Japan's Central Social Insurance Medical Council (Chuikyo) has granted reimbursement coverage to 11 pharmaceutical treatments, awarding Merck Sharp & Dohme (MSD, US)'s PD-1 inhibitor Keytruda (pembrolizumab) the same National Health Insurance (NHI) price as competitor Opdivo (nivolumab; Ono Pharma, Japan).
Implications | The announcement came after the Japan's Drug Pricing Organization (DPO) rejected Merck Sharp & Dohme (MSD, US)'s request for a 5–30% utility premium (II) for Keytruda (pembrolizumab). |
Outlook | Japan's latest reimbursement pricing decisions indicate a stricter stance in allocating premiums, as authorities discuss wide-ranging drug-pricing reforms that are expected to create a much more challenging pricing landscape for makers of branded treatments. |
Japan's Central Social Insurance Medical Council (Chuikyo) has granted Keytruda (pembrolizumab) a daily National Health Insurance (NHI) price of JPY39,099 (USD347.74), which is the same as that for Opdivo (nivolumab; Ono Pharma, Japan), whose price was cut by 50% earlier this month (see Japan: 16 November 2016: Japan approves emergency 50% price cut for PD-1 inhibitor Opdivo in February). The Chuikyo is also forecasting peak sales of JPY54.4 billion for Keytrudain its fourth year on the Japan market.
Interestingly, the Chuikyo's pricing announcement comes after Merck Sharp & Dohme (MSD, US)'s request for a 5–30% utility premium (II) (in addition to Keytruda's National Health Insurance [NHI] price) was refused by Japan's Drug Pricing Organization (DPO), which sets reimbursement prices and proposes them to Chuikyo. MSD argued that Keytruda was recommended as a first-line treatment for non-small cell lung cancer (NSCLC) in overseas markets, and also significantly extended overall survival versus current standard-of-care.
According to Pharma Japan, the DPO argued that granting the premium would be "difficult" because there is a lack of head-to-head clinical trials comparing Keytruda with Opdivo. In addition, the DPO argued that Opdivo could also be perceived as having superior usefulness because of its additional indications, such as for the treatment of renal cell carcinoma.
The approved treatments will be listed on Japan's NHI from February 15, according to Pharma Japan.
Drug | Sponsor | Indication | NHI* reimbursement price (JPY) | Pricing method | Premium |
|---|---|---|---|---|---|
Tecfidera (dimethyl fumarate) | Biogen (US) | Prevention of multiple sclerosis relapses and disability | 2,037.20 (120 mg); 4,074.20 (240 mg) | ||
Linzess (linaclotide) | Astellas (Japan) | Irritable bowel syndrome with constipation | 92.40 | Similar efficacy comparison method (I) | |
YazFlex (drospirenone + ethinylestradiol betadex) | Bayer (Germany) | Dysmenorrhea, pain associated with endometriosis | 275.00 | Cost calculation method | |
Otezla (apremilast) | Celgene (US) | Plaque psoriasis inadequately controlled with local therapy and psoriatic arthritis | 324.20 (10 mg); 648.40 (20mg); 972.60 (30mg) | Similar efficacy comparison method (I) | Premium for usefulness (5%) |
Ximency (daclatasvir HCl + asunaprevir + beclabuvir HCl) | Bristol-Myers Squibb (US) | Improvement of viraemia in patients with genotype 1 chronic hepatitis C with or without compensated cirrhosis | 11,528.8 | Similar efficacy comparison method (I) | Upward adjustment based on average foreign price |
Vemlidy (tenofovir alafenamide fumarate) | Gilead Sciences (US) | Inhibition of the replication of hepatitis B virus (HBV) in patients with chronic HBV infection whose hepatic function has been confirmed to be abnormal because of replication of HBV | 996.50 | Similar efficacy comparison method (II) | |
Riamet (artemether + lumefantrine) | Novartis (Switzerland) | Malaria | 242.30 | Similar efficacy comparison method (I) | Downward adjustment based on average foreign price |
Ovidrel (choriogonadotropin alfa) | Merck Serono (Germany) | Induction of ovulation and luteinisation in anovulatory or oligo-ovulatory patients with pituitary-hypothalamic dysfunction and induction of final follicular maturation and luteinisation in women prior to assisted reproductive technology | 2,910.00 | Similar efficacy comparison method (I) | |
Mozobil (plerixafor) | Sanofi (France) | Mobilisation of haematopoietic stem cells to the peripheral blood for autologous peripheral blood stem cell transplantation | 581,972.00 | Cost calculation method | 25% premium on 14.6% standard operating profit rate; Upward adjustment based on average foreign price |
Parsabiv (etelcalcetide HCl) | Ono Pharma (Japan) | Secondary hyperparathyroidism in patients on haemodialysis | 873.00 (2.5mg); 1,283.00 (5mg); 1,885.00 (10mg) | Similar efficacy comparison method (I) | |
Keytruda (pembrolizumab) | MSD (US) | Unresectable malignant melanoma and PD-L1 positive unresectable, advanced or relapsed NSCLC | 84,488 (20mg); 410,541 (100mg) | Similar efficacy comparison method (I) | |
*National Health Insurance | |||||
Source: Chuikyo, Pharma Japan, 2017© 2017 IHS | |||||
In addition, the Chuikyo granted reimbursement coverage to several other treatments, including Gilead Sciences (US)'s HBV treatment Vemlidy (tenofovir alafenamide fumarate [TAF]), which was awarded the second-highest peak sales forecast after Keytruda. Vermildy received daily NHI price of JPY996.50, the same as comparator Tenozet (tenofovir disoproxil fumarate [TDF]).
In terms of premiums, Sanofi (France)'s Mozobil (plerixafor) received an NHI price of JPY581,972, after receiving a 25% premium on the standard operating profit rate (14.6%) through the cost calculation pricing formula, as well as an upward revision under the foreign price adjustment rule.
Celgene (US)'s psoriasis treatment Otezla (apremilast) also received a 5% premium for usefulness, and was priced using Chugai Pharmaceutical (Japan)'s Tigason (etretinate) as a comparator under the similar efficacy comparison rule.
Drug | Number of patients treated | Sales forecast (JPY) | Year (after launching) |
|---|---|---|---|
Tecfidera (dimethyl fumarate) | 3,500 | 7.6 billion | 10th |
Linzess (linaclotide) | 170,000 | 2.9 billion | 10th |
YazFlex (drospirenone + ethinylestradiol betadex) | 74,000 | 6.6. billion | Fifth |
Otezla (apremilast) | 16,000 | 7,5 billion | 10th |
Ximency (daclatasvir HCl + asunaprevir + beclabuvir HCl) | 2,000 | 7.2 billion | Second |
Vemlidy (tenofovir alafenamide fumarate) | 63,000 | 22.8 billion | 10th |
Riamet (artemether + lumefantrine) | 15 | 87,000 | Second |
Ovidrel (choriogonadotropin alfa) | 47,000 | 140 million | 10th |
Mozobil (plerixafor) | 700 | 920 million | 10th |
Parsabiv (etelcalcetide HCl) | 33,000 | 6.3 billioin | Fifth |
Keytruda (pembrolizumab) | 7,300 | 54.4 billion | Fourth |
*National Health Insurance | |||
Source: Chuikyo, Pharma Japan, 2017© 2017 IHS | |||
Outlook and implications
Japan's latest reimbursement pricing decisions indicate a stricter stance in allocating premiums, as authorities discuss wide-ranging drug pricing reforms that are expected to create a much more challenging pricing landscape for makers of branded treatments.
First, the Chuikyo's award of the same NHI price to Keytruda as for Opdivo answers many questions that arose after the price of Opdivo was cut by 50%. Over the past year at least, Opdivo had become a lightning rod for public criticism of the "expensive drug issue" in Japan, eventually spurring authorities to approve the drastic price cut by arguing that the sustainability of the country's social insurance system was at stake. At the time, it was unclear whether the scope of such steep price cuts would be expanded to similar drugs.
In addition, the DPO's refusal of MSD's request for a usefulness premium is also revealing, with its unwillingness to reward a premium further highlighted by its refusal to entertain Sanofi's reported argument that the total product costs for Mozobil (plerixafor) used under the cost calculation method was far off the amount presented by Sanofi. According to Pharma Japan, the DPO rejected Sanofi's argument by saying that any research and development (R&D) costs that should be covered in the calculation had already been included as selling, general, and administrative expenses (SG&A) costs. Finally, the DPO also dismissed Celgene's request for a 5–30% utility premium (II) for Otezla.
Looking ahead, the Chuikyo is expected to become more stringent in its awarding of premiums, particularly given the impetus to remove the United States from its calculation of the foreign price adjustment rule. In addition, Japanese authorities are expected to reach a verdict on the implementation of cost-effectiveness critieria by the summer, which is also expected to increase pressure on pharmaceutical pricing (see Japan: 9 February 2017: Japan's Chuikyo to reach decision on introduction of cost-effectiveness scheme by mid-2017).