Promotion of Generic Drug Use and Market Impact
Hideaki Kasuya ( The Office of Pharmaceutical Industry Research Former Senior Researcher)
Junichi Nisihimura ( The Office of Pharmaceutical Industry Research Visiting Researcher)
(No.54: June 2012 issue)
The government is promoting various measures to promote the penetration of generic drugs with the goal of achieving a 30% volume share of generic drugs in FY2012. The following is a brief overview of the situation regarding the penetration of generics in the domestic pharmaceutical market.
The penetration of generics in the domestic pharmaceutical market was analyzed not only from the perspective of the market as a whole, but also from the perspective of each therapeutic area, comparing the penetration of generics in those therapeutic areas where generics have penetrated and those where generics have not. The analysis was based on the following factors
While the market growth rate is expected to slow down as generics penetrate the market, prescriptions are replaced by drugs with lower drug prices and drug costs are curbed, it is assumed that competition in the market will become more intense with the entry of generics, and that companies that create new drugs will be engaged in "improved innovation" such as expanding indications and adding new formulations of branded drugs in order to meet patient needs. Innovation" such as expanding indications and adding new formulations of brand-name drugs to meet patient needs. We analyzed not only from the perspective of controlling drug costs, but also from a second perspective, what other effects the promotion of generic penetration may have on healthcare consumers.
In the domestic pharmaceutical market, the promotion of generic penetration is mainly promoted by the price of "drug price difference", which will suppress drug costs. On the other hand, it also promotes "improved innovation" by companies that create new drugs.
When we categorized generics and long-listed drugs into groups and analyzed the difference in penetration, we found that long-listed drugs were superior to generics not only in terms of the "drug price difference" but also in two other factors: "dosage form coverage" and "stable supply. For these two factors, the convenience of long-term listed products is considered to be enhanced. In order to promote the penetration of generics, it will be important not only from the viewpoint of price (i.e., the difference in drug price), but also to expand "dosage form coverage" to the same level as that of long-term listed drugs, and to ensure a "stable supply.
The promotion of generic penetration will not only help reduce the burden of drug costs on healthcare consumers, but will also be of great benefit in terms of expanding access to drugs. The promotion of generic penetration is also expected to have the effect of encouraging competition in the market, encouraging innovation by companies that create new drugs to improve on branded drugs and provide more value-added drugs to healthcare consumers. Future promotion of generic penetration will need to be discussed not only from the perspective of price (drug cost), but also from the perspective of healthcare consumers, who will be able to "improve accessibility and convenience" to drugs.