TOKYO – Japan's pharmaceutical industry is calling for a more collaborative relationship between government and industry in the face of uncertainties in the country and the possibility of more frequent reviews of drug prices.

Much has improved in terms of regulation and industry oversight in Japan, said Patrik Jonsson, chairman of the Japan-based executive committee of the Pharmaceutical Research and Manufacturers of America (PhRMA), speaking during the annual conference this month. Approvals by the PMDA are now much faster and more drugs have been submitted for approval. But he pointed out that a collaborative relationship between industry and government would go a long way to balance pro-innovation policies and the financial stability of both the industry and the country's health care system.

"We are prepared to work very closely together with the Japanese government," said Jonsson. "We want to have regular dialogues with key stakeholders such as the MHLW [Ministry of Health, Labour and Welfare] and Chuikyo, and also the four ministries that were highly engaged with the Council on Economic and Fiscal Policy in the fourth quarter. We are prepared to come up with forward-leading proposals to ensure we strike the right balance."

Chuikyo is the Central Social Insurance Medical Council, which sets drug pricing.

The conference was held amidst uncertainty in both American and Japanese pharmaceutical industries. In November, the Chuikyo, which is run by the MHLW, approved a proposal to cut in half the price of cancer drug Opdivo (nivolumab), by Ono Pharmaceutical Co. Ltd., starting this month. The list price of the drug at the time was ¥35 million (US$321,000) for a year of treatment.

The move took the industry by surprise, as Japan has traditionally adjusted prices every two years.

An MHLW representative told BioWorld Asia at the time that the move was an unexpected "emergency review," which broke away from the regular biennial drug price review system. (See BioWorld Asia, Dec. 7, 2016.)

The Chuikyo also published a policy paper on Dec. 20 that allows for an annual review and re-pricing of drugs hit by considerable disparity between the set price and market price; quarterly reviews of drugs with newly approved applications; and a fundamental review of pricing premiums for innovative drugs. Those are all issues that PhRMA, and its members, worry about.

"What concerns us is not just the content and the huge magnitude of this, but also the time it was decided," said Jonsson, during the PhRMA conference. "This was decided within less than four weeks. And many stakeholders were not involved in this dialogue, including the research-based pharmaceutical industry."

In the U.S., President Donald Trump has targeted the pharmaceutical industry, declaring the need to "create new bidding procedures for the drug industry" because pharmaceutical companies are "getting away with murder." Stock prices of Japanese pharmaceutical companies plummeted following those comments. (See BioWorld Today, Jan. 24, 2017.)

Trump toned down the rhetoric in the first official meeting with members of the U.S. biopharma industry, but held to the message that "we have to get the prices way down." (See BioWorld Today, Feb. 1, 2017.)

Trump also pledged to "repeal and replace" the Affordable Care Act, but how he will do that remains unclear. At the PhRMA conference, Jonsson said it is still too early to assess the implications of any repeal and that his group will continue to work with the new administration.

In Japan, PhRMA comprises 10 member companies, including Pfizer Inc., Amgen Astellas Biopharma K.K. and Eli Lilly and Co. The Japanese branch was founded in 1987.

In December, PhRMA joined six other organizations to publish a joint statement opposing annual re-pricing of drugs and made its case to the Chuikyo alongside the European Federation of Pharmaceutical Industries and Associations.

Although the annual review and re-pricing policy that the groups opposed most loudly was not adopted, the pharmaceutical industry has not been completely victorious either. The issue is still on the table and PhRMA expects to continue lobbying for less frequent price reviews. However, given the current status of the discussion, it seems unlikely that the MHLW will reverse its policy proposals and revert back to strictly biennial drug price reviews.

"We want to ensure the sustainability of Japan's universal coverage, which is one of the best health care systems in the world," said Jonsson. "But we also want to make sure that we maintain the pro-innovation agenda for Japan."

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