December 20, 2017
FOR IMMEDIATE RELEASE

Consequences Expected from the Final Drug Pricing Reform Package
Industry concerned about Potential Impact for Japanese Patients and for theJapanese Economy
Tokyo, Japan (December 20, 2017) — The following is a joint press statement issued
by the Pharmaceutical Research and Manufacturers of America (PhRMA) and theEuropean Federation of Pharmaceutical Industries and Associations (EFPIA).
The innovative pharmaceutical industry is a significant contributor to Japan in the formof foreign direct investment in R&D, tens of thousands of jobs, and significant tax
revenue. The industry has also contributed in a meaningful way to achieving Prime
Minister Abe’s vision of a “vibrant Japan” by helping Japanese people to live longer,
healthier lives.
In light of this, although we recognize that the Ministry of Health, Labour, and Welfare(MHLW) made some minor improvements, the innovative pharmaceutical industry isdisappointed with and concerned by the final drug pricing reform package that waspresented to the Chuikyo this morning by MHLW. Despite significant input andalternative proposals put forward by all industry associations, we observe that few
meaningful changes were made to the draft package that was shared with the Chuikyo
on November 22. In particular, we note that in the final reform package thepro-innovation incentives have been seriously eroded, sending the message todomestic and foreign players that Japan is backing away from its pro-innovation
environment and risks not attracting early investment for next generation medicines.
The industry is, in particular, concerned that the number of future innovative products
to qualify for the Price Maintenance Premium (PMP) will be reduced dramatically andthat, despite their efforts, fewer companies will qualify under the new company
requirements for PMP. Further, specific elements of the PMP eligibility criteria could
create discriminatory or unfair situations between companies, which is very troubling
to our industry associations.
The expected consequences of the pricing reform are that: Incentives to develop new products in Japan will be so eroded that early patient
access to new medicines will be seriously jeopardized.

 R&D investment will be encouraged to prioritize over Japan those countries thatare providing a predictable environment and are actively promoting innovation.
 Potential growth in the Japanese economy that was expected to come from thissector is now unlikely to be realized.
 Japan will be perceived as and will become less competitive within the innovation
arena.
PhRMA and EFPIA will continue to strive for fair and innovation-friendly policies to beenacted in Japan for the benefit of Japanese patients and the Japanese economy. In
that vein, the organizations call for the Japanese government to urgently undertake afair and transparent process to ensure that all elements of the healthcare sector arecontributing their share of burden to ensure our common goal of long-termsustainability of the Japanese healthcare system.
About PhRMAThe Pharmaceutical Research and Manufacturers of America (PhRMA) represents the country’s
leading innovative biopharmaceutical research companies, which are devoted to discovering anddeveloping medicines that enable patients to live longer, healthier, and more productive lives.
Since 2000, PhRMA member companies have invested more than $600 billion in the search for new
treatments and cures, including an estimated $65.5 billion in 2016 alone.
About EFPIA
European Federation of Pharmaceutical Industries and Associations (EFPIA), headquartered inBrussels, the capital of Belgium, represents the pharmaceutical industry operating in Europe.
Through its direct membership of 33 national associations and 42 leading pharmaceuticalcompanies, EFPIA is the voice of 1,900 companies committed to developing and bringing newtreatments to patients around the world that will improve the quality of life.

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