The Gains and Losses of Separation of Medicine from Japan

The separation of medicine has always been a focus of medical reform discussions in various countries.

Although the reform measures in different regions are different, if the prescription is to eventually flow out of the hospital, it will inevitably need to increase the doctor's cost (such as the prescription fee) and give the pharmacist financial independence (increase the dispensing fee)

From the perspective of separation of interests, although the decision-making power and the right to sell prescriptions have been separated, it can reduce irrational use of drugs and reduce large prescriptions, but the profit of pharmacies in selling drugs is the same as that of hospitals, and they all hope to sell expensive drugs.

If you look at the Japanese market, as of 2019, Japan’s pharmaceutical division ratio has reached 74.

1974 was the first year of the separation of Japanese medicine.

After 1998, doctors did not carry out a continuous and large-scale increase in the prescription release fee.

In the late 1990s, as the Japanese economy no longer had the original characteristics of rapid expansion and its aging population became increasingly serious, the stimulus measures for the outflow of prescription drugs were changed from economic incentives to generic drugs alternative strategies

Since 2002, the Japanese government has given incentives to the adjustment of generic drugs, but the early incentives have been weak, which has also led to insufficient substitution of generic drugs

In order to promote the strategy of substitution of generic drugs, the Japanese government has continuously increased incentives for the dispensing of generic drugs and established punitive measures

By 2020, after 4 revisions in 8 years, not only will pharmacies require a substantial increase in the replacement rate of generic drugs, but also penalties will be imposed on pharmacies that are less than a certain percentage of the replacement rate of generic drugs, and points will be deducted

Starting from April 2020, the replacement rate of generic drugs above 75% will drop from 18 points to 15 points, those above 80% will remain unchanged at 22 points, and those above 85% will rise from 26 points to 28 points

Through the above measures, the proportion of prescriptions for generic drugs in Japan has reached 79.

After nearly 50 years of development, the separation of medicine in Japan is generally successful, but this is a very slow reform.

Therefore, the stagnation of the prescription drug market in Japan after 2015 is due to the replacement strategy of generic drugs, which means that as long as the payment policy is adjusted at the drug sales terminal, the total drug cost can be effectively controlled, which was promoted by the previous large-scale redemption policy.

From Japan’s experience, it can be seen that the outflow of prescriptions through large-scale subsidies to medical institutions cannot drive down the price of medicines, nor can it ensure that the interests of pharmacies are cut off from medical institutions

If we look back at the Chinese market, centralized drug procurement is a clear alternative strategy for generic drugs

Therefore, separation of medicine is not a necessary option for payment reform
.
The benefit of the separation of medicine is to promote the unprecedented prosperity of retail pharmacies outside the hospital and the improvement of the status of pharmacists.
Since the prescriptions are all outside the hospital, the later payment reforms are mainly concentrated in controlled pharmacies, and there is relatively little resistance to reform
.
However, the separation of medicine requires sufficient benefits for doctors and medical institutions.
First of all, the total medical cost must be greatly increased
.
An economy in a period of high growth may have fiscal capacity, but once the economy is in a period of long-term adjustment, it is difficult to have such fiscal expenses to cover the cost of reform
.