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TOKYO (Reuters) - Prime Minister Shinzo Abe's economic advisers, hoping to curb Japan's ballooning healthcare costs, proposed on Wednesday reforms to the way drug prices are set, a step opposed by foreign and domestic drug makers who say the changes will stifle investment.
The proposals follow a decision to halve the price of Bristol Myers Squibb Co's cancer drug Opdivo last month, and an earlier move to slash the price of Gilead Science Inc's highly effective but expensive hepatitis C drug Sovaldi.
The four private-sector advisers at Abe's Council on Economic and Fiscal Policy (CEFP) proposed reviewing all prescription drug prices, which are set by the government, at least annually, rather than once every two years as currently.
The advisers, including Sadayuki Sakakibara, head of Japan's biggest business lobby Keidanren, went on to call for reviewing four times a year official prices of the drugs that prove to be effective against more diseases than initially identified and which experience an unexpectedly high surge in sales.
Health Minister Yasuhisa Shiozaki put forward a similar proposal at the panel's meeting on Wednesday.
Based on the private-sector advisers' proposals, Abe ordered Economy Minister Nobuteru Ishihara and other cabinet ministers to map out basic guidelines by the next panel meeting later this month.
Abe's advisers also called for reviewing prices on generic drugs once a year or more, which would lead to lower official prices given that market prices of medicines overall are on a steady decline.
Japanese and foreign drug makers argue that not only would the changes stifle innovation by creating uncertainty over pricing but would undercut a key component of Abe's economic growth policy, which calls for attracting research and development investment from pharmaceutical companies.
"The current system of biennial repricing has served Japan and the Japanese people well by ensuring the predictability of reimbursement, controlling healthcare expenditures, rewarding innovation and, most importantly, improving access for Japanese patients to the most innovative treatments available globally," said a joint statement by U.S. and European industry groups.
"Adopting annual repricing threatens to undo all of these achievements," the statement said, echoing complaints by Japanese drug makers.
Reporting by Tetsushi Kajimoto and Linda Sieg; Editing by Muralikumar Anantharaman