TOKYO – Though Japan's drug sector will maintain a pro-innovation policy with the aim to maximize patient value, discussions between the country's Ministry of Health, Labour and Welfare (MHLW) and the Pharmaceutical Research and Manufacturers of America (PHRMA) showed stark differences in opinions.

Yasuhiro Suzuki, director general at the Health Insurance Bureau and chief global health officer at the MHLW, and Amy Jackson, Japan representative at PHRMA, both spoke during BioAsia International here as part of a session aptly titled "Addressing Shifts in Japanese Reimbursement Policy."

"We are going to be discussing and deciding on the actual reform direction toward the end of this year, but currently we are employing a couple of principle provisions," said Suzuki. "First, I think we have to strike the best balance between innovation and financial sustainability of health insurance in this country. Second, we need transparency and predictability in the pricing policy. Third, we need to maximize patient value and ensure the quality of health care. Fourth, we have to have a pricing system that supports an expedited approval process for pharmaceuticals. Finally, we have to employ the cost-effectiveness analysis to introduce and enforce such pricing revision."

Suzuki added that the MHLW would hold discussions with industry professionals, patient associations and medical associations, with the aim to resolve some issues by the end of summer 2018.

PHRMA, however, has been critical of changes in pricing policy and published a joint statement together with six other organizations in December to oppose it. The issue came to the forefront at the end of last year when regulators in Japan cut the reimbursement price for anticancer drug Opdivo (nivolumab) by as much as 50 percent. In Japan, Opdivo is distributed by Ono Pharmaceutical Ltd. (See BioWorld Today, Dec. 7, 2016.)

The cuts last year were not done as part of the biannual price revisions.

"For repricing of new indications, I think there is a strong agreement among all stakeholders in this system that this is something that needs to be addressed. It is a flaw in the current Japanese system, and Opdivo unfortunately highlighted that flaw. It is something we all believe needs to be corrected," said Jackson.

"In terms of the annual price survey, we would be very concerned if Japan were to implement full-scale annual price cuts on all drugs including innovative new drugs. If there is an overhaul of this system and it is severely curtailed or even completely rescinded or overturned, this will be a significant concern and a really anti-innovative measure that could discourage further innovation in this market and turn around some of the progress that Japan has made," she added.

During the discussion, when asked about opportunities for stakeholders to provide their input, Suzuki answered that aside from unofficial communication, the MHLW is providing opportunities for the industry to join discussions with the Central Social Insurance Medical Council (Chuikyo) to have their input considered as much as possible. For the annual price review, most stakeholders are going to be concerned with generics, since brand names would not have discounts.

Jackson said that when the reform process kicked off in November, it took the government four weeks to set its parameters despite the magnitude of the effort, and that they did not want to have conversations with relevant stakeholders, including industry as well as patient groups and pharmaceutical wholesalers. She added that any country seeking such changes should employ a strict and transparent process to get the best outcome and avoid unintended consequences.

Despite the fact that the MHLW told BioWorld Today that the emergency price review of Opdivo was "an exceptional case," the discussion to change price revisions away from a biennial basis has been ongoing. On Dec. 20, Chuikyo published a policy paper proposing ideas to annually review and reprice drugs with considerable price differences on the market, while maintaining the major review at the biennial level, quarterly review of drugs with new indications, and fundamental review of premium prices for innovative drugs.

The policy paper further emphasized the need to address the accuracy and transparency of drug price calculation, its influence on business stakeholders, and improvement of logistics. This leaves little room for agreement between the government and the industry, industry analysts have said.