Japan's dilemma: Generics vs long-listed brands, by P Reed Maurer

In most countries, promoting generics to save money in the health care budget is considered good policy. There is no downside to this position. Practitioners are not criticized, in fact they are lauded for taking on pharma companies who allegedly charge outrageous prices for branded drugs, according to long-time Japanese industry watcher P Reed Maurer, president of International Alliances Limited.

Policy makers in Japan do not have the luxury of implementing a criticism immune generics promotion policy. Proof of this dilemma is the relatively low level of generic penetration, estimated at less than 10 percent of pharma market value and around 25 percent of volume.  This Japan-only phenomenon will not surprise outside observers who have long believed the Japanese market is different from other pharma markets.

As examined below, the generics versus long-listed brands dilemma can be rationally described, thus different but understandable, says Mr Maurer. More difficult is to predict the nature and timing of outcomes. Will generics and brands coexist or will one supplant the other?