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Politics

Japan to slash price of costly cancer drug early

Ono Pharmaceutical's Opdivo is a highly effective but extremely expensive cancer treatment drug.

TOKYO -- Aiming to curb rising medical costs, the Japanese health ministry has decided to lower the government-sanctioned price of an expensive cancer treatment a year before its regular review.

Opdivo, from Ono Pharmaceutical, is highly effective but costs an annual 35 million yen ($344,500) or so for a 60kg adult. Treating 50,000 lung cancer patients with it for a year could run to 1.75 trillion yen, the Ministry of Finance's Fiscal System Council estimated this April.

In Japan, where national health insurance shoulders a high proportion of pharmaceutical costs, the government sets prices of prescription drugs. The officially sanctioned prices receive biennial reviews, with the next slated for the year starting April 2018. While the two-year cycle has been broken before in response to a consumption tax hike, it is highly unusual to revise the price of a single drug in an off year.

The Ministry of Health, Labor and Welfare aims to get the ball rolling Wednesday at a meeting of its Central Social Insurance Medical Council, with an eye toward slashing the price up to 25%. The assessment process includes a mechanism for cutting the price of an expensive product whose sales far exceed the drugmaker's expectations.

For instance, a drug's price can be reduced by a maximum of 25% if it generates annual sales of 100 billion yen to 150 billion yen and if sales exceed the company's projection by 50% or more. Opdivo's annual sales are forecast in the low 100 billion yen range.

The council is expected to finalize the new price in November.

(Nikkei)

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