PhRMA

On behalf of the U.S. and European business communities, and their respective biopharmaceutical industries, the American Chamber of Commerce in Japan (ACCJ), the Biotechnology Innovation Organization (BIO), the European Business Council (EBC), the European Federation of Pharmaceutical Industries and Associations (EFPIA), and the Pharmaceutical Research and Manufacturers of America (PhRMA) issue the following Joint Statement.

Background
On March 30th a consumption tax subcommittee of the Central Social Insurance Medical Council (Chuikyo) approved an MHLW proposal to conduct an out-of-cycle price survey (in a schedule similar to one in 2017), paving the way for an out-of-cycle 2019 pricing revision.

Fundamentally, the MHLW stated that the purpose of conducting a price survey in 2018 is to adjust prices due to the planned increase of the consumption tax in October 2019. It is expected that hospital and technical fees are also to be adjusted according to the same timeline, with any changes implemented in October 2019.

RECOMMENDATIONS
As MHLW has stated that the sole purpose of conducting the survey in 2018 is for making appropriate tax adjustments to NHI prices in 2019:

• If there is no consumption tax revision in 2019, there should be no related price revisions.
• If the consumption tax revision occurs as planned, the price adjustment should be implemented accordingly in October 2019 (not earlier).
• Any change in prices done in conjunction with the increase in the consumption tax should not be used as a precedent for any possible move by Japan to annual repricing. Our united and firm position is that annual repricing should be applied only to those products for which the percentage differential between the market price and the NHI reimbursed price is large. Annual repricing should not be applied to innovative products, as that would significantly undervalue their underlying intellectual property.

Moreover, the scope of revision in 2019 should be limited, as this ad-hoc revision has the sole purpose of reflecting changes due to the increase in consumption tax. There is no justification for a full price revision in 2019.

A NOTE ON FUTURE DISCUSSIONS
The Abe Administration has taken important steps to strengthen the Japanese economy and return it to a period of sustained economic growth, with a significant focus on the role of healthcare industries. We note that in his economic growth strategy, Prime Minister Abe has specifically focused on innovative pharmaceuticals and advanced medical technologies as key engines of productivity and growth.

Despite this strong vision, recent policy measures, including the drastic reform of the drug pricing system and stated intention to implement a Health Technology Assessment System (HTA) have raised serious concerns about the fairness, transparency, and predictability of the Japanese market. This unpredictably is further exacerbated with the first “off-year” pricing revision slated for April 2021, covering a scope of products yet to be defined.

We strongly urge the Government of Japan to not undo important progress made over the past decade, and commit to providing a policy framework that adequately rewards innovation. Only in doing so can Japan ensure patient access to the most innovative, life-saving therapies and technologies, and the innovative pharmaceutical and medical devices industries fulfill their promise as growth engines of the Japanese economy.

Our associations recognize the importance and challenges of ensuring the fiscal sustainability of Japan’s universal healthcare system, particularly given Japan’s rapidly aging population. That is why we have repeatedly and consistently called on MHLW and the Japanese Government to establish a meaningful partnership with industry and other stakeholders to examine and discuss ways to strengthen the financing of Japan’s healthcare system without jeopardizing patient access to innovative products, drawing on the lessons to be learned from global best practices. To date, key decisions have been made behind closed doors with virtually no formal opportunities for interested stakeholders to provide input. We believe a more inclusive approach, which would benefit from the knowledge and expertise of all stakeholders, will best serve Japan, Japanese patients, and the Japanese economy in the long-run.

The American Chamber of Commerce in Japan (ACCJ)

The American Chamber of Commerce in Japan (ACCJ) was established in 1948 by representatives of 40 American companies and has grown into one of the most influential business organizations in Japan. Consisting mainly of executives from American companies, currently the ACCJ has members representing 1,000 companies with offices in Tokyo, Nagoya, and Osaka. Working closely with the governments of the United States and Japan, business organizations, and others, the ACCJ promotes activities that help achieve its mission of further developing commerce between the United States and Japan, promoting the interests of U.S. companies and members, and improving the international business environment in Japan. The ACCJ’s more than 60 committees represent a variety of industries and make policy recommendations through advocacy tools such as viewpoints, public comments and white papers. The ACCJ holds approximately 500 events and seminars a year, many of which focus on government policy and economic trends. The ACCJ is also committed to promoting charitable events and CSR activities.

The European Business Council (EBC)

The European Business Council (EBC) is the trade policy arm of 16 European national chambers of commerce and business associations in Japan. It is also registered with the Ministry of Trade, Economy and Industry as the European (EU) Chamber of Commerce in Japan. Established in 1972, the EBC works to improve the trade and investment environment for European companies in Japan. The EBC currently represents more than 2,500 local European companies and individuals who are members of their national chambers of commerce. Some 250 of these companies participate directly in the EBC’s 26 sector-based committees.

European Federation of Pharmaceutical Industries and Associations (EFPIA)

EFPIA Japan represents 24 R&D-based pharmaceutical companies, and is the voice of the European innovative pharmaceutical industry in Japan. Through the early introduction of innovative medicines and vaccines we aim to contribute to the health of patients in Japan.

Pharmaceutical Research and Manufacturers of America (PhRMA)

PhRMA Japan represents the U.S. research-based pharmaceutical companies. Its mission is to promote the health of patients and contribute to the healthier lives of all people.

Biotechnology Innovation Organization (Bio)

BIO is the world’s largest trade association representing biotechnology companies, academic institutions, state biotechnology centers and related organizations across the United States and in more than 30 other nations. BIO members are involved in the research and development of innovative healthcare, agricultural, industrial and environmental biotechnology products. BIO also produces the BIO International Convention, the world’s largest gathering of the biotechnology industry, along with industry-leading investor and partnering meetings held around the world.