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Expenditure On Retail Pharmaceuticals Per Capita, 2017 (USD$ PPP)
Prescribed Medicines: $708
Over-The-Counter Medicines: $122
Medical Non-Durable: $8
Total: $838

Source: OECD (2019), Health at a Glance 2019: OECD Indicators, OECD Publishing, Paris, https://doi.org/10.1787/4dd50c09-en.

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Expenditure On Retail Pharmaceuticals By Type Of Financing, 2017 (%)
Government/Compulsory Plans: 72%
Voluntary Health Insurance Plans: 1%
Out-Of-Pocket: 27%
Other: %

Source: OECD (2019), Health at a Glance 2019: OECD Indicators, OECD Publishing, Paris, https://doi.org/10.1787/4dd50c09-en.

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“Drug costs accounted for 22.1% of all health expenditure in 2013. Although the total drug expenditure has been increasing yearly, its rate of increase is almost the same as the rate of increase in health expenditure (Fig. 5.2). About 800 million prescriptions were written, and about US$ 64.2 billion was disbursed by public health insurance for prescribed medicines (Ministry of Health, Labour and Welfare, 2016a).”

Source: Sakamoto H, Rahman M, Nomura S, Okamoto E, Koike S, Yasunaga H et al. Japan Health System Review. Vol. 8 No. 1. New Delhi: World Health Organization, Regional Office for South-East Asia, 2018.

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“The government sets the prices of all drugs reimbursed by the universal health insurance system with the “fee schedule.” The list of reimbursable drugs includes nearly 16 000 items for oral, parenteral and topical administration.

“For new drugs, reimbursement prices are determined with reference to the prices of similar drugs that have already been approved. If there is no similar drug, the prices are determined based on accounting for material and other costs.

“The reimbursement price used to be revised every two years. The revised price is determined according to market prices during the past two years. To calculate the price, the government is authorized by the Health Insurance Act to conduct a market drug price survey before the revision. This survey is conducted in close cooperation with wholesalers, who submit their transaction records with health care providers. The official reimbursement price is set at the weighted average of the transaction price with an adjustment, which is usually set at 2%. This system reduces the reimbursement prices of all the drugs, and approximately US$ 4.5 billion of pharmaceutical costs are cut at every revision.

“However, in 2017, a new chemotherapy called Nivolumub was released for sale originally for malignant melanoma, costing approximately US$ 336 110/year/person. Its use was then expanded to some types of lung cancer and renal cell carcinoma, and it has started to put severe financial burden on the universal health insurance system. The MHLW [Ministry of Health, Labor, and Welfare] urgently revised the reimbursement rate down to 50%. Since then, the MHLW decided to change the revision schedule from every two years to every year so as to better reflect the market trend and to contain rapid increases in pharmaceutical expenditure. Debate questioning how to balance cost-containment for new medicines while also promoting R&D (i.e., incentives for pharmaceutical companies) has been ongoing.”

Source: Sakamoto H, Rahman M, Nomura S, Okamoto E, Koike S, Yasunaga H et al. Japan Health System Review. Vol. 8 No. 1. New Delhi: World Health Organization, Regional Office for South-East Asia, 2018.

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Health Systems Facts is a project of the Real Reporting Foundation. We provide reliable statistics and other data from authoritative sources regarding health systems in the US and several other nations.

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Page last updated Dec. 22, 2020 by Doug McVay, Editor.