Introduction to Policy Discussion
According to a joint statement (Joint Statement on Need for FY2026 NHI Drug Pricing and Cost-Effectiveness Assessment System Reform | 2025 News Release | Japan Pharmaceutical Manufacturers Association(JPMA)) released on December 16, 2025, by the Japan Pharmaceutical Manufacturers Association (JPMA), the Pharmaceutical Research and Manufacturers of America (PhRMA), and the European Federation of Pharmaceutical Industries and Associations (EFPIA), the three industry bodies expressed their shared views on the ongoing discussions at the Central Social Insurance Medical Council (Chuikyo) regarding reforms to Japan’s FY2026 National Health Insurance (NHI) drug pricing system and the cost-effectiveness assessment (CEA) framework. The statement emphasizes the need for reforms that balance fiscal sustainability with the promotion of pharmaceutical innovation and stable patient access to new medicines.
Concerns Over the Current Drug Pricing Environment
The joint statement highlights that frequent revisions to the NHI drug pricing system, including regular price reductions during the patent period, have weakened Japan’s pharmaceutical innovation ecosystem. As a result, Japan’s share in the global early-stage development pipeline and R&D investment has declined, and cases of delayed launches or non-launches of innovative medicines in Japan (so-called “drug loss”) have increased. While the industry acknowledges the government’s need to ensure fiscal discipline, it warns that the current system undermines Japan’s international competitiveness as a market for innovative medicines.
Impact of Global Policy Interactions
The statement also notes that Japan’s drug prices are increasingly referenced in overseas policy frameworks, such as the US Most-Favored-Nation (MFN) approach. This magnifies the global impact of Japan’s pricing policies and further influences companies’ global development and launch strategies, potentially exacerbating drug lag and drug loss in Japan.
Proposals for Maintaining Drug Prices During the Patent Period
To address these issues, the three associations strongly advocate for maintaining drug prices during the patent period to ensure appropriate returns on innovation. They argue that predictable pricing is essential to incentivize R&D investment and to secure the continuous supply of innovative medicines to Japanese patients. The statement further calls for the abolition of mechanisms such as off-year price revisions, large-market expansion repricing rules, and spillover adjustments that lead to repeated price erosion.
Cautious Approach to Expanding Cost-Effectiveness Assessments
With respect to cost-effectiveness assessments, the joint statement cautions against expanding the scope of CEA prematurely. It recommends that any expansion be preceded by thorough, objective verification by independent experts to ensure that the system is scientifically robust, transparent, and internationally aligned. The industry stresses that CEA should support value-based decision-making without discouraging innovation.
Improving Initial Drug Pricing for New Modalities
The statement also calls for improvements in the initial drug pricing framework, particularly for novel modalities such as advanced therapies and regenerative medicines. The associations argue that existing comparator-based approaches may not adequately capture the value of such innovations and that a more flexible, value-oriented evaluation framework is required.
Conclusion
The joint JPMA–PhRMA–EFPIA statement underscores the urgency of comprehensive reform of Japan’s FY2026 NHI drug pricing and CEA systems. By ensuring price stability during the patent period, adopting a cautious and evidence-based approach to cost-effectiveness assessments, and modernizing initial pricing methodologies, the industry believes Japan can restore its attractiveness as a launch market, strengthen its pharmaceutical innovation ecosystem, and ultimately improve patient access to innovative medicines.