In a desperate bid to stem the rise in health care costs, the government is reining in one of its biggest medical outlays: prescription drugs.

Japan spent a record ¥39.2 trillion on health care in fiscal 2011, out of which prescription drugs accounted for ¥8.4 trillion. The drug costs are expected to rise further, with 1 in 3 people reaching age 65 or older in 2035.

The Council on Economic and Fiscal Policy, headed by Prime Minister Shinzo Abe, is weighing an overhaul of the social security system as part of measures to restore the nation's ailing fiscal health.