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CMIC Resources

Unpacking Japan’s Drug Pricing Reforms: What You Need to Know

In the ever-evolving landscape of healthcare, drug pricing and availability has been a constant topic within industry news. Recently, Japan took significant strides in its healthcare policies with the approval of a comprehensive drug pricing proposal by the Ministry of Health, Labor and Welfare (MHLW) of Japan. These reforms signify a pivotal moment in Japan’s approach to pharmaceutical pricing. In this blog post, we unpack these reforms and provide essential insights into what you need to know.

Key Changes

This year, Japan released an FY2024 drug pricing reform. One exciting part of this is the “early introduction premium” which aims to offer a 5-10% pricing premium to newly launched drugs that arrive promptly in the Japanese market. To qualify, products must undergo international or simultaneous/local clinical trials in Japan, be prioritized for review and be submitted/approved earlier than in the US & EU, or within a 6-month window.

Japan Drug Pricing ReformsIf a foreign reference price wasn’t available upon Japan’s introduction, adjustments can be made later on its applicability. To mitigate patient costs, the MHLW suggests capping price increases at 1.2 times the original price. This adjustment system encourages drug developers to prioritize Japan among their early launch markets.

Also within these new reforms includes the PMP (Price Maintenance Premium), designed to recalibrate drug prices in alignment with their therapeutic value and market dynamics. The PMP criteria in Japan adjusts price protection based on a company’s efforts in new drug development. However, concerns have arisen about smaller biotech firms facing disadvantages due to their limited R&D scale. The MHLW has proposed abolishing the company criteria, ensuring full price protection for PMP-designated products. Additionally, the PMP product criteria will now expand to include those with “early introduction premiums” and “pediatric premiums.”  This aims to maintain innovative drug prices throughout the patent period.

Pharmaceutical companies will need to have some pricing adjustments, necessitating a more transparent and evidence-based approach to justify pricing decisions. The reforms aim to strike a delicate balance between ensuring patient access to innovative treatments while safeguarding the fiscal sustainability of the healthcare system.


Looking Ahead

For pharmaceutical companies operating in Japan, these reforms herald both challenges and opportunities. While the new pricing regulations may pose initial hurdles, companies with a robust portfolio of innovative therapies stand to benefit from a more streamlined and value-centric pricing environment. With this new reform, we may see an uptick in drug developers hosting studies in the country. Japan’s recent drug pricing reforms signify a proactive response to the evolving healthcare landscape.

At CMIC Group, we serve as your trusted partner in navigating the complexities of the Japanese market. Our team of seasoned experts is proficient in regulatory affairs and possesses the knowledge and experience necessary to facilitate your entry into this dynamic market seamlessly. With over three decades of specialized expertise in conducting clinical trials across Asia, including Japan, we stand ready to address any inquiries or challenges you may encounter along the way. Trust CMIC Group to be your guiding force as you embark on your journey to success in the Japanese market.






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