Figure 2.
Drug pricing system in Japan.
Notes: Pricing of drugs is strictly controlled by the central government under the universal health coverage. After market approval, the price of a drug is reduced every 2 years. When a patent expires in approximately 10 years, generic drugs will appear with a price reduction of around 40% compared to the price of the off-patent branded drug. When the pharmaceutical company conducts new drug development requested by the government, the on-patent branded drug will be made available at a premium to maintain the price in line with the newly introduced policy in 2010.