be disclosed, and upon each application to add an indication for a particular drug, an amortized plan for each and/or all indications should also be developed and reviewed to determine an appropriate drug price after the additional approval.