A government panel on Wednesday approved coverage of a new therapy to treat leukemia and other hematologic cancers, which currently costs 33.49 million yen ($305,000), by national health insurance, a move that would significantly ease the burden on patients.

The drug Kymriah, to be produced and sold by Novartis Pharma K.K., a Tokyo-based unit of Swiss pharmaceutical giant Novartis AG, will carry the highest price tag of any single drug in Japan. Coverage is set to take effect May 22.

But the decision by the health ministry panel may raise concerns about the impact on the country's ballooning medical care costs amid the rapidly ageing population.

The one-time therapy, which works by genetically modifying a patient's immune cells to launch an all-out attack on the disease, is considered effective on patients for whom existing treatments do not work.

Under Japan's public health insurance system, a policyholder usually shoulders around 10 percent to 30 percent of the cost incurred at medical institutions, with the remaining amount covered by the policy in exchange for paying monthly premiums.

There is also a cap on monthly medical payments depending on a policyholder's income. For example, a patient with annual income between 3.7 million yen and 7.7 million yen, would have to shoulder costs of roughly 410,000 yen a month to be treated with Kymriah.

The Ministry of Health, Labor and Welfare estimates the number of patients that will be eligible to use the drug will total 216 a year at most and will generate annual revenue of 7.2 billion yen.

Clinical tests of Kymriah, including those in which Japanese patients took part, have shown that around 80 percent of those suffering from leukemia and some 50 percent of those with lymphoma saw significant improvements in symptoms.

Those eligible to use the drug include children and those 25 or younger with B-cell precursor acute lymphoblastic leukemia and patients with diffuse large B-cell lymphoma, who are not able to be cured using other anticancer drugs.

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