Japan drug price reforms risk hurting investment: Bristol-Myers CEO

Japan’s “overly restrictive” drug pricing policies risk diverting foreign direct investment to China and other markets, the chief executive of Bristol-Myers Squibb stated.

The Japanese government made reforms in 2018 that change how its national health system pays for new and innovative drugs.

But those changes are not science-based and favour large domestic drugmakers over foreign and smaller players, Giovanni Caforio told a news conference in Tokyo.

“The world is very competitive, and countries such as China have made it a priority to develop a biopharmaceutical innovation-focused industry,” Caforio said at an event organised by the Japan office of PhRMA, the main US drugmaker lobby.

Caforio was announced as chairman of PhRMA last month.

Japan’s government is seeking ways to squeeze savings from its national health care system as the population ages. The number of working-age people in Japan compared to those over the age of 65 is 1.8, the lowest in the world, according to a 2019 United Nations report.

Japan is the world’s second-largest market for innovative drugs such as gene-based therapies and cutting-edge cancer drugs. As a wealthy country with one of the fastest ageing societies, it remains an attractive market for global pharmaceutical makers.

Japan is also a major centre for pharma research, producing drugs such as Opdivo, a blockbuster cancer drug licensed globally by Bristol-Myers.

The rules announced last year evaluate drugs and their makers for innovation to determine how much the government will pay for treatments.

The rules would also subject drugs to annual reviews starting from 2021, as opposed to biannual reviews now. Caforio said he met with senior government officials to press for more discussion on the regulations.

“These decisions could impact whether the strong investment patterns in Japan continue and whether new medicines are rapidly available for Japanese patients in the future,” he said.