The upcoming changes to Japan’s pricing mechanism for prescription medicines will not include any radical developments and will reflect the government’s focus on containing health care spending, according to a new report from Decision Resources.

The country’s medical bill is currently estimated at around 33 trillion yen a year, around $306.17 billion, boosted by the country’s fast-aging population, with prescription drug costs now accounting for 7 trillion yen annually. The latest pricing proposals allow for an increase in premiums to be awarded and, for innovative drugs, the premium range will be increased, says the report.

“To qualify for this premium in Japan, a product must have clinically useful new mechanisms of action, must be proven to have greater efficacy or improved safety and must demonstrate resultant, improved management of the target indication,” said Stuart Bowman, director at Decision Resources. “However, this premium is rarely awarded given the stringent, and less than transparent, qualifying criteria,” he added.

Last December, Japan’s Central Social Insurance Medical Council (Chuikyo) announced that the next biennial drug price review, to be implemented this April, will include price cuts averages 5.2%. The previous reductions, imposed in April 2006. averaged 6.7%, but the new round of measures will also includes incentives to boost the use of generics. As from April, the average price cut for new products facing generic competition for the first time will be in the range of 4%-6%.

There will be extraordinary price cuts for products whose sales have far exceeded the forecasts on which their initial price listings were based. Among these will be antihypertensives including Banyu/Merck & Co’s Nu-Lotan (losartan) and Preminent (losartan plus hydrochlorothiazide), Boehringer Ingelheim/Astellas’ Micardis (telmisartan), Daiichi Sankyo’s Olmetec (olmesartan), Novartis’ Diovan (valsartan) and Takeda’s Blopress (candesartan). Blopress is Japan’s top-selling drug, and its worldwide sales rose 10.1% to 173 billion yen in the nine months to December 2007, Takeda reported in January.

Also qualifying for repricing will be a number of antidepressants, including Astellas/Meiji Seika/Solvay’s Depromel/Luvox (fluvoxamine), GlaxoSmithKline’s Paxil (paroxetine) and Pfizer’s J-Zoloft (sertraline).

The April 2006 round of price cuts was largely the reason for the Japanese market bottoming out, at a value of 7.7 trillion yen, in 2006-7, after having grown around 5.5% in the previous 12 months, says IMS. Japan remains the world’s second largest pharma market, after the USA.