Japan to Lower Official Drug Prices in FY 2026

Tokyo, Dec. 3 (Jiji Press)–The Japanese government is expected to lower the state-set prices of drugs in its fiscal 2026 revision after a health ministry survey found that market prices are lower than the official prices. The survey results, presented Wednesday to the Central Social Insurance Medical Council, which advises the health minister, showed that prices of drugs purchased by medical institutions from wholesalers were 4.8 pct lower than official prices on average as of September. The health ministry hopes to lower the official drug prices to reduce financial burdens on the public, as market prices often fall below official prices due to competition. The 4.8 pct gap between the market and official prices narrowed by 0.4 percentage point from the previous year to hit a record low, reflecting persisting inflation and an increase in the frequency of the government’s drug price revision to every year from every two years. Of the total value of generic drugs and their brand-name counterparts used, generic products accounted for 68.7 pct as of September, exceeding the government’s target of hitting at least 65 pct by the end of fiscal 2029. Japan is slated to begin full-fledged discussions on ways to use financial resources to be freed up by the price cut and on the planned revision of overall government-set medical service fees. The fees under the public health insurance program comprise labor costs for medical workers in addition to drug prices. The Japan Medical Association is calling for a hike in labor costs to deal with inflation and wage increases. But the Finance Ministry is reluctant to do so as it hopes to curb rises in medical expenses, arguing that clinics are financially stable. END [Copyright The Jiji Press, Ltd.]