The drug pricing subcommittee of Japan's Central Social Insurance Medical Council (Chuikyo) has "basically agreed" to an out-of-cycle repricing of high-cost immuno-oncology treatment Opdivo (nivolumab; Ono Pharmaceutical, Japan) before the next National Health Insurance (NHI) drug price revision in April 2018, according to Pharma Japan.
Implications | Opdivo is expected to be the primary candidate for repricing, although the Ministry of Health, Labour, and Welfare (MHLW) is also expected to draw up a list of other eligible treatments. |
Outlook | The Chuikyo's decision does not come as a surprise, and is expected to substantially increase pricing pressure on innovative treatments in Japan. |
Japan's Ministry of Health, Labour and Welfare (MHLW) has proposed using "huge seller" repricing as an emergency measure for Opdivo, a process that has already been applied for other drugs in FY 2016 (see Japan: 7 March 2016: Gilead Sciences' Sovaldi, Harvoni to see 31.7% price cut under Japan's "huge seller" re-pricing reform).
The MHLW has also proposed two criteria for treatments to be eligible for emergency repricing. The first would cover treatments that were not subject to repricing discussions in FY 2016, including treatments that gained marketing approval for additional indications between October 2015 and March 2016. The second includes treatments that earned sales of over JPY100 billion (USD963.7 million), which was 10 times over the initial sales forecast.
According to the source, Opdivo is expected to be the primary candidate for "huge seller" repricing, given its multiple new indications in the October-March period. However, the MHLW is also expected to draw up a list of other treatments that received additional indications. The MHLW added that due to the rapidly growing numbers of additional indications and dosages for certain treatments, emergency price reductions were necessary. The Chuikyo plans to discuss the NHI price reduction rate for Opdivo at its next meeting.
In addition, during the Chuikyo meeting several panel members called for a fundamental overhaul of Japan's drug pricing system in the run-up to the next biennial NHI price revision in FY 2018, in order to avoid further need for emergency measures. Panel members also called for a revision of the cost calculation drug pricing method – which has already come under criticism – as well as of the foreign price adjustment measure.
Outlook and implications
The Chuikyo's decision does not come as a surprise, and is expected to substantially increase pricing pressure on innovative treatments in Japan. Specifically, although access to the Japanese market and reimbursement coverage may not change significantly, negotiations over NHI pricing are expected to be much more focused on cost-effectiveness based on sales forecasts and potential for additional indications of the treatment.
In particular, the NHI pricing of Keytruda (pembrolizumab) – expected to receive its reimbursement price next month – will be watched closely to see whether it will be based on a revised comparison price for Opdivo. It is likely that this will be the case (see Japan: 2 September 2016: Gilead's Harvoni and Sovaldi rank as Japan's first and third best-selling prescription drugs in FY 2015/16).