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JAPAN STUDIES NEW DRUG PRICE CURBS

June 27, 2005

A Japanese finance ministry panel has outlined plans to restructure the National Health Insurance pricing system in order to promote generic medicines. The committee will further study changes to reimbursement coverage of drugs that are designated as "similar" to OTC products.

The panel will also review the general status of the health insurance system, in an attempt to promote "selection and concentration" in the budget. This could imply changes to Japan's mixed medical care system, where some services are not currently covered by health insurance. Attention is likely to be paid to the special medical system, under which hospitals deliver advanced treatments that are not covered by insurance.

Meanwhile, despite government cost cutting and recent controversial product withdrawals in recent years, Japanese consumers' confidence in the pharmaceutical sector appears to have actually risen. In positive news for drugmakers, a new survey by Japan's Pharmaceutical Manufacturers' Association shows that 94% of respondents said the sector was "highly" or "fairly" necessary for society.

Additionally, 74% of participants felt the industry was "trustworthy," while 91.2% believed prescription drugs dispensed in hospitals were "fairly reliable." However, only 24% believed drugmakers provide adequate product information, and only 23% believed that companies take consumer opinions into account.