Tokyo changes prescription to cut drug bill

ALARMED by spiralling health care costs, the Japanese government is taking steps to wean the public away from its tendency to reach for a variety of pills at the slightest cough or shiver.

The Japanese are the biggest spenders on drugs in the world, with a per capita expenditure of US $228 per annum. Of the country's Yen 23 trillion (US $180 billion) spent on health each year, 30 per cent is spent on drugs.

A large part of this money goes into the pockets of doctors, who are among the richest in the country -- they account for more of Japan's Rolls Royces than any other section of professionals. Compared with the average American doctor's earning of US $213,000 a year, a Japanese physician earns US $327,000.

The method of distributing and selling drugs prevalent in Japan contributes to the affluence of the doctors. Doctors prescribe and dispense medicines that they buy at discounted rates from wholesalers, but they are reimbursed for the drugs at the price set by the government, which is much higher.

The government's new pricing system brings the official price of drugs much closer to the wholesale price, thereby removing the incentive for doctors to prescribe expensive medication.