JAPANESE GOVERNMENT REPORT URGES PHARMA SECTOR REFORMS

Japan's cabinet has endorsed a new survey carried out by its Economic and Fiscal Policy Department on the future of government spending in the country. As expected, the report's major recommendations include reductions in social security and healthcare expenditure.

Reforms to the role of the Chuikyo, Japan's main public health insurance system, are likely to be fundamental. Under the report's proposals, the organisation would be able to draw up medical service fees for final official approval, with hospital groups and senior government officials assuming a much more direct influence over spending. This would effectively align the twin concerns of pricing and therapeutic value — important factors in plans by other governments to reform drug purchasing and reimbursement.

In general, the influential report's recommendations are in line with previous statements from Japanese officials. While many of these are negative for international research-based firms, such as the calls for greater use of generics and lower medical service fees, the report embraces earlier plans to speed up drug approvals and encourage clinical trial activity.

The latter proposal is in line with Japan's ambitions for its biotech sector. Also significantly, the report urges a greater focus on enhancing the international competitiveness of local pharmaceutical and medical device industries.