Japan saves record $12.2bn in 2017 through greater generic use

Through a concerted shift from branded drugs to generic equivalents as a means to lower prescription costs, Japan is estimated to have saved ¥1.3 trillion ($12.2 billion) throughout the course of the fiscal year 2017 – the biggest recorded reduction and 40% more than projections for 2015, according to the nation’s Ministry of Health, Labour and Welfare (MHLW).

The Japanese Government has set a target for 80% of all drugs used by 2020 to be generics, with projected savings of ¥1.3 trillion in savings – goals which these new data show it is close to meeting; as of September last year, 65.8% of all drugs in use were generics.

According to the MHLW, premiums keeping prices high on new drugs will drop ¥25 billion to ¥81 billion in 2018, while the number of drugs affected with fall from 823 to 560 as the ministry moves to restrict which varieties of therapy can demand such premiums.

Overall, prices are expected to fall by 1.36% in 2018.

The ministry has also revealed cuts to its government-set prices, including Bristol-Myers Squibb’s blockbuster immunotherapy Opdivo, which will see a price reduction of 23.8% throughout 2018, coming down to ¥278,000 from ¥365,000 per 100mg. Just four years earlier, the drug’s price stood at ¥730,000 – its price was halved by the government in February last year in an attempt to relieve pressure on the nation’s insurance system.

A major rival to Opdivo, the price tag on MSD’s Keytruda is also expected to drop by 11.2% to ¥365,000 per 100mg.

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