INTERVIEW: Uphill battle for Japan generic drugs

19 April 2007 06:29  [Source: ICIS news]

By Cheok Soh Hui

TOKYO (ICIS news)--Japan’s pharmaceutical industry, the world’s second largest, is likely to experience continued resistance to generics in the near term even as markets elsewhere boom, a senior company official said Thursday.

Over the last six years, while the market for generic drugs in Europe and the US expanded rapidly, the Japanese generic markets shrank, Kenji Toda, senior vice president of government relations at Eisai Co, one of Japan’s largest pharmaceutical companies, told ICIS.

"Doctors and patients doubt the quality of generic drugs. Also, it does not help that prices of generic drugs in Japan are higher than in other countries, he said.

"Overall, it’s a cultural issue which will take years of publicity and education to change."

Multinational drug companies are eyeing Japan’s ageing population as a key market for cheaper generics, following price cuts last year of an average of 6.7% by Japan’s health ministry last year. The cuts were the largest since 2000.

Toda said he expected Japanese consumers to adopt a more favourable attitude towards generics only after five to six years as companies step up advertising to market generics.

Still, for Japan’s generic drugs market to thrive, the industry must also ensure a healthy pipeline of new drugs, Toda said.

In 2006, Japan’s pharmaceutical sales slumped 0.4% from a year earlier to $64m, according to a recent study by IMS Health.

Toda explained that the high costs of clinical trials and long approval process have hampered new drug development, which could in turn negatively impact the generics market.

Amid intensifying competition from developed and emerging markets a, only a limited number of companies will survive going forward, he said.

Hence, reinvigorating the local pharmaceutical industry is one of the priorities of prime minister’s Shinzo Abe’s administration, he added.

There must be greater dialogue and cooperation between Japanese pharmaceutical companies and the government to fuel innovation and the development of new drugs, he added.

By: Cheok Soh Hui
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