JAPAN STUDIES NEW GENERICS-FRIENDLY REIMBURSEMENT POLICY

Japan's finance ministry is lobbying top government officials for new drug cost-containment mechanisms. Under the proposed initiative, patients would be obliged to cover the price gap between the reference innovative product and the appropriate generic with co-payments. Media reports warn that added out-of-pocket expenditure could hit the elderly — already Japan's most significant age group — hardest of all.

The proposals follow a series of informal meetings on reducing the burden carried by Japan's National Health Insurance (NHI) reimbursement system. Such a radical step would have a major impact on the generics market, which is struggling against negative perceptions and consumers' isolation from personal cost considerations as regards drug reimbursement.

The final shape of Japan's healthcare reform plan is not due until the end of the year, but other proposals have already stirred controversy. Some prescription products designated as "similar" to OTCs could be excluded from reimbursement, and changes to healthcare finance could also boost consumers' cost sensitivity. With higher fees for hospital stays and new exclusions from coverage for certain groups, many research-based drugmakers fear that a more cost-aware approach will fail to reward innovative healthcare products.