In an unprecedented move, a government panel decided Wednesday to cut the official price of cancer drug Opdivo by 50 percent, amid fears that widespread use of the newly approved and super-expensive drug could drain state coffers.
The Central Social Insurance Medical Council, better known as Chuikyo and comprised of medical interest group representatives, decided on the emergency price-cutting measure targeting Opdivo, an anti-cancer drug developed by Ono Pharmaceutical Co.
The drug, which stimulates the body’s natural immune system to fight off tumors, was initially approved for use among a small number of patients with advanced melanoma, but was expanded last year to patients with lung cancer, who number in the tens of thousands.
The price for Opdivo has so far been set at ¥730,000 per 100 grams, with the cost of treatment per patient estimated at ¥35 million a year.
Drug prices are normally reviewed every two years, with the next changes slated for April 2018. Under the new policy adopted by the council, drugs the sales of which surge rapidly within two years and exceed ¥150 billion in fiscal 2016 can be subjected to price cuts ahead of the regular review.
Wednesday’s move will lead to cuts in national medical expenses by ¥75 billion or more in fiscal 2017, which starts in April, the health ministry said. Patient burdens will remain unchanged, as, under the nation’s universal health care, people undergoing expensive treatments can be exempted from paying more than a certain amount determined by their income levels.
The pharmaceutical industry had opposed the ad-hoc price review, saying it hurts corporate incentives to develop innovative drugs and renders the business environment unpredictable.
Shinsuke Amano, a 43-year-old blood cancer survivor who heads the Japan Federation of Cancer Patient Groups, said the price-cutting is “inevitable,” given the fact that Japan’s health care is supported largely by taxpayers. But he expressed alarm over views by some experts that access to such expensive drugs should be restricted, to exclude people over certain ages.
“Such measures would lead to abandoning care for vulnerable members of society,” Amano said. “Going after specific drugs like a game of whack-a-mole won’t lead to a fundamental solution.”
Wednesday’s move comes as the rapidly aging nation grapples with surging medical expenses, which reached a record ¥41.46 trillion in fiscal 2015. Of the total, costs of prescription drugs hit ¥7.9 trillion, up 9.4 percent from the year before. Recent approvals of super-expensive drugs, including Opdivo and the hepatitis C drug Harvoni, which was approved last year, have spurred an emotionally charged debate over price and access.
Amano said that such debate should be more comprehensive. For example, the policymakers should opt for continued coverage of therapies targeting the most severe illnesses or ones that affect the survival of patients, and scale back coverage for drugs for which over-the-counter versions are available, he said. Instead, the debate has been limited to talk of specific cancer drugs only, he added.
Takuya Shinohara, a chief analyst at NLI Research Institute in Tokyo, meanwhile said that Japan’s drug pricing mechanism is hard for most people to understand. While the government sets the official prices of drugs to make them the same for patients visiting any hospital around the country, the actual prices of drugs that hospitals or pharmacies pay to drugmakers are often lower and vary from institution to institution, he said, adding that purchasing institutions rake in the gap between the official and market prices. The government investigates the market prices of drugs and has them reflected in the biannual price review, but it has failed to catch up with real-time prices, which fluctuate daily, he said.
“With the Opdivo case in mind, the price review should be carried out more often, like once a year,” he said. “While some people oppose increasing the frequency of such reviews, saying the manpower for investigating market prices would be enormous, I think there are ways to implement more swift reviews.”