Analyzing Upward Deviation of Actual vs Predicted Drug Sales in Japan for a Reasonable Drug-Pricing Policy

Shoyo Shibata, Daigo Fukumoto, Takeshi Suzuki, Koken Ozaki

Research output: Contribution to journalArticle

Abstract

Background: Predictions of drug sales play an important role in setting drug prices in Japan, where drug prices are highly regulated. One of 2 primary Japanese drug-pricing methodologies—the cost calculation method— refers extensively to the prediction of drug sales in establishing drug prices. Deviations from predicted sales can induce disproportionate drug prices and unexpected pharmaceutical expenditures. This study aimed to estimate the upward deviation of actual sales from predicted sales and to explore the predictors of such upward deviation. Methods: Estimates of upward deviation in 2015 were produced for new molecular entities (NMEs) approved in 2006-2015. To identify the predictors associated with upward deviation through binary logistic regression analyses, sales within 3 years of launch and in the predicted year in which peak sales would be reached were used. Results: Estimated upward deviation was more than 1220 billion yen in 2015 for the targeted drugs. Drugs priced by the cost calculation method or by obtaining additional indications were significantly more likely to show an upward deviation from predicted peak sales. Conclusion: There is substantial upward deviation between actual and predicted drug sales in Japan. So long as drug sales predictions are used in drug price calculations, a flexible repricing system is needed to buffer unexpected pharmaceutical expenditures.

Original languageEnglish
JournalTherapeutic Innovation and Regulatory Science
DOIs
Publication statusAccepted/In press - 2019 Jan 1

Fingerprint

Japan
Costs and Cost Analysis
Pharmaceutical Preparations
Health Expenditures
Drug Costs
Buffers
Logistic Models
Regression Analysis

Keywords

  • additional indications
  • cost calculation method
  • drug pricing
  • drug sales
  • regulatory science

ASJC Scopus subject areas

  • Pharmacology, Toxicology and Pharmaceutics (miscellaneous)
  • Public Health, Environmental and Occupational Health
  • Pharmacology (medical)

Cite this

Analyzing Upward Deviation of Actual vs Predicted Drug Sales in Japan for a Reasonable Drug-Pricing Policy. / Shibata, Shoyo; Fukumoto, Daigo; Suzuki, Takeshi; Ozaki, Koken.

In: Therapeutic Innovation and Regulatory Science, 01.01.2019.

Research output: Contribution to journalArticle

@article{80c6f6bcf9914625b3e684fada4ce526,
title = "Analyzing Upward Deviation of Actual vs Predicted Drug Sales in Japan for a Reasonable Drug-Pricing Policy",
abstract = "Background: Predictions of drug sales play an important role in setting drug prices in Japan, where drug prices are highly regulated. One of 2 primary Japanese drug-pricing methodologies—the cost calculation method— refers extensively to the prediction of drug sales in establishing drug prices. Deviations from predicted sales can induce disproportionate drug prices and unexpected pharmaceutical expenditures. This study aimed to estimate the upward deviation of actual sales from predicted sales and to explore the predictors of such upward deviation. Methods: Estimates of upward deviation in 2015 were produced for new molecular entities (NMEs) approved in 2006-2015. To identify the predictors associated with upward deviation through binary logistic regression analyses, sales within 3 years of launch and in the predicted year in which peak sales would be reached were used. Results: Estimated upward deviation was more than 1220 billion yen in 2015 for the targeted drugs. Drugs priced by the cost calculation method or by obtaining additional indications were significantly more likely to show an upward deviation from predicted peak sales. Conclusion: There is substantial upward deviation between actual and predicted drug sales in Japan. So long as drug sales predictions are used in drug price calculations, a flexible repricing system is needed to buffer unexpected pharmaceutical expenditures.",
keywords = "additional indications, cost calculation method, drug pricing, drug sales, regulatory science",
author = "Shoyo Shibata and Daigo Fukumoto and Takeshi Suzuki and Koken Ozaki",
year = "2019",
month = "1",
day = "1",
doi = "10.1177/2168479019860123",
language = "English",
journal = "Therapeutic Innovation and Regulatory Science",
issn = "2168-4790",
publisher = "SAGE Publications Inc.",

}

TY - JOUR

T1 - Analyzing Upward Deviation of Actual vs Predicted Drug Sales in Japan for a Reasonable Drug-Pricing Policy

AU - Shibata, Shoyo

AU - Fukumoto, Daigo

AU - Suzuki, Takeshi

AU - Ozaki, Koken

PY - 2019/1/1

Y1 - 2019/1/1

N2 - Background: Predictions of drug sales play an important role in setting drug prices in Japan, where drug prices are highly regulated. One of 2 primary Japanese drug-pricing methodologies—the cost calculation method— refers extensively to the prediction of drug sales in establishing drug prices. Deviations from predicted sales can induce disproportionate drug prices and unexpected pharmaceutical expenditures. This study aimed to estimate the upward deviation of actual sales from predicted sales and to explore the predictors of such upward deviation. Methods: Estimates of upward deviation in 2015 were produced for new molecular entities (NMEs) approved in 2006-2015. To identify the predictors associated with upward deviation through binary logistic regression analyses, sales within 3 years of launch and in the predicted year in which peak sales would be reached were used. Results: Estimated upward deviation was more than 1220 billion yen in 2015 for the targeted drugs. Drugs priced by the cost calculation method or by obtaining additional indications were significantly more likely to show an upward deviation from predicted peak sales. Conclusion: There is substantial upward deviation between actual and predicted drug sales in Japan. So long as drug sales predictions are used in drug price calculations, a flexible repricing system is needed to buffer unexpected pharmaceutical expenditures.

AB - Background: Predictions of drug sales play an important role in setting drug prices in Japan, where drug prices are highly regulated. One of 2 primary Japanese drug-pricing methodologies—the cost calculation method— refers extensively to the prediction of drug sales in establishing drug prices. Deviations from predicted sales can induce disproportionate drug prices and unexpected pharmaceutical expenditures. This study aimed to estimate the upward deviation of actual sales from predicted sales and to explore the predictors of such upward deviation. Methods: Estimates of upward deviation in 2015 were produced for new molecular entities (NMEs) approved in 2006-2015. To identify the predictors associated with upward deviation through binary logistic regression analyses, sales within 3 years of launch and in the predicted year in which peak sales would be reached were used. Results: Estimated upward deviation was more than 1220 billion yen in 2015 for the targeted drugs. Drugs priced by the cost calculation method or by obtaining additional indications were significantly more likely to show an upward deviation from predicted peak sales. Conclusion: There is substantial upward deviation between actual and predicted drug sales in Japan. So long as drug sales predictions are used in drug price calculations, a flexible repricing system is needed to buffer unexpected pharmaceutical expenditures.

KW - additional indications

KW - cost calculation method

KW - drug pricing

KW - drug sales

KW - regulatory science

UR - http://www.scopus.com/inward/record.url?scp=85070269577&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=85070269577&partnerID=8YFLogxK

U2 - 10.1177/2168479019860123

DO - 10.1177/2168479019860123

M3 - Article

JO - Therapeutic Innovation and Regulatory Science

JF - Therapeutic Innovation and Regulatory Science

SN - 2168-4790

ER -