State of Joint Development of Generic Drugs in Japan

Abstract

 Plenty of challenges related to the industry structure, pricing system, and distribution of generic drugs exist as underlying causes for the recent unstable supply of pharmaceuticals, mainly generic drugs. Small-volume multiproduct manufacturing is among them, and its association with the recent active joint development of generic drugs has been pointed out. Also, so-called “authorized generics,” a sort of joint development, is suggested to have been encouraging excessive price competition in the generic market. This study reports the state of joint development of generic drugs in Japan. A survey of popular generic drugs recently approved and listed in the national health insurance revealed that 50％ or more companies participated in joint development groups for more than half of the active substances, and that for products belonging to a same joint development group, the price has been revised to different price ranges, suggesting adverse effects on distribution as well as intensified price competition due to the increased number of generic products with a same substance. Also, authorized generics have been marketed for more than one-third of the substances and dominated the generic market, which can stifle reasonable competition. Systems for stable supply of pharmaceuticals need to be established based on the selection of companies capable of supplying products in a sustained and stable manner and reasonable competition among generic products through the improved handlings of the joint development from multiple perspectives including the revision of drug pricing system.