Pricing and Reimbursement in Japan

Content

• Chapter 1 Executive Summary
  • Scope of the report
  • Key findings
• Chapter 2 Overview Of The Japanese Healthcare And P&r System
  • An introduction to the Japanese healthcare system
  • The government must improve efficiency and reduce costs in healthcare provision
  • High drug spending is a visible cost containment target in the Japanese healthcare system
  • An overview of the Japanese healthcare system
  • Public healthcare insurance schemes provide the majority of Japanese healthcare
  • Hospitals remain the first port-of-call for patients seeking healthcare in Japan
  • There are a number of key stakeholders that impact healthcare provision in Japan
  • Governmental stakeholders are unified under the Ministry for Health, Labor and Welfare
  • Healthcare worker and industry stakeholders
  • Gaining a price and reimbursement level in Japan: the process and the key stakeholders that affect it
  • The process of gaining a price and reimbursement level
  • Drugs qualify for fairly generous premiums if they are innovative enough
  • A wide range of premiums are available for innovative drugs, and it is slowly getting easier to meet these criteria
  • A number of healthcare stakeholders impact government P&R strategy and healthcare provision
  • The DPO and Chuikyo are the key governmental stakeholders shaping P&R
  • The influence of healthcare stakeholders in shaping healthcare reform and P&R implementation is varied
• Chapter 3 The Pricing And Reimbursement Environment In Japan
  • Key reforms impacting the P&R environment
  • Biennial price cuts and patient co-payment have been the dominant P&R cost-containment tools in Japan
  • Biennial price cuts have historically had the greatest impact in restricting pharmaceutical expenditure
  • Over the past decade, the R zone has fallen, making price cuts more punitive
  • In addition to standard price cuts, extraordinary price cuts and long-listed drug price cuts also impact drugs
  • Patient co-payment is one of the most effective ways to control patient spending in Japan
  • PE analysis also plays a role in P&R in Japan, but on a more informal basis than in European markets like the UK
  • Increased DTC, the greater adoption of a prospective payment system, and increased generic uptake are all set to impact drug price following launch
  • Pharmaceutical companies exploit loopholes in advertising restrictions to capitalize on DTC and physician promotion
  • The adoption of the DRG-like diagnosis procedure combination (DPC) reimbursement system has met strong opposition but it may help to cut costs and reduce ALOS
  • There is a strong drive to increase generic uptake in Japan to help contain costs
  • Generic prescription in Japan is driven primarily on price
  • Despite cost savings available with generics, a range of factors have restricted generic uptake in Japan
  • Increased patient and physician awareness of generic drugs, greater patient participation in health management, and increased generic substitution are all helping to counteract the significant restrictors to generic uptake
  • The future is bright for generic uptake in Japan although there is still significant patient and physician resistance to overcome
  • Government use of an OTC switching category to transfer cost to patients is not effective in Japan because of the risk-averse nature of healthcare provision
  • Japanese drugs companies do not have to contend with parallel importation
• Chapter 4 Key Macro Trends Indirectly Impacting P&r In Japan
  • Healthcare costs are being driven up by a range of factors, even though drug prices appear to be falling
  • Long patient hospital stays are a significant problem in Japan and is becoming an increasingly visible focus for cost containment
  • The failure of healthcare providers to price services differentially together with financial incentives to provide outpatient care exacerbates patient selection of in-patient care as the first port of call
  • Patients have historically had little incentive to be cost-conscious
  • Physicians are under attack and have little incentive to prescribe cost-consciously
  • The wide variety of health insurance schemes has done little to help contain costs
  • Historically high drug prices have been falling in the Japanese market
  • Innovation is required for a high level of reimbursement, yet there are problems capturing and adequately rewarding innovation
  • The level of innovation required for premiums is difficult to attain
  • There has historically been relatively low R&D investment in Japan
  • Innovative drugs may bypass the lengthy approval and P&R processes which have historically slowed down access to the Japanese market
  • Restructuring R&D strategy and capitalizing on governmental financial incentives will boost innovation
  • R&D restructuring may help to capture greater innovation
  • The Japanese government needs to provide greater financial incentives for R&D and make clinical trial progression, approval and P&R assessment easier to encourage foreign investment
  • Characteristics of Japanese society impact the healthcare service
  • The stagnant Japanese economy impacts on Japanese healthcare provision
• Chapter 5 The Future Of P&r In Japan
  • There are a range of factors that directly impact P&R tool use and effectiveness
  • The government should aim at making it easier for drugs companies to demonstrate innovation
  • The price cut system is set to evolve
  • Generic uptake is set to be strongly boosted
  • The number of drug types receiving high reimbursement levels is set to change
  • Reference pricing is set to become more restrictive
  • A range of factors that shape healthcare provision will also indirectly impact P&R
• Chapter 6 Bibliography
  • Publications and online articles
  • Datamonitor resources
• Chapter 7 Glossary
  • Glossary of terms
• List of Tables
  • Table 1: There are a range of premiums for new drugs which help boost drug price and reward innovation
• List of Figures
  • Figure 1: A range of factors will shape the Japanese healthcare system in the future
  • Figure 2: Healthcare spending as a proportion of GDP is below the seven major market average in Japan
  • Figure 3: Japan has historically spent a high percentage of healthcare spending on pharmaceuticals, 1980-2000
  • Figure 4: Japan's total healthcare expenditure as a percentage of GDP is not rising strongly, 1980-2003
  • Figure 5: A wide range of bodies and groups impact healthcare provision in Japan
  • Figure 6: From a healthcare and P&R perspective, there are five key bureaus in the MHLW
  • Figure 7: Reforms since 1997 have focused on a range of factors, most significantly drug prices, co-payment and medical fees
  • Figure 8: Higher biennial price cuts and a reduced R Zone percentage are increasingly punitive for drugs companies, 1992-2006
  • Figure 9: There are more disincentives than incentives for generic prescription in Japan
  • Figure 10: There are a number of factors increasing the cost of Japanese healthcare provision
  • Figure 11: There are a range of different healthcare schemes, depending on the characteristics of the person being covered
  • Figure 12: The top-13 Japanese pharma/biotech companies have had a lower R&D investment as a percentage of revenues compared to the top-38 Western pharma/biotech companies, 1999-2005