Q1. What are the key points of the EFPIA response toward the fundamental review of the drug pricing system?
  • EFPIA is pleased to be able to contribute to this important policy discussion, and will do so based on four principles, which all key stakeholders should be able to agree on:
    1. ensure the sustainability of universal healthcare coverage (UHC);
    2. ensure patient access to innovation;
    3. restore the predictability and stability to the Japanese pharma market;
    4. iv. reward innovation and improve the quality of healthcare in Japan.
    Q2. What is the basic understanding of EFPIA on reforms of Japanese healthcare system?
  • The drug budget is well-controlled compared to the world market, which grew by +6.9% in 2016. In contrast, the growth of the Japanese market was -3.8% in 2016 and -7.2% in Q1 2017.
  • Long-term negative growth of the pharma market, combined with a lack of stability and predictability, could reduce the attractiveness of the Japanese market and lead to lower investment by multinational companies, reopening the drug lag.
  • The drug budget is well-controlled, except for a few cases. A formal mechanism to manage these exceptional cases should however be established.
  • Drug costs are only one part of overall healthcare costs: a holistic view is needed and a fundamental reform should not be limited to managing drug prices only. Reform should include a review of all healthcare costs and revenue sources, including medical fees, medical procedures, hospital stays, patient co-payments etc.
  • Q3. What is the position of EFPIA on significant drug market expansion by additional indications?
  • EFPIA supports the government’s aim of avoiding sudden and significant increases to the drug budget as a result of additional indications.
  • We therefore support the proposal for a swift price revision following market expansion by additional indication(s), provided that the cases are exceptional.
  • These price revisions should be based on actual sales amounts, i.e. they should be based on reality and not on estimates.
  • Q4. What is the position of EFPIA on the cost-plus price setting method used for products where the current comparator pricing method is not applicable?
  • EFPIA accepts that the cost-plus price setting method which does not assess the value of a product, and we are open to discussing alternative price-setting methods for innovative products where the current comparator pricing method is inappropriate.
  • Examples of alternative methods could include one or more of:
    1. a new cost-plus approach using the cost of an alternative treatment rather than the manufacturing cost of the new drug;
    2. a widely chosen price comparator among the market;
    3. direct comparison with foreign price(s).
  • Q5. What is the position of EFPIA on the Foreign Price Adjustment (FPA) rule, especially about use of the US AWP price?
  • The US accounts for about a half of the world pharmaceutical market (versus less than 10% for Japan), and bears the largest share of the burden for global R&D costs. If Japan wishes to continue to contribute to global R&D, reference to the US needs to continue in some form.
  • EFPIA could support the use of other appropriate prices as alternatives to AWP.
  • Q6. What is the position of EFPIA on the annual price revision for all drugs?
  • EFPIA believes that the basic approach should be for prices to be revised biennially.
  • These “off” year revisions should be focused on generic and long-listed products that are discounting in the market from the NHI price target by an exceptional amount.
  • New products during their period of exclusivity should not be subject to these “off” year revisions.
  • EFPIA could support annual repricing, provided that the savings from this measure are used to maintain strong support for innovation.
  • Q7. What is the position of EFPIA on future pricing of Long Listed products (LLP) and generics?
  • EFPIA supports the proposal to revisit LLP and Gx prices, provided that the savings from this measure are used to maintain strong support for innovation.
  • Q8. What is the position of EFPIA on innovation premium?
  • Savings from the non-innovative part of the drug budget should be used to maintain strong support for innovation through the price maintenance premium.
  • Q9. While sustaining universal healthcare coverage (UHC) in Japan, what should we do to ensure patient access to innovation?
  • For innovative pharmaceutical companies, predictability and stability of the system are extremely important for the research and development of new products that require huge investments over a long time period.
  • Innovation must be rewarded in a fair and predictable manner to ensure necessary investment in R&D is made in Japan, allowing Japanese patients early access to new treatments. The current review should set a stable medium-term framework for drug pricing in Japan, and there should be no further sudden rule changes as in 2015-16.
  • In return for a stable, pro-innovation framework, EFPIA supports:
  • re-pricing for products with additional indications in exceptional cases;
  • annual survey-based re-pricing for generic and long-listed products with large discounts;
  • new alternatives to the cost-plus price setting method;
  • adjustment of the foreign price adjustment rule;
  • some form of post-launch HTA assessment.
  • Q10. What is the position of EFPIA on Health Technology Assessment (HTA) which has been introduced on a trial basis and where full-scale introduction from 2018 has been discussed?
  • EFPIA believes it is necessary to set appropriate prices for medical technologies and / or drugs based on value.
  • On the other hand, although HTA has been introduced in Europe, there are still many issued to be solved and the approach can become a barrier to access to medicines for patients. Japan needs to introduce a system which fits into the Japanese situation and maintains patient access. On that basis, EFPIA proposes:
  • The number of products assessed should be limited. Japan does not yet have a well-established HTA infrastructure so cannot assess a large number of products. The focus should be on products with a large budget impact and in receipt of a significant premium.
  • Multi-criteria decision analysis could be more suitable than a pure cost per QALY method.
  • Any assessment should be post-launch (e.g. two years after market entry). Pre-launch assessment would risk reopening the drug lag.