Why medical care costs in Japan have increased despite declining prices for pharmaceuticals.

Analysis of the 1979 to 1993 surveys of national claims data shows that, using deflated prices, most of the increase in outpatient care costs is due to drugs, with increases in gross volume and deflated unit prices making equal contributions. Further analysis of detailed prescriptions data obtained from one-tenth of the total sample for 1991 and 1993 reveals that new drugs and originator drugs tend to be selected more often. The present vicious cycle of high launch prices, followed by subsequent cuts in the fee schedule, has led to adverse consequences for the industry, physicians and patients.