2018 Healthcare revision in Japan

In March 5th, the details of the 2018 healthcare revision was published (official documents are available only in Japanese).

Japan has biannual healthcare revision with re-pricing on all pharmaceutical products and devices. 2018 revision is effective from April 1st in 2018. The biggest three changes that I think in the 2018 revision are made on 1) bed categories, 2) drug/device pricing system including annual re-pricing and 3) Trial introduction of Cost-Effectiveness analysis. 

1. bed categories
Japan has more beds per capita compared than any OECD countries have and we need the resource shift from secondary medical services to the primary services. The new system encourages to increase nursing homes and to reduce acute beds, which are not quite limited to 'acute' phase use as the average length of stay was reported at 17 days compared to one digit in other countries in OECD report.

2. Drug/device pricing system
With an increasing pressure of medical expense on the national budget, annual re-pricing and x4/year re-pricing for certain products are introduced. Industries have been strongly against the annual re-pricing (practical price reduction) for several years, because an annual re-pricing which requires a broad survey in prices may increases the total national spending.

3. Cost-effectiveness analysis (CEA)
CEA introduction in the pricing/re-pricing process is still in a trial phase, yet prices of two products will be reduced and one product to be increased in April 2018, according to the result of the trial CEAs. 

HTA commettee in 7/March/2018

Is a HTA process introduced in pharma/device pricing in Japan?

Currently 13 products are taken as trial cases. In March 7th, a brief... very brief summary of CEA results and suggestions from a temporal appraisal committee were published and further discussed in the expert committee in Chuikyo, Central Social Insurance Medical Council. [meeting materials are only available in Japanese at; www.mhlw.go.jp/stf/shingi2/0000196685.html]

Within 13 products, 2 products are decided to reduce their price at re-pricing, effective from 2018 April, Opdivor(r) and Kadcyla(r), while positive re-pricing on one product, Najuta(r). The decision was made based on the threshold of five million JPY/QALY* and 'ethical/social factors'* through the appraisal process.

*Note; both the threshold and the 'ethical/social factors' are the tentative rules specifically decided for the trial use only. They will be further discussed toward the end of 2018.


I have observed two main discussion points at the March 7th meeting; 1) CEA concept/scientific advice, and 2) Willingness to Pay.

1) CEA concept or structure development was confirmed not enough and a lack of agreement on the concept between manufacturers and the committee prior to start the actual analysis resulted discrepancy in their CEA outcomes. At the appraisal process, the decision was made based on the better outcome among the two analysis results. For the future practice, MHLW suggested a working group under Chukyo by inviting medical expert, prior to start analysis to agree on CEA concept. The suggestion was not quite accepted by some committee members, because the more closed committees means the less transparency to public and to the final decision makers.

2) Willingness to pay research has been suggested to determine the threshold, but the idea of 'price on life' has been facing persistent resistance with the ethical point of view. Having said that, some committee members noted the importance and high priority of deciding legitimate threshold to introduce CEA in pricing/re-pricing, by the end of 2018.


Personal takeaways

Despite the schedule presented to introduce new HTA system by the end of 2018, it might take more than two years to start up a partial HTA system (e.g. only for re-pricing for some products) and possibly five years to set up a complete HTA system in pricing/re-pricing in Japan. Having said that, at a raising awareness, CEA could be well accepted as a communication tool to present the value of a product to various stakeholders, from market access point of view.