Japan's April Drug Price Cuts To Be 4.4%

As drugmakers in Japan were bracing themselves for a further round ofgovernment-mandated price cuts, news has been released that for this year, effective April, the average reduction will be 4.4%. This means drug prices will have been cut in two consecutive years, rather than the biennial reductions to which the industry had become used.

Last April, the cuts averaged 6.8%, though for some products they were as high as 25% (Marketletter April 1, 1996). Details of this year's cuts are still not available, but Pharma Japan reports that the Reasonable-zone will be 10% and for "long-listed new drugs with generics it will be calculated at 8%."

At the same time, the Ministry of Health said it will allow price increases of 0.3% overall on unprofitable drugs.