保健医療科学

2019Vol.68 No.1 p.27−33

Topics: Recent topics in public health in Japan 2019

＜ Review ＞
Application of economic evaluation of pharmaceuticals
and medical devices in Japan
Takashi Fukuda, Takeru Shiroiwa
Center for Outcomes Research and Economic Evaluation for Health, National Institute of Public Health
Abstract
In Japan, annual medical expenditure reached 40 trillion yen in 2013 and it continues to increase underpublic health insurance scheme. One of the reason of increasing medical expenditure is population aging.
However, another big reason is increasing technologies in health care, such as advanced medical devices
and new pharmaceuticals. Insurance coverage and reimbursement prices are discussed and determinedby the Ministry of Health, Labour, and Welfare. The Ministry has to consult with Central Social Insurance
Medical Council (Chuikyo). Chuikyo has own rules for pricing pharmaceuticals and medical devices.
From fiscal year 2012, discussions on economic evaluation began within a subcommittee of the Chuikyo,
Several issues were discussed in the subcommittee, such as target products to be evaluated, methods forevaluation, use of evaluation results. Based on the discussion in the subcommittee, in 2016, a pilot programof cost-effectiveness evaluation started for 7 pharmaceuticals and 6 medical devices. In the evaluation process, manufacturers of selected products were asked to submit cost effectiveness analysis, according to theguideline for cost effectiveness analysis. Then, submitted data were reviewed and re-analysed, if necessary,by expert groups. The results were discussed in the expert committee of cost effectiveness to make final
decision. Based on the results, prices of some products were adjusted.
From 2019, economic evaluation of pharmaceuticals and medical devices will be fully implemented in order to provide efficient health care. To make the new evaluation system meaningful , “Center for Outcomes
Research and Economic Evaluation for Health (CORE2-Health)” was established in the National Instituteof Public Health to provide good evidence on cost effectiveness.
keywords: cost effectiveness, health technology assessment, pharmaceutical, medical device, Central Social
Insurance Medical Council, reimbursement price, Japan(accepted for publication, 8th February 2019)

I．Background
In Japan, annual medical expenditure reached 40 trillion
yen in 2013 and it continues to increase. One of the reason of increasing medical expenditure is population aging
because per capita medical expenditure for the elderly ismuch higher than the expenditure for younger generation.
However, another big reason is increasing technologies
in health care, such as advanced medical devices and newpharmaceuticals. Innovative technologies are continuously

developed and introduced. Some of those technologies costa lot to health care finance. It is important to balance technology advancement and cost for sustainable health caredelivery.
Economic evaluation of health care technologies may be
one of the solutions for efficient use of health care budget. It
is often described as a part of health technology assessment(HTA)[1]. In some countries, such as England, Canada, andAustralia, economic evaluation of pharmaceuticals and medical devices are used to determine coverage by the publicly

Corresponding author: Takashi Fukuda
2-3-6 Minami, Wako, Saitama 351-0197, Japan.
Tel: +81-48-458-6237 /Fax: +81-48-458-6715
Email: fukuda.t.aa@niph.go.jp

J. Natl. Inst. Public Health, 68 (1) : 201927

Figure 1
Takashi Fukuda, Takeru Shiroiwa
Process of New Drug Pricing before 2018

1

Figure 1 Process of New Drug Pricing before 2018

funded health care system. Even in Asia, Korea and Thailand already started such an approach. In Japan, since 1992
when new medicines are added to the reimbursement list
for public health insurance, economic evaluation data canbe submitted to the Ministry of Health, Labour and Welfare(MHLW). However, there is a lack of clear rules regarding
how to use the submitted data. In fact, even if economic
data are submitted, many pharmaceutical companies do notbelieve that such data are reflected in the pricing of theirproducts.
In Japan, insurance coverage and reimbursement prices
are discussed and determined by the MHLW. The Ministry
has to consult with Central Social Insurance Medical Council (Chuikyo) before those decisions are made. Chuikyo has
own rules for pricing pharmaceuticals and medical devices.
Reimbursement prices of new drugs are determined using two methods: “the similar efficacy comparison method”
and “the cost calculation method” (Figure 1). The similar
efficacy comparison method is applied when similar drugs
have been already listed in terms of efficacy and pharmacological properties. The daily price of the new drug is set atthe same as that of the comparator. If a new drug is evaluated as an innovative one, the MHLW adds a premium which
can range between 5% and 120% of the comparator’s daily
price.
The degree of innovation is judged by the following four
points: (a) new action mechanism, (b) higher efficacy orsafety, (c) improvement of treatment for target disease,and (d) beneficial drug formulation. The percentage of thepremium depends on the degree of innovation. If one of thefour criteria is met, then the new drug may obtain a 5%–
30% premium. The premium of a new drug featuring twoof (a)–(c) is 35%–60%, and that of a drug with all of (a)–(c)is 70%–120%. In addition, if a new drug has a small market
size or pediatric labeling, then an additional premium may
be applied.
If there is no appropriate comparator, then the costcalculation method is used. The cost is calculated by summing the costs of manufacturing, research and develop-28

ment(R&D), administration, marketing, and profit. R&D,
administration, marketing, and profit rate are set according
to the average rate of pharmaceutical industry. However,for a new innovative (or not innovative) drug, the profit
rate might be adjusted from −50% to 200% of the standard
profit rate based upon the degree of innovation, safety, andefficacy compared with existing therapy.
The price, using either of these methods, may be revisedby comparison with the average list price from four countries: US, UK, France, and Germany. If the calculated priceis more than 1.25 times, or less than 0.75 times, the average price abroad, this price is raised or lowered.
From fiscal year 2012, discussions on economic evaluation began within a subcommittee of the Chuikyo, i.e., the“Special Committee on Cost-Effectiveness,” which consistsof 16 individuals (6 representatives of healthcare payers, 6
healthcare professionals, and 4 third parties), in addition to
4 industries and 3 health economists as non-voting members. Several issues were discussed in the subcommittee,
such as target products to be evaluated, methods for evaluation, use of evaluation results. Based on the discussionof the subcommittee, the government announced in the“Basic Policy on Economic and Fiscal Management andReform 2015” that “it will consider the cost-effectivenessof insurance coverage of medicine and medical devices as away to cope with the sophistication of healthcare” and “thegovernment will introduce such cost-effectiveness analysis
on a trial basis for the FY2016 revision of remunerations”[2]. In 2016, a pilot program of cost-effectiveness evaluation
started[3].

II．A pilot program of cost effectivenessevaluation at Chuikyo
At the beginning of the pilot program of cost effectiveness evaluation of pharmaceuticals and medical devices,
two important basics were agreed in Chuikyo in 2016. One
was the target poducts. The subcommittee considered
whether it should evaluate new products which would beapproved after FY2016 or existing products which were already in the market. In Japan, almost all prescription drugs
are covered by health insurance scheme within 60 days (90days maximum) after approval. And, all the drugs have theirreimbursement prices determined at Chuikyo. If we would
conduct cost effectiveness anslysis after approval, it would
cause the delay of insurance coverage. The delay of insurance coverage of drugs compared to US or European countries had been a big issue, which was called “drug lag”. The
government and the Pharmaceuticals and Medical Device
Agency (PMDA) have struggled to overcome the issue. If a
new step of cost effectiveness analysis might cause the ad-

J. Natl. Inst. Public Health, 68 (1) : 2019

Application of economic evaluation of pharmaceuticals and medical devices in Japanditional delay, it would not be acceptable. In order to avoid
such an additional delay, Chuikyo decided to pick up existing products to be evaluated in the pilot program. The otherissue was how to use the results of cost effectiveness analyses. In many countries those results are used to determine
whether the new technology should be covered by publicly
funded scheme. However, this approach might cause to limit access to those new technologies from patients. In order
to avoid this problem, Chuikyo decided to use the economic
evaluation results to adjust reimbursement prices of pharmaceuticals and medical devices. In such a manner, patients
do not lose their access to those technologies.

By this rule, 13 products (7 drugs and 6 medical devices)were selected by Chuikyo. Drugs for anti-hepatitis C and
PD-L1 antibody, which receive much attention in the press,
were included as target products.

IV．Evaluation process

The manufacturers of the target products were requested to submit economic evaluation data by the end of FY
2016. Once this was completed, academic groups, including
experts on clinical epidemiology and health economics,
independently reviewed the data in early FY 2017 (Figure2). Because Japan had no official HTA agency, such as NICE
in the UK. the National Institute of Public Health (NIPH)
III．Target products
coordinated this review process. The reviewed data were
The evaluation does not target all drugs and medical definally sent to another subcommittee under Chuikyo, thevices. Target products are determined by Chuikyo, and the“expert committee of cost-effectiveness”, which was established in FY2016.
selection criteria were established based upon the degree ofTo establish standard methodology for submission, ourinnovation (premium rate) and market size. Target products
research team, funded by MHLW, was asked to develop awere chosen among the products, for which reimbursement
methodological guideline for cost-effectiveness evaluation
decisions were made between FY 2012 and FY 2015. Fourby the subcommittee for the pilot program (Figure 3)[4].
categories were set as target criteria: drugs and medical
Manufacturers had to carry out the analysis stipulated bydevices (1) with the highest premium rate, priced by thethe guideline. In the guideline, it was mentioned that thesimilar efficacy (category) comparison method; (2) withanalyses should be done from public healthcare payer’s≥10% premium and highest sales (or highest price, in caseperspective, which only include direct medical costs underof medical devices), priced by the similar efficacy (category)
public health insurance scheme. It was also mentioned thatcomparison method; (3) with highest premium rate, priced
quality-adjusted life year (QALY) should be used as a basic
by the cost calculation method; and (4) with ≥10% premium and highest sales (price), priced by the cost calculation
outcome unit.
method, excluding rare intractable diseases. In addition, theThe expert committee had a role to perform “appraisal”
pilot program also targets drugs which were similar to theof the data including a social and ethical perspective, while
2 special committee was in charge of designing a systemselected drugs in terms of pharmacological effect, as well asFigure theof Cost EffectivenessEvaluationof Pharmaceuticals
devices belonging to theProcess
same reimbursement
category.
for cost-effectivenessevaluation.andThis appraisal allowed the

Medical Devices in the Pilot Program

Data Submission

Review and Reanalyses

Appraisal

The Marketing Authorization Holder will carry out the analysis
based on analyses guidelines and submit data of costeffectiveness analyses.
Preliminary consultation about the framework of analysis will
be held before the initiation of the analysis.
Submitted data will be reviewed neutrally by a publicorganization, in collaboration with external specialists.
At meeting of the Special Organization for Cost-Effectiveness,
results of analyses provided by the company and the review
group, appraisal will be performed from the expert’s
viewpoint, and a draft of the evaluation will be prepared(undisclosed discussion).
The marketing approval holder who submitted the data can
attend the meeting of the Special Organization for CostEffectiveness and directly express views at the meeting.

Figure 2 Process of Cost Effectiveness Evaluation of Pharmaceuticals and Medical Devices in the Pilot Program

J. Natl. Inst. Public Health, 68 (1) : 201929

Figure 3
Takashi Fukuda, Takeru Shiroiwa
Guidelines for Cost Effectiveness Analysis
1 Objectives
Developed by the research
2 Perspective of analysis
group funded by MHLW.
3 Target population
4 Comparator(s)5 Additional benefit in effectiveness/safety
6 Methods of analysis
7 Time horizon
8 Choice of outcome
9 Sources of clinical data
10 Calculation of costs
11 Long-term care costs and productivity loss
12 Discounting
13 Modeling
14 Uncertainty
15 Reporting/publication
Figure 3 Guidelines for Cost Effectiveness Analysis

expert committee to judge whether an evaluated healthcare technology was cost-effective or not. This committee
was closely protected, including the names of members orschedules, like drug pricing organization. The results of theevaluation were reflected in reimbursement prices in thenext revision, FY 2018.
The cost per QALY threshold in the pilot program was set
to be 5 million yen per QALY (Figure 4-A). However, priceof the products were not reduced to meet the threshold. If
the result showed ICER was below 5 million yen per QALY,
the price was not adjusted. If the ICER was 10 million yen or
more per QALY, the price was adjusted at maximum reduction rate. The maximum rate was the 90% of the premium.
If the ICER was between 5 and 10 million yen per QALY, theprice was adjusted with linear relationship. Because the economic evaluation results were used to complement existingpricing rules and target products were chosen among the
products which had 10% premium or more, maximum reduction rate was set as 90% of the premium.
In addition to the price reduction scheme, Chuikyo adopted a new idea to increase price of the products under sever4-A
al conditions. The conditionsFigure
were that
economic evaluation

result showed the target product dominated the old therapy,
which meant the new product improved the outcome withlower cost, and that maximum increase rate was 10% of
overall price. Such price increasing scheme was not seen inother countries. In Japan, price of pharmaceuticals and medical devices are determined at Chuikyo based on the pricing
rules. So manufacturers are not able to decide prices evenwhen they are patented. The new scheme was to encourage
to produce such cost effective technologies.

V．Price adjustment and issues
In March 2018, based on the cost effectiveness results,
prices of the two of the target products, nivolumab andtrastuzumab emtansine were reduced, though actual reduction rate were not disclosed. On the other hand, the priceof Kawasumi Najuta Thoracic Stent Graft System was increased.
However, 7 products out of 13 in the pilot program, analysis results submitted by manufacturers and reanalysis
group were markedly different, even though both analyses
followed the guideline. Major reasons for the discrepan-

Determination of repricing rate in the pilot program

Repricingrate

No change

1.0

Price reduction
based on ICER

Price reduction
with maximum
reduction rate

0.1

5 million JPY

0

10 million JPY

ICER（／QALY）

Figure 4-A Determination of repricing rate in the pilot program

30

Figure 4-B
J. Natl.
Inst. Public
Health,(1) : 2019implementation
Determinationof pepricing
ratein the68
full-scale
Repricing
rate

1.0

No change

Price reduction basedon ICER range
Price reduction
with maximum
reduction rate

Application of economic evaluation of pharmaceuticals and medical devices in Japancy were; difference of the scope (eg. target population,comparator), difference in the selection of data used in theanalyses (eg. data sources, definition of the target patientsgroup). Because it was a pilot program, the subcommittee
decided to verify the reasons of the discrepancy in order toconsider a more rational analysis. For this purpose, analyses
as a verification were performed in 2018.

ing will take 3 months. So it is expected to go through thewhole process in 15 to 18 months after insurance coverage.
Re-pricing scheme will be also modified from the pilot
program. It was proposed that price reduction rate would
be two steps instead of linear relationship between 5 to 10
million yen per QALY, because uncertainty for estimating
ICER should be considered (Figure 4-B). In the linear relationship implied no allowance of uncertainty of ICER. The
same reduction rate will be applied when ICER is between
VI．Modification of the pilot program toward
5 to 7.5 million yen per QALY, and so will be when ICER
full-scale implementation
is between 7.5 to 10 million yen per QALY. This scheme
The government announced in its “Basic Policy on Ecoseems more reasonable if we consider methodological limnomic and Fiscal Management and Reform 2018” that “theitation about uncertainty.
government will continue to review specific contents when
In order to increase the number of evaluation, importanceit comes to the full-scale implementation of cost-effecof educational program to perform more analyses was also
tiveness evaluations, and will come to a conclusion in FY
pointed out in the proposal.
2018”[5]. Based on this announcement and experiences of
The plan for full-scale implementation will be discussed
the pilot program, the cost effectiveness evaluation subcomand determined by the end of March, 2019, and the new
mittee under Chuikyo intensively discussed several issues,
system is expected to start in April, 2019.
such as target products, evaluation process, and use of evalUnder the limited budget for health care in Japan, effiuation results.
cient use of health care resources are required. Economic
Finally , the plan for the full-scale implementation was
evaluation is becoming more and more important. In orderproposed in the subcommittee on January 23, 2019[6].
to perform economic evaluation and its application to policy
Several modification were made to the pilot program.
making, the National Institute of Public Health established
Figure4-A
Target products will mainly be new pharmaceuticals anda new unit, “Center for Outcomes Research and Economic
Determination of repricing ratein the pilot program
medical devices which will be approved after full-scale
Evaluation for Health (CORE2-Health)” in April, 2018. The
Repricing
implementation, which have premiums in the initial pricecenter is willing to act as leading agency in Health Technolrate
No change
ogy Assessment (HTA) in Japan.
setting, and estimated peak annual sales beyond a certain
level. In order to avoid the delay
1.0 of reimbursement, drugs
Price reduction
on ICERand devices will be priced under current pricing rules first, basedReference
and when the evaluation is done, the price will be adjusted.
Price reduction[1] Turner S, Chase
DL, Milne R, Cook A, Hicks NJ, RosThe number of target products are somewhat uncertain.
with maximum
ten C, et al. The
healthIn Japan, lack of experts in this field is one of the issues. So
reduction ratetechnology assessment adaptation toolkit: description and use. Int J Technol Assess
the number of evaluation will depend on the availability of
0.1
Health Care. 2009;25 (Suppl 2):37-41.
resources.
million JPY
10 million[2] Cabinet
Office.JPY
Basic PolicyICER
on Economic and Fiscal
Expected time frame is that 9 months after5 selectionof0（／QALY）
Management and Reform 2015. Tokyo: Cabinet Office;target products will be preparation time for manufacturer
2015. https://www5.cao.go.jp/keizai-shimon/kaigi/cabisubmission, including pre-analyses consultations. Submitted
net/2015/2015_basicpolicies_en.pdf (accessed 2019-02analyses will be reviewed, and re-analysed if necessary, in 3
Figure4-Bmaking for re-pric07)
to 6 months. Appraisal and final
decision

Determination of pepricing rate in the full-scale implementation

Repricingrate

No change

Price reduction basedon ICER range

1.0

Price reduction
with maximum
reduction rate

PLOOLRQ-3<

PLOOLRQ-3< PLOOLRQ-3<

ICER（／QALY）

Figure 4-B Determination of pepricing rate in the full-scale implementation

J. Natl. Inst. Public Health, 68 (1) : 201931

Takashi Fukuda, Takeru Shiroiwa[3] Shiroiwa T, Fukuda T, Ikeda S, Takura T. New decision-making processes for the pricing of health technologies in Japan: The FY 2016/2017 pilot phase forthe introduction of economic evaluations. Health Policy. 2017;121(8):836-841.
[4] Shiroiwa T, Fukuda T, Ikeda S, Takura T, Moriwaki K.
Development of an Official Guideline for the Economic
Evaluation of Drugs/Medical Devices in Japan. Value in
Health. 2017;20(3):372-378.
[5] Cabinet Office. Basic Policy on Economic and Fiscal
Management and Reform 2018. Tokyo: Cabinet Office;32

2018. https://www5.cao.go.jp/keizai-shimon/kaigi/cabinet/2018/2018_basicpolicies_en.pdf (accessed 2019-0207)[6] 厚生労働省．費用対効果評価について 骨子（案）．
東京：厚生労働省；2019．https://www.mhlw.go.jp/content/12404000/000472472.pdf (accessed 2019-02-07)
Ministry of Health, Labour and Welfare. [Plan for costeffectiveness evaluation (cost effectiveness subcommittee)] (in Japanese). Tokyo: MHLW; 2019. https://www.mhlw.go.jp/content/12404000/000472472.pdf (accessed 2019-02-07)

J. Natl. Inst. Public Health, 68 (1) : 2019

Application of economic evaluation of pharmaceuticals and medical devices in Japan

日本における医薬品・医療機器の経済評価の応用
福田敬，白岩健
国立保健医療科学院保健医療経済評価研究センター

抄録
日本では，公的医療保険制度で賄われる国民医療費が2013年に40兆円を超え，年々増加している．
医療費が増加する理由の一つは人口の高齢化だが，他の要因として，新規の医薬品や医療機器の導入という技術進歩によるものが考えられる．保険収載の判断や償還価格の設定は，厚生労働省が中央社
会保険医療協議会（中医協）に諮問し，医薬品や医療機器の価格設定のルールに基づいて決定される．
2012年に経済評価の応用に関する議論が中医協の新たな部会で開始された．ここでは評価対象とする技術，評価方法，評価結果の活用方法などについて議論されてきた．この議論に基づいて，2016年には７つの医薬品と 6 つの医療機器を対象として費用対効果評価の試行的導入が開始された．評価プ
ロセスでは，まず当該品目の製造企業が分析ガイドラインに基づいて費用効果分析のデータを提出し，これを専門家グループがレビューし，必要に応じて再分析した．これらの結果は費用対効果評価専門組織で議論され最終的な結果が決められた．この結果に基づき，いくつかの品目については価格調整された．
2019年からは，効率的な医療提供を促進するために，医薬品・医療機器の費用対効果評価が制度として導入される見込みである．このようなしくみを意義のあるものにするために，費用対効果に関す
るエビデンスを提供する組織として，国立保健医療科学院に保健医療経済評価研究センターが設置された．
キーワード：費用対効果，医療技術評価，医薬品，医療機器，中央社会保険医療協議会，償還価格，
日本

J. Natl. Inst. Public Health, 68 (1) : 201933