Japan's Ministry of Health, Labour and Welfare (MHLW) has issued formal notification and further details of April's National Health Insurance price revision, including details of awards of the premium for new drug development, and the impact of new pricing rules on off-patent branded originators (long-listed drugs).
IHS Global Insight perspective | |
Significance | Pfizer (US) tops the list of companies in terms of number of premium awards, which exempt an on-patent product from the revisions until entry of generic competition. |
Implications | Among prominent drugs awarded the premium are last year's top-selling drug in Japan, Sanofi (France)'s Plavix (clopidogrel), and Pfizer's renal cell carcinoma treatment Inlyta (axitinib). |
Outlook | There is greater emphasis on enforcement of a requirement for companies receiving the premium to engage in development of drugs meeting unmet needs, as requested by the MHLW. |
Japan's Ministry of Health, Labour and Welfare (MHLW) has issued further details of April's National Health Insurance (NHI) price revision in its gazette published yesterday (5 March), as reported by PharmAsia News. The gazette contains the NHI list prices for 15,303 products – including 9,092 oral products, 3,721 injectables, 2,465 topical products, and 25 dental drugs.
Pfizer tops award of premium for new drug development
Also provided were details relating to the award of the "premium to promote the development of new drugs and eliminate off-label use", first introduced in 2010 and providing a price premium and exemption from price revision for patented drugs of which actual market price does not display a significant discrepancy from the NHI list price, among other conditions. A total of 89 companies' 397 active pharmaceutical ingredients (APIs) equating to 758 products are to be awarded the premium in this year's revision, accounting for around 37% of all branded drugs where there is no generic competitor, up from 35% during the previous price revision in fiscal year (FY) 2012. Affected drugs will receive price premiums of up to 4.94%, while 630 of the 758 affected products (83.1%) are granted exemption from the price revisions.
FY 2014 price revision awards of premium for new drug development: top-ranking companies | ||
Company | No. of APIs | No of products |
Pfizer | 30 | 55 |
GSK | 24 | 47 |
Novartis Pharma | 19 | 36 |
Janssen Pharmaceutical | 17 | 35 |
Chugai | 15 | 35 |
MSD | 20 | 34 |
AstraZeneca | 11 | 26 |
Astellas | 11 | 25 |
Daiichi Sankyo | 12 | 25 |
Eli Lilly Japan | 7 | 25 |
Source: PharmaJapan, MHLW | ||
Pfizer (US) came out top in terms of number of products eligible for the premium, rising above GlaxoSmithKline (UK) with an increase of 12 products since FY 2012. Prominent individual products newly eligible for the premium this year include Pfizer's renal cell carcinoma treatment Inlyta (axitinib), Sanofi (France)'s anti-allergy treatment Dellegra (fexofenadine + pseudoephedrine), and Japan's top-selling drug during 2013, Sanofi's Plavix (clopidogrel; see Japan: 24 February 2014: Japan's prescription drug market grows 3.1% during 2013, Plavix jumps to top spot). Only Daiichi Sankyo and Astellas were among the local companies to make the top 10.
The price premium will be rescinded for 57 APIs/105 products due to entry of generic competitors and other reasons, including Boehringer Ingelheim (Germany)'s Parkinson's disease treatment Bi-Sifrol (pramipexole). In a tightening of the premium's eligibility conditions, from this year manufacturers are obliged to respond to MHLW requests for development of drugs meeting unmet needs to be eligible, and eight APIs/10 products have been excluded from the premium under this new rule.
Outlook and implications
The "premium for new drug development" has had a transformative effect on the Japanese drug market in terms of rewarding innovation, acting as a price-maintenance scheme for the duration of patent for drugs that previously faced steady erosion of NHI list prices within the biennial revisions. The premium has naturally proved popular with industry, and there were some moves to enshrine the premium as a permanent feature of Japan's pricing landscape in the negotiations surrounding this year's revision: the MHLW proposed "institutionalising" the premium as opposed to making it permanent as a compromise measure for Japanese health payors, but for now the premium officially remains a temporary measure (see Japan: 6 December 2013: Japan moves to make premium for new drug development permanent). Introduced as a measure to reward companies that volunteer to carry out development of drugs meeting unmet needs, this component has been emphasised within this year's revision.
The MHLW's gazette notes that this year's revision will produce a 5.64% overall reduction in average NHI prices on a drug spending basis, a slight reduction from the forecast previously released (see Japan: 3 January 2014: Japan's 2014 revision to bring down NHI drug prices by 5.7%).