Recent Debate over How to Tackle Rapid Increases in Pharmaceutical Expenditure in Japan

Pharmaceutical expenditure has been rapidly increasing since 2000 in Japan mainly due to successive introduction and diffusion of high-priced new pharmaceuticals (thereafter, drugs). The share of drug expenditure in the national healthcare expenditure rose from 19.6% in 2000 to 22.3% in 2013, a 2.7% point rise in 13 years. In the same period, the share of healthcare personnel's income dropped 3.8% points from 50.2% to 46.4%. Further, in 2016 national healthcare expenditure rose for 3.8%, which is exceptionally high by Japanese standard (roughly 2%), and the main culprit was the rapid increase in drug expenditure due to successive introduction of extremely high-priced drugs. Due to these changes, drugs have become the main target in current healthcare cost containment policy. In this article, I briefly explain two debates relating to drug cost and cost control that occurred in 2016 and 2017, respectively, in Japan, based on my two articles that I wrote when I participated in these debates. Although two debates are independent, the first debate that was triggered by an introduction of extraordinary high-priced drug (Opdivo) substantially affected the second debate on how to introduce official cost-effectiveness appraisal of new drugs in Japan.