Big Molecule Watch
February 3, 2016

Japan Announces Proposed Plan to Reduce Biosimilar and Generic Drug Prices

Japan’s Ministry of Health, Labor, and Welfare has proposed a plan to lower prices of generic and biosimilar drugs across the pharmaceutical industry.  Under the proposed plan, generic drugs will be priced at 40% of brand-name drug prices, while “[b]iotechnology-based generics, such as genetically modified drugs, will be initially priced at 70 percent.”  The plan is part of a government initiative to increase the market share of generic drugs to at least 60% by the end of fiscal year 2017—closer to the levels of generic-drug market share found in Europe and in the U.S.

The proposed 30% price reduction for biosimilar drugs would be on the higher end of price-reductions seen in other markets: the first biosimilar approved in the U.S. (Sandoz’s Zarxio® product) launched at an initial 15% discount relative to the reference product biologic, Neupogen®.  In Europe, biosimilars are typically priced at discounts of 15-30% from the brand-name biologics.