OBJECTIVES: To promote generic drug use, Japanese government had been implementing aggressive financial incentives to hospitals, physicians and pharmacies for over a decade. This study describes the recent generic drug policies in Japan and the future directions.

METHODS: Information on generic drug uptake and policies were retrieved from the websites of Ministry of Health, Labour and Welfare (MHLW) and Japan Generic Medicines Association as well as grey literature. Medical and pharmacy fees were obtained from MHLW. Policy impacts and future directions were analysed by reviewing literature and discussion meeting minutes at Chuikyo (Japanese Central Social Insurance Medical Council).

RESULTS:. On June 2017, the government officially set the target rate of generic drug use at 80% by September 2020 and introduced aggressive financial incentives in the National Health Insurance scheme to increase its uptake. The current pro-generics policies include additional fees reimbursed to physicians for prescribing generics, premiums to hospitals and clinics that achieve high rate of generic use, premiums (or disincentives) to pharmacies that achieve (or penalize) high (or low) dispense rate of generics. These policies helped to increase the uptake of generic drugs consistently, from 60% in 2015 to 74% in 2018. Based on current discussions at Chuikyo, future policies are expected in the following areas: incentives to increase biosimilar use, promotion to replace long-listed drugs with generics, and customization of drug formularies to local healthcare needs.

CONCLUSIONS: Japanese government promotes generic drugs through strong financial incentives to hospitals, physicians, and pharmacies. As a result, the use of generic drugs has increased consistently over the years and is expected to grow even further. Given the trend, there is a growing need for pharmaceutical companies to differentiate their products from generic drugs.