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The generic drug market in Japan: will it finally take off?

Published online by Cambridge University Press:  21 December 2010

Toshiaki Iizuka  and
Kensuke Kubo
Toshiaki Iizuka*
Affiliation:
Professor, Faculty of Economics, University of Tokyo, Tokyo, Japan
Kensuke Kubo
Affiliation:
Associate Senior Research Fellow, Development Studies Center, Institute of Developing Economies, Japan External Trade Organization, Chiba, Japan
*
Correspondence to: Professor Toshiaki Iizuka, Faculty of Economics, University of Tokyo, 7-3-1 Hongo, Bunkyo-ku, Tokyo 113-0033, Japan. Email: toshi.iizuka@gmail.com
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Abstract

Historically, brand-name pharmaceuticals have enjoyed long periods of market exclusivity in Japan, given the limited use of generics after patent expiration. To improve the efficiency of the health-care system, however, the government has recently implemented various policies aimed at increasing generic substitution. Although this has created expectations that the Japanese generic drug market may finally take off, to date, generic usage has increased only modestly. After reviewing the incentives of key market participants to choose generics, we argue that previous government policies did not provide proper incentives for pharmacies to boost generic substitution. We offer some recommendations that may help to increase generic usage.

Type
Articles
Information
Health Economics, Policy and Law , Volume 6 , Issue 3 , 16 June 2011 , pp. 369 - 389
Copyright
Copyright © Cambridge University Press 2010

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