Japan's pharma licks its wounds after NHI cuts

The pharmaceutical industry is counting the cost of the latest round of price cuts in Japan, after the Ministry of Health, Labor and Welfare announcement of the revision in reimbursement levels for drugs under the National Health Insurance program, effective from April 1 (Market-letters passim). The average cut to the industry as a whole is 6.7%, or 1.6% on the "medical expense basis." Out of 13,311 listed drugs on the NHI scheme, 10,113 will have their prices forced down, 3,123 will remain unchanged and only 75 will have prices set higher by the MHLW. Most drugmakers expect to suffer substantial price cuts above the industry average.

The extent of individual firms' average price cuts varies according to whether any of their major products are subject to an "extraordinary price cut." This is based on such criteria as: if the drug is a long-listed product with generic competition; or if the drug is repriced because annual sales or market share have grown above the fore-cast level when the drug was first listed in the NHI scheme. Eight substances in 22 products are subject to extraordinary price cuts, including proton-pump inhibitor antiulcer drugs, an anti-influenza agent and an anticancer drug.

Foreign firms less affected