Govt plans to cut prices of half of prescription drugs in FY23

The Yomiuri Shimbun
The Health, Labor and Welfare Ministry / The Environment Ministry. In Central Gov’t Bldg. No.5, Chiyoda ward, Tokyo

TOKYO (Jiji Press) — The government plans to cut official prices for 48% of all of about 19,400 prescription drugs in its fiscal 2023 revision, it was learned Friday.

Chief Cabinet Secretary Hirokazu Matsuno, Finance Minister Shunichi Suzuki and Health, Labor and Welfare Minister Katsunobu Kato agreed the same day on the cut, which is seen reducing medical expenses by some ¥300 billion.

The government is expected to formalize the plan this week.

Government-set prescription drug prices had been revised every two years in principle, together with medical fees paid to hospitals and clinics. In a shift from the format, the government started to review the official prices every year in fiscal 2021 to reflect market prices in the official prices quickly.

In a survey for September this year, market drug prices were about 7% lower than official prices on average.

The proportion of drugs subject to the price cuts was reduced from the initially targeted level of about 70%, following a request from the pharmaceutical industry, which has been worried about soaring ingredient prices.