4:48 PM
Feb 08, 2019
 |  BC Extra  |  Politics & Policy

PhRMA urges USTR to address Japan's 'damaging' pricing policy, commends China's progress

PhRMA said the Office of the United States Trade Representative must prioritize action to end Japan's "damaging" pricing regulations. In its submission for USTR's upcoming annual Special 301 Report, PhRMA said USTR should add Japan to its list of "Priority Foreign Countries," a designation PhRMA said is reserved "for countries with the worst market access barriers and the most damaging intellectual property practices."

PhRMA elevated Japan in this year's submission in response to pricing regulations the country implemented over the past two years, including premium pricing rules and "flawed" Health Technology Assessments. Japan joins Canada, South Korea and Malaysia as PhRMA's recommended "Priority Foreign Countries."

PhRMA said Japan's pricing policies covering patented medicines "inappropriately target products developed outside Japan for price cuts and are out of line with international norms and best practices. These rules are being developed with little stakeholder engagement or transparency and significantly erode the appropriate value for U.S. intellectual property.”

In December 2017, Japan implemented pricing reforms that imposed additional criteria for drugs to qualify for exemption from standard price adjustments under its price maintenance premium system. The added criteria raised the bar on what is defined as “innovative” (see "Progress Preserved").

PhRMA said that about 30% of patented medicines no longer qualify.

PhRMA also called out a lack of transparency in Japan's new Health Technology Assessment system, which the country plans to implement in April. According to PhRMA, the proposed system has elements that "clearly target foreign firms for additional price cuts."

In its submission, the trade group said it is "encouraged by China’s ongoing work to strengthen its drug regulatory framework and IP protection and enforcement system." In particular, PhRMA commended the country's patent law amendments proposed in January, which include compensation for patent term loss due to regulatory review and approval. PhRMA said it "strongly encourages China to move swiftly to implement proposed reforms." However, Tony Chen, a partner at Jones Day, told BioCentury in January the approval process could take 6-10 months (see "Patent Reform Back on Agenda in China").

PhRMA also welcomed China's proposed regulatory data protection terms of six and 12 years protection for synthetic drugs and biologics, respectively, and commended the country's progress on strengthening reimbursements for innovative medicines. The trade group said China's overall drug approval process is still much longer than international practice, but said the country has made "significant" progress in reforms to speed it up. PhRMA noted that China's National Medical Products Administration (NMPA) "approved a number of drugs in 2018 under timelines consistent with FDA and European standards."

PhRMA also pointed to the 2017 update to China’s National Reimbursement Drug List and the addition of 17 cancer drugs as two encouraging steps (see "China Adds Insurance Coverage for 17 Cancer Therapies").

Many of the proposed reforms PhRMA applauded must be approved and implemented, and the trade group still sees a long road before China addressed all of its concerns. As such, PhRMA requested that China remain on USTR's Priority Watch List in 2019.

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