Japan Looks to Lower Price of Generic Drugs in 2016

In the U.S. and Europe, many more generic drugs are prescribed than prescription products; however, in Japan, prescription products have dominated the Japanese market. Since the cost of prescription products is much higher than generics, and the Japanese government is going bankrupt (single-payer system), generic use is growing quickly in Japan. To stymie increases in healthcare spending, the Japanese government has announced goals of increasing the percentage share of generics in overall prescriptions from 40% (2014) to over 70% by 2017 and over 80% by 2021.

According to a recent article in the Japan Times, an advisory body of Japan’s Ministry of Health, Labor, and Welfare (MHLW) has agreed to reduce the price of generic drugs to 50% of brand name prices. In Japan, generic drugs are currently priced at 60% of brand name drugs, while in the US, generic drugs are typically priced at around 20% of brand name pharmaceuticals. A final decision on generic drug pricing in Japan will be made by the end of this month and would go into effect in April of 2016.