August 31, 2009
Generic drugs facing a period of mega-competition for 2010
| Generic drug makers are on the defense in the domestic drug market, which new drug makers have had a stronghold of for quite some time. In addition, a series of mainstay drug patents will expire this year allowing an opportunity for generic drug makers to add hot-selling products to their product lines. New drug makers are trying to counter their attempts by getting into the generic drug market. There is a possibility that some generic drug makers may not be strong enough financially to survive the competition. The largest generic drug maker in Japan, Sawai Pharmaceutical Co., Ltd. had a big increase in their revenue of 2009 (April to June). They may reach sales of over 100 billion yen within five years. Other generic drug makers also show drastic increases both in sales and profit. As a result, the government loosened the regulations of prescriptions in April 2009. Patients will have the option to choose a generic drug as long as the doctor doesn’t give special instructions against it. Generic drugs can be purchased at a lower cost of about 30% to 70% below the cost of a new drug. The government, which intends to hold down the cost of medical care, is aiming to promote generic drugs to increase the market share from 16% in 2004 to over 30% in 2012. According to Sawai Pharmaceutical Co., Ltd., the domestic market size of generic drugs will be at 705 billion yen in 2012, which is an increase of 36.9% from 2009. It greatly surpasses the pace of expected growth (by 11.7%) of the whole pharmaceutical drug market in the same period. Many new drug makers perceive it as a promising market and plan to launch their products. Furthermore, some overseas firms, including the world’s largest generic drug makers, are ready to enter the market by aligning themselves with the leading Japanese new drug makers. |
