OTC-Similar Drug Surcharge From March 2027: What It Costs

Bottom line: patches, hay fever drugs and moisturisers cost ¥50 to ¥240 more a month at 30%

*Drug prices from the MHLW National Health Insurance drug price list (effective 13 August 2026). We applied the calculation method in the Central Social Insurance Medical Council paper of 16 September 2026; the amounts cover the drug portion only. Consultation and dispensing fees are not included, and pharmacies round the total to ¥10, so real bills can differ by a few tens of yen[Chuikyo paper 2-2, calculation example (in Japanese)].

Is your usual drug covered? The most-prescribed of the 77 ingredients

The scheme covers prescription drugs that match an OTC medicine in ingredient and route (swallowed, applied as a patch, rubbed on and so on) and have the same maximum daily dose. The Ministry of Health, Labour and Welfare (MHLW) selected 77 ingredients mechanically, and the test is the ingredient name, not the brand[MHLW, subcommittee paper, 27 Aug 2026, p.3 (in Japanese)]. Brand-name and generic products are treated alike.

*The full list of 77 ingredients and about 1,000 product names is in the MHLW product list[MHLW product list (in Japanese)].

Some commonly prescribed drugs are not on the list. Easy-to-miss examples:

• Acetaminophen on its own is not among the 77 (only a combination cold remedy is)
• Ingredients with no OTC version, or prescriptions with a higher daily dose than OTC products, are outside the scheme
• The same ingredient is exempt when prescribed for a use that OTC products do not have (next section)

You can check ingredient names in your medication notebook (お薬手帳) or the drug information sheet from the pharmacy. If you use your My Number insurance card, the drug information in Mynaportal shows them too (My Number insurance card).

The same ingredient can be exempt: prescriptions for uses OTC products lack

The test also depends on why the drug was prescribed. Only prescriptions that match a use written on the OTC package insert attract the charge; others do not[same paper, p.7].

The doctor marks the prescription. A new "partially uninsured care" (一部保険外療養) column will show "○" if the charge applies and "ー" if it does not[Chuikyo paper 2-2, p.2 (in Japanese)]. The pharmacy collects the charge according to that mark.

How the separate charge is calculated: take out a quarter, then apply 10% to 30% to the rest

The calculation has two steps. First, a quarter of the drug price is taken out as the separate charge. Then your usual co-payment rate applies to the remaining three quarters.

The key point is that no co-payment rate applies to the quarter. It sits outside insurance, so people paying 10% and 30% pay the same amount for it.

• Whether consumption tax applies to the separate charge is "under consideration within the government". The existing special charge for choosing a brand-name drug over a generic does carry consumption tax
• From March 2027, the special charge for choosing a brand-name drug will also be calculated as "half the price gap × total quantity"
• Where both would apply, you pay only the OTC-similar separate charge, not the brand-name special charge

People paying 10% see the biggest rise: watch out if you are 70 or 75 and over

The lower your co-payment rate, the larger the increase. The quarter is the same for everyone, and only the remaining three quarters gets cheaper.

*Our estimate, applying the Chuikyo method to generic prices effective 13 August 2026. Amounts before the pharmacy's rounding.

A 10% payer who keeps using 60 patches and 200g of lotion every month pays ¥531 more a month, or ¥6,372 a year. The drug part of the bill roughly triples. Check your own rate and the income lines in the medical system for people aged 75 and over. The same law also brings dividends and other financial income into the test for the late-stage elderly co-payment rate (when financial income starts to count).

Who does not pay: children, welfare recipients, cancer and intractable disease treatment, inpatients

The exemptions were settled by the Medical Insurance Subcommittee on 16 September 2026[MHLW subcommittee summary, p.8 (in Japanese)]. Some depend on who you are, others on the situation.

The low-income rule is easy to misread. Early discussions spoke of "low-income people", but the final plan exempts only welfare recipients[subcommittee paper, 27 Aug 2026, p.14 (in Japanese)]. Households exempt from resident tax have other relief, such as the high-cost medical expense benefit; see benefits and reductions for resident-tax-exempt households.

Designated intractable disease status is confirmed by the medical care recipient certificate or registration certificate. Until the end of fiscal 2027, other objective documents are also accepted.

Drugs used all year can be exempt: six months of use for tablets, atopic dermatitis for creams

The charge also does not apply when a doctor judges that year-round use is medically necessary. The rules differ for tablets and for creams or patches[same summary, pp.4-5 and p.8].

• Tablets: exempt if prescribed for roughly 50 weeks (a year). With at least about six months of use and a doctor's judgment that year-round use is needed, the exemption can start before 50 weeks
• Creams and patches: year-round heparinoid or urea for atopic dermatitis, and steroid creams used as proactive therapy, are exempt
• Transitional measure: patches for severe knee osteoarthritis and moisturisers for other severe skin conditions are exempt until the end of fiscal 2028, then reviewed against clinical guidelines
• New patients are normally charged for the first six months, and those expected to finish treatment within six months remain charged

If you take a rhinitis or laxative drug all year, it is worth asking your doctor before March 2027 whether it counts as year-round use. Your medication notebook also shows past use if you change clinics.

Who this does not suit, and caveats: switching to OTC products is not always cheaper

"If there is a surcharge, I'll just buy OTC" is usually more expensive on drug cost alone. The MHLW's own examples show prescription drugs still cheaper even after the separate charge[same summary, p.8].

*MHLW examples. Prescription figures cover the drug only; first-visit, repeat-visit and dispensing fees are extra.

On the other hand, a visit carries consultation and dispensing fees and time off. Do not decide on the drug price gap alone:

• New or unusual symptoms: see a doctor first. Do not let OTC self-care delay a visit
• Long-term use of the same drug: you may qualify for the year-round exemption, so ask your doctor first
• Other medicines: switching to OTC weakens interaction checks. Show a pharmacist your list of prescriptions
• No monthly cap on the surcharge: it sits outside insurance, so it is not expected to count toward the high-cost medical expense benefit (to be confirmed in the implementing notices)

Watch where the scheme is heading, too. The government says it will consider more ingredients and a higher share than one quarter from fiscal 2027[subcommittee paper, p.21, ministers' agreement (in Japanese)]. Monthly caps on medical bills are explained in the high-cost medical expense benefit, but it is safer to budget on the basis that this surcharge sits outside them.

What about the medical expense deduction and the self-medication tax scheme?

Households whose medical bills top ¥100,000 a year will want to know whether the separate charge counts toward the medical expense deduction (医療費控除). As of September 2026, neither the National Tax Agency nor the MHLW has said so explicitly.

• The special charge for choosing a brand-name drug was classed as eligible for the medical expense deduction in the MHLW's Q&A of March 2025
• The OTC-similar separate charge is also part of the price of a drug needed for treatment, but whether it is treated the same way must await the implementing notices and Q&A
• The brand-name special charge does not appear in the medical expense notice on Mynaportal. The separate charge may not either, so keep your pharmacy receipts

OTC products bought instead for treatment count toward the medical expense deduction. For products marked on the receipt, you can instead choose the self-medication tax scheme (セルフメディケーション税制): the amount above ¥12,000 a year is deductible, up to ¥88,000[NTA No.1129 (in Japanese)]. You must choose one of the two, so compare them before filing. See how to calculate the medical expense deduction for its scope.

Frequently asked questions

Summary

• Starting March 2027, prescription drugs with the same ingredients as over-the-counter medicines will require an additional out-of-pocket payment of one-quarter of the drug cost, on top of the regular copayment.
• The target covers 77 ingredients and 1,042 products, including loxoprofen patches, fexofenadine, heparinoid, and magnesium oxide.
• Because the one-quarter portion is the same amount regardless of your copayment rate, the relative increase is larger for those paying only 10%.
• Children up to the end of the fiscal year they turn 18, welfare medical assistance recipients, cancer and designated intractable disease treatment, and inpatients are excluded.
• Medicines used year-round may sometimes be excluded. Check the ingredient name in your medication notebook and confirm with your doctor.

References (sources)

• MHLW, "Implementing the review of insurance benefits for OTC-similar drugs", 216th Medical Insurance Subcommittee, Material 1 (16 Sep 2026) (in Japanese) — exemptions, long-term use rules, burden examples
• MHLW, 213th Medical Insurance Subcommittee, Material 1 (27 Aug 2026) (in Japanese) — list of 77 ingredients, differences in indications, outline of the amended law
• MHLW, Chuikyo General Assembly paper 2-2 (16 Sep 2026) (in Japanese) — prescription column and calculation examples
• MHLW, list of prescription drugs subject to the separate charge (draft, 5 Aug 2026) (in Japanese)
• MHLW, "The Medical Insurance System Reform Act has been enacted" (Act No. 31 of 2026) (in Japanese)
• MHLW, National Health Insurance drug price list (effective 13 Aug 2026) (in Japanese) — prices used in our estimates
• MHLW, special charge for brand-name drugs with generics (in Japanese)
• NTA Tax Answer No.1122, medical expenses eligible for deduction (in Japanese)
• NTA Tax Answer No.1129, self-medication tax scheme (in Japanese)

This article is general information based on decisions as of September 2026. Details may change in official notices. Ask your doctor or pharmacist whether your prescription is covered, and a tax office or tax accountant about the medical expense deduction.