Pharmaceutical pricing in Japan: market evidence for rheumatoid arthritis treatment

Drug price setting is one of the key challenges faced by the Japanese health care system. This study aims to identify the determinants of drug price in Japan using the example of the rheumatoid arthritis (RA) treatment market.

In order to compare prices across different products, we calculated prices per defined daily dose using WHO methodology. Price determinants were calculated both at launch and over time using IMS quarterly data on medicines approved for RA treatment in Japan from 2012 to 2015. Pharmaceutical pricing was modeled as a function of clinical and economic variables using regression analysis.

For prices at the launch we found that differences in efficacy are not reflected in price differentials. We also report that the number of products within a molecule class had a negative effect on prices while originator drugs maintained higher prices.

Although the existing pricing rules in Japan are very comprehensive they do not necessarily capture differences in product characteristics. The findings here support the notion that competitive forces are weak in highly regulated markets such as Japan.