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Further capping of generics in Japan Posted 29/01/2016

In a bid to increase uptake of more cost-effective drugs and to curb healthcare spending, the Japanese Government has put forward plans to price generics at half the cost of brand-name drugs from April 2016, a reduction of 10%.

This initiative comes as an attempt to reduce drug costs in Japan, which have been found to be much greater than the average of industrialized nations [1].

As part of the government’s proposals, pharmaceutical companies will be allowed to sell a generic version of a brand-name drug after patent expiration if the quality of the generic drug is deemed to be on a par with the brand-name version. This will be priced lower than its brand-name counterpart owing to the lower research and developmental costs.

Generics of brand-name drugs manufactured by different companies will be priced at 40% of the originator drugs and biotechnology-based biosimilars will be priced initially at 70%.

The government is also expected to limit fees to hospitals and doctors, saving them an estimated US$3.5 billion.

This follows a target already set of 80% for generics prescribing by March 2021. It currently stands at 50% but is expected to reach 70% in 2017. The drive to reduce healthcare spend comes against the backdrop of an ageing population in Japan that is requiring increased medical care.

Related article
Europe–Japan cooperation on generics and biosimilars regulation 

Reference
1.  GaBI Online - Generics and Biosimilars Initiative. Prescribing and dispensing generics in Japan [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2016 Jan 29]. Available from: www.gabionline.net/Generics/Research/Prescribing-and-dispensing-generics-in-Japan  

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Source: Japan Times

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