Individuals in Japan began facing higher out-of-pocket expenses in October for brand-name drugs whose patents have expired.

With the increases, the government aims to reduce health care costs by encouraging greater use of generic drugs, which offer the same effectiveness as brand-name originals at lower prices.

Widely used moisturizing ointments and poultices are among the products subject to the price increases, posing a challenge for authorities to inform users widely and avoid confusion at pharmacy counters.

Under the new system, patients pay more for brand-name drugs prescribed by medical institutions if the patents have expired. A quarter of the price difference between these drugs and their generic equivalents is no longer covered by insurance, adding to patients' out-of-pocket costs, which typically range from 10% to 30% of total expenses.

A senior health ministry official said, "The new system does not apply if brand-name drugs are prescribed at a doctor's discretion or if generic drugs are unavailable at pharmacies."

For about 20 years, the government has actively promoted the use of generic drugs. While the penetration rate for generics currently stands at around 80% by volume, it was only 56.7% by value as of last year.

In a health ministry survey, the most common reason doctors gave for prescribing brand-name drugs was, "Because patients ask for them."

The ministry believes that further encouraging the use of generic drugs will require increasing the financial burden on patients who prefer original, brand-name medications. It has also set a target to raise the penetration rate of generics to over 65% by value by the end of fiscal 2029.

A total of 1,095 medical products have been selected for the increased out-of-pocket costs, according to criteria such as a generic drug replacement rate of 50% or higher. They include many widely used medications, such as Hirudoid, a moisturizing cream prescribed for infants and patients with atopic dermatitis, the hay fever medicine Allegra, Mohrus Tape poultice and Isojin gargle.

For example, an individual with a 30% co-payment who is prescribed 300 grams of Hirudoid ointment will be charged ¥2,439 ($15.8) at the pharmacy, an increase of ¥774 from the previous cost.

In recent years, Hirudoid has drawn regulatory attention due to high-volume prescriptions for cosmetic purposes. Additionally, online resales of other drugs to overseas buyers have been confirmed.

A medical industry official said, "If the upcoming increase in out-of-pocket costs helps reduce inappropriate prescriptions, it will be a solution with dual benefits."

Medical institutions and pharmacies nationwide are informing patients about the new system. Pharmacy counters, however, may face issues with patients who refuse to switch to generic drugs.

Original and generic drugs contain the same active ingredient but differ in their additives, with ointments and poultices being typical examples.

"We may receive complaints from patients who switch to generic drugs about noticeable differences in usability," the industry official noted.

Some patients are concerned over potential further increases in the costs of original drugs, as the Finance Ministry aims to expand the scope of exclusion from insurance coverage for these medications.

Still, a ruling Liberal Democratic Party official who has previously held a ministerial position cautioned against hastily increasing financial burdens on patients. "Additional burdens will negatively impact not only patients but also pharmaceutical companies," the official said.