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Ono faces steep price cut for Opdivo in Japan

Japanese regulator proposes 50% cut after drug’s population growth exceeds initial projections

Ono PharmaceuticalsJapan has followed through on plans for an out-of-cycle price cut for Ono Pharmaceuticals' cancer drug Opdivo, lowering it by 50%.

The Central Social Insurance Medical Council (CSIMC) has not only recommended reducing the price of Opdivo (nivolumab) a year early but has opted for a cut at the top end of predictions. The new price will come into effect next February.

Drug prices in Japan are typically revised every two years, and Opdivo was not due to have its price tweaked until fiscal 2018. The MHLW committee has accelerated that process by activating an emergency provision that allows earlier cuts for big-selling drugs – making 100bn to 150bn yen a year – and which exceed company sales projections by 50% or more.

Opdivo reached the market in Japan in 2014 for melanoma, claiming a price of 730,000 yen ($6,700) per 100mg dose, which equated to upwards of $320,000 per year for a typical patient. That was initially sustainable as there were relatively few patients on treatment, but subsequent approval of Opdivo for non-small cell lung cancer (NSCLC) and renal cell carcinoma (RCC) have dramatically swelled the eligible patient population.

Now its price has been cut to 365,000 yen per 100mg, which according to the committee brings it closer into line with the price of the drug in other countries including the US. Earlier it had been suggested that a 25% reduction was more likely.

Ono has said it is considering filing an objection to the decision, on the grounds that the move will disrupt its business forecasts, saying the cut will cut projected earnings, according to a Japan Today report.

The decision comes at a time when there are increasing calls in Japan to replace the current two-year pricing cycle with an annual review, in a bid to help curb escalating spending on medicines in the country. The pharma industry has argued that it would be better to focus on making sure drugs are prescribed appropriately and reducing waste.

The Opdivo move follows an earlier out-of-cycle price cut for Gilead's hepatitis C virus therapy Sovaldi (sofosbuvir) and it is reported that Amgen's cholesterol-lowering antibody Repatha (evolocumab) may be the next product in the frame.

Article by
Phil Taylor

17th November 2016

From: Sales

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