Japan to Cut Drug Prices by 5.2% in 2008: Source

Japan will order an average drug price cut of 5.2 percent in its latest drug price review to take effect from next April, a government source said on Tuesday.

The cut will be smaller than the last reduction of 6.7 percent in 2006 but it will be combined with more steps to promote generic medicines that will also hurt branded makers.

Most analysts' forecasts call for an average cut of around 5 to 6 percent.

Fast-ageing Japan, which offers national health insurance, is eager to trim ballooning medical costs now estimated at around 33 trillion yen ($290 billion) per year, with drugs alone accounting for some 7 trillion yen.