PhRMA

On behalf of the U.S. and European business communities, and their respective biopharmaceutical and medical technologies industries, the American Chamber of Commerce in Japan (ACCJ), the Advanced Medical Technology Association (AdvaMed), the American Medical Devices and Diagnostics Manufacturers’ Association (AMDD), the Biotechnology Innovation Organization (BIO), the European Business Council (EBC) Medical Equipment Committee, the European Federation of Pharmaceutical Industries and Associations (EFPIA), and the Pharmaceutical Research and Manufacturers of America (PhRMA) issue the following Joint Statement.

Recommendations
According to numerous media reports, on November 25th Prime Minister Abe tasked the Council for Economic and Fiscal Policy (CEFP) to discuss and finalize policies to fundamentally reform Japan’s drug pricing system. Prime Minister Abe asked the CEFP to complete this enormously complicated reform by the end of December –roughly within one month’s time. Included within this mandate from Prime Minister Abe is a proposal to move from the current system of biennial repricing to a system of annual repricing. Repricing is an issue that impacts the entire healthcare sector, both domestic and foreign. The current system of biennial repricing has served Japan and the Japanese people well by ensuring the predictability of reimbursement, controlling healthcare expenditures, rewarding innovation and, most importantly, improving access for Japanese patients to the most innovative treatments available globally through the elimination of the drug and device lags. Adopting annual repricing threatens to undo all of these achievements. As such, our associations strongly urge Prime Minister Abe, the CEFP and the Japanese Government to reject the adoption of annual repricing. Rather we propose that the Japanese Government establish an inclusive process involving all stakeholders – government, healthcare professionals, academia, industry and patients – to thoroughly discuss and align on a comprehensive set of reforms that best addresses the challenges of ensuring the sustainability of Japan’s healthcare system while properly rewarding innovation. Our associations thank Japan for its careful consideration of this proposal.

Background
The Abe Administration has taken important steps to strengthen the Japanese economy and return it to a period of sustained economic growth, with a significant focus on the role of healthcare industries. We note that in his economic growth strategy, Prime Minister Abe specifically focuses on innovative pharmaceuticals and advanced medical technology as key engines of productivity and growth.

In addition, we applaud the Abe Administration for its vision in establishing the Japan Agency for Medical Research and Development (AMED) to lead coordination of integrated medical R&D from basic research to practical application. We fully agree that the pharmaceutical and medical technologies industries can play an important part in Japan’s future growth and prosperity while contributing to the health and welfare of the Japanese people.

In light of the importance of our industries to the successful attainment of the Prime Minister’s economic goals and in delivering innovative treatments, any change of the schedule for repricing from the current biennial system – which has functioned well for over two decades – to an annual repricing schedule would inhibit investment, and impede innovation. Adopting annual repricing, coming on top of a number of burdensome measures in the 2016 reimbursement revisions, including, among other measures, implementation of the new ‘huge seller repricing’ rule and the increase in the generic adoption target from 70 percent to 80 percent, would add another significant burden on manufacturers’ ability to invest in innovation in Japan. This in turn would damage public health in Japan by reversing the impressive progress that has been made in reducing the drug and device lags, a significant achievement as Japanese patients now have early access to the newest and most innovative medical technologies being developed around the world. A shortening of the repricing schedule to once a year would also make it less likely that the Prime Minister’s economic growth goals will be achieved.

Annual repricing would have a significant negative impact on the entire healthcare sector, including distributors and healthcare facilities, and would have a negative effect on the efforts of physicians to provide the newest and best life-saving and lifeenhancing care to patients, increasing their healthy lifespans. At a time when Prime Minister Abe is working hard to promote a vibrant Japanese healthcare industry and encourage new entrants into the sector, this policy would have the opposite effect.

An annual repricing cycle would hamper the predictability of reimbursement prices for both new and existing medical technologies. This could raise the cost of participating in the Japanese market and make investment riskier, which would be at odds with the Prime Minister’s efforts to attract more investment in research and development and in manufacturing.

Our associations appreciate the importance and challenges of ensuring the fiscal sustainability of Japan’s universal healthcare system, particularly given Japan’s rapidly aging population. That is why we have repeatedly and consistently called on MHLW and the Japanese Government to establish a meaningful partnership with industry and other stakeholders to examine and discuss ways to strengthen the financing of Japan’s healthcare system drawing on the lessons to be learned from global best practices. We believe an inclusive approach, which would benefit from the knowledge and expertise of all stakeholders, rather than a limited spectrum of views, will best serve Japan in the long-run.

The American Chamber of Commerce in Japan (ACCJ)

The American Chamber of Commerce in Japan (ACCJ) was established in 1948 by representatives of 40 American companies and has grown into one of the most influential business organizations in Japan. Consisting mainly of executives from American companies, currently the ACCJ has members representing 1,000 companies with offices in Tokyo, Nagoya, and Osaka. Working closely with the governments of the United States and Japan, business organizations, and others, the ACCJ promotes activities that help achieve its mission of further developing commerce between the United States and Japan, promoting the interests of U.S. companies and members, and improving the international business environment in Japan. The ACCJ’s more than 60 committees represent a variety of industries and make policy recommendations through advocacy tools such as viewpoints, public comments and white papers. The ACCJ holds approximately 500 events and seminars a year, many of which focus on government policy and economic trends. The ACCJ is also committed to promoting charitable events and CSR activities.

The European Business Council (EBC)

The European Business Council (EBC) is the trade policy arm of 16 European national chambers of commerce and business associations in Japan. It is also registered with the Ministry of Trade, Economy and Industry as the European (EU) Chamber of Commerce in Japan. Established in 1972, the EBC works to improve the trade and investment environment for European companies in Japan. The EBC currently represents more than 2,500 local European companies and individuals who are members of their national chambers of commerce. Some 250 of these companies participate directly in the EBC’s 26 sector-based committees.

The Advanced Medical Technology Association (AdvaMed)

The Advanced Medical Technology Association (AdvaMed) is the world’s largest medical technology association. Based in Washington, D.C., AdvaMed represents international manufacturers of medical devices, diagnostic products and medical information systems.

The American Medical Devices and Diagnostics Manufacturers’ Association (AMDD)

The American Medical Devices and Diagnostics Manufacturers’ Association (AMDD) was established on April 1, 2009 to represent the Japanese operations of 63 U.S.-based companies that provide medical devices, including heart pacemakers, ICDs, catheters such as PCI and stent grafts, orthopedics such as artificial joints, and artificial ocular lenses, imaging diagnostic equipment, in vitro diagnostics and other advanced medical technologies to patients and healthcare providers in Japan. The Association’s member companies account for approximately 21,000 jobs in Japan. Of the medical devices approved within Japan between January 2005 and December 2011, 58% were products of AMDD member companies. For more information about the AMDD, please visit: http://www.amdd.jp

European Federation of Pharmaceutical Industries and Associations (EFPIA)

EFPIA Japan represents 24 R&D-based pharmaceutical companies, and is the voice of the European innovative pharmaceutical industry in Japan. Through the early introduction of innovative medicines and vaccines we aim to contribute to the health of patients in Japan.

Pharmaceutical Research and Manufacturers of America (PhRMA)

PhRMA Japan represents the U.S. research-based pharmaceutical companies. Its mission is to promote the health of patients and contribute to the healthier lives of all people.

Biotechnology Innovation Organization (Bio)

BIO is the world’s largest trade association representing biotechnology companies, academic institutions, state biotechnology centers and related organizations across the United States and in more than 30 other nations. BIO members are involved in the research and development of innovative healthcare, agricultural, industrial and environmental biotechnology products. BIO also produces the BIO International Convention, the world’s largest gathering of the biotechnology industry, along with industry-leading investor and partnering meetings held around the world.