Japan’s reimbursement mechanism for innovative pharmaceutical products

Japan is one of the countries that determines reimbursement pricing of pharmaceuticals the fastest. It updates its formulary four times a year, making its pharmaceutical market quite lucrative.

The country’s healthcare landscape and reimbursement pricing policies are changing rapidly. The reimbursement framework is being changed to a value-based one through the implementation of incremental cost-effectiveness ratios (ICERs) and cost‐effectiveness assessments (CEAs). In this insight paper, we cover the following:

• Japan’s governing bodies and reimbursement mechanisms and policies.
• New health technology assessment (HTA) method – cost-effectiveness assessment.
• Parameters used for reimbursement pricing.
• The Japanese government’s mechanism(s) for controlling drug pricing.
• Recent examples of price cuts and price increases.

Key Takeaways

• Reimbursement pricing assessment takes 60 days or a maximum of 90 days
  from market authorisation to patient access.
• Considers average of foreign reference pricing from the US, the UK, Germany
  and France as one of the benchmarks for setting reimbursement price.
• Provides price maintenance premiums to support innovation in drug discovery.
• Cost‐effectiveness assessment (CEA) is conducted only for highly innovative and financially
  impactful drugs.
• Implements CEA method to adjust prices post-launch, it happened for the first time in 2021.
• Shifted drug price revision from biennial to every year, where the NHI list price is corrected
  using actual purchase/market prices Some of the products price increased by +20%
  during 2020 price revisions (Faslodex and Dupixent)

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