JAPANESE EX-HEALTH MINISTER PUSHES RADICAL PRICING

A former Japanese health minister has reintroduced a series of radical plans to reform pharmaceutical pricing. Proposed changes to the current system, which bases pricing on efficacy comparisons, might prove too radical for the government's tastes; however, the more cautious steps already taken by officials to reform pricing already suggests that a more cost-conscious approach is gaining ground.

Under former minister Yuya Niwa's draft measures, the national health insurance system would set product prices according to market competition, only about a year after each drug's marketing approval in Japan. Further, the plans suggest the introduction of a reference pricing system based on price, with the cost of drugs being examined more frequently.

The bill also urges greater uptake of generics, which currently account for just 6% of market value and roughly 15% of sales in volume terms. Although generic prescribing incentives have been introduced for doctors, the sector still struggles against negative consumer perceptions. In Japan, many off-patent branded drugs are still widely prescribed. Niwa also blames the slowness of generics to win market share in Japan on unstable supplies and inadequate drug information.

Meanwhile, recent data indicates Japanese new drug approvals continue to slow, averaging 21.9 months in 2004 — more than a month longer than in 2003, despite the introduction of 19 products, six fewer than in the preceding year. However, officials attribute this poor performance to disruption caused by the creation of the Medical Devices Agency in April 2004, and note that fast-track reviews for 12 products actually quickened in 2004 to 7.8 months.