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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.

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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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