Japan to lower medical fees by cutting drug prices

November 10, 2017

TOKYO- The Japanese government plans to lower medical fees in fiscal 2018 by sharply cutting drug prices in a bid to curb growing social security costs stemming from the country's aging population, informed sources said Thursday.

But the government is expected to slightly raise the base portion of the medical fees, mostly remuneration for doctors and pharmacists, the sources said.

In a meeting with Prime Minister Shinzo Abe, Japan Medical Association President Yoshitake Yokokura called on the government to increase the portion of fees paid to doctors and pharmacists. Abe said the government needs to secure financial resources for proper health care.

Government-administered medical fees are reviewed every two years. The government cut medical fees in its previous review for fiscal 2016, which ended last March.

A reduction in medical fees will lower the proportions of medical expenses financed by tax revenues, health insurance premiums and out-of-pocket expenses by patients.

As part of its efforts to restore fiscal health, the government plans to curb the increase of 630 billion yen in social security costs estimated for fiscal 2018 by 130 billion yen.

The government believes it can achieve the reduction goal chiefly by lowering drug prices, which are reviewed based on market prices, the sources said.

But the government sees it difficult to lower fees paid to doctors and pharmacists amid a deterioration in hospitals' finances due to higher labor costs. In addition, Abe himself has been calling on corporate employers to raise wages by 3 pct.

The government is considering lightly raising the remuneration following a 0.49 pct increase in the previous review. Jiji Press