Japan’s First Off-Year Re-Pricing to Impact 70% of All NHI-Listed Medicines

Date: December 18, 2020 | Country: JAPAN | Region: ASIA & SOUTH PACIFIC | Type: Price Changes | Keywords: #mhlw #nhi #offyearrepricing #policy #pricediscrepancies #regulation

PRICENTRIC BRIEF:

  • Japan’s government has decided to move ahead with off-year re-pricing for the first time in April 2021 for products with national health insurance (NHI) and market price gaps above 5%, or 70% of all listed drugs and 60% of innovative medicines in Japan
  • Off-year re-pricing was a biannual practice in Japan before the government decided to implement it yearly, to take place in April after prices are surveyed in September
  • As with previous years, the average discrepancy between NHI and market prices for this year’s re-pricing was around 8%, according to the September 2020 drug survey, however, officials are only tweaking the prices of medicines above the 5% threshold, sparing those with price discrepancies below this percentage

THE DETAILS

TOKYO, Japan – Japan’s government has decided to move ahead with off-year re-pricing for the first time in April 2021 for products with national health insurance (NHI) and market price gaps above 5%, or 70% of all listed drugs and 60% of innovative medicines in Japan.

Off-year re-pricing was a biannual practice in Japan before the government decided to implement it yearly, to take place in April after prices are surveyed in September.

Multiple industry groups and stakeholders pleaded against enacting off-year re-pricing this year due to the impact of the COVID-19 pandemic on the health system as a whole, preferring the government not to do away with off-year re-pricing entirely but delay it until things are again running as normal.

Notably, the Pharmaceutical Manufacturers’ Association Federation of Japan (FPMAJ) urged the government to stall its plan because of major delays experienced in price negotiations between wholesalers and medical institutions, frontline healthcare providers are already burdened by the virus, and the industry is doing its best to ensure stable prices, despite COVID-19.

However, recently re-appointed Minister of Health, Labor, and Welfare Norihisa Tamura vowed that the Ministry will investigate the impact of off-year re-pricing on pharmaceutical companies and medical institutions, with a focus on the margins between NHI prices and market prices that have become a source of income for medical institutions.

As with previous years, the average discrepancy between NHI and market prices for this year’s re-pricing was around 8%, according to the September 2020 drug survey. To mitigate the impact of re-pricing, officials sought to only tweak the prices of medicines above either a 4% or 6% threshold, before settling on 5%.

This go at off-year re-pricing is Japan’s first attempt at annual re-pricing of medicines in Japan, and a government survey was conducted this past September to find major discrepancies between NHI and market prices. NHI prices were to be implemented based on results from a survey of 67% of wholesaler offices and half the number of healthcare institutions.

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