OBJECTIVES:  Despite the introduction of a two-year pilot policy in government for value-based re-pricing in Japan, still no chart exist on affordability of expensive technologies and sustainability of the universal health coverage (UHC). To address this fundamental question, we aimed to seek a potential solution using differential pricing (DP) for the National Formulary list.

METHODS: A theory is developed based on cyclic bipolar-state modeling with investment and disinvestment, in which cost increase by investments for new technologies is cancelled out by cost decrease by disinvestments using DP. Since the Japanese national list prices are applied to the whole country without any differentiation, cost-saving could be achieved if the government sets the list prices discounted by region instead of applying the same price to the whole country. Our approach formulated this hypothetical DP application.

RESULTS: Suppose two statistical distributions by region, regarding:1) socio-economic statuses θ_i and 2) health outcomes δ_i