Paku Midin: CHALLENGES PERSIST AS SCANDALS PLAGUE JAPAN'S GENERIC DRUG PUSH

CHALLENGES PERSIST AS SCANDALS PLAGUE JAPAN'S GENERIC DRUG PUSH

@Jackie San

As Japan pushes for generic drugs to reach an 80% market share by volume, the aftermath of a series of manufacturing scandals is leading to shortages of the more affordable alternatives to brand-name medicines, with producers rushing to meet demand.

Generics have the exact same active ingredients as brand-named medicines and provide the same effects — the difference is that they can only be manufactured and sold by other companies after the original patent expires.

Hiroyuki Sakamaki, an expert in pharmaceutical policies and health economics at the Kanagawa University of Health Services, said it will take at least three years to resolve the current shortages.

He said that most of the shortages seen today stem from a violation of Good Manufacturing Practice (GMP), a system that ensures drugs are produced and regulated based on quality standards.

Sakamaki said that around 70% of the shortage seen today is caused by scandals that were discovered in late 2020.

In December 2020, Kobayashi Kako, a generic drug manufacturer based in Fukui Prefecture, was found to have accidentally mixed sleep inducing components into its anti-fungal medicine — causing two deaths and leading to adverse health effects for over 240 people.

Around 70% of those who took the drug experienced adverse effects, such as impaired consciousness, the company said. It also emerged that the company had been falsifying pharmaceutical test results for 40 years.

Legal violations were found in nearly 80% of the company’s products, and it was found to have created fake documents used to clear inspections by prefectural authorities. Prefectural officials said executives at the company knew of the illegal conduct but did nothing to stop it. The prefecture ordered the company to suspend operations in February 2021.

The problems at Kobayashi Kako prompted nationwide on-site investigations of manufacturers conducted by prefectural authorities as well as voluntary inspections, revealing that several plants were in violation of GMP.

Within the past two years, generic-drug manufacturers, including major drug producer Nichi-Iko Pharmaceutical, received business suspension orders, highlighting problems at pharmaceutical companies across the country. This resulted in the suspensions of not only plant operations but also the shipment of a wide range of drugs.

Following the suspensions, the Japan Generic Medicines Association, an industry organization, conducted a voluntary inspection of its members and found that 31 of the 38 member companies had manufacturing procedures that were not approved by the government.

In the wake of these issues, Japan has been experiencing a massive drug shortage impacting pharmacies and medical institutions nationwide.

According to the latest survey results from the Federation of Pharmaceutical Manufacturers' Associations of Japan, 2,942 generic drugs were negatively impacted as of May, with 1,928 categorized as having “limited shipment” and 1,014 had shipments suspended. In total, 33% of generics are experiencing supply issues.

Specifically, medications for atopic dermatitis, hives, hypertension, angina, rheumatism, depression, bronchitis, antipyretics and colds have been difficult to acquire, an NHK report said.

During a health ministry meeting in early June, an expert panel addressed the unstable supply of generic drugs, calling for the establishment of a new forum for more detailed discussion.

At the meeting, a health ministry official highlighted the decline in the domestic pharmaceutical industry's international competitiveness, pointing to data on global trends and the situation in Japan.

Among 190 generic drugmakers in Japan, only 30 produce more than 100 different medicines, with 148 companies producing fewer than 50 medicines, the health ministry said in a report last month. The top eight companies dominated half of the industry.

Japanese generic drug companies tend to have low profitability, in terms of sales per company, compared with those in other countries. In Japan, 67% of generic drug companies have sales of less than ¥1 billion, while that figure is 33% in the U.S. and 11% in the U.K., the report said.

Japan’s price-setting system — in which drug prices are lowered annually — has been criticized for hindering efforts to achieve stable supply.

Mitsuro Sawai, chairman of Sawai Pharmaceutical, said his company faced an 8% decline in drug prices after fee revisions in fiscal 2023, impacting profits at the major manufacturer of generics.

“The situation is so critical that if it continues every year, Sawai may cease to exist in three years,” Sawai said in an interview this month with Mix Online, a pharmaceutical industry news site.

He added that the only viable solution would be to create a system that aligns with the government’s goal to bring the market share of generic drugs to 80%.

Sakamaki, the expert in pharmaceutical policies, said Japan has fallen behind global peers in terms of the distribution and supply of generic drugs.

He said producers put quality and compliance on the backburner, rushing to meet demand amid drawn-out government approval processes.

“In other countries, the procedures are much simpler,” Sakamaki said. “In European countries or in the U.S., if there are no issues with the quality of the drugs and no negative effects on patients, they can continue shipping out (medicine) without any interruptions.”

But he added that the manufacturing capabilities of companies also play a role. Japan's prowess in drug production is not particularly advanced, especially considering its high standards, Sakamaki said.

Sakamaki noted that while these strict standards work to ensure patient safety, they also pose hurdles for potential advancement.

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