An aging population is not the only cause of headache for policymakers trying to keep the nation’s medical costs down — now they have “superexpensive” drugs to deal with.
Medical expenses paid to hospitals and clinics across the nation were estimated to have reached a record ¥41.46 trillion in fiscal 2015, up 3.8 percent from the previous year, the Health, Labor and Welfare Ministry announced Tuesday. The figure marks a ¥1.5 trillion rise from fiscal 2014.
Of the total, costs of prescription drugs stood at ¥7.9 trillion, up ¥680 billion, or 9.4 percent, from the year before. In particular, antiviral drugs — including the hepatitis C drug Harvoni, which was approved for use under the public insurance program last year — alone accounted for ¥414 billion, marking a 250 percent increase from the year before, according to the ministry.
The ballooning costs are likely to affect the ongoing debate in government panels over the pricing of drugs. A health ministry panel is currently discussing how to lower the price of certain drugs as an emergency measure for fear that their widespread use could drain state coffers.
Under the nation’s universal health care system, basically all drugs approved for use by doctors are covered under the public health insurance program, which every resident is required to join.
People undergoing expensive medical treatment can get most of their fees reimbursed. The cost burdens vary based on an individual’s income, and are kept under ¥140,100 per month.
But a series of new drugs that have been approved in Japan are so pricey that they could threaten state finances.
The hepatitis C drug Harvoni, developed by U.S.-based Gilead Sciences Inc., was approved in August 2015. A government panel decided that the daily dose of one Harvoni pill would be set at around ¥80,000.
The exorbitant sum — which experts say reflects the high development cost — has prodded authorities to review the price-setting mechanism.
Last month, the health ministry singled out Opdivo, a biotech-driven lung cancer drug, as a target of an emergency price-cutting measure.
Opdivo, supplied by Bristol-Myers Squibb Co., was originally approved on the premise that it would be used only for a small number of patients with advanced melanoma. But late last year, the drug was also OK’d for patients with lung cancer, who number in the tens of thousands.
Some experts are arguing for a more radical approach — potentially limiting the ages of patients eligible for expensive treatments.
Dr. Hideo Kunito, head of the chemotherapy department at the Japanese Red Cross Medical Center in Tokyo, said in a meeting of a panel of experts at the Finance Ministry in April that doctors currently have no way of knowing what types of lung cancer Opdivo works best for, and thus are motivated to use the drug, which costs ¥35 million a year per patient.
“Let’s say we put the patient number at 50,000, which is a conservative estimate,” Kunito told the meeting. “The total cost of using Opdivo on the 50,000 would be ¥1.75 trillion. That is enough to build seven new National Stadiums. If we have two more drugs like this, that’s big enough to beat the national defense budget.”
He further argued that the ages of patients might need to be considered in discussing how to limit the pool of those eligible for state-subsidized health care.
“Currently, the highest age of patients that Nivolumab (the generic name for Opdivo) can be used for is set at 100,” he said. “We are trying to extend the life of a 100-year-old by a year for ¥35 million.”
He likened the situation to a sinking ship.
“There are only so many spaces on a life raft,” said Kunito. “It’s an extremely tough situation, but if we don’t limit our coverage, we will all drown.”
Takuya Shinohara, a chief analyst at NLI Research Institute in Tokyo, said that while Japan needs to introduce the idea of cost-benefit analysis in medical care, it needs to do it prudently, so as not to deny care to a certain segment of the population.
“If we compare the cost effectiveness of treatment between centenarians and for those in their 40s and 50s, it could be argued that the latter should be prioritized, as they have more healthy years to live,” Shinohara said. “But if we take that logic too far, patients with advanced-stage cancers could find themselves abandoned. Also, it’s hard to express one’s overall health condition in numerical terms.”
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