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Benefits Of Using The International Reference Pricing China And Japan

By Betty Sanders


The ever-escalating cost of healthcare has made it difficult for most people to access health care services. Governments are, therefore forced to step in and control prices to ensure universal access. Various strategies can be used to determine the cost of medicines, and IRP is an emerging system in this sector. When it comes to International Reference Pricing China and Japan stand to gain a lot due to their economic and geographic similarities. For more details on how these two countries can benefit from this system, read on.

There is a streamlined cost of medicines. Before, the same drug could go for different prices within the same country. These differences could be quite big percentages. IRP has eliminated such disparities in market discrimination. Now, the cost of drugs is not only across the country, but also across the region.

There is greater market access. Streamlining of prices not only removes disparities, but also increases the range of reach of drugs. Japan and China can trade the same drug across their borders at relatively the same cost. Hence, companies can focus on producing high-quality medicines rather than just competing for markets.

The control of drug manufacturers on the prices of medicines is eliminated. A capitalistic system, such as what the drug market is, can be cannibalistic. For example, drug manufacturers may escalate process, not because of high production costs but simply because they are dominant and can dictate prices. Such a scenario would play against the government's interest in providing universal access to healthcare.

Treatment benefits to patients are enhanced. When prices are set, patients can get treatment, knowing very well the costs they will incur. However, it is important to note that not all medicines are placed under the IRP. Only certain types or classes of drugs are referenced. These are mainly drugs that are of significance to each country.

The prices for medicines have been reduced greatly. In any system where there is control on pricing, finding a method that benefits everyone is never easy. However, the IRP ensures that drug manufacturers get their work's worth, and patients get value for their money. This has greatly curtailed the prices.

IRP is simple and cheap. Many systems fail at the implementation stage. This is because they are rigorous and require a lot of information to be implemented successfully. However, when countries share similar economic and geographic environments such as China, and Japan do, they can benefit from IRP greatly.

Implementation is cheap. For a system to be implemented with ease, it should be easy to replicate. The International Reference Pricing relies heavily on communication. There is little resource usage after development. The manufacturers and stakeholders in the industry are simply communicated to the polices for them to implement.

The IRP is gaining international recognition as more and more countries begin to adopt it. This system is ideal for countries like China and Japan. This is because it will ensure that no country pays more or less in the region.




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