TOKYO (Reuters) - Japan will weigh the concerns of U.S. drug firms in its efforts to complete by year-end a drastic revision of its drug-pricing system, aimed at reining in medical spending and cutting the public burden, the health minister said on Friday.
Japan is battling to cut the annual increase in welfare spending to around 500 billion yen ($4.5 billion) in the next fiscal year, and drug price cuts have a key role in the ministry’s strategy.
Katsunobu Kato said he would back fiscal reform by sticking with a cap on increases in social security spending to fund services for Japan’s fast-ageing population.
“I’ve directly heard opinions from the U.S. pharmaceutical industry,” Kato told Reuters in an interview.
“We will thrash out a drastic revision by the year-end, while hearing opinions of interested parties through Central Social Insurance Medical Council.”
The council is an expert panel that advises the ministry and canvasses the views of industry representatives.
Japan wants to cut healthcare costs and drug prices even if this provokes opposition from U.S. drug firms and lobby groups in Washington over the prospect of eroding profits.
Kato, a close aide of Prime Minister Shinzo Abe, declined to comment on reports that the premier will call an election next month and delay the timetable for fiscal reform to boost education spending.
Last December, Japan said it would review official drug pricing every year, instead of every two years, and widen the review to all prescription drugs, following drastic price cuts for two blockbuster drugs, among them cancer drug Opdivo.
The United States has urged Japan to reassess its system of drug pricing set by the government, for fear it could lead to price cuts on new, expensive drugs.
“We need to respond to overall fiscal consolidation,” Kato added. “On the other hand, we also need to meet people’s demand for measures to cope with an aging society.”
People aged 65 and older number a record 34.6 million, or 27.3 percent of Japan’s population - the highest among advanced nations, official data show.
Annual budget requests from government offices topped 100 trillion yen ($894 billion) for a fourth straight year in fiscal 2018, with the health ministry seeking the biggest chunk, about 31.4 trillion yen, an increase of 630 billion over this fiscal year.
Asked about the weighting of stock investment by Japan’s Government Pension Investment Fund (GPIF), the world’s largest pension fund, with $1.3 trillion under management, Kato said:
“We’re not planning now to change the present portfolio. It’s up to the (GPIF) management to make decision as appropriate.”
Reporting by Tetsushi Kajimoto; Editing by Clarence Fernandez