The Ministry of Health, Labor, and Welfare (MHLW) has recently focused on the generics market, with new regulations and planned regulations for the future. On April 18, 2007, the Central Social Insurance Medical Council (Chuikyo) approved adding generic drugs to the National Health Insurance drug price list twice a year compared to the current once-a-year additions. By listing generics more often, the MHLW hopes to give patients access to new generics sooner and promote their use.
In contrast, branded products are listed four times a year. Some Chuikyo members are pushing for generics to be listed quarterly in the same way. The chairman of Chuikyo has said they will take into consideration increased listings in future discussions. As of now, however, generics will only be listed twice a year.
MHLW also plans to introduce a new prescription process in 2008. Currently, prices for medicines covered by national insurance are based on the prices of original brand-name medicines. However, under the proposed new process, the pricing system would be based on prices of generics. Therefore, if a doctor chooses a brand-name drug over a generic under this new system, s/he will be required to provide an explanation.
In 2006, MHLW had introduced a box for doctors to check showing that the brand-name prescription could be replaced with a generic. However, a recent Chuikyo survey revealed that less than 1 percent of 970,000 random samples actually ended up with a generics prescription. By requiring doctors to explain why they prescribed a brand name product, the MHLW hopes to promote the use of generics.
Generics account for 40-50% of pharmaceuticals used in countries such as Germany and the US, but Japan’s market share is much smaller. On average, generics cost about 34% less than corresponding brand name products in Japan. MHLW estimates that medical costs could be reduced by almost $8 trillion a year, if Japan’s generic usage increased by 40 to 50%.