Impact of generic entry to off-patent branded medicines in Japanese pharmaceutical market

Abstract

The Japanese pharmaceutical market is known for having a relatively low market penetration of generic medicines. However, the velocity of generic penetration varies among medicines. Looking at current sales and share of off-patent branded medicines and generic medicines in Japanese pharmaceutical market, our main aim is to identify the factors associated with sales reductions of off-patent medicines and price competition caused by generic entry in the Japanese pharmaceutical market. We showed as one result that an increase in the number of generic maker entries significantly increases both price competition and sales reductions of off-patent branded medicines. As a second factor of note, we found that being subject to ''NHI Drug Price Premium for Promoting the Creation of New Drugs and the Elimination of Off-label Use'' before generic entry is related to maintaining sales of off-patent branded medicines after generic entry. The importance of generic medicines is increasing in association with the hypertrophy of health care expenditures in Japan. Efficient polices and corporate strategies reflecting market principles are strongly needed. Detailed results of this study on what determines whether sales and prices of off-patent medicines significantly decrease after generic entry in the Japanese pharmaceutical market should be useful for this purpose.

Optimal Anti-cancer Drug Profiles for Effective Penetration of the Anti-cancer Drug Market by Generic Drugs in Japan

“…The pharmaceutical firm can recover the research and development (R&D) costs and invest again in the “next” R&D. It is thought that competition from generic drugs may further encourage companies to develop innovative drugs and reduce costs of off-patent brand-name medications, thereby generating savings to patients. 13 Savings on the pharmaceutical budget enable governments to reimburse newer expensive drugs. In addition, compared with other developed countries, the anti-cancer and neuroscience drug markets in Japan have been gradually expanding.…”