In what could further worsen Japan’s drug shortage, major generic drug manufacturer Sawai Pharmaceutical has announced that it had been fraudulently using capsules of its stomach ulcer drug with new, replaced outer shells for post-approval quality testing, in place of the original capsules it should have used, for over eight years until this spring.

The workers tasked with testing the prescription drug Teprenone at its Kyushu factory had deliberately removed granules from old capsules and put them in new capsule shells, then used these capsules for dissolution testing to determine the drug’s stability, the firm said Monday. Stability testing is required by health ministry guidelines to ensure the quality of pharmaceutical products on the market is up to par.

According to an investigative report released by Sawai, the firm’s staff had for years replaced the capsule shells with new ones so the drug would pass the dissolution test, as the quality of the shells declines over time and makes it harder for the granules to dissolve.

On Monday, Sawai executives apologized to patients and clients at a news conference in Osaka. The misconduct, which dates back to 2015, violates the Good Manufacturing Practice (GMP), a system for ensuring that products are consistently produced and controlled according to quality standards that is stipulated by the health ministry.

On Tuesday, health minister Keizo Takemi called the incident “extremely regrettable,” saying it undermines public confidence in generics.

“We understand that the governments of Osaka Prefecture, where the firm’s head office is located, and Fukuoka Prefecture, where the Kyushu factory is located, will investigate and take disciplinary action,” Takemi told a news briefing. “We will also take strict action and step up surveillance against drugmakers.”

Sawai executives said they were first informed about the problem in May, after a new worker was assigned to perform the test without knowing that the firm routinely manipulated the samples, and reported that the product failed to meet the required dissolution standards. The revelation prompted an investigation by a panel made up of an outside lawyer, a GMP expert and the firm’s auditor, president Motohiko Kimura said.

Sawai officials said they drew all the capsules that were within their expiration dates in July, noting that the chances of the fraudulent practice causing a significant impact on the drug’s efficacy and safety were low. It added that it is “extremely unlikely” that it would cause serious health problems.

In recent years the generic drug industry has been hit with a series of manufacturing scandals, clogging the supply of generics, which account for nearly 80% of all drugs available in Japan.

Since 2021, over a dozen generic drugmakers, including Kobayashi Kako and Nichi-Iko Pharmaceutical, have been ordered to suspend operations due to product quality problems.

As of September, 2,947 items, or 32.2% of all generics sold in Japan, were in short supply, according to the Federation of Pharmaceutical Manufacturers' Associations of Japan. Of them, 1,737 were in limited supply and 1,210 had shipments suspended.

A shortage of generic drugs is worsening amid the spread of influenza, prompting the health ministry to step up efforts to resolve structural issues plaguing the industry.

The investigation report cited several factors that allowed the inappropriate testing to continue for years, including the companywide culture of taking stability monitoring lightly, employees’ tendency to blindly follow the orders of their superiors, the lack of understanding by testing staff of the importance of GMP, insufficient management of testing records, and overwork and shortages of staff in charge of such testing.