Annual medical expenditure in Japan is continuously increasing. This may be caused by technology advancement as well as population ageing. Some new and high cost technologies, including new drugs, have been introduced. In order to balance technology advancement with medical expenditure, economic evaluation of new technologies is one way to approach the issue. In 2016 a pilot program stared at the Central Social Insurance Medical Council to evaluate cost effectiveness of some drugs and medical devices. In the pilot program, companies of selected products were asked to submit primary data and analyses to the Ministry of Health, Labour and Welfare. The ministry, together with some experts, reviewed the submitted data and re-analyzed if necessary. After these assessment process, not only cost effectiveness of each product, but also ethical or social aspects are considered in the appraisal phase. Finally results will be used to adjust reimbursement prices in the 2018 price revision. In the council, some issues toward full implementation of the new system will be discussed by 2019.

Evaluation of the efficacy and safety is most important for introducing the vaccine. But when introducing widely using public resources such as routine vaccination, it is also necessary to consider cost-effectiveness. In this paper, we first introduce the situation of ACIP in the United States and JCVI in the UK as examples of using cost-effectiveness analysis for vaccine policy in other countries. Next, I will outline the situation of efforts at the immunization inoculation group of the Infectious Disease Subcommittee of the Welfare Science Council of Japan and the vaccination/vaccine section of the Health Science Council. Next, we describe the necessity of standardization of research methods and outline the research guidelines on the evaluation of the cost-effectiveness of immunization prepared by the authors so far. With reference to the analysis guidelines for cost-effectiveness evaluation already used in the Chuikyo, this guideline considers vaccinespecific issues such as loss of productivity and Herd effect while trying to unify within a possible range such as discount rate etc. Based on this guideline, the economic evaluation is carried out by a unified method. It will be possible to do scientific discussions on the appropriateness of introducing routine vaccination of each vaccine, the priority order, the subjects of inoculation, the method of inoculation, etc. based on the financial influence and the value from a social point of view.

In the 21st century, in addition to “evidence-based medicine” (EBM), with its focus on life extension, “value-based medicine” (VBM), which considers quality of life (QOL) improvement, has become widespread. Assessment of QOL and patient-reported outcomes (PRO) in cost-effectiveness analysis―a mainstay of VBM―contributes to successful introduction of health technology assessment (HTA) in Japan. PRO is an umbrella term for a broad variety of concepts that measure the health status of patients as subjectively perceived by them. QOL and PRO differ in terms of concepts and depth they signify, but the latter often substitutes for the former as the subjectively reported endpoint of clinical trials, and is a term that covers perceived symptoms, physical functions, health satisfaction, and health-related QOL. This study explains the EuroQol-5 Dimensions (EQ-5D), a patient-reported outcome measure (PROM) whose application is exemplified in the official guideline issued by the Central Social Insurance Medical Council (Chuikyo) for the economic evaluation of drugs/medical devices. This study also discusses the importance and challenges of QOL/PRO measurements in cost-effectiveness analysis, as well as the need for international standardization for PROMs. Finally, it introduces the issues associated with the assessment of QOL/PRO in the trial introduction of cost-effectiveness analysis；that is, the necessity of evidence data, differences in evaluations of medicines and medical equipment, mappings that convert non-preference-based utility scores to preference-based EQ-5D scores in cases where preference-based utility scores were not measured during the clinical trials, and sensitivity analysis. HTA is thus expected to be adequately conducted in Japan.

In Japan, cost-effectiveness evaluations for medicines and medical devices are scheduled to be introduced in April, 2019 in a full-scale mode, following 2-year trial. The whole process of the “Cost-Effectiveness Evaluation (Japanese HTA：Health Technology Assessment)” is divided into three steps that are “Assessment” , “Appraisal” , and “Decision” . In the process of the “Appraisal”, the results of cost-effectiveness analysis (CEA) are evaluated along with the several factors other than CEA, such as social and ethical elements. The Special Committee on Cost-Effectiveness Evaluation (SCCEE) of Central Social Insurance Medical Council (CSIMC) has determined four factors that should be considered during the “Appraisal” process, as follows. 1) Benefit from the standpoint of public health (e.g. measures for infectious diseases), 2) Additional costs which are not included in public health insurance (e.g. long-term care costs, productivity costs), 3) Life-prolonging therapy for long-standing severe diseases, 4) Treatment for the diseases in which alternative treatment is not sufficiently present. Special attention for ‘Innovation’ used to be discussed in SCCEE, however, they decided not to employ it as a considerable factor for the “Appraisal” , since it had already received ‘Innovation premium’ at an initial pricing process. It is controversial whether the Japanese HTA agency should ask the pharmaceutical companies to present another CEA model that includes public health view or indirect costs, or just consider 1) and/or 2) factors as qualitative or semi-quantitative ones during “Appraisal” process. As for 3), they should pay attention for the special situation of the patients with end of life stage. SCCEE has declared that they will use the results of HTA just for adjusting the price of medicines or devices, not for insurance covering decision, while UK uses it for the latter purpose. It will be necessary further discussion on problems regarding “Appraisal” process, considering the difference of purpose for utilizing HTA results between Japan and UK.

A pilot program of cost effectiveness evaluation of pharmaceuticals and medical devices was started in 2016 in Japan. Some values necessary for the evaluation, such as the number of patients, treatment pattern, medical costs, and prevalence of adverse events, can be determined based on analysis of medical databases. The databases used for health economics and outcomes research in Japan are divided into insurance claims databases and hospital-based databases. From the perspective of the pharmaceutical industry, private medical databases, such as Japan Medical Data Center (JMDC) and Medical Data Vision (MDV), which are insurance claims and hospital-based databases, respectively, are easily accessed. When using these databases, it is important to understand the advantages and disadvantages of each. Public databases such as the National Database and MID-NET are expected to resolve the limitations of the databases above. However, they still have issues related to sufficiency of data, generalizability of results, and user access. For the purpose of analysis for future formal programs of cost effectiveness evaluation of pharmaceuticals and medical devices in Japan, improved quality and general use of these databases are desired. Pharmaceutical companies use the medical databases in various departments depending on the purposes. It is urgently required that pharmaceutical companies establish career development plans for the people in charge of cost effectiveness evaluation, to ensure their capability of keeping up to date with the characteristics of the latest medical databases and performing reasonable analysis based on them.

Health Technology Assessment (HTA) of healthcare technologies including drugs, medical devices, and interventions is expected to be fully implemented into the pricing evaluation system. Under this circumstance, it is crucial to show not only clinical but also economic benefits in the healthcare technology. Real World Evidence (RWE) obtained from Real World Data (RWD) can be useful input from clinical practice since economic evaluation needs various information including effectiveness, epidemiology, costs, and utilities in long-term follow-up. According to GetReal report from IMI initiatives, in the assessment phase, epidemiology data such as incidence and prevalence, and resource use data were generally accepted by most of HTA agencies in major European countries. However, treatment effects by RWD were considered to be used under specific circumstances. In the appraisal phase, treatment effects on the basis of RWD was regarded as complementary data while other parameters such as epidemiology data, costs, and resource use were regarded as fundamental and reliable. In Japan, Health Economics and Outcomes Research (HEOR) using RWD is emerging rapidly and the volume of input data collected for economic evaluation from RWD is expected to increase. There are limited descriptions on RWD in the cost-effectiveness guideline issued by Chuikyo in Japan. Considering RWD to be an important source of economic evaluation, it is helpful to have information on what kind of RWD can be used as RWE for economic evaluations in HTA policy and guidelines in Japan. Further development of HTA policy and guidelines reflecting RWD element is desired.

Patients can receive advanced medical care at a relatively low burden with the support of the system of the public health insurance for the whole nation and high-cost medical expense benefit in Japan. Despite these systems, some patients feel that they have many economic burden of medical care and cancer patient groups have demanded the reduction of economic burden. On the other hand some claim that the application of insurance to new drugs should be revised as the prices of new drugs are highly rising. As for health technology assessment cost-effectiveness evaluation is now being introduced from the point of cutting costs and patients now do not participate in the process of appraisal.

The recent developed medicine for various cancer types tends to be highly priced. If those expenssive medicines are sold for the large number of cancer patients with lung cancer, stomach cancer, colon cancer, etc, the nationwide health insurance systems covering every citizen would be no longer sustainable in Japan. Because of these concerns, the Central Social Insurance Medical Council ― an advisory body of the Health and Welfare minister ― have started discussions about HTA (health technology assessment) since 2005. And then, the assessment will start at next April. It is a very important assessment for keeping sustainability of the medical policy, but on the other side we find some issues which have to be solved, namely lack of human resources, lack of voices from patients and the public, and lack of transparency in policy making processes. HTA in Japan has been lagged compared to the Western countries, and I would expect many more new challenges in Japan and hope to see us learn from the past.