Lower drug prices to cut gov’t spending by up to 150b yen

December 6, 2017

Tokyo- The Japanese government will likely be able to cut its medical spending by some 140 billion to 150 billion yen in fiscal 2018, by lowering official prices of prescription drugs to match market prices, it was learned on Wednesday.

Market prices of prescription drugs were about 9.1 percent lower than government-set prices in September, according to a health ministry survey reported to the Central Social Insurance Medical Council on the day.

The survey was carried out to collect data for the next biennial revision, in fiscal 2018, of fees paid to medical institutions from health insurance programs.

The price gap expanded by 0.3 percentage point from the previous survey, conducted for the medical fee revision for fiscal 2016, apparently reflecting intensifying sales competition for new expensive drugs.

The planned cut in official drug prices will enable the government to meet its target of reducing its social security spending in its fiscal 2018, which starts next April, by some 130 billion yen from the previous year, informed sources said.

The government is also seeking to cut other medical costs, in order to eke out funds to raise doctors' fees, the sources said. Jiji Press