The Current Situation of Japanese Medicinal Plants Industry and its Significance on the Pharmaceutical Industry 3-1 - 農業知識入口網

III. Theme/subjects for Japanese medicinal plants industry
III-1. Rising crude drug prices and declining product values

Crude drug prices in Japan have increased in the recent years. The main factor for this increase is due to the rising labor costs in China.

The NHI price of prescription drugs in Japan are fixed and subject for re-evaluation every two years according to the actual trading price. However, the actual trading price is lower than the NHI price because they are determined by the negotiations between the medical institutions and wholesalers. As a result, the NHI price of most prescription drugs will decrease several % every two years. Kampo formulations are not exempted from this fluctuating market either, as reflected in their considerable price reduction over the past several decades. Western pharmaceutical companies compensate for NHI price reductions of existing products with new, high-value
products. Since Kampo medicine companies do not make new products, price decrement inevitably leads to lower profit.