Depending on your viewpoint, generic drugs represent either the future of the global pharmaceutical industry or an irritating drain on the revenues of R&D based companies. The sector continues to grow in importance, fuelled by the twin pressures of therapeutically significant products coming off patent and health provider demands for lower prices. Analysts in industry and commerce must have a clear understanding of the threats and opportunities in key markets worldwide.

Generics market reports from Espicom Business Intelligence are produced by a multi-lingual editorial team with over 25 years pharmaceutical market experience. And when that experience is combined with one of the best healthcare market databases around, and informed by direct access to over 1200 companies and organisations worldwide, you have unbeatable, reliable, qualified and enriched market analysis. The Japanese pharmaceutical market is the second largest in the world. According to the JGPMA, generics account for around 16% of the market by volume, and around 6.0% by value. This is a similar percentage to that in France or Spain. Generics are not new in Japan, but they have a low profile and a poor reputation. Many people see them as inferior to branded products. Many old brands in Japan are still widely prescribed, despite patent expiry. The government has recently introduced new ‘stable supply' rules, to be implemented by 2011, in order to create a more high profile, better-regarded local generic industry.

The pricing system is not helpful for generics. All prescription drug prices are kept low by the government, with arbitrary price cuts on a regular basis. Patients and prescribers therefore have little incentive to use generics. Pharmacists and hospitals on the other hand, obtain revenues from drug sales, and are keen to dispense higher priced products. Some reforms of the pricing and reimbursement system have been made, although their effect so far appears to have been limited. One major change in 2006 has been the issuing of new prescription forms which allow a doctor to authorise the dispensing of a generic drug. There is also now a small cash incentive for doctors and pharmacists to prescribe/dispense generics.

Japan has a sizeable but very fragmented generic industry. A few players, such as Sawai and Towa, are attempting to boost the image of the sector, but most companies are undercapitalised and unable to make the necessary investments. Only a handful of overseas generic manufacturers have direct operations in Japan.

This in-depth report provides a wide-ranging examination of the generic pharmaceuticals market, including the operating environment, current market size, future prospects and five-year market projections.