US and European trade groups urge caution on Japan’s pharmaceutical pricing structure

US trade group the Biotechnology Industry Organization (BIO) has joined a coalition of organizations US and European groups urging the government of Japan to maintain the established reimbursement pricing structure for pharmaceuticals and medical devices.

While the Abe Administration continues to take impressive steps to promote the domestic and foreign innovative health care industry in Japan over the past several years, its proposal to change the schedule for reimbursement pricing to an annual system poses a danger to investment and innovation across the entire health care spectrum. Such a change would impede innovation and delay access by Japanese patients to lifesaving and enhancing health care innovation, the trade groups say.

The Abe Administration has stated that it intends to raise the consumption tax in April 2017 from the current 8% to 10%. It is widely accepted that reimbursement prices for pharmaceuticals and medical devices will need to be adjusted in some fashion at that time to factor in the higher consumption tax. Thus, combined with the regular biennial re-pricings scheduled for 2016 and 2018, an increase in the consumption tax as planned in 2017 would result in three consecutive years of re-pricing adjustments.