Determinants of market prices for drugs under Japan’s national health insurance

Figures & data

Table 1. Term explanations of the rules of price revision for listed drugs.

Term	Type of rules	Explanation
Price maintenance premium	Maintenance	The price revision of new drugs is protected under the patent period when the drug meets a certain condition. The sample conditions are (1) orphan drugs, (2) products developed due to the government’s open requests, (3) products granted pricing premiums, or (4) drugs with new mechanisms of action.
Basic drugs	Maintenance	Drugs whose efficacy and safety have been established through long-term and widespread use in medical practice; drugs whose prices are to be maintained due to the necessity of ensuring a stable supply to the market.
Minimum statutory DPS prices	Maintenance	The minimum drug price selected for each dosage form to secure the minimum profit covering the supply cost. The price is maintained at the time of price revision.
Long-listed drugs eligible for exceptional revisions	Additional reduction	Additional price reduction for original products with slow entry of the generic products.
Market expansion re-pricing	Additional reduction	When the annual sales exceed the expected annual sales by a certain factor, the price will further be reduced during price revision by up to 50%.
Recalculations for unprofitable products	Price increase	Increase in the price of a drug that cannot be continuously manufactured and sold by the manufacturer/distributor because the drug is significantly low-priced.
Premiums for orphan and pediatric drugs	Price increase	When pediatric or orphan indications are approved or true clinical utility has been verified after its launch, premiums are added to the price.
Weighted average pricing (generics)	Weighted average	The price of generics is categorized into the following three weighted average prices: One drug price is selected for all generic drugs with a calculated price of <30% of the maximum price. One drug price is selected for all generic drugs with a calculated price of ≥30% and <50% of the maximum price. One drug price is selected for all generic drugs with a calculated price of ≥50% of the maximum drug price.

Figure 1. Mechanism of DPS price revision based on the market price.

Table 2. Characteristics of drugs in the analysis.

Characteristics	Values	Description	Reference
Existence of generics, n (%)	307 (17%)	The drug has generics with the same gradient on NHI price list	6
Form of the drugs		The drugs were categorized into three forms:	6
Internal medicine, n (%)	720 (41%)	Examples: tablets, capsules, powders, dry syrups
Injection medicine, n (%)	772 (43%)	Examples: injections including prefilled syringe
External medicine, n (%)	283 (16%)	Examples: eye drops, nasal drops, inhalants, patches
Class of therapeutic categories		The drugs were categorized into seven therapeutic categories:	9
(1) Nervous system and sensory organs, n (%)	298 (17%)	Examples: Hypnotics and sedatives, anxiolytics, antipyretics and analgesics, anti-inflammatory agents, psychotropics
(2) Individual organs, n (%)	539 (30%)	Examples: Antiarrhythmic agents, antihypertensives, hyperlipidemia agents, bronchodilators, peptic ulcer agents, hormones
(3) Metabolism, n (%)	416 (23%)	Examples: Nutrients, blood and body fluid agents, dialysis agents
(4) Cellular function, n (%)	194 (11%)	Examples: Alkylating agents, plant extract preparations, radioactive drugs, allergic agents
(5) Pathologic microorganisms and parasites, n (%)	179 (10%)	Examples: Antibiotics, antivirals
(6) Not mainly for therapeutic purpose, n (%)	113 (6%)	Examples: Diagnostic agents
(7) Narcotics, n (%)	36 (2%)	Examples: Alkaloidal narcotics
Number of new drugs in the same therapeutic category		Number of the same class drugs listed from April 2016 to March 2018	6,9,10
None, n (%)	952 (54%)
One, n (%)	387 (22%)
Two or more, n (%)	436 (25%)
Listed in the Japanese Pharmacopoeia, n (%)	166 (9%)	The drug is listed in the Japanese Pharmacopoeia 17th edition	11
Total number	1,775

Figure 2. Drugs in the analysis revised only by market price.

Table 3. Mean percentage divergence of each drug category.

Japan Standard Commodity Classification	Mean percentage divergence (%)
(1) Nervous system and sensory organs	6.56
Agents affecting the central nervous system	6.34
Agents affecting the peripheral nervous system	5.81
Agents affecting sensory organs	6.93
(2) Individual organs	7.69
Cardiovascular agents	7.61
Respiratory organ agents	7.07
Digestive organ agents	7.60
Hormones	7.51
Urogenital and anal organ agents	5.63
Epidermides	7.24
(3) Metabolism	7.21
Vitamins	7.89
Nutrients and tonics	7.13
Blood and body fluid agents	8.43
Dialysis agents	5.76
Other agents affecting metabolism	8.24
(4) Cellular function	6.52
Antineoplastics	8.07
Radioactive drugs	1.09
Allergic agents	4.36
(5) Pathologic microorganisms and parasites	6.18
Antibiotics	6.91
Chemotherapeutics	6.87
Biological preparations	4.58
Parasitics	6.12
(6) Not mainly for therapeutic purpose	9.12
Intracorporeal diagnostic agents	9.87
Other agents not mainly for therapeutic purpose	8.00
(7) Narcotics	5.12
Alkaloidal narcotics	5.05
Non-alkaloidal narcotics	4.91

Table 4. Results of the univariate analysis: association between percentage divergence and covariates.

Categorical variables	Mean percentage divergence	Standard deviation	p-value
Existence of generics
Yes	9.67	3.05	<0.0001
No	6.62	2.75
Form of the drugs
Internal medicine	7.56	2.38	0.0001
Injection medicine	6.87	3.84
External medicine	6.85	1.59
Class of therapeutic categories
(1) Nervous system and sensory organs	6.56	1.62	0.0001
(2) Individual organs	7.69	2.16
(3) Metabolism	7.21	3.38
(4) Cellular function	6.52	3.92
(5) Pathologic microorganisms and parasites	6.18	2.65
(6) Not mainly for therapeutic purpose	9.12	5.11
(7) Narcotics	5.12	1.49
Number of new drugs in the same therapeutic category
None	6.80	3.13	0.0001
One	7.38	2.21
Two or more	7.70	3.36
Listed in the Japanese Pharmacopoeia
Yes	8.82	2.74	0.0001
No	6.97	3.01
Total	7.15	3.04

Table 5. Multivariate regression analysis.

Categorical variables	Coef.	Standard error	95% CI	p˗value
Intercept	6.06	0.18	5.69, 6.43	<0.001
Existence of generics	2.80	0.18	2.46, 3.15	<0.001
Form of the drugs
Injection medicine	−0.41	0.16	−0.72, −0.10	0.009
External medicine	−0.19	0.20	−0.58, 0.20	0.343
Class of therapeutic categories
(2) Individual organs	0.72	0.19	0.34, 1.10	<0.001
(3) Metabolism	0.71	0.22	0.28, 1.15	0.001
(4) Cellular function	−0.31	0.26	−0.81, 0.20	0.236
(5) Pathologic microorganisms and parasites	−0.76	0.26	−1.28, −0.24	0.004
(6) Not mainly for therapeutic purpose	3.08	0.31	2.48, 3.68	<0.001
(7) Narcotics	−1.72	0.47	−2.65, −0.80	<0.001
Number of new drugs in the same therapeutic category
One	0.19	0.17	−0.14, 0.53	0.259
Two or more	0.98	0.16	0.65, 1.30	<0.001
Listed in the Japanese Pharmacopoeia	0.99	0.23	0.55, 1.44	<0.001

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Data availability statement

All necessary data used for this study are included in the manuscript.