Photo/Illutration Generic drugs (Asahi Shimbun file photo)

Japan has been plagued by prolonged shortages of common drugs such as cough suppressants, expectorants and antimicrobial agents.

According to a survey by a pharmaceutical industry organization, as of September, shipments of about 20 percent of all drugs are either suspended or limited in quantity. Seventy percent of these are generic drugs, which are basically sold as more affordable alternatives.

Concerning generic medications, a drugmaker in Fukui Prefecture was embroiled in a scandal three years ago over accidentally mixing sleeping medication into its generic skin drug used internally, resulting in deaths and injuries.

Since then, more than 10 drugmakers have received business suspension orders and other penalties for violating laws and regulations, which has been a major cause of the supply shortage.

With capacity for expanding the production of the drugs in short supply limited, it is necessary to get through the winter, when an increase in demand is expected due to the outbreak of infectious diseases, through efforts such as limiting drug prescriptions as much as possible.

We urge the industry and the government to closely monitor the supply situation for drugs to prevent excessive stockpiling and uneven distribution.

There is a serious lack of awareness for compliance with laws and regulations related to manufacturing and quality in the industry.

Some observers also say the industry is beset with structural problems caused by the tendency of many manufacturers of generic drugs to prioritize production efficiency and shipping schedules to cash in on rapidly expanding demand.

The industry needs to make concerted efforts to restore public trust and prevent a recurrence instead of leaving the challenge to individual companies.

The government has been encouraging the use of generic drugs to curb the growth of health care spending through various incentives.

They include higher medical fees paid to health care providers under the public health insurance program when hospitals and pharmacies choose generic drugs. The usage rate of generic drugs is approaching the target of 80 percent.

In 2005, the requirements for the licenses to manufacture and sell generic drugs were eased. This led to an influx of small and midsize players into the booming generic drug business.

As government-set prescription drug prices have been lowered steadily, competition among drugs has intensified.

But it is difficult for generic drugmakers to stop production even of unprofitable products, as long as there is demand.

This situation has been further compounded by the rising costs of imported raw materials and packaging materials.

To secure profits, generic drugmakers have had no choice but to venture into new product lines. Consequently, many companies have fallen into the practice of producing a broad array of products in small amounts.

Their production lines, being operated with fixed long-term schedules, cannot be adjusted flexibly. As a result, they are unable to fill the supply gaps created by other companies’ shipping suspensions.

The government bears some responsibility for this situation. It should take policy actions to support the industry’s transformation into one that can ensure steady supplies of the necessary items while maintaining quality.

First and foremost, it is vital to create a system where companies with the ability to manufacture and supply products of a proper quality are fairly rewarded by the market.

It is also crucial to take steps to improve transparency regarding each company’s production capacity, distribution and inventory while preventing unforeseen shortages and disruptions.

One policy question facing the government is how prescription drug prices should be reviewed and adjusted to promote these reforms.

The government should carefully review and reconsider the drug pricing system from the perspective of ensuring a stable supply as well as curbing health care costs.

--The Asahi Shimbun, Oct. 31

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