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21 November, 2016

EFPIA and PhRMA Regret the Continued Moves Away from aPro-innovation Policy Environmentand Call for a Partnership withGovernment to Restore Stability and Predictability in the JapanesePharmaceutical Market

Carsten Brunn
Chairman, EFPIA Japan

Patrik Jonsson
Chairman, Japan Based Executive Committee, PhRMAEFPIA and PhRMA regret the continued deterioration in the stability and predictability of theJapanese pharmaceutical pricing environment. The industry shares the goal of ensuring thelong-term sustainability of the national healthcare system, but also believes stronger emphasis
must be put on providing adequate reward for innovation to ensure that Japanese patients
continue to have early access to cutting edge life-saving medicines, to attract furtherinvestment in Japan, and to allow this sector to reach its potential as a growth engine of theJapanese economy.In particular:
The two associations regret the decision of the Japanese government to impose a large
out-of-cycle price cut on one specific drug. This is another sudden policy change and has
serious implications on future R&D and innovation in Japan.

While recognizing thebudget pressures that the Japanese government faces, changing the pricing rules at short
notice to deal with a single product or a small number of products (as happened with theSpecial Repricing) undermines faith in the rules-based system. A better approach would befor government to form a partnership with the industry aimed at finding
sustainablelong-term joint solutions. In this partnership, government and industry shouldengage in comprehensive discussions aimed at restoring stability and predictability for all
stakeholders.



EFPIA and PhRMA are also both concerned about the practical introduction ofa

newoptimal use guidelinessystem which may cause reimbursement to diverge from label
just for cost reasons. The MHLW has been clear throughout that the introduction of suchguidelines will not delay patient access to new medicines. Recent developments raise therisk that this may not be the case. The two associations therefore call on MHLW to confirm
that the principle of no delay to patient access from these guidelines remains a keypriority.
Recent discussions at the Central Social Insurance Medical Council raise concerns that
economic factors,rather than the good of Japanese patients,mightdrive future productapproval decisions. The two associations therefore call on MHLW to confirm that clinicaland scientific decisions will continue to be keptseparate from economic decisions.

In recent years, the Japanese pro-innovation pharmaceutical pricing environment has worked
efficiently to the benefit of patients/society, government and the industry. Exceptional cases
have raised questions about reform of the pricing system, but it continues to function well.
The government, the industry, and other stakeholders should work in partnership to findlong-term solutions that will maintain a system that supports continued innovation for thebenefit of patients in Japan. EFPIA and PhRMA are ready and willing to contribute to such apartnership.





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