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JAPAN SALES, VOLUME,PRICING 2015
EvaluatePharma®’s Japan Sales, Volume, Pricing Intelligence
The size of the Japanese pharmaceutical market and the favourable payer environment makes it a key market for commercialisation of any new drug. In response to client requests for insight into Japan drug pricing and the volume dynamic behind Japan drug sales, EvaluatePharma® now includes: Japan regulatory approvals (PMDA); National Health Insurance (NHI) drug reimbursement prices; new drug price setting details, including price premiums achieved; and peak sales forecasts at launch. See the key features of this enhancement listed below. A comprehensive methodology document including in-depth documentation of the Japan datasets and use cases is available to all EvaluatePharma® subscribers. This new content integrates with our existing reported annual and quarterly Japan drug product sales as well as with our USA Sales, Volume and Pricing and with the rest of the EvaluatePharma® service.
The clients we collaborated with to develop the pricing insights told us that they particularly valued:
� Insight into Japan unit drug pricing and cost per patient per year for assessments
� Efficiency in conducting international drug price comparisons
� Access to patient-based forecasts models for similar products launched in Japan
� Transparency on new drug pricing methodology and premiums achieved for peer products
� Integration of pricing information with other commercial and R&D intelligence
� Translation to overcome language barriers and eliminate difficult document searches
Key features of this new intelligence include:
� Single, trusted source for Japan sales, pricing and product peak sales forecasts at launch
� Comprehensive Japan unit drug pricing including primary care and biotechnology products, branded and generics. Source: National Health Insurance (NHI) drug price list
� International price comparisons for Japan, USA, France, Germany and the United Kingdom
� Peak sales forecast at launch; including cost per patient calculation and number of patients treated
� Pricing Premiums achieved and methodology used to calculate initial reimbursement price
� All regulatory approvals from PMDA (Pharmaceutical and Medical Devices Agency)
To find out more about our USA and Japan Sales, Volume and Pricing, future pricing developments and Evaluate’s full range of services contact us:
Disclaimer
All intellectual property rights in this report remain that of Evaluate Ltd and/or its respective third party licensors. Whilst all reasonable steps have been taken to ensure that the data presented are accurate, Evaluate Ltd cannot accept responsibility for errors or omissions. Neither does Evaluate Ltd warrant the accuracy, merchantability or fitness for a particular purpose of the data. Nothing in the reports shall constitute investment, financial or legal advice and the contents of the reports are provided for information purposes only. The data is not intended to amount to advice and should not be used as a determining factor in any investment decision. This report may not be lent, resold, hired out or otherwise disposed of by way of trade in any form of binding or cover other than that in which it is published, without the prior written consent of Evaluate Ltd. Copyright © 2015 Evaluate Ltd. All rights reserved.
� North America: Debbie Paul Tel: +1 617 573 9453 Email: [email protected]
� Rest of the World: Will Hau Tel: +44 (0)20 7377 0800 Email: [email protected]
� Japan: Hiroshi Yamazaki Tel: + 81 (0) 80 1164 4754 Email: [email protected]
� For general questions: Christine Lindgren Tel: +1 617 866 3906 Email: [email protected]
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EvaluatePharma® Foreword:
Why Japan is a Key Strategic Market
Japan is the second largest prescription drug market after the USA, with government reimbursed purchases growing 5.9%, in local currency, to around $60bn (¥7,038bn) in fiscal 2013. The Japanese Yen has experienced a near 30% depreciation since the start of aggressive monetary expansion in December 2012. This has hit the dollar reporting of sales by Big Pharma. Despite this, Japan remains a core strategic country for large and medium sized pharmaceutical and biotech companies due to its favourable reimbursement environment.
Favourable Reimbursement Environment of the Japanese Market
The primary payer for drugs in Japan is the government. In order for hospitals and pharmacies to get reimbursed, a drug with its associated price must be listed on the National Health Insurance (NHI) list. This is achieved by getting the Pharmaceutical and Medical Devices Agency (PMDA) to approve a drug for marketing in Japan. Upon approval, a manufacturer can request a new reimbursement drug price from the Drug Pricing Organisation (DPO) and – once a reimbursement price has been agreed between the DPO and the manufacturer – the drug can be added to the NHI coverage list. The median number of days between approval and NHI reimbursement is 60 days.
Getting the Right Price at Launch is Critical; Rewards for Innovation
The DPO sets the reimbursed price in Japan and offers price premiums for innovation. Given that the reimbursed price of a drug is essentially fixed at launch, it is vitally important that drug companies achieve the optimal price at launch. Within this report, we explore the two pricing methods: Cost Calculation (when no comparator drug is available) and Similar Efficacy Comparison Method (page 15+). In addition, we look at the largest premiums awarded since 2006 (page 17), and show that Bristol-Myers Squibb/ Ono’s melanoma treatment, Opdivo, tops the list within the Cost Calculation Method.
Price Adjustment Every Two Years: April 2014 Prices Reduced by 4.2%
Every two years, effective on 1st April, the MHLW (Ministry of Health, Labour and Welfare) undertakes a price revision of drugs on the NHI coverage list. The primary purpose of this revision is to reduce the gap between the reimbursement price and the actual price paid by purchasers (hospitals/ pharmacies). On page 13 we have calculated the April 2014 revision at -4.2%. We can also see that biotechnology products had a price cut of 2.5% versus a price reduction of 5.2% for small molecule products. This is due to the reduced discounting on biotechnology products versus small molecule and also the reduced impact of patent expiries on biotechnology products versus small molecules.
Peak Sales Potential of Newly Reimbursed Drugs Surges to $34bn in 2010-15
When applying for drug reimbursement, companies are required to submit a peak sales forecast, including the number of patients treated. Analysis on page 7 reveals drugs with a collective $34bn of potential peak sales received reimbursement post 2010 versus $16.9bn for the period 2005-9. This illustrates that the Japanese market is set for a period of sustained growth.
New Endocrine (Diabetes) & Central Nervous System Drugs Largest Therapy Area for Growth
On reviewing the therapeutic split of the collective $34bn in peak sales (page 8) of newly reimbursed drugs in 2010-14, we identify endocrine (diabetes) as the leading therapeutic area with $6.1bn in peak sales potential. This is driven by a raft of new treatment options available (including SGLT2, GLP-1 & DPP-IV) to Japan’s large treated diabetic population (~7 million patients). Central nervous system (CNS) is second with projected peak sales of $5.3bn.
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The fact that oncology only ranks 6th, in peak sales forecasts, despite having the second highest number of drugs reimbursed for 2010-14, and endocrine and CNS are ranking one and two, highlights the epidemiological differences between Japan and the other G7 countries.
Japan Drug Prices 40% Cheaper than USA
The process for receiving a reimbursed drug price requires a company to submit comparable unit prices for the key markets of USA, Germany, UK and France. On page 15 we have analysed all the price comparison data and can reveal that between 2005-14, the median reimbursed price for drugs in Japan was 40% below reference price in the USA. In addition, we show that median drug prices in Japan are 20% lower than in Germany, 28% higher than in the UK and 11% higher than in France.
Anthony Raeside Head of Research, Evaluate Ltd
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EvaluatePharma® Foreword
Key Highlights Japan Sales,
Volume, Pricing Report
� Peak Sales Forecast of Newly Reimbursed Drugs Surges to $34bn in 2010-14 Versus $16.9bn in 2005-09
� Quantity of Reimbursed Drugs Increases 8% to 64 in 2014 vs. 2013; 2014 Peak Sales Forecast Increases 19% to
$6.3bn
� New Endocrine Drugs Have Highest Peak Sales Forecast; Central Nervous System Second
� Median Annual Cost of New Drugs in Japan Jumps to $837 (¥98k) in 2010-14, From $697 (¥82k) in 2005-09
� 10 New Drugs Cost More Than $100,000 (¥11.7m+) per Year in 2010-14
� New Cancer Treatments Giotrif & Zytiga Priced at Premium Versus Other Newly Reimbursed Drugs in 2014
� Japan Reimbursed Prices of Small Molecule Drugs (-5.2%) Falls Twice as Fast as Biologicals (-2.5%) in 2014
Revision
� Prices of Top 10 Selling Japanese Drugs Declined 19% Over the Last Four NHI Price Revisions (2008-14)
� Japan Reimbursed Drug Prices 40% Lower than USA; 20% Cheaper than Germany
� Cost Calculation Used in 21% of New Drug Package Reimbursements in 2014; Similar Efficacy Used in 79%
� Opdivo Earns 60% Adjustment for Novelty, Efficacy and Safety in 2014
� Daklinza Achieves Highest Price Premium in 2014 of 40%
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Table of Contents
7 Japan Drug Reimbursement Analysis (Peak Sales & Count): 2005 to 2014
8 Japan Drug Reimbursement Analysis (2005 – 14): By Therapy Area
10 Japan Drug Reimbursement Analysis (2014): By Company
11 Reimbursed Cost per Patient per Year Analysis (2010 – 14 vs. 2005 – 09)
12 Japan Reimbursed Cost per Patient vs. No. of Patients Treated (2014)
13 Japan NHI Drug Price Revisions (2008 – 14): Total, Small Molecule & Biotech
14 Japan NHI Drug Price Revisions (2008 – 14): Top 10 Product Analysis
15 Price Comparision: Japan vs. Key International Markets
16 Japan Process for Pricing New Drugs
17 Distribution of New Drug Pricing Methods (2006-14)
18 Cost Calculation Method & Price Adjustment Analysis (2006 – 14)
20 Similar Efficacy Comparison Method Price Premiums (2006 – 14)
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Japan Newly Reimbursed Drugs: Count of Number with Peak Sales vs. Total Japan Peak Sales Forecast (2005-14)
Year (1 JAN - 31 DEC) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
No. of NHI Reimbursed Products
New Active Ingredient 17 21 29 32 25 29 30 32 39 45
+24% +38% +10% -22% +16% +3% +7% +22% +15%
No. of Drugs with Peak Sales 24 40 42 47 41 50 49 42 59 64
% Chg. +67% +5% +12% -13% +22% -2% -14% +40% +8%
Japan Peak Sales (¥m) 156,214 385,216 402,802 337,959 522,172 803,255 670,017 387,727 519,547 666,468
% Chg. +147% +5% -16% +55% +54% -17% -42% +34% +28%
Japan Peak Sales ($bn) 1.4 3.3 3.4 3.2 5.5 9.0 8.5 4.8 5.3 6.3
% Chg. +129% +2% -4% +70% +64% -6% -43% +10% +19%
2005-09 Peak Sales ($bn): 16.9 2010-14 Peak Sales ($bn): 34.0
Top 10 Reimbursed Drugs in 2014: Ranked on Company Forecast Peak Sales
No. of
Product Company Filing Name (¥m) ($m) Patients
1 Suglat Astellas Pharma 52,800 515 800,000
2 Farxiga Bristol-Myers Squibb 50,000 491 760,000
3 Canaglu Mitsubishi Tanabe Pharma 46,000 428 720,000
4 Zalutia Eli Lilly 42,700 417 970,000
5 Effient Daiichi Sankyo 40,000 393 540,000
6 Zytiga Johnson & Johnson 37,000 344 7,500
7 Deberza Kowa Company 34,000 334 530,000
8 Giotrif Boehringer Ingelheim 23,200 226 6,900
9 Lusefi Taisho Pharmaceutical Holdings 23,000 226 360,000
10 Daklinza Bristol-Myers Squibb 22,200 207 17,000
Other 295,568 2,738 4,836,786
Total 666,468 6,320 9,548,186
3,362,319
63,889
1,305,882
$644
Cost per Patient Per
Year ($)
$646
$595
$430
$728
$45,921
$630
$32,816
$628
$12,156
63,889
44,021
74,074
4,933,333
64,151
Japan Drug Reimbursement Analysis (Peak Sales & Count): 2005 to 2014
Cost per Patient Per
Year (¥)
66,000
65,789
Peak Sales
Peak Sales Forecast of Newly Reimbursed Drugs Surges to $34bn in 2010-14 Versus $16.9bn in 2005-09 Quantity of Reimbursed Drugs Increases 8% to 64 in 2014 vs. 2013; 2014 Peak Sales Forecast Increases 19% to $6.3bnEvaluatePharma® finds that the overall output of the Japanese drug industry, measured by expected peak sales forecast of newly NHI reimbursed drugs, has dramatically increased from $16.9bn in 2005-09 to $34.0bn in 2010-14.In 2014, 64 newly reimbursed drugs had a peak sales forecast available, an 8% increase on 2013. The total value of peak salesforecast increased 19% from $5.3bn in 2013 to $6.3bn in 2014. 2014 reimbursed drugs were dominated by new SGLT2 inhibitors for type-2 diabetes, led by Astellas Pharma's Suglat, with a peak sales forecast of $515m.
Note: Where products are co-promoted, sales have been credited to the applicant company. Suglat: Astellas Pharma co-promotes in Japan with Merck & Co & Kotobuki Pharmaceutical. Farxiga: AstraZeneca co-promotes in Japan with Ono. 1 APR 2014: BMS completed divestment to AZ. Canaglu: Mitsubishi Tanabe Pharma co-promotes in Japan with Daiichi Sankyo. Zalutia: Eli Lilly co-promotes in Japan with Nippon Shinyaku for erectile dysfunction & BPH indications. Zytiga: J&J co-promotes in Japan with AstraZeneca. Deberza: Kowa and Sanofi both applied for price reimbursement. Sales have been credited to Kowa. Lusefi: Taisho Pharmaceutical co-promotes in Japan with Novartis.
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Japan Newly Reimbursed Drugs: Count vs. Peak Sales Forecast at LaunchSource: EvaluatePharma® (9 MAR 2015)
Japan Peak Sales ($bn) No. of Drugs with Peak Sales
Peak Sales:2005-09: $16.9bn2010-14: $34.0bn
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Japan Drug Reimbursement Analysis(Peak Sales & Count): 2005 to 2014
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Forecast Peak Sales & Count of New NHI Reimbursed Drugs by Therapy Area: 2010-14 versus 2005-09
Therapy Area 2005-2009 2010-2014 2005-2009 2010-2014 % Chg. 2005-2009 2010-2014
1 Endocrine 95,144 553,820 951 6,053 +637% 7 27
2 Central Nervous System 200,383 460,916 1,909 5,341 +280% 25 52
3 Musculoskeletal 247,988 411,207 2,215 4,682 +211% 11 22
4 Cardiovascular 364,633 378,700 3,539 4,277 +121% 16 17
5 Blood 144,320 323,164 1,236 3,594 +291% 9 19
6 Oncology & Immunomodulators 136,514 303,919 1,244 3,202 +257% 29 40
7 Respiratory 181,211 156,248 1,529 1,747 +114% 16 17
8 Systemic Anti-infectives 161,185 160,550 1,724 1,693 +98% 30 27
9 Gastro-Intestinal 74,617 97,640 268 1,154 +430% 7 9
10 Sensory Organs 27,320 95,060 727 1,085 +149% 12 13
11 Genito-Urinary 117,911 76,212 1,058 805 +76% 14 7
12 Various 46,867 21,578 440 246 +56% 15 12
13 Dermatology 6,270 8,000 61 74 +123% 3 2
Total 1,804,362 3,047,014 16,901 33,954 +201% 194 264
Japan Drug Reimbursement Analysis (2005-14): By Therapy Area
Peak Sales ($m)Peak Sales (¥m) Drug Count
0 1000 2000 3000 4000 5000 6000 7000
EndocrineCentral Nervous…Musculoskeletal
CardiovascularBlood
Oncology &…Respiratory
Systemic Anti-infectivesGastro-Intestinal
Sensory OrgansGenito-Urinary
VariousDermatology
Japan Peak Sales ($m)
Japan Peak Sales Forecast by Therapy Area: 2005-09 vs. 2010-14Source: EvaluatePharma® (9 MAR 2015)
2005-2009
2010-2014
New Endocrine Drugs Have Highest Peak Sales Forecast; Central Nervous System SecondEvaluatePharma® finds that new endocrine (diabetes) drugs reimbursed between 2010-14, had the highest peak sales forecast at over $6bn. Japan has a large treated diabetic population, around 7 million patients, and with a raft of new treatment options available (including DPP-IV, GLP-1 & SGLT2) this is clearly a growth hotspot for Japan. Central nervous system is second at $5.3bn, but with almost double the number of reimbursed drugs (52) versus endocrine (27).Surprisingly, oncology and immunodulators, which had the second highest number of drug reimbursements at 40 in 2010-14, only ranks 6th in terms of peak sales potential. This could to be due to the lower incidence of cancer in Japan versus other G7 countries and the resulting lower number of potential patients.
0 10 20 30 40 50 60
Central Nervous…Oncology &…
Systemic Anti-…Endocrine
MusculoskeletalBlood
CardiovascularRespiratory
Sensory OrgansVarious
Gastro-IntestinalGenito-Urinary
Dermatology
No. of NHI Reimbursed Drugs
Japan Reimbursed Drug Count by Therapy Area: 2005-09 vs. 2010-14Source: EvaluatePharma® (9 MAR 2015)
2005-20092010-2014
Peak Sales >$400mNesina (DPP-IV)Suglat (SGLT2)
Tenelia (DPP-IV) Farxiga (SGLT2)Canaglu (SGLT2)
Tradjenta (DPP-IV)
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Japan Drug Reimbursement Analysis(2005 – 14): By Therapy Area
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Forecast Peak Sales & Count of New NHI Reimbursed Drugs by Therapy Area: 2010-14 versus 2005-09
Therapy Area 2005-2009 2010-2014 2005-2009 2010-2014 % Chg. 2005-2009 2010-2014
1 Endocrine 95,144 553,820 951 6,053 +637% 7 27
2 Central Nervous System 200,383 460,916 1,909 5,341 +280% 25 52
3 Musculoskeletal 247,988 411,207 2,215 4,682 +211% 11 22
4 Cardiovascular 364,633 378,700 3,539 4,277 +121% 16 17
5 Blood 144,320 323,164 1,236 3,594 +291% 9 19
6 Oncology & Immunomodulators 136,514 303,919 1,244 3,202 +257% 29 40
7 Respiratory 181,211 156,248 1,529 1,747 +114% 16 17
8 Systemic Anti-infectives 161,185 160,550 1,724 1,693 +98% 30 27
9 Gastro-Intestinal 74,617 97,640 268 1,154 +430% 7 9
10 Sensory Organs 27,320 95,060 727 1,085 +149% 12 13
11 Genito-Urinary 117,911 76,212 1,058 805 +76% 14 7
12 Various 46,867 21,578 440 246 +56% 15 12
13 Dermatology 6,270 8,000 61 74 +123% 3 2
Total 1,804,362 3,047,014 16,901 33,954 +201% 194 264
Japan Drug Reimbursement Analysis (2005-14): By Therapy Area
Peak Sales ($m)Peak Sales (¥m) Drug Count
0 1000 2000 3000 4000 5000 6000 7000
EndocrineCentral Nervous…Musculoskeletal
CardiovascularBlood
Oncology &…Respiratory
Systemic Anti-infectivesGastro-Intestinal
Sensory OrgansGenito-Urinary
VariousDermatology
Japan Peak Sales ($m)
Japan Peak Sales Forecast by Therapy Area: 2005-09 vs. 2010-14Source: EvaluatePharma® (9 MAR 2015)
2005-2009
2010-2014
New Endocrine Drugs Have Highest Peak Sales Forecast; Central Nervous System SecondEvaluatePharma® finds that new endocrine (diabetes) drugs reimbursed between 2010-14, had the highest peak sales forecast at over $6bn. Japan has a large treated diabetic population, around 7 million patients, and with a raft of new treatment options available (including DPP-IV, GLP-1 & SGLT2) this is clearly a growth hotspot for Japan. Central nervous system is second at $5.3bn, but with almost double the number of reimbursed drugs (52) versus endocrine (27).Surprisingly, oncology and immunodulators, which had the second highest number of drug reimbursements at 40 in 2010-14, only ranks 6th in terms of peak sales potential. This could to be due to the lower incidence of cancer in Japan versus other G7 countries and the resulting lower number of potential patients.
0 10 20 30 40 50 60
Central Nervous…Oncology &…
Systemic Anti-…Endocrine
MusculoskeletalBlood
CardiovascularRespiratory
Sensory OrgansVarious
Gastro-IntestinalGenito-Urinary
Dermatology
No. of NHI Reimbursed Drugs
Japan Reimbursed Drug Count by Therapy Area: 2005-09 vs. 2010-14Source: EvaluatePharma® (9 MAR 2015)
2005-20092010-2014
Peak Sales >$400mNesina (DPP-IV)Suglat (SGLT2)
Tenelia (DPP-IV) Farxiga (SGLT2)Canaglu (SGLT2)
Tradjenta (DPP-IV)
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Japan Drug Reimbursement Analysis(2005 – 14): By Therapy Area Cont.
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Top 10 Companies in 2014: Ranked on Company Forecast Peak Sales for Newly Reimbursed Drugs
Peak Sales Peak Sales
Company ($m) (¥m)
1 Bristol-Myers Squibb 3 846 88,100
2 Daiichi Sankyo 2 582 62,000
3 Astellas Pharma 2 548 56,100
4 Johnson & Johnson 4 447 47,940
5 Mitsubishi Tanabe Pharma 1 428 46,000
6 Eli Lilly 1 417 42,700
7 Kowa Company 2 399 41,600
8 Chugai Pharmaceutical 2 364 38,300
9 GlaxoSmithKline 4 311 32,700
10 Takeda 3 228 23,268
Total of Top 10 24 4,570 478,708
Other 40 1,750 187,760
Total 64 6,320 666,468
Japan Drug Reimbursement Analysis (2014): By Company
No. of Drugs
Reimbursed
Bristol-Myers Squibb has Highest Potential Peak Sales of Newly Reimbursed Drugs in 2014EvaluatePharma® finds that Bristol-Myers Squibb's three new drug reimbursements in 2014 totalled $846m in peak sales potential. BMS's diabetes treatment Farxiga, later divested to AstraZeneca, accounted for almost $500m, with hepatitis C treatments Daklinza and Sunvepra also contributing to BMS taking the number 1 position in Japan in 2014. Daiichi Sankyo comes in second with $582m from blood products Effient and Lixiana.Mitsubishi Tanabe and Eli Lilly both launched one product in 2014 but each is worth over $400m in potential peak sales.
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Top 10 Companies in 2014: Ranked on Forecast Peak Sales for Newly Reimbursed DrugsSource: EvaluatePharma® (9 MAR 2015)
Peak Sales Forecast
Count of Approvals
Methodology: Company analysis is based on the applicant company. Peak sales, stated above, is the total of all peak sales for company's new drugs in 2014. Sales of products which are co-promoted have been credited to the applicant company. Key products in 2014 co-promoted include: Suglat: Astellas Pharma co-promotes in Japan with Merck & Co & Kotobuki Pharmaceutical. Farxiga: AstraZeneca co-promotes in Japan with Ono. 1 APR 2014: BMS completed divestment to AZ. Canaglu: Mitsubishi Tanabe Pharma co-promotes in Japan with Daiichi Sankyo. Zalutia: Eli Lilly co-promotes in Japan with Nippon Shinyaku for erectile dysfunction & BPH indications. Zytiga: J&J co-promotes in Japan with AstraZeneca. Deberza: Kowa and Sanofi both applied for price reimbursement. Sales have been credited to Kowa. Lusefi: Taisho Pharmaceutical co-promotes in Japan with Novartis.
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Japan Drug Reimbursement Analysis(2014): By Company
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Count of New Drugs in Japan (2010-14 vs. 2005-09) by Reimbursed Cost per Patient per Year Price Band
Rate 1$ = 117
Reimbursed Cost per Year Banding % Split of New Products
USA $ Yen ¥ 2005-09 2010-14 Chg. 2005-09 2010-14
$100,000+ ¥11.7m + 5 10 +5 3% 4%
$50,000 - $100,000 ¥5.85m - ¥11.7m 2 6 +4 1% 2%
$25,000 - $50,000 ¥2.925m - ¥5.85m 8 18 +10 4% 7%
$10,000 - $25,000 ¥1.17m - ¥2.925m 23 27 +4 12% 10%
$5,000 - $10,000 ¥0.585m - ¥1.17m 18 21 +3 9% 8%
$1,000 - $5,000 ¥0.117m - ¥0.585m 35 44 +9 18% 17%
$0 - $1,000 ¥0m - ¥0.117m 103 137 +34 53% 52%194 263 +69 100% 100%
$10,000+ 38 61 +23 20% 23%
$0 - $10,000 156 202 +46 80% 77%
2005-09 2010-14 2005-09 2010-14 Total
Cost per Patient Analysis ¥ ¥ $ $ % Change
Median Cost per Drug per Year 81,515 97,941 $697 $837 +20%
Average Cost per Drug per Year 1,511,454 1,756,063 $12,918 $15,009 +16%
Count
Reimbursed Cost per Patient per Year Analysis (2010-14 vs. 2005-09)
Methodology: The reimbursed cost per patient per year is based on the company disclosed analysis at the time of reimbursement. To improve analysis the Yen cost per patient is translated into dollars using the latest exchange rate ($1 = ¥117).
Median Annual Cost of New Drugs in Japan Jumps to $837 (¥98k) in 2010-14, From $697 (¥82k) in 2005-0910 New Drugs Cost More Than $100,000 (¥11.7m+) per Year in 2010-14EvaluatePharma® finds that the median annual reimbursed cost per patient per year within newly reimbursed drugs in the period 2010-14 has increased to $837 (¥98k), from $697 (¥82k) in the period 2005-09.The shift to higher cost drugs partially reflects industry product launches of innovative drugs aimed at smaller patient population sizes. There were 10 drugs reimbursed which cost in excess of $100,000 (¥11.7m+) per year in the period 2010-14, versus 5 in the period 2005-09.
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Count of New Drugs in Japan by Cost per Patient per Year Price Band in 2010-14 vs. 2005-09Source: EvaluatePharma® (9 MAR 2015)
2005-09 2010-142010-14: Highest Cost per PatientVpriv (¥50m/ $465k)Solaris (¥45m/ $383k)Byclot (¥38m/ $357k)Vyndaqel (¥21m/ $184k )
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Reimbursed Cost per Patient per Year Analysis (2010 – 14 vs. 2005 – 09)
12
Japan Reimbursed Cost per Patient vs. No. of Patients Treated (2014)
Top 10 Japan Drugs by Reimbursed Cost per Patient per Year in 2014: Peak Sales & No. of Patients Treated
No. of
Product Patients
1 Vpriv I.V. 400 Units 50,000,000 $465,419 14 30
2 Byclot 38,333,333 $356,821 43 120
3 Treprost Injection 20mg, 50mg, 100mg, 200mg 18,000,000 $167,551 34 200
4 Alecensa Capsule 20mg, 40mg 14,200,000 $132,179 198 1,500
5 Alprolix I.V. 500, 1000, 2000, 3000 14,107,143 $131,315 74 560
6 Deltyba Tablet 50mg 9,333,333 $86,878 5 60
7 Adcetris 50mg for Intravenous Drip Infusion 7,466,667 $72,874 22 300
8 Kadcyla I.V. infusion 100mg,160mg 6,538,462 $63,815 166 2,600
9 Opdivo I.V. 20mg, 100mg 6,595,745 $61,396 29 470
10 Jakavi Tablet 5mg 6,250,000 $58,177 93 1,600
Cost per Patient
per Year (¥)
Cost per Patient
per Year ($)
Peak Sales
($m)
New Cancer Treatments Giotrif & Zytiga Priced at Premium Versus Other Newly Reimbursed Drugs in 2014EvaluatePharma® finds that prostate cancer treatment Zytiga (J&J/ AZ) and Boehringer Ingelheim's lung cancer treatment Giotrif are among the products reimbursed in 2014 which are priced at a premium compared to all other drugs reimbursed in 2014. The analysis is based on a regression of reimbursed cost per patient per year against peak number of patients treated for drugs reimbursed in 2014 and reviewing outliers. The analysis does not take into account explicit innovation premiums awarded on reimbursement.The annual reimbursed cost per patient per year of all drugs in 2014 is moderately correlated to the number of patients treated (R2 = 0.59).
y = 682030x-0.587
R² = 0.5917
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000
Reim
burs
ed C
ost p
er P
atie
nt p
er y
ear (
$)
Japan Forecast Peak Number of Patients Treated
Japan Reimbursed Drugs in 2014: Cost per Patient per Year vs. No. of Patients TreatedSource: EvaluatePharma® (9 MAR 2015)
Note: In theory the products above the line of best fit should represent the best patient outcome, cost out of healthcare and improved patient economic activity relative to the competition, for the indications in which sales are achieved.
Giotrif (BI)
Zytiga (J&J/ AZ)
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Reimbursed Cost per Patient vs. No. of Patients Treated (2014)
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Japan NHI Drug Average Percentage Price Revisions (2008-2014): Total, Small Molecule & Biotechnology Analysis
Average Price Revision
Year Q2 2008 Q2 2010 Q2 2012 Q2 2014 % chg.
Small Molecule Drugs -6.6% -7.2% -6.7% -5.2% 76.7 -23%
Biotechnology Drugs -3.5% -4.8% -3.3% -2.5% 86.6 -13%
Total -5.4% -6.3% -5.6% -4.5% 79.9 -20%
Japan NHI Drug Median Percentage Price Revisions (2008-2014): Total, Small Molecule & Biotechnology Analysis
Median Price Revision
Year Q2 2008 Q2 2010 Q2 2012 Q2 2014 % chg.
Small Molecule Drugs -4.4% -6.5% -5.9% -3.4% 81.3 -19%
Biotechnology Drugs -3.5% -4.2% -4.0% -1.1% 87.8 -12%
Total -3.8% -5.4% -5.0% -2.3% 84.5 -16%
Japan Drug Price Revisions (2008-14): Total, Small Molecule & Biotech
Q1 2008 =
100
Q1 2008 =
100
-4.6%
-6.2%
-5.0%
-4.2%-3.5%
-4.8%
-3.3%
-2.5%
-6.6%-7.2%
-6.7%
-5.2%
-8%
-7%
-6%
-5%
-4%
-3%
-2%
-1%
0%Q2 2008 Q2 2010 Q2 2012 Q2 2014
Perc
enta
ge D
rug
Pric
e Re
visi
on (%
)
Japan NHI Drug Price Revisions 2008-2014: Average Percentage RevisionSource: EvaluatePharma® (9 MAR 2015)
Total
Biotech
Small Molecule
Japan Reimbursed Prices of Small Molecule Drugs (-5.2%) Falls Twice as Fast as Biologicals (-2.5%) in 2014 RevisionEvaluatePharma® finds that small molecule drugs got hit by an average 5.2% price cut compared to a 2.5% cut for biologicals in the last Japan price revision, effective 1st of April 2014. The difference is due to the reduced discounting on biotechnologyproducts versus small molecule drugs and also the reduced impact of generics on biotechnology pricing vs. small molecule.
Every two years, effective 1st April, the MHLW undertakes a price revision. The primary purpose of this revision is to reduce the gap between the reimbursement price and the actual price paid by purchasers (hospitals/ pharmacies). It is worth noting that, ifactual sales exceed double the original forecasted peak, a product’s price can be reduced by up to 25%. The overall revision inthe 2014 price revision was -4.2% based on EvaluatePharma® analysis.
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Japan NHI Drug Price Revisions (2008 – 14): Total, Small Molecule & Biotech
14
Japan Top 10 Selling Drugs in 2013: Percentage Reimbursed Price Revisions 2008-2014
Average Price Revision
Product Q2 2008 Q2 2010 Q2 2012 Q2 2014 % chg. Note
Prevacid -4.3% -8.6% -10.0% -8.4% 72.1 -27.9% First generic launched MAY 05
Benicar -10.1% -7.9% -7.6% -5.1% 72.6 -27.4%
Micardis -10.1% -7.5% -8.0% -4.5% 73.1 -26.9%
Januvia 0.0% -3.4% -7.1% -10.1% 80.6 -19.4%
Diovan -4.2% -4.9% -6.5% -3.1% 82.5 -17.5% First generic launched JUN 14
Mohrus Tape -10.1% -7.3% -6.6% -4.7% 74.2 -25.8%
Remicade -6.9% 0.0% 0.3% -10.9% 83.1 -16.9% Biosimilar launched NOV 14
Avastin -0.6% 0.0% -8.8% 2.9% 93.2 -6.8%
Blopress -10.1% -7.2% -6.6% 0.0% 77.9 -22.1% First generic launched SEP 14
Plavix -3.5% -1.2% -0.1% 2.8% 97.9 -2.1%
Average -6.0% -4.8% -6.1% -4.1% 80.6 -19.3%
Japan NHI Drug Price Revisions 2008-14: Top 10 Product Analysis
Q1 2008 =
100
-12%
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
Prevacid Benicar Micardis Januvia Diovan MohrusTape
Remicade Avastin Blopress Plavix
Perc
enta
ge D
rug
Reim
burs
emen
d P
rice
Revi
sion
(%)
Japan Top 10 Selling Drugs: Reimbursed Price Revisions 2008-2014 (%)Source: EvaluatePharma® (9 MAR 2015)
Q2 2008
Q2 2010
Q2 2012
Q2 2014
Prices of Top 10 Selling Japanese Drugs Declined 19% Over the Last Four NHI Price Revisions (2008-14) EvaluatePharma® finds that the reimbursed drug prices for all of the top 10 selling products in Japan have decreased over the period 2008-2014, by on average 19%. The price of the drug Plavix decreased the least, with a 2% drop over the period 2008 to 2014. Prevacid had the largest decrease in reimbursed drug price with a reduction of 28%.In Q2 2014 Remicade was hit by an 11% price reduction and in November 2014 Nippon Kayaku launched a biosimilar into the Japanese market.
Methodology: Reimbursed drug price revision reflects the average across all packs.
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Japan NHI Price Revisions (2008 – 14): Product Analysis
15
Top 5 Reimbursed Drugs in 2014 (Based on Peak Sales): Japan Reimbursed Unit Price vs. Foreign Comparators
Product Unit Price: Jp ($) USA ($) (USA=100) UK ($) (UK=100) Ger ($) (Ger=100) Fr ($) (Fr=100)
1 Farxiga Tablets 10mg 3.03 11.57 26 2.21 137 3.46 87 - -
2 Canaglu Tablet 100mg 1.91 11.57 17 2.13 90 - - - -
3 Zalutia Tablets 5mg 2.25 6.49 35 3.28 69 - - 5.97 38
4 Effient Tablets 5mg 3.53 9.91 36 2.86 123 4.33 82 - -
5 Zytiga Tablet 250mg 34.36 68.37 50 39.78 86 58.54 59 38.79 89
Average 33 101 76 63
Price Comparison: Japan vs Key International Markets
Japan vs. USA Japan vs. UK Japan vs. Germany Japan vs. France
Japan Reimbursed Drug Prices 40% Lower than USA; 20% Cheaper than GermanyJapan Prices 28% Higher than UK and 11% Above FranceEvaluatePharma® finds that the average median reimbursed drug price in Japan is 40% below the average reference price in the USA at launch, based on analysis of Japanese regulatory documents. Japan prices are also less than German reference prices byaround 20%.Compared to the UK and France, reimbursed prices in Japan are 28% and 11% more expensive, respectively.Out of the top 5 reimbursed drugs with foreign comparators in 2014, USA prices were at least double that of the Japan prices.
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
110 116 118 103 93 88 80 80 97 106
Median Japan vs. USA Price (USA=100)
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
200 214 235 191 146 135 128 126 153 174
Median Japan vs. UK Price (UK=100)
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
137 146 161 151 130 116 111 103 129 140
Median Japan vs. Germany Price (Germany=100)
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
137 146 161 151 130 116 111 103 129 140
Median Japan vs. France Price (France=100)
YearExchange Rate (£-¥)
YearExchange Rate (€-¥)
YearExchange Rate ($-¥)
YearExchange Rate (€-¥)
2005-14 Average Median Japan vs. USA Price: 60%
2005-14 Average Median Japan vs. UK Price: 128%
2005-14 Average Median Japan vs. Germany Price: 80%
2005-14 Average Median Japan vs. France Price: 111%
Methodology: Suglat excluded as no foreign price comparison available.
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Price Comparison: Japan vs. Key International Markets
16
Pricing Methods for New Drugs
Japan Process for Pricing New Drugs
Overview of Methodology Used by Drug Pricing Organisation (DPO) to Price New Drugs in JapanThere are two fundamental pricing methods for newly approved drugs in Japan: Cost Calculation and Similar Efficacy.
Cost Calculation Method: Drugs perceived to be without a comparator in the Japan market are priced according to the sum of key costs related to drug production. The NHI price calculated as the sum of costs such as raw materials, labour, manufacturing,marketing, operating profit (average rate for major Japanese manufacturers plus/ minus a possible adjustment for innovation),distribution, and consumption tax.
Similar Efficacy Method: Drugs which have a comparable drug on the market, as identified by the Ministry of Health, are priced in direct comparison to these dependent on treatment regimen and comparative innovation, usefulness, marketability, paediatric use and new kit available.
Both groups are then subjected to potential change related to foreign price comparisons and any further necessary adjustments.
Pricing Adjustments vs. Price PremiumsA product is potentially eligible for a price premium if it can show significant benefits above current market alternative competitor products. Price premiums have been incorporated into the Japan Ministry of Health pricing structure since 1982. The awarding of premiums serves to promote innovation within the industry by increasing daily treatment cost. The awarded percentage is basedon product performance against benchmark criteria as defined and judged by the Ministry.
If no comparable product is identified by the Ministry then a new product is ineligible for a price premium. These products are priced according to the Cost Calculation Method. This structure also serves to promote further innovation within the industry byincorporating flexiblity for positive and negative percentage adjustments to standard average operating profits in relation to a new product's novelty, efficacy and safety.
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Japan Process for Pricing New Drugs
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Counts of New Drug Pricing Methods & Premium/ Positive Adjustment (2006-14)
Annual Count of Reimbursed Drug Packages
2006 2007 2008 2009 2010 2011 2012 2013 2014
Cost Calculation Method 17 15 23 10 24 22 21 18 28
Adjustment Achieved 0 0 7 6 9 12 4 0 8
Positive Adjustment Achieved % 0% 0% 30% 60% 38% 55% 19% 0% 29%
Similar Efficacy Comparison Method (I) 91 77 67 93 108 82 60 128 99
Similar Efficacy Comparison Method (II) 2 5 11 3 1 12 4 8 4
Total Similar Efficacy Comparison Method 93 82 78 96 109 94 64 136 103
Premium Achieved 18 25 24 36 13 22 8 13 25
Premium Achieved % 19% 30% 31% 38% 12% 23% 13% 10% 24%
Distribution of New Drug Pricing Methods (%)
Percentage Distribution
2006 2007 2008 2009 2010 2011 2012 2013 2014
Cost Calculation Method (%) 15% 15% 23% 9% 18% 19% 25% 12% 21%
Similar Efficacy Comparison Method (I) 83% 79% 66% 88% 81% 71% 71% 83% 76%
Similar Efficacy Comparison Method (II) 2% 5% 11% 3% 1% 10% 5% 5% 3%
Total Similar Efficacy Comparison Method (%) 85% 85% 77% 91% 82% 81% 75% 88% 79%
Distribution of New Drug Pricing Methods (2006-14)
Cost Calculation Used in 21% of New Drug Package Reimbursements in 2014; Similar Efficacy Used in 79%EvaluatePharma® finds that the distribution of new drug pricing methods remained steady in 2014 with 21% of drugs falling into the Cost Calculation Method and 79% into the Similar Efficacy Comparison Methods (76% Similar Efficacy Comparison Method I, 3% bySimilar Efficacy Comparison Method II).
Cost Calculation: Drugs without direct comparators within the Japanese market may also receive pricing boosts by way of novelty, efficacy & safety adjustments to operating profit rates in the Cost Calculation Method. In 2014, 29% of new drugs achieved positive price adjustments within this method of pricing.Similar Efficacy Comparison: Innovation is rewarded within the MHLW system wherein me-too drugs may gain various premiums dependent on innovation, usefulness, marketability, paediatric use or function as a new kit product. In 2014, 24% of new drugs achieved a positive premium within this method of pricing.
17 15 2310
24 22 21 18 28
9177 67 93
108
8260
128 99
2
5 113
1
12
4
8
4
15% 15%
23%
9%
18% 19%25%
12%
21%
85% 85%
77%
91%
82% 81%75%
88%
79%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0
20
40
60
80
100
120
140
160
180
2006 2007 2008 2009 2010 2011 2012 2013 2014
Perc
enta
ge D
istr
ibut
ion
of P
ricin
g M
etho
d
Coun
t of N
umbe
r of D
rugs
Rei
mbu
rsed
Year
Count of New Drug Pricing Methods & Distribution (%) (2006-14)Source: EvaluatePharma® (9 MAR 2015)
Cost Calculation Method Similar Efficacy Comparison Method (I)
Similar Efficacy Comparison Method (II) Cost Calculation Method (%)
Total Similar Efficacy Comparison Method (%)
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Distribution of New Drug Pricing Methods (2006 – 14)
18
Cost Calculation Method & Price Adjustments Analysis (2006-14)
Top 5 Largest Adjustments Cost Calculation Method: Novelty, Efficacy and Safety 2006-14 (%)
Brand Name Company
Reimbursement
Date Pricing Comment
Standard Av.
Operating Profit
Rate (%)
Adjustment:
Novelty,
Efficacy and
Safety (%)
Final Operating
Profit rate (%) NHI Price (¥)
Opdivo I.V. 20mg Ono
Pharmaceutical
02/09/2014 Standard Operating
Profit Rate × 160%
16.9 60.0 27.0 150,200
Opdivo I.V.
100mg
Ono
Pharmaceutical
02/09/2014 Standard Operating
Profit Rate × 160%
16.9 60.0 27.0 729,849
Halaven
Intravenous
Injection 1mg
Eisai 19/07/2011 Standard Operating
Profit Rate × 140%
19.2 40.0 26.9 64,070
Deltyba Tablet
50mg
Otsuka
Pharmaceutical
02/09/2014 Standard Operating
Profit Rate × 140%
16.9 40.0 23.7 6,125
Recomodulin
Intravenous
Infusion 12800
Asahi Kasei
Pharma
18/04/2008 Standard Operating
Profit Rate × 130%
19.2 30.0 25.0 38,352
Pirespa Tablet
200mg
Shionogi 12/12/2008 Standard Operating
Profit Rate × 130%
19.2 30.0 25.0 676.4
Samsca Tablet
15mg
Otsuka
Pharmaceutical
10/12/2010 Standard Operating
Profit Rate × 130%
19.2 30.0 25.0 2,525.7
Opdivo Earns 60% Adjustment for Novelty, Efficacy and SafetyEvaluatePharma® finds the MHLW awarded two of the highest recorded adjustments for novelty, efficacy and safety in 2014. Bristol-Myers Squibb/ Ono's melanoma treatment Opdivo, achieved a 60% boost on the standard operating profit rate and Otsuka a 40% hike on Deltyba, its new tuberculosis drug.
Cost Calculation Adjustments: Innovation, efficacy and safety in new drugs is accounted for in adjustments of the standard operating profit rate. This rate being derived from the average taken over the previous 3 years, sourced from the Handbook ofIndustrial Financial Data (Development Bank of Japan). The Opdivo adjustment is the largest percentage adjustment awarded by the MHLW (previously typical adjustments have ranged between ±50% ), however 2014 had a lower standard average operating profit rate, at 16.9% versus 19.2% in recent years. The chart demonstrates how Opdivo's final operating profit rate is similar to previous awards.
0
60
60
40
40
30
0.0
27.0
27.0
26.9
23.7
25.0
0 10 20 30 40 50 60 70
Brand Name
Opdivo I.V. 20mg
Opdivo I.V. 100mg
Halaven Intravenous Injection 1mg
Deltyba Tablet 50mg
Recomodulin Intravenous Infusion 12800
(%)
Top 5 Largest Adjustments: Novelty, Efficacy and Safety 2006-14 (%)Source: EvaluatePharma® (2 MAR 2015)
Opdivo Earns 60% Adjustment for Novelty, Efficacy and Safety in 2014EvaluatePharma® finds the MHLW awarded two of the highest recorded adjustments for novelty, efficacy and safety in 2014. Bristol-Myers Squibb/ Ono's melanoma treatment Opdivo, achieved a 60% boost on the standard operating profit rate and Otsuka a 40% hike on Deltyba, its new tuberculosis drug.
Cost Calculation Adjustments: Innovation, efficacy and safety in new drugs is accounted for in adjustments of the standard operating profit rate. This rate being derived from the average taken over the previous 3 years, sourced from the Handbook ofIndustrial Financial Data (Development Bank of Japan). The Opdivo adjustment is the largest percentage adjustment awarded by the MHLW (typical adjustments range from -50% to +100%), however 2014 had a lower standard average operating profit rate, at 16.9% versus 19.2% in recent years. The chart demonstrates how Opdivo's final operating profit rate compares to previous awards.
Case Study example: Opdivo I.V. 100mg Cost Calculation Method
Production costs: ¥ 459,778Distribution costs: + ¥ 45,953Consumption tax: + ¥ 54,063
Std. Av. Operating Profit Rate: 16.9%Adjustment (%): 60%Final Profit Rate: 27.0%
Operating Costs: + ¥ 170,055Total Price: ¥ 729,849
60
60
40
40
30
30
30
27.0
27.0
26.9
23.7
25.0
25.0
25.0
0 20 40 60 80 100
Opdivo I.V. 20mg
Opdivo I.V. 100mg
Halaven Intravenous Injection 1mg
Deltyba Tablet 50mg
Recomodulin Intravenous Infusion 12800
Pirespa Tablet 200mg
Samsca Tablet 15mg
(%)Top 5 Largest Adjustments: Novelty, Efficacy and Safety 2006-14 (%)
Source: EvaluatePharma® (9 MAR 2015)
Adjustment: Novelty, Efficacy and Safety(%)
Final Operating Profit rate (%)
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Cost Calculation Method & Price Adjustments Analysis (2006 – 14)
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Cost Calculation Method & Price Adjustments Analysis (2006-14)
Top 5 Largest Adjustments Cost Calculation Method: Novelty, Efficacy and Safety 2006-14 (%)
Brand Name Company
Reimbursement
Date Pricing Comment
Standard Av.
Operating Profit
Rate (%)
Adjustment:
Novelty,
Efficacy and
Safety (%)
Final Operating
Profit rate (%) NHI Price (¥)
Opdivo I.V. 20mg Ono
Pharmaceutical
02/09/2014 Standard Operating
Profit Rate × 160%
16.9 60.0 27.0 150,200
Opdivo I.V.
100mg
Ono
Pharmaceutical
02/09/2014 Standard Operating
Profit Rate × 160%
16.9 60.0 27.0 729,849
Halaven
Intravenous
Injection 1mg
Eisai 19/07/2011 Standard Operating
Profit Rate × 140%
19.2 40.0 26.9 64,070
Deltyba Tablet
50mg
Otsuka
Pharmaceutical
02/09/2014 Standard Operating
Profit Rate × 140%
16.9 40.0 23.7 6,125
Recomodulin
Intravenous
Infusion 12800
Asahi Kasei
Pharma
18/04/2008 Standard Operating
Profit Rate × 130%
19.2 30.0 25.0 38,352
Pirespa Tablet
200mg
Shionogi 12/12/2008 Standard Operating
Profit Rate × 130%
19.2 30.0 25.0 676.4
Samsca Tablet
15mg
Otsuka
Pharmaceutical
10/12/2010 Standard Operating
Profit Rate × 130%
19.2 30.0 25.0 2,525.7
Opdivo Earns 60% Adjustment for Novelty, Efficacy and SafetyEvaluatePharma® finds the MHLW awarded two of the highest recorded adjustments for novelty, efficacy and safety in 2014. Bristol-Myers Squibb/ Ono's melanoma treatment Opdivo, achieved a 60% boost on the standard operating profit rate and Otsuka a 40% hike on Deltyba, its new tuberculosis drug.
Cost Calculation Adjustments: Innovation, efficacy and safety in new drugs is accounted for in adjustments of the standard operating profit rate. This rate being derived from the average taken over the previous 3 years, sourced from the Handbook ofIndustrial Financial Data (Development Bank of Japan). The Opdivo adjustment is the largest percentage adjustment awarded by the MHLW (previously typical adjustments have ranged between ±50% ), however 2014 had a lower standard average operating profit rate, at 16.9% versus 19.2% in recent years. The chart demonstrates how Opdivo's final operating profit rate is similar to previous awards.
0
60
60
40
40
30
0.0
27.0
27.0
26.9
23.7
25.0
0 10 20 30 40 50 60 70
Brand Name
Opdivo I.V. 20mg
Opdivo I.V. 100mg
Halaven Intravenous Injection 1mg
Deltyba Tablet 50mg
Recomodulin Intravenous Infusion 12800
(%)
Top 5 Largest Adjustments: Novelty, Efficacy and Safety 2006-14 (%)Source: EvaluatePharma® (2 MAR 2015)
Opdivo Earns 60% Adjustment for Novelty, Efficacy and Safety in 2014EvaluatePharma® finds the MHLW awarded two of the highest recorded adjustments for novelty, efficacy and safety in 2014. Bristol-Myers Squibb/ Ono's melanoma treatment Opdivo, achieved a 60% boost on the standard operating profit rate and Otsuka a 40% hike on Deltyba, its new tuberculosis drug.
Cost Calculation Adjustments: Innovation, efficacy and safety in new drugs is accounted for in adjustments of the standard operating profit rate. This rate being derived from the average taken over the previous 3 years, sourced from the Handbook ofIndustrial Financial Data (Development Bank of Japan). The Opdivo adjustment is the largest percentage adjustment awarded by the MHLW (typical adjustments range from -50% to +100%), however 2014 had a lower standard average operating profit rate, at 16.9% versus 19.2% in recent years. The chart demonstrates how Opdivo's final operating profit rate compares to previous awards.
Case Study example: Opdivo I.V. 100mg Cost Calculation Method
Production costs: ¥ 459,778Distribution costs: + ¥ 45,953Consumption tax: + ¥ 54,063
Std. Av. Operating Profit Rate: 16.9%Adjustment (%): 60%Final Profit Rate: 27.0%
Operating Costs: + ¥ 170,055Total Price: ¥ 729,849
60
60
40
40
30
30
30
27.0
27.0
26.9
23.7
25.0
25.0
25.0
0 20 40 60 80 100
Opdivo I.V. 20mg
Opdivo I.V. 100mg
Halaven Intravenous Injection 1mg
Deltyba Tablet 50mg
Recomodulin Intravenous Infusion 12800
Pirespa Tablet 200mg
Samsca Tablet 15mg
(%)Top 5 Largest Adjustments: Novelty, Efficacy and Safety 2006-14 (%)
Source: EvaluatePharma® (9 MAR 2015)
Adjustment: Novelty, Efficacy and Safety(%)
Final Operating Profit rate (%)
Cost Calculation Method & Price Adjustments Analysis (2006 – 14) Cont.
20
Case Study example: Daklinza Tablet 60mg Similar Efficacy Comparison (I) Pricing Calculation
Identified comparator product: New Product:
Olysio Daklinza
Treatment regimen: Treatment regimen:
1 Tablet per day, 12-week course. 1 Tablet per day, 24-week course
Dose/ Formulation: Dose/ Formulation:
100mg Tablet 60mg Tablet
Price: Premium:
¥ 13,122.80 40% for Usefulness (I)
Reimbursement price:
¥ 6,561.40 (as treatment course is double that of Olysio)
¥ 6,561.40 + 40% = ¥ 9,185.40
Top 5 Similar Efficacy Pricing Premiums Attained 2006-14 (%)
Brand Name Company
Foreign
Comparator Date Pricing Comment
Adj.Price
Premium (%)
Adjustment:
Foreign Price NHI Price (¥)
Isentress Tablet
400mg
Banyu
Pharmaceutical
YES 13/06/2008 Premium for Usefulness (I) (A=40%);
Marketability based Calculation (I)
(A=10%); Upward adjustment based on
average foreign price
50 Upward adjustment
based on average
foreign price
1,510
Imusera Capsule
0.5mg
Mitsubishi Tanabe
Pharma
YES 25/11/2011 Premium for Usefulness (I) (A=40%);
Premium for Marketability (I) (A=10%)
50 - 8,172
Gilenya Capsule
0.5mg
Novartis Pharma YES 25/11/2011 Premium for Usefulness (I) (A=40%);
Premium for Marketability (I) (A=10%)
50 - 8,172
Macugen
Intravitreal Injection
kit 0.3mg
Pfizer Japan YES 12/09/2008 Premium for Usefulness (I) (A=35%);
Premium for marketability (A=10%)
45 - 123,457
Telavic Tablet
250mg
Mitsubishi Tanabe
Pharma
NO 25/11/2011 Premium for Usefulness (I) (A=40%) 40 - 1,422
Daklinza Tablet
60mg
Bristol-Myers NO 02/09/2014 Premium for Usefulness (I) (A=40%) 40 - 9,186
Similar Efficacy Comparison Method Price Premiums (2006-14)
50
50
50
45
40
40
0 10 20 30 40 50 60
Isentress Tablet 400mg
Imusera Capsule 0.5mg
Gilenya Capsule 0.5mg
Macugen Intravitreal Injection kit 0.3mg
Telavic Tablet 250mg
Daklinza Tablet 60mg
Adjustment: Price Premium (%)
Top 5 Similar Efficacy Pricing Premiums Attained 2006-14 (%)Source: EvaluatePharma® (9 MAR 2015)
Daklinza Achieves Highest Price Premium in 2014 of 40%EvaluatePharma® investigation into NHI pricing data can reveal the highest premium for a similar drug in 2014 was 40%, to Bristol-Myers for the Hepatitis C NS5A inhibitor Daklinza Tablet 60mg.
Daklinza is priced by Similar Efficacy Comparison. Access to original NHI price reimbursement documents indicates Soburiado/ Sovriad/ Olysio (Johnson & Johnson) is the MHLW comparator product. Through this comparison, a Premium for Usefulness (I) of 40%indicates that Daklinza meets two of the three MHLW criteria that:- the drug has a new clinically useful mechanism of action- there is evidence of greater efficacy and safety - the drug improves treatment of indicated diseases and injuries.
Premiums for Usefulness (I) can Range From 35% - 60%If, after premiums have been given (for the similar efficacy comparison (I) method), the calculated price is 1.25 times higher or 0.75 times lower than the average foreign price (mean of USA, UK, German and French prices), the calculated price may be adjusted further.
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Similar Efficacy Comparison Method Price Premiums (2006 – 14)
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