Generic firms still face brand loyalty challenge in Japan say experts

Japan’s Ministry of Health Labor and Welfare (MHLW) started to promote generic drugs in 2007​, arguing that increasing the market share held by non-branded meds from 17% to 30% by 2012 would let it cut healthcare spending and reduce the financial burden on patients.

Generic drug use has increased as a result, although not as rapidly as expected. In 2013, 28% of all drugs sold in Japan were non-branded products.

But the pace is likely to quicken according to Masaki Muto, chairman of the Japan Generic Medicines Society (JGA).

He told delegates at CPhI Japan in Tokyo last week that measures introduced by the Ministry of Health Labor and Welfare (MHLW) in 2014 – including price reductions​ – would boost generic uptake.

Brand loyalty​

Whether the pricing measures will be sufficient to help the MHLW hit its revised target – the agency wants generic drugs to hold 60% market share by the end of fiscal 2017 (here in Japanese​) – remains to be seen.

Chase VanDuzer, a senior associate at consulting and recruitment organization at Apex, told in-Pharmatechnologist.com price is not the only factor that Japanese patients and physicians take into consideration.

“Even with this [MHLW generics promotion] policy, it may not be achieved as Japanese people still have a sort of ‘brand loyalty’ mind-set. A couple years ago, I met a senior member of Pfizer who explained that in the US, Lipitor lost 75% of its market share while in Japan, it kept 75%.”​

Pfizer did not respond to a request for comment.

Market Access​

Another issue holding back generics in Japan is the fact that global non-branded suppliers find it difficult to break into the market according to VanDuzer, explaining that such difficulties are often drive Big Pharma partnering, acquisition and investment strategies.

A similar point was made by Reva Pharmachem managing director, Gurpreet Sandhu, who told delegates “foreign companies often experience difficulties penetrating into the customer base that is historically loyal to Japanese-made products​.”

This idea is supported by a number of recent deals. In 2012​, Pfizer partnered with Mylan's Tokyo subsidiary to try and expand in the market.

Similarly, Teva​ cited opportunities resulting from Japan's changed attitude to generic drugs as a key motivation for manufacturing capcity investments made in 2013.