Drug prices in Japan are reviewed every 2 years, with the prices of existing drugs typically undergoing a 5-10% cut, on average. The general aim of the price cuts is to bring the reimbursement price of existing drugs down to the wholesale price level thus eliminating the margin that hospitals may receive from negotiating with wholesalers and manufacturers.
Pharmaceutical prices will be readjusted in April 2018, in line with the bi-annual price review. Prices are currently set to be reduced by 1.45% though this could increase to 1.74% if reform steps are taken into account, including a change to surcharges for new drugs.
The health ministry said last October that it will set a rule to cut the price of new drugs if their annual cost is at least 5 million yen (USD $47,000) more than existing treatments. The new system would be considered for 13 drugs, including the cancer treatment Opdivo, which has an annual cost per patient of 14 million yen (USD $131,000).