Contemporary generic market in Japan – key conditions to successful evolution

Abstract

The Japanese pharmaceutical market, the world’s second largest, is traditionally renowned for the domination of patented drugs and the weakest generics share among major established economies. An in-depth observation of published evidence in Japanese/English language provided closer insight into current trends in Japanese domestic legislation and pharmaceutical market development. Recent governmental interventions have resulted in significant expansion of the generic medicines market size. Substantial savings due to generic substitution of patent-protected drugs have already been achieved and are likely to increase in future. Nationwide population aging threatening sustainable healthcare funding is contributing to the relevance of generic policy success. Serious long-term challenges to the modest Japanese generic manufacturing capacities will be posed by foreign pharmaceutical industries particularly the ones based in emerging BRIC economies.

Keywords::

• attitudes
• bioequivalence
• dispensing
• drug information
• generic medicines
• health policy
• industry
• Japan
• patent protection
• pharmaceuticals market
• prescribing

Financial & competing interests disclosure

This paper was written while the first author (M Jakovljevic) was a visiting associate professor at Hosei University. This market analysis was supported financially by Ministry of Education, Culture, Sports, Science & Technology in Japan (Grant Number 22000001) and by the Ministry of Education, Science and Technological Development, Republic of Serbia Research Grant Number OI 175 014. The publication of the results was not contingent on either Ministry’s approval. The authors have no other relevant affiliations or financial involvement with any organization or entity with a financial interest in or financial conflict with the subject matter or materials discussed in the manuscript apart from those disclosed.

No writing assistance was utilized in the production of this manuscript.

Key issues

• This systematic review of published evidence in English and Japanese language was undertaken in order to fill in current gap in knowledge on fresh new developments and consequences of past health policy measures in Japanese market of generic medicines.

• Authors believe that an effort aimed at encompassing the contemporary big picture in generic market evolution could be useful viewpoint for the pharmaceutical industry leaders, but also pose new challenging research questions for the academic community.

• Years of targeted interventions of Japanese government have resulted in significant expansion of generic medicines prescription and market size in terms of unit consumption.

• Health policy measures targeted at attending physicians and pharmacists, supporting generic substitution of patented drugs, bear certain peculiarity due to traditional lack of separation between prescription and dispensing of medicines in the Far East region of Asia.

• These cost containment efforts nationwide are likely to bring substantial savings essential for financing the unmet population needs in the long run.

• Anticipated impact of generic substitution to the quality of medical services will be rather acceptable opposing conventional attitude on unreliable quality and safety of copycat medicines embraced by Japanese consumers.

• Biosimilars present particularly promising field of generic research and development worldwide. Regardless of some advances, Japanese market will probably not accelerate substantially its pace of biosimilars uptake, remaining below 1% of total seven major market volume sales until 2019.

• Having in mind far-reaching consequences of population aging for sustainable healthcare funding and rising role of the emerging markets of generic manufacturers in Japan, it is likely that national generic sector will expand further.

• Few large-scale mergers of domestic with overseas generic companies, together with more receptive attitude of local policy makers and healthcare professionals will keep attracting substantial foreign investment in this industry branch.

• Although presence of generic manufacturers from established, mature economies in Japan is substantial, companies based in emerging BRIC countries are most likely to pose serious long-term challenge to the national industry.

• Trends noticed through the past two decades implicate that Japanese pharmaceutical market has the potential to actually become one of the globally competitive generic industry hubs in the future.