Wednesday, February 8, 2012

Japan - Price Cut for Generics Expected in April

In Japan, there is a cult of mandatory price cuts on drug prices once  every two years. This is done in the month of April. Both patent protected and long listed drugs have to take the price cuts. In case of patented drugs, the price cuts are decided based on a market survey done in the previous year. Besides, those drugs whose sales   have exceeded twice the initial forecast or the ¥15b level are also subjects of price cuts. 
In case of long listed drugs ( innovator drugs which have their patents expired and generic copies available in the market) are subject to 4-6% price cut when their generic copies are launched in the market.

Besides these mandatory provisions on price cuts in Japan, there is also an Adhoc price cut, which the Japan's Korosho (Ministry of Health, Labor and Welfare Council for promoting drug industry policies) may adopt at its discretion. The discretion is generally exercised to support the generic penetration in Japan. Korosho intends to bring generic penetration to 30% in Japan by 2012, which was lagging at 21% till September 2011.