Press Release

Biopharmaceutical Leaders: Japanese Patients, Health Care System and Economy Benefit from Access to Innovative Medicines

PhRMA November 1, 2017

Tokyo, Japan (November 2, 2017) — Leaders from US -based innovative biopharmaceutical companies met with Japanese government officials and other stakeholders October 30-November 1 to underscore the importance of the country’s critical role as a pro-innovation economy. As major reforms to Japan’s drug pricing system are considered, Robert J. Hugin, executive chairman of Celgene Corporation, Kenneth C. Frazier, chairman of the board and chief executive officer, Merck & Co., Inc., and David A. Ricks, chairman and chief executive officer, Eli Lilly and Company, highlighted the importance of protecting Japanese patients’ early access to the world’s latest breakthrough treatments and cures and ensuring the long-term stability of Japan’s health care system.

Since 2010, the Japanese government has enacted a comprehensive program of pro-innovation policies that have virtually eliminated delays for Japanese patients to access new therapies, significantly increased biopharmaceutical investments in Japan, especially in the area of clinical trials, and helped foster the biopharmaceutical sector as a continued growth engine for the Japanese economy.

One key element of these pro-innovation policies was the establishment of the Price Maintenance Premium (PMP), which rewards innovation and allows for pricing stability throughout the patent life of a medicine. It also allows for a sharp drop in price and a shift to generics at the end of a medicine’s patent period. As part of their discussions, the industry leaders urged the Japanese government to make the PMP permanent and avoid reducing the scope of the program to ensure continued progress in bringing cutting-edge treatments and cures to patients and building a truly sustainable health care system that works for Japanese patients, Japanese society and the Japanese economy.

The group also urged the Japanese government to proceed carefully with respect to any potential policy to institute a “health technology assessment,” or HTA system, to assess the cost-effectiveness of treatment interventions. No country has implemented an HTA system without stifling innovation and delaying, or eliminating entirely, access to needed medicines. In the U.K., for example, the country’s so-called “cost-effectiveness thresholds” have had dire consequences, including lower-than-average five-year cancer survival rates and political outrage that has forced the government to establish a special cancer drug fund to get patients access to life-saving treatments. It is paramount that Japan not institute any HTA policies that would weaken Japan’s commitment to medical innovation and patient access to medicines.

Speaking about the future of biopharmaceutical innovation in Japan, Pharmaceutical Research and Manufacturers of America (PhRMA) President and CEO Stephen J. Ubl added, “Japan has built one of the best health care systems in the world. Promoting and making permanent the government’s pro-innovation policies of the last 10 years and protecting against future policies that would hinder this progress and threaten the long-term stability of the country’s health care system is critical to Japan’s continued leadership on the global stage.”

Related quotes from Mr. Hugin, Mr. Frazier, and Mr. Ricks are as follows:

Celgene Corporation’s Robert J. Hugin: “There are thousands of new drugs in development that are going to make a real difference in the fight against the toughest diseases of our time. To be able to use the incredible science of today to redefine disease as we know it, and ensure that patients worldwide are benefiting from these advances, is the definition of progress.”

Merck & Co., Inc., chairman of the board and CEO Kenneth C. Frazier: “From investing in research and development, to conducting clinical trials and working with government leaders and other health care stakeholders, everything we do as an industry must have the patient at the center. That’s why we are focused on promoting policies in Japan and around the world that will build, sustain and strengthen health care systems that work for patients and their families.”

Eli Lilly and Company chairman and CEO David A. Ricks: “Drug discovery is a very risky business, which is why we rely so strongly on transparent and predictable regulatory and pricing systems like Japan’s Price Maintenance Premium. We collectively share the responsibility not to give into short-term thinking at the expense of long-term objectives like finding a cure for Alzheimer’s disease.”


About PhRMA
The Pharmaceutical Research and Manufacturers of America (PhRMA) represents the country’s leading innovative biopharmaceutical research companies, which are devoted to discovering and developing medicines that enable patients to live longer, healthier, and more productive lives. Since 2000, PhRMA member companies have invested more than $600 billion in the search for new treatments and cures, including an estimated $65.5 billion in 2016 alone.

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