Critical insights to prepare for market access success

By Christophe Segalini, Darren Talbot and Ross Maclean

As the world’s third largest pharmaceutical market, Japan accounted for approximately 6% of the $1.5tn in global pharmaceutical sales in 2022. While this makes it an attractive market for all pharmaceutical companies, Japan is also an important reference country in the Asia-Pacific region, especially for pricing and reimbursement, with government agencies in other countries considering the price of a medicinal product in Japan to inform the cost in their own countries.

However, the path to market access in Japan is complex and is about more than just pricing and reimbursement. The expectation from the Pharmaceuticals and Medical Devices Agency (PDMA), Japan’s regulatory authority, to review dedicated Japanese patient-level data is understood by all and should be considered a critical part of clinical development if commercialisation in Japan is envisioned. If a dedicated Japanese study is not possible, recruiting sufficient Japanese patients into a global study is encouraged, to ensure the overall global results can be confidently applied to the Japanese setting. That may secure regulatory approval but not market access.

Total spending on healthcare in Japan, calculated as a percentage of gross domestic product (GDP), has risen from 6.2% in 1980 to 11% in 2020. Faced with this rapidly rising healthcare expenditure – due, in part, to emerging health technologies and an ageing population – Japanese authorities needed to consider ways to control this spending.

Using the application of health technology assessment (HTA) in Europe as a model, Japanese authorities created a cost-effectiveness evaluation (CEE) process in 2019. Designed as a mechanism to control healthcare spending, this process reflects the methodology of HTA, which assesses the clinical benefit of a new healthcare technology and balances this against the willingness of a society to pay for the added value.

‘Japan is the world’s third largest pharmaceutical market and accounted for approximately 6% of the $1.5tn in global pharmaceutical sales in 2022’

Due to the fast pace of regulatory listing of new health technologies under public health insurance, the CEE is a complementary means to potentially adjust prices after initial reimbursement. This offers an incentive to pharmaceutical companies, as commercial sales are not delayed due to a lengthy HTA process, as is the case in many European countries.

C2H (or Center for Outcomes Research and Economic Evaluation for Health), a department of the National Institute of Public Health (NIPH), is the public organisation that conducts cost-effectiveness evaluations (CEEs) in Japan. Not all technologies are subject to CEEs and clear criteria govern the selection of technologies for evaluation, essentially based on the potential risk for significant financial impact – with exceptions being made for rare diseases and paediatric indications to avoid disincentives to research.

To keep a balance between cost and outcomes, and to harmonise the Japanese pricing system with CEEs, C2H is highly transparent, providing clear guidance on the CEE process to biopharma companies. Yet, CEEs are also a lengthy process, largely due to a shortage of local health technology assessment (HTA) expertise. For example, only two out of the 13 assessments started in 2022 were completed by the end of 2023.

The entire CEE process is estimated to take 15 to 18 months. While this is longer than the process in other HTA markets, we believe there are critical steps companies can take to help ensure not only a higher likelihood of a smoother experience but also possibly a somewhat quicker and more positive outcome. Based on the experience of a recent successful launch of an innovative specialist product for acute hospital use in Japan, there are six insights that should be considered to maximise success:

1. Consider revisiting the position of Japan in the traditional launch sequence. Due to the formulaic CEE approach, C2H does not rely on reference countries for approvals or price referencing, making Japan an attractive early launch market. Additionally, Japan is not used as a price reference for the United States or any European country, minimising any potential risk of a negative impact in other major commercial markets. However, it is influential for other Asia-Pacific countries and is referenced for pricing by some countries in the Middle East. Therefore, Japan can act as a leading market in the east without having any impact on western markets.

The takeaway? Embrace the C2H process to proactively manage internal choices, inputs and governance in a way that can see your innovation rewarded in Japan (and benefit other markets). And, pre-plan to have Japan dossier needs clearly included in the global book of work.

2. Assess the likely CEE classification. The first step in launch planning in Japan is to assess the expected classification by C2H. Table 1 presents clear criteria that mandate an estimation of peak sales, knowledge of comparator drug pricing and an understanding of expected premiums in the initial price negotiation.

3. Clarify the expected benefit. The patient/population, intervention, comparison and outcomes (PICO) methodology forms the basis of the product’s health economic strategy informing CEE modelling grounded in a solid foundation. Assuming a product is selected for a CEE, we found having a global cost-effectiveness model (with a UK reference setting) is a useful starting point. However, given the different regulatory and clinical setting in Japan compared to the UK, the comparison used in the CEE may differ.

4. Local adaptation is essential. Knowledge of and mastering the Japanese C2H process and its requirements is paramount. Here we identify three elements critical to adaptation of a global value proposition to the Japanese market:

• Conduct a local Systematic Literature Review (SLR): Many global SLRs are restricted to English language. Conducting a Japanese-language SLR will identify clinical evidence and treatment patterns in the Japanese market and is required for a C2H submission
• Identify local Japanese data sources for describing the current standard of care and medical costs. For example, Medical Data Vision (MDV) has been successfully used for C2H submissions and is a recommended resource for hospital products, with coverage of more than 40 million Japanese patients.
• Engage local key opinion leaders (KOLs): Japanese culture highly values clinical practice expertise, and such KOL endorsement will support the medical unmet need, the selected comparator in the CEE and the proposed place in therapy for a new product in Japan.

‘Japan is an important reference country in the Asia-Pacific region, especially for pricing and reimbursement’

5. Identify an experienced local HEOR partner. A local partner to conduct the above activities and to support ongoing dialogue with C2H is a wise investment. Pre-submission meetings with C2H are possible and we would strongly advise these. During these meetings, an agreement can be reached on the health economics and outcomes research (HEOR) strategy, including comparator therapies, for example, prior to submission. Also, compared to many global markets there is a relative scarcity of HEOR talent in Japan. Thus, early identification of a CEE partner is critical.

6. Knowledge transfer to drive success. It is essential to create effective cross-collaboration between the HQ teams and the local Japan affiliate to ensure exchange, sharing and learning from markets where HTA requirements have been the norm for years.

Transfer of knowledge and formal training are vital; considering relocating other markets’ HTA expert(s) is also a valid option, as the methodology applied by C2H has been developed based on experience with other HTA bodies, such as the National Institute for Health and Care Excellence (NICE) in the UK.

Japan is somewhat unique when it comes to regulatory processes and, especially, its approach to accessing pharmaceutical products and technologies. More than ever, the ‘think global, act local’ mindset is warranted for companies when looking to launch a product in the country. And, while securing market access in any country is a challenge and by no means guaranteed, our experience informs a practical and impactful roadmap that we believe can maximise the chance of success in Japan. Given the financial rewards, it’s definitely a road worth taking.

Ross Maclean is EVP, Head of Medical Affairs at Precision AQ; Christophe Segalini is Head, Global Value & Access at Celldex Therapeutics and Darren Talbot is Global Value & Access Lead at Viatris