• Kyodo


Prime Minister Shinzo Abe has ordered his ministers to study specific measures to curb increases in medical expenditures as an effort to restore the nation’s fiscal health.

“In order to achieve the fiscal rehabilitation goal for fiscal 2020, we have to steadily promote expenditure reforms,” Abe said Friday at a meeting of the Council on Economic and Fiscal Policy, referring to the goal of turning the primary balance into a surplus.

As a step to curb medication costs, a major factor for rises in medical expenditures, private-sector members of the government panel urged the government to “drastically cut the price of Opdivo,” an expensive new drug for cancer treatment.

The proposal came as the government is considering slashing the price of Opdivo, which is priced at around ¥730,000 ($7,000) for 100 milligrams, compared with some ¥300,000 in the United States and about ¥150,000 in Britain.

Opdivo, initially marketed in Japan in 2014 to treat a certain type of skin cancer, was originally sold at such a high price because there was a limited number of patients.

But after it was determined the drug was effective in treating lung cancer, demand spiked, sharply lifting the nation’s medical expenditures.

As the government revises drug prices once every two years, the next revision is slated to take place in fiscal 2018. But the health ministry is considering cutting the price of Opdivo by 25 percent for fiscal 2017, as part of an exceptional measure.

At the panel meeting, one private-sector member proposed the government slash the price as much as 50 percent, according to officials.

Under the budgetary request for fiscal 2017, the Ministry of Health, Labor and Welfare is asking for ¥640 billion in increased medical and other social security spending for the nation’s aging population. The panel urged the government to limit the rise in social security spending at around ¥500 billion, maintaining the pace achieved in recent years.

Japan’s fiscal health is the worst among major industrialized economies, with public debt at more than 200 percent of nominal gross domestic product due primarily to swelling social security costs amid an aging society. A deficit in the primary balance means the government cannot finance its annual budget, excluding debt-servicing costs, without issuing new bonds.

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