Current Situation for Generic Drugs in Japan

Abstract

Although the Japanese pharmaceutical market is the second largest market in the world, the share of generics is extremely low when compared with those in the USA, the UK and Germany. The reason for this is that there are several obstacles to quick access to, and market penetration of, generics that would be incomprehensible to foreign companies. In Japan, systems such as substitution of generics for brands, reference pricing, etc have not yet been implemented. Similarly, the complete separation of prescribing and dispensing medicines has not occurred in Japan, where 48 per cent of medical institutions both prescribe and dispense pharmaceutical products. This is in stark contrast to both the USA and the EU, where complete separation exists. Medical institutions that gain profits from the gap between the purchasing and reimbursement price still tend to use brands with higher profit margins than generics; however, the push to promote the use of generics has just started. Therefore, generics companies and their associations must implement appropriate strategies in response to the changing circumstances.