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Expensive new drugs put strain on Japan’s health system

by Philip Brasor and Masako Tsubuku

Special To The Japan Times

The big news right now in the medical world is the development of anti-cancer drugs that use the body’s natural immune system to fight off tumors. In Japan, the most famous of these drugs is probably Opdivo, created by the relatively minor Ono Pharmaceutical Co. in collaboration with Bristol-Myers Squibb Co.

Last summer, Opdivo was approved for treating a certain type of lung cancer by the Ministry of Health, Labor and Welfare, which means national health insurance will pay for treatments. That’s very important, since the drug costs a staggering ¥1.33 million per dose.

Under normal conditions of care for a lung cancer patient weighing 60 kilograms, the cost of using Opdivo would come to ¥2.55 million a month. However, an insured individual would only pay about ¥650,000 a year thanks to a special exception for “high-priced medicines” that reduces a patient’s payment depending on their income. And if the patient is over 70 years old, the amount comes down even further, since the elderly only have to pay 10 percent of their medical costs out of pocket to begin with, rather than the 30 percent that most people pay through national health insurance.

Consequently, Opdivo, which was originally developed to treat skin cancer, is giving hope to lung cancer patients in Japan, though it may be too soon to celebrate it as the miracle drug some media are calling it.

A recent report on NHK’s in-depth news program “Close-up Gendai” outlined the problems with Opdivo and, by extension, other expensive new drugs that are being put on the market. After telling the story of one 74-year-old lung cancer sufferer who saw no positive results from chemotherapy but whose tumors shrank after beginning treatment with Opdivo last December, the program presented a physician, Dr. Hideo Kunito of the Red Cross Hospital, who warned that widespread use of such expensive drugs will “destroy Japan’s medical system.”

What most media are not pointing out is that Opdivo so far has only proven “effective” for 20-30 percent of the patients who have taken it. Right now, drugs cost the Japanese government ¥8.5 trillion a year, and Kunito estimates that if 50,000 people — the number of lung cancer patients for whom Opdivo would be used — went on the new drug, it would add another ¥1.75 trillion, thus bankrupting not only the health insurance system but the country with it. And that, he says, is the minimum estimate. Some patients have reported side effects that require supplemental treatment, which means the bill related to just this one drug could increase in other indirect ways.

The main problem is that doctors are still learning how to use the drug, and at present the dosages are mostly guesswork. Sometimes the tumor shrinks and sometimes it gets bigger, which means doctors may increase dosages. But since the drug is only effective 30 percent of the time at most, it makes it even more difficult to determine how much to administer.

On July 22 the health ministry warned doctors who prescribe Opdivo that when used with other anti-cancer drugs, the side effects can be particularly deadly. Obviously, there is still a lot more research to be done, and in the meantime, as Kunito points out, more of these types of very expensive drugs will be entering the market, and people who suffer from the ailments they treat will demand them from their doctors.

Kunito recommends that use of Opdivo be limited in accordance with age. At one point in the program he said that people “after the age of 75 should acknowledge that their life is essentially complete,” a statement that will surely meet with a great deal of controversy. His point is that the government should not have to spend “millions of yen” to extend a life by only a year at most. Japanese over 65 make up 25 percent of those with health insurance, and they account for 60 percent of all medical costs. Drugs themselves are 20 percent of all medical expenditures, or ¥40 trillion in 2015, a 9 percent increase over 2014.

Other possible solutions to the cost-of-care problem will be equally controversial: revoke or reduce the special exclusion for expensive drugs, raise taxes and/or insurance premiums to address rising drug expenses or get pharmaceutical companies to push down the price. As it stands, the prices of all prescription drugs in Japan are set by the health ministry in accordance with drug company data.

What most consumers want to know is: Why are these drugs so expensive? The main reason is the cost of research. For every successful drug that makes it to market, 20,000 do not. Most of the expense goes into animal and human testing. An increasing portion of new drugs today are developed using biotechnology, meaning a living organism is involved in their manufacture. This adds considerably to the cost when compared to conventional factory-made pharmaceuticals.

As with many things in our world, the main culprit is the market. Drug companies naturally look for treatments that are in demand, which is why so many companies make medications to treat high blood pressure and diabetes, conditions that more and more people are developing. Likewise, cancer is a huge money maker, even if an increasing number of doctors are questioning the widespread use of chemotherapy, since they believe the treatment is often worse than the disease. But these drugs are in high demand, so pharmaceutical companies work hard to develop them.

Rarer cancers and other diseases are not addressed as much, so when drugs are developed for them, they can be very expensive. That’s why the health ministry doesn’t set the price too low. If it did, Japanese companies might stop developing drugs for certain conditions because there would be no incentive. Opdivo’s price is expected to come down in the future, since it was developed for melanoma, which relatively few people suffer from in Japan. There are many more lung cancer patients.

On July 27, the ministry said it would draw up new guidelines for expensive drugs aimed at making their use by doctors and hospitals more cost-effective and “mitigating side effects.” According to the Asahi Shimbun, the guidelines will likely specify what sort of patients will use these expensive drugs and which doctors and hospitals will be able to prescribe them. If expensive drugs are used outside of these guidelines, national health insurance may not pay for them.

Opvido is one of the drugs targeted. Another is Repatha, a treatment for high cholesterol that went on sale in April and costs ¥23,000 per dosage. Patients who need Repatha will probably have to take it for a very long period of time — perhaps for the rest of their lives.

Yen for Living covers issues related to making, spending and saving money in Japan, on the second and fourth Sundays of the month.