New year shock for pharmas as Japan cuts drug payments by up to 6.7%

With a 6.7 National Health Insurance price reduction looming in April 2006, Japanese pharmaceutical manu-facturers are feeling gloomy about their futures. "We have seen the new year with bitter anguish because our utmost efforts to contribute to investment in R&D and enhance-ment of profit earning capability overseas would be wiped out by the NHI price reduction," said Kiyoshi Morita, chairman of the Tokyo Pharmaceutical Manufacturers' Association.

Speaking on January 6 at a new year's gathering in Tokyo, Mr Morita, who is also chairman of Daiichi-Sankyo, noted that pharmaceuticals is one of the leading industries which can contribute to the Japanese economy as a whole.

Responding to the challenges of an aging population and rising demand for health care by juggling its budgets within the constraints of an overall increase of 0.6%, the Ministry of Health, Labor and Welfare is cutting the NHI drug price basis by 6.7%, exceeding expectations which had ranged from 4%-6% (Marketletters passim).