Updated on 21 May 2013
LLPs do not seem to lose their market share rapidly in Japan even after the expiry of their patents. This is primarily because doctors and patients prefer LLP brands over generics (because of the various mentioned earlier). However, some doctors are willing to accept generics if manufacturers enhance their quality and after sales service and there is an expectation that manufacturers contribute to lowering of drug prices. In fact, the price of generics is on average 70 percent of LLPs but, in reality, this price might decrease further by up to 40 percent of the original, based on a weighted average of all generics. The generics players plan to occupy a market share of 30 percent in volume by April 2013, which has been set by the Ministry of Health, Labour and Welfare (MHLW), Japan. However, generic manufacturers are concerned that the various strategies that they are adopting to acheive their given target, including price reductions, will adversely impact the development of stable supply chains.
Introduction of HTA policy in 2014
The MHLW's Health Technology Assessment (HTA) task force in Japan has been working towards implementing the HTA in 2014. There are three outstanding areas that need the policy is looking to resolve. First is defining the scope and definition of cost when comparing it to the benefit to public healthcare and second is establishing a basis of comparison to assess the new technology. The third and the most outstanding issue, is what is to be included in the cost calculation formula.
From the government's point of view, only objective indicators should be included that can be readily assessed. Therefore, costs would be based on insurance and reimbursement factors without including productivity loss, which can be more ambiguous and difficult to quantify. Conversely, doctors prefer not to exclude patient productivity loss because they believe calculations that are based only on objective indicators can underestimate the value of medical treatment.
Globally, the EuroQuol-5 Dimension (EQ-5D) is the measurement commonly used in the calculation of Quality Adjusted Life Year (QALY) , used for HTA calculations. The global trend is to measure patient quality of life based on their subjective perception rather than opportunity cost. Doctors in Japan are, however, hesitant to accept patients' self-evaluation as an indicator to score medical technology and they expect EQ-5D to be used in combination with other objective measurements. Thus, although, EQ-5D scale can presently be introduced as a trial, specific Japanese evaluation criteria to measure the costs need to be developed during the trial period.
The HTA itself begun in the UK and Australia as a way to justify the cost of utilizing new technologies and drugs. How original metrics that measure the costs in Japan are determined will be the key to successfully concluding this debate and implementing the HTA policy in 2014. This will likely affect the market approval process in Japan and so pharmaceutical manufacturers should consider their R&D and strategic planning processes to ensure they will be able to meet these changes.