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M 17: Unique Pharmaceutical Market and Pricing System in Japan: Suggestions to Global Pharma for Effective Market Penetration

Poster Presenter

Shoyo Shibata

PhD Candidate, Faculty of Pharmacy
Keio University
Japan

Objectives

The main objective is to reveal profiles of the Japanese market including pricing systems, which will be useful for those pharma companies that aim to join Japanese market, based on the analyses between the top-selling drugs in the Japanese market and those in the US, UK, France, and Germany.

Method

The data set for this study was created from the IMS Market Database. Uni- and multivariate logistic regression analyses, a simple linear regression model and an economic model based on the drug price elasticity were applied in this research.

Results

More cardiovascular and less central nervous system (CNS) and oncology drugs were ranked among the top 100 best-selling drugs in the Japanese market, which is different from the market in other developed countries. Further, generic drugs have eroded, especially in therapeutic areas with no assured benefits in the global market, such as cardiovascular drugs. A significant difference was confirmed in the number of the cardiovascular drugs in Japan. R2 values were calculated between sales by therapeutic areas and country, suggesting that the extent of transition to a global market were in the following order: United States > United Kingdom > Germany > France > Japan. Overall, the Japanese market was unique in that drugs in CNS and oncology were not highly profitable compared with the other countries. However, it was confirmed that Japanese unique pricing system “Reward Premiums for the promotion of innovative drug discovery and resolution of off-label use issue, etc” encouraged the development of new drugs in neurology, oncology and orphan diseases. The following factors were significantly related to receiving a reward premium from this incentive system between 2010 and 2014 from the odds ratios calculated by logit regressions: a more recent launch, a global promotional company, and an orphan drug designation. Cardiovascular drugs were less likely to receive rewards, whereas drugs acting on the CNS and anti-cancer agents were significant contributing factors to receive reward premiums. The reward system positively affected drug sales in specific therapeutic areas, including neuroscience and oncology, as well as the quantity sold of neuroscience-related drugs, indicating that it has been working in accordance with its aims of promoting the development of new drugs.

Conclusion

Current Japanese pharmaceutical market has unique characteristics among developed countries; the significant number of cardiovascular drugs is available in Japan. Recently in Japan, development has primarily focused on "Oncology" and "Neurology" drugs through unique pricing system. Therefore, the Japanese market is expected to catch up with overseas markets in the near future, suggesting that the development of innovative CNS and oncology drugs is highly important for both Japanese and global pharmaceutical companies. Another result of this study is that the drugs in neuroscience and oncology have a significant positive relation to the reward premiums. In addition, drugs sold by a global pharmaceutical company and designated orphan drugs, significantly contributed to the rewards as well. However, cardiovascular drugs have a significant negative relation to the rewards indicating that this unique incentive program has been encouraging the development of drugs which meet the high medical needs in specific therapeutic areas such as neurology and oncology. This study also examined the effects of this premium rewards system on both drug sales and quantity of drugs sold. In particular, this system had a positive effect on drugs in neuroscience- and oncology-related areas, suggesting that it has been working in accordance with its original aims of promoting the development of innovative drugs. In conclusion, this research revealed the following characteristics in Japanese market: 1) More cardiovascular and less CNS and oncology drugs were ranked among the best-selling drugs in the Japanese market; and 2) the unique incentive system has been working well in Japan to encourage the R&D of neurology, oncology, and orphan disease drugs; and 3) the Japanese market will rival overseas markets in the near future. Authors believe that these analyses results would be useful for those global pharma companies that aim to join Japanese market and achieve/maximize profits in Japan.