Cost-effectiveness evaluation for pricing medicines and devices: A new value-based price adjustment system in Japan

In Japan, a new cost-effectiveness evaluation system for medicine and medical device pricing was employed in April 2019 after a trial implementation. This study describes the discussions held from April 2016 to March 2019 concerning the newly introduced system.

Using published government documents, discussions with stakeholders, and the minutes of the Chuikyo committee meetings, the following issues are addressed: (i) the results of the trial implementation and (ii) an overview of the newly introduced system.

During the trial implementation, thirteen products were evaluated and their prices adjusted. The process of the new system-which was to be implemented in FY 2019-takes about 15-18 months to complete after listing of the target products by the National Health Insurance. The target products are selected principally based on sales volume, degree of innovation (premium), and disclosure of rationale for price setting. First, a manufacturer submits the cost-effectiveness data, which is then reviewed by the Center for Outcomes Research and Economic Evaluation for Health (C2H) in collaboration with academics. The results of the cost-effectiveness evaluation are not considered during the decision-making process concerning the product's listing. The price adjustment system is similar to value-based pricing (VBP); hence, the new system can be considered as VBP adjustment.

Cost-effectiveness evaluation can help promote both technological innovation and sustainability of the healthcare system. We need to create a greater capacity for enhancing this academic review system.