business

Japan drug price reforms risk hurting investment: Bristol-Myers CEO

9 Comments
By Rocky Swift

Japan’s “overly restrictive” drug pricing policies risk diverting foreign direct investment to China and other markets, the chief executive of Bristol-Myers Squibb said.

The Japanese government made reforms in 2018 that change how its national health system pays for new and innovative drugs.

But those changes are not science-based and favor large domestic drugmakers over foreign and smaller players, Giovanni Caforio told a news conference in Tokyo.

“The world is very competitive, and countries such as China have made it a priority to develop a biopharmaceutical innovation-focused industry,” Caforio said at an event organized by the Japan office of PhRMA, the main U.S. drugmaker lobby.

Caforio was announced as chairman of PhRMA last month.

Japan’s government is seeking ways to squeeze savings from its national health care system as the population ages. The number of working-age people in Japan compared to those over the age of 65 is 1.8, the lowest in the world, according to a 2019 United Nations report.

Japan is the world’s second-largest market for innovative drugs such as gene-based therapies and cutting-edge cancer drugs. As a wealthy country with one of the fastest ageing societies, it remains an attractive market for global pharmaceutical makers.

Japan is also a major center for pharma research, producing drugs such as Opdivo, a blockbuster cancer drug licensed globally by Bristol-Myers.

The rules announced last year evaluate drugs and their makers for innovation to determine how much the government will pay for treatments.

The rules would also subject drugs to annual reviews starting from 2021, as opposed to biannual reviews now. Caforio said he met with senior government officials to press for more discussion on the regulations.

“These decisions could impact whether the strong investment patterns in Japan continue and whether new medicines are rapidly available for Japanese patients in the future,” he said.

© (c) Copyright Thomson Reuters 2019.

©2019 GPlusMedia Inc.

9 Comments
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Caforio said, “These decisions could impact whether the strong investment patterns in Japan continue and whether new medicines are rapidly available for Japanese patients in the future,”

Why not just bluntly say that the tactic of extortion is on the table, as Japan's decision would potentially impact your annual bonus of a Bugatti La Voiture Noire?

2 ( +2 / -0 )

But those changes are not science-based and favor large domestic drugmakers over foreign and smaller players, Giovanni Caforio told a news conference in Tokyo.

Nit surprised. Nothing new.

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I once knew a Pharma Sales Head of a major local company.... they argued that Japanese have different bodies to the rest of the Human species and that's why there's so many restrictions upon Foreign pharma products entering the Country...

Given the increased introduction of Foreign workforce persons, that argument would seem to be a bit weak nowadays.... but then this is Japan...

2 ( +3 / -1 )

@mmekdw

So true. I have heard the same.

Ad, body temperature is also different, that is why... (insert irrelevant information here).

I am surprised that I was able inter-breed into this other species at all.

That being said, I am also shocked by the amount of prescribed medication over here, and for the smalled sniffle. Of the various doctors that I have talked to, most prescribed medication is in the request of the patient. Either it is not needed yet demanded, or it is cheaper than the same at the pharmacy.

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I work in pharma and thought it would be stable but many companies are only a few patents away from bankruptcy. Millions in research can be stolen by a good chemical manufacturer in India, etc. I won't be surprised if many pharma go bankrupt soon. The new opportunity is personalized medicine but it may be hard to develop a business model where treatment is $100k per person.

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 I won't be surprised if many pharma go bankrupt soon. 

I find that hard to believe. Bankruptcy that won't happen.

Are pharmas not making a profit?

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They wouldn't risk diverting medicines away from Japan. While Japan is a small market, it is still one if the largest consumers of medication. So they are trying to optimize their bottom line. They wouldn't abandon that much money.

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80-90% of prescribed meds are sold as generics with little profit. The innovator companies fight to find new meds but easy pickings are over. I think the current model will collapse soon and more government support of research will be necessary.

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Just as long as drug prices are as low as possible for the average person, is what's most important.

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