Shifts to generics to cut Japan FY 2017 medical costs by 1.3 trillion yen

March 5, 2018

Tokyo- Switching to generic drugs from brand-name drugs for which patents have expired is estimated to lower Japan's total medical costs by 1,299.1 billion yen in fiscal 2017, the health ministry said Monday.

The reduction is some 40 percent larger than the previous estimate for fiscal 2015 and is the biggest ever.

The government aims to raise the share of generic drugs to 80 pct or more by September 2020, based on a projection that about 1.3 trillion yen in medical costs could be saved a year if the target is met.

The estimate for the fiscal year ending this month shows that the government has almost achieved the objective.

As of the end of September last year, the share of generic drugs stood at 65.8 percent.

The ministry also said the premiums added for keeping the prices of new drugs high for certain periods will total 81 billion yen in the fiscal 2018 drug price revisions, down by 25 billion yen from the present. The number of drugs subject to the measure will decrease to 560 from 823.

The premium price system has conventionally been applied to almost all new drugs.

Starting in fiscal 2018, however, the ministry plans to strictly limit the range of new drugs that can carry premium price tags to certain types of products, including those with innovative features, in the hope of reducing the country's overall medical costs. Jiji Press