On April 1, the Ministry of Health, Labor and Welfare notified local governments that from now on welfare recipients entitled to free medical care must only use generic pharmaceuticals rather than more expensive brand-name drugs. Almost immediately the plan was attacked in the media, which implied that the government was once again treating poor people like dirt. During a Cabinet meeting on April 28, health minister Yoichi Masuzoe acknowledged the criticism by saying that the wording of the directive would be changed.
It sounds like a cynical response, and the original directive does sound a bit judgmental. It stated that since welfare recipients pay nothing for their medical care they have no “incentive” to choose less expensive drugs, and that if someone opts for brand-name drugs with no “legitimate medical reason” for doing so, then that person will lose his or her benefits. The new wording will supposedly soften the tone while retaining the main purpose, which is to encourage the use of generics and save the government about ¥1 trillion a year.
However, the problem may have less to do with the government’s poor communication skills than with the public’s — not to mention the media’s — incomplete knowledge about generic drugs. According to the Mainichi Shimbun, generics account for about 60 percent of all prescription drug sales in the West, while in Japan the share is only about 17 percent and has remained at that level since the early part of the decade when the government first started promoting generics.
After the patent on a new drug expires, other companies can market their own versions with the same active ingredients. It is assumed that these generic drugs are identical in dosage, strength, safety and efficacy to those of the so-called innovator drug. However, because the generic drug maker has not had to pay for research and development or for testing (for approval they only have to prove “bioequivalency”), not to mention advertising and marketing, they can sell the drug at a much lower price. An innovator drug costs tens of billions of yen to produce, while a generic only costs about ¥100 million at most. The price of a generic can be as much as 80 percent less than that of its brand-name equivalent.
So why haven’t generics become more widespread in Japan? An article in the Tokyo Shimbun published last July conjectured that consumers and even some doctors still equate “cheaper” with “less effective,” and that neither the government nor the generic-drug industry has managed to counteract this attitude. When the Fair Trade Commission carried out a survey and explained the real difference between generics and brand-name drugs, 96 percent of the respondents said they would choose generics.
Obviously, it’s a matter of public relations, and in the past month two new advertising campaigns have highlighted what’s at stake for Japan’s pharmaceutical industry, seemingly in response to a new system governing the writing of prescriptions. In April 2006, the health ministry directed doctors to indicate on prescriptions whether or not patients could opt for generic versions of drugs when they filled them in. With the new directive, however, the patient can obtain a generic version unless a doctor specifically writes otherwise. So, basically, this new system emphasizes the patient’s choice rather than the doctor’s.
So we now see septuagenarian TV celebrity Tetsuko Kuroyanagi urging consumers to “show courage” and ask their doctors to prescribe them generics in commercials and print ads for the generic drug maker Towa Yakuhin. The “courage” angle is revealing, since it suggests that one of the reasons generics haven’t caught on in Japan is that patients are afraid to ask for them, as if doing so might be interpreted by physicians as a challenge to their godlike authority.
Conversely, we have veteran actor Tetsuya Watari shilling for Daiichi Sankyo, a brand-name drug maker. Watari is seen at a pharmacy counter contemplating a pill he has just received: “Have you ever thought about which company makes your medicine, and not just what kind of medicine it is?” About a decade ago Watari went through a well-publicized cancer scare, and the fact that he’s still here testifies to the effectiveness of his treatment. That little white pill has kept him alive, it’s implied, so why take the chance of switching to something different?
The ad also implies that there’s competition to worry about, but generic makers have reason to be anxious, too. The 240 Japanese firms that make generics are classified as small- or medium-size businesses, and foreign companies are moving in. India is the world leader in generics, and several Indian companies have already entered the Japanese market. In some cases, they’ve entered by buying small Japanese makers outright.
Even if the Japanese public’s feelings about generics remain the same the market will only get bigger, but according to a recent article in the Asahi Shimbun it may have more to do with changing diagnostic standards than with the aging society. The most commonly prescribed drugs in Japan right now are for high blood pressure, and since 2000 the officially sanctioned blood pressure level for indicating hypertension has been lowered twice, thus leading to a huge increase in the number of people being diagnosed with hypertension. So both generic and brand-name drug makers can relax. There’s enough customers for everyone.