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Japan to slash Opdivo costs by 50%

pharmafile | November 17, 2016 | News story | Business Services, Manufacturing and Production, Medical Communications, Research and Development, Sales and Marketing Japan, opdivo 

Japan’s health ministry has announced it is to slash the price of Bristol-Myers Squibb’s Opdivo by 50% in the country due to the drug’s heavy burden on health spending.

While drug prices in the country are normally reviewed every two years, Japan’s health ministry made an exception for the immunotherapy treatment after a stark rise in its use meant it was costing 35 million yen ($320,000) per patient per year.

To combat this, the ministry took advantage a rule in the country whereby drugs which generate between 100 billion and 150 billion yen a year can have their prices reduced by 25%. Ono Pharmaceutical, manufacturer of the drug in Japan, estimates annual sales to be 126 billion on a shipment basis.

But due to rising health care expenditures, and parallels drawn with the US and UK, where the drug costs only 40% and 20% as much respectively, prime minister Shinzo Abe called for the drug’s price cut to be increased to 50%, citing that cost estimates in fact reached 151.6 billion yen after factoring in distribution costs and other expenses.

However, the ministry relied on its own calculations, which has led some critics to question the validity of the decision, including the Central Social Insurance Medical Council. However, the council nonetheless approved the cut, which has led some to believe these actions were predetermined.

Industry figures have vocally condemned the move, with the Federation of Pharmaceutical Manufacturers’ Associations stating the move “is a major departure from the current rules and should never be repeated.”

The price cut is to come into effect on 1 February 2017.

Matt Fellows

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