Japan Slashed the Price of Opdivo by 50% Last Year – Can Trump Do the Same Here in the U.S.? | Pharmaguy's Insights Into Drug Industry News | Scoop.it

President Donald Trump has pledged to reverse what he describes as "astronomical" drug prices in the U.S. Thousands of miles away, Japan, long a profit sanctuary for multinational pharmaceutical companies, is taking a similar tack.


About $93 billion is spent annually on medications in Japan, and the government plays a key role on prices because it covers about 40 percent of the country’s health spending via its national insurance scheme. In December, officials announced plans to review drug prices more frequently: annually for all therapies and quarterly for the newest and most expensive ones that are used widely.


In November, the government unexpectedly decided to slash the price of Opdivo by half to 75,100 yen ($660) for 20 mg bottles after an oncologist estimated that it could cost the national health system $15 billion annually. That forced Ono, the company that co-developed the drug with Bristol-Myers and sells it in Japan, to lower its profit outlook for the current fiscal year by 25 percent.


Despite the protests, the Japanese pressures are nowhere near done for pharma. The government is already preparing to assess the price levels of seven drugs for the next round next year. Gilead’s Sovaldi and Ono and Bristol-Myers Opdivo are among the drugs selected for another round of reviews and could potentially face even more reductions. Gilead declined to comment.


The government will push for tighter cost control going forward, said Atsushi Seki, a Tokyo-based pharma analyst at UBS Group AG. “It will also put more pressure on drug prices as drugmakers seek combination therapies of expensive medicines.’’