Healthcare

July 2005

Panel Calls For More Transparency In Setting Medical Fees
The council responsible for setting medical treatment fees should increase the ranks of independent members and improve the transparency of the pricing process, according to a reform plan drafted by an expert panel.　The Central Social Insurance Medical Council is an advisory body to the Minister of Health and Welfare. It serves a central role in the nation's health care system, setting on a biennial basis the prices paid by insurance firms to health care providers.　An expert panel tasked with assessing the entity was established in the wake of a corruption scandal involving four council members. The reform proposal will be compiled on Wednesday, and the Health Ministry will use the recommendations to revise legislation and implement specific measures.　The council currently consists of eight members representing insurance managers and others paying into the system; eight for the care providers, such as doctors and pharmacists; and four on behalf of public interest groups. As part of efforts to gather a wider range of opinions, the reform plan calls for raising the number of public interest representatives, including academics, on a par with the other two groups. It recommends the addition of prefectural governors, among others, as council members.　The reform proposal also aims to reduce the council's role in setting medical fees. Along with reviewing prices every two years, the council has deliberated on the appropriate overall level for future health care expenditures, submitting budgetary provisions to the government. Discussion on overall medical outlays should be clearly excluded from the extent of the council's advisory role, according to the reform panel's recommendations.　(The Nihon Keizai Shimbun, July 16, 2005)

Drugmakers Demand A Say In Determining Mandatory Drug Prices
Drugmakers should be allowed to propose prices for their new drugs before mandatory prices are set by the government, according to a proposal released Wednesday by the Japan Pharmaceutical Manufacturers Association.　The association produced the request to enter the ongoing discussion of drug-price system reform. It intends to pitch the proposal to various officials, including those attending a meeting of the Central Social Insurance Medical Council slated for next Wednesday.　Under the association's proposal, the Ministry of Health and the social insurance council will discuss the appropriateness of drugmakers' price suggestions. Mandatory prices will still be determined by the government, but it will allow drugmakers to make a case for what they believe to be the right price.　Within the current framework, drugmakers have little involvement in the process because mandatory prices are set by the council based on proposals made by the health ministry.　The association also intends to call for eliminating a system that lowers a drug's price once its patent expires and another that automatically reduces the prices of drugs that sell more than what officials estimated.　(The Nikkei Business Daily, July 14, 2005)

Generic Drugmakers Vying For Market Share As Major Patents Expire
With a number of lucrative drugs facing patent expirations this year, generic drug manufacturers see a golden opportunity to roll out a batch of new products.　Generic drugmakers' sales fluctuate depending on how many drug patents expire in a given year. But this year, many of the drugs whose patents are set to run out are major products that generate about 400 billion yen in annual revenue, according to industry estimates.　Sawai Pharmaceutical Co. plans to introduce 34 products, including generic versions of Takeda Pharmaceutical Co.'s Basen diabetes drug and Astellas Pharma Inc.'s Harnal, which is used to treat urinary problems. Sawai will target 2.8 billion yen in sales for the year ending March 31, 2006.　Towa Pharmaceutical Co. also plans to unveil 34 drugs such as its own generics of Basen and Harnal as well as Takeda Pharmaceutical's Takepron hypertension drug. Towa will aim for 1.8 billion yen in sales for the year ending March 31, 2006.　Nippon Chemiphar Co. plans to import a generic drug from Ranbaxy Laboratories Ltd. of India, with which it has a tie-up. A production subsidiary in Japan will handle the final packaging. Nippon Chemiphar expects sales from 12 drugs, including the Indian import, to total around 600 million yen.　In fiscal 2003, generic drugmakers held 5.2% of the prescription drug market on a price basis and 16.4% on a volume basis, according to data from the Ethical Pharmaceutical Manufacturers Association. These figures are expected to rise now that the Health Ministry is promoting the use of generics as a way to hold down medical expenses.　(The Nihon Keizai Shimbun, July 9, 2005)

Venture Capitalists Double Investment In Bio/Medical Sectors
Venture capital firms invested 28 billion yen in biotechnology and medical start-ups in fiscal 2004, more than double the amount a year earlier, according to a Nikkei Business Daily survey released on July 4.　Investment in IT/Internet ventures fell short of that with annual growth of 31%, but the total sum was a high 28.5 billion yen. The service sector drew 20 billion yen in investment, up 4%.　Total investment by venture capitalists reached 226.3 billion last fiscal year, an increase of 29% from fiscal 2003. Of that amount, a sector-by-sector breakdown was available for 141.9 billion yen, of which 27% was put in the IT/Net area, 27% in biotechnology, 19% in services and 27% in other areas.　Resona Capital Co. made the most investment in the bio/medical industry. By unearthing promising ventures with the help of university technology-licensing organizations, the firm invested 5.3 billion yen in about 20 start-ups last fiscal year.　The company actively hired midcareer investment staff to enhance its ability to evaluate potential targets. It also set up a section last October to give management advice to start-ups in which it had invested.　The firm gives managers the authority to make investments of up to around 10 million yen to increase the speed of decision making. Major recipients of its funding include LinkGenomics Inc., a pharmaceutical research firm.　Second-ranked Jafco Co. made investments last year through its bio-related funds.　In partnership with an independent venture capital firm specializing in the biotechnology sector, the company invested aggressively not only in start-ups but also in ventures whose research and development activities were in more advanced stages.　The firm also increased the value of investment per venture last fiscal year, with BioOne Corp. becoming one of the firms that received a hefty amount.　The survey, conducted in cooperation with Nikkei Research Inc., covered 163 venture capital firms nationwide, with 99 providing valid responses.　(The Nikkei Business Daily, July 5, 2005)