Thursday, July 28, 2011

Japan Pharmaceutical Market : Generic drug price reductions and lowering repricing threshold

On 27th July, the Pharmaceutical industry trade paper, RISFAX, reported that the Central Social Insurance Medical Council (CSIMC) Special Committee on Drug Pricing is contemplating the issue of possible changes to the generic drug pricing structure.  It is contemplating whether to increase the generic drug pricing  discount from the current 70% of brand price to 60% of brand price, whether to  reduce the threshold for application of the special repricing for market expansion rule. The intent of  further discounting generic drugs is to promote joint development of generic drugs, boos production efficiency and increase generic penetration.
Other issues that have been put for debate are
o        Correctness the 80% pricing rule for non-oral combination drugs  
o        Compensation premium for generic drugs supported by clinical trial data on Japanese patients.
o        Lowering the annual sales overshoot threshold for the special repricing for market expansion to below the current JPY15bn.
Opinions of the Special Committee on Drug Prices will referred to CSIMC for debate from autumn through year-end.

In case the proposed measures are accepted, I believe it is likely to have a negative impact on the national savings, as the generic substitution is unlikely to be meaningful, with a 10% additional discount.

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