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Pharmaceutical prices, quantities and innovation. Comparing Japan with the US
N Ikegami1, W Mitchell, J Penner-Hahn
1Faculty of Policy Management, School of Medicine, Keio University, Tokyo, Japan.
Pharmacoeconomics
|October 5, 1994
Summary
Japan
Area of Science:
- Health Economics
- Pharmaceutical Policy
- Comparative Healthcare Systems
Background:
- Japan implemented drug price reductions starting in 1981.
- Despite these reductions, per capita pharmaceutical expenditure in Japan remains higher than in the US.
Purpose of the Study:
- To analyze the reasons behind higher per capita pharmaceutical expenditure in Japan compared to the US.
- To identify factors contributing to aggregate drug spending despite individual drug price decreases.
Main Methods:
- Comparative analysis of pharmaceutical spending patterns between Japan and the US.
- Examination of drug utilization, including the use of original drugs versus generics, polypharmacy, and specific drug categories.
Main Results:
- Higher aggregate expenditure in Japan is attributed to greater use of novel drugs and lower generic utilization.
- Increased drug quantities are used due to polypharmacy, including vitamins, nutrients, antihypertensives, and cerebral metabolic activators.
- Milder-acting drugs with unproven efficacy also contribute to higher expenditure.
Conclusions:
- Pharmaceutical expenditure in Japan is unlikely to decrease soon, even with pricing policy changes and distribution system improvements.
- Factors beyond drug pricing, such as prescribing patterns and drug choices, significantly influence overall pharmaceutical spending.