Action Plan for Promoting Generic Substitution

• Abstract
• Purpose of health policy or idea
• Characteristics of this policy
• Political and economic background
• Purpose and process analysis
• Expected outcome
• References

Abstract

An action plan was announced to double generic substitution in five years. The plan consists of measures in five areas for action: swift and secure delivery, quality assurance, drug information services, local action plans and national campaigns, and regulations and incentives of public health insurance. Pharmacists will be able and supposed to substitute generic medicines unless physicians explicitly prohibit it on their prescriptions.

Purpose of health policy or idea

Generic pharmaceuticals have been less used in Japan; only 16.8 % of total prescription s in quantity was shared by them in 2004. From the beginning of the 21st century, the Government took some measures to promote generic substitution, with which the use of generic drugs has gradually increased.

The Government, however, decided to more drastically increase the use of generic drugs, for which the Government set a target of generic substitution and made an action programme for promoting generic substitution (Isobe 2007; MHLW 2007).

Generics - five areas for action

The programme clarifies measures to be taken in the following five areas for action: swift and secure delivery, quality assurance, drug information services, local action plans and national campaigns, and regulations and incentives of public health insurance.

The general feature of the programmes is that the Government shall strengthen its supervision generic makers in terms of delivery, quality assurance, and drug information services. Also, the Government has commissioned an agency to give advice to consumers and health professions about generic medicines as well as has campaigned for generic substitution. Local governments (prefectures) have been involved to organize local committees for promote generic substitution.

One important change of public health insurance is that pharmacists will be given power to substitute generic pharmaceuticals for branded products unless physicians explicitly prohibit substitution on their prescription forms. The guidance for physicians and pharmacists of public health insurance are to be modified to consider or promote generic substitution if available.

Main points

Main objectives

The objective of the policy is to promote substitution. The target officially established on it is to increase the generic substitution rate from 17 % in 2006 to more than 30% in 2012.

Type of incentives

Financial - Major financial incentives are additional payments to pharcies where generic substitution rate is more than 30.

Non-financial - Campaigns and direct-marketing would make change consumers to demand for more generic medicines. Local plans are expected to facilitate introduction of generic medicines to public local hospitals which would affect other hospitals.

Groups affected

Physicians and Hopsitals, Pharmacists and Patients, Generic pharmaceutical companies

Degree of Innovation	traditional		innovative
Degree of Controversy	consensual		highly controversial
Structural or Systemic Impact	marginal		fundamental
Public Visibility	very low		very high
Transferability	strongly system-dependent		system-neutral

Degree of Innovation: traditional regulation and incentives are used to achieve the target;
Degree of Controversy: most points of controversy exist on implementation and practical issues;
Structural or Systemic Impact:  its impact on the health system would be marginal though the substitution rate probably will increase the substitution rate significantly;
Public Visibility: the issue of generic substitution has become visible because of news reporting, campaign by the government, direct marketing by generic companies.
Transferability: the policy seems system-neutral in the sense of promoting generic substitutions

Political and economic background

Making more efficient health care has been a political slogan since the 1980s. Generic substitution has become an easily understandable and feasible tool to achieve it without lowering quality of and access to health care. The Government released a plan for making health care efficient in July, which set the overall target on the generic substitution rate. This action programme was made to achieve the target.

Change based on an overall national health policy statement

Making health and long-term care more efficient: a five-year plan

Purpose and process analysis

Current Process Stages

	Idea	Pilot	Policy Paper	Legislation	Implementation	Evaluation	Change
Implemented in this survey?

Origins of health policy idea

Since the 1990s, promotion of generic substitution has been argued for cost-savings. Although the Government took measures to increase the use of generic pharmaceuticals at national hospitals and introduced financial incentives in fee-schedule early in 2002, drastic measures such as mandatory substitution have not been doable until recently, resulting in gradual increase of the substitution rate.

Under increasing pressure to achieve efficient care, however, this policy has attracted considerable attention as a tool to truly increase efficiency without undermining access and quality of health care in theory. But in practice challenges described in the action programmes has prevented health care institutions and physicians from prescribing generic medicines instead of branded products. Therefore policies to solve them have been necessary.

Initiators of idea/main actors

• Government

• Providers

• Payers

• Private Sector or Industry

• Media

Approach of idea

The approach of the idea is described as:
renewed: Following many western countries

Stakeholder positions

Payers are generally welcomed the plan because of cost-efficiency or savings, while providers seem neutral to accept this programme and to look at how generic makers will perform in terms of delivery, quality, and information services.

Japan Medical Association, once against generic substitution by pharmacist, did not take objections, but revealed that many physicians feel uneasy about generic medicines when conducting surveys.

Generic drug makers have been pushing this programme. On the other hand, they have done aggressive direct marketing with mass advertising. Branded pharmaceutical companies apparently remain neutral.

The media generally support promotion of generic substitution, but some call attention to the existing challenge, particularly in terms of consumer safety.

Actors and positions

Government
Ministry of Health	very supportive		strongly opposed
Ministry of Finance	very supportive		strongly opposed
The Cabinet	very supportive		strongly opposed
Providers
Physicians	very supportive		strongly opposed
Hospitals	very supportive		strongly opposed
Phrmacists	very supportive		strongly opposed
Payers
Payers	very supportive		strongly opposed
Private Sector or Industry
Generic pharmaceutical companies	very supportive		strongly opposed
Media
Major newspapers	very supportive		strongly opposed

Actors and influence

Government
Ministry of Health	very strong		none
Ministry of Finance	very strong		none
The Cabinet	very strong		none
Providers
Physicians	very strong		none
Hospitals	very strong		none
Phrmacists	very strong		none
Payers
Payers	very strong		none
Private Sector or Industry
Generic pharmaceutical companies	very strong		none
Media
Major newspapers	very strong		none

Positions and Influences at a glance

Adoption and implementation

The Government gradually has implemented measures depicted in the programme. As to financial incentives, the 2008 revision of the public health insurance payment system (fee-schedule) has introduced those incentivs above mentioned.

Monitoring and evaluation

The Government will continuously monitor the progress of this programme. As the overall target set, its revision would be undertaken if necessary. Peformances of generic pharmaceutical companies in terms of delivery, quality assurance and drug information services will be monitored as well as the overall substitution rate.

Expected outcome

With this programme, generic substitution probably will progress faster than ever. The change of the prescription form would make much more prescriptions alternated by generics. Consumers will welcome reduction of co-payment brought about by generic substitution. But, on the other hand, since consumers have been becoming more sensitive safety issues, general progress in delivery, quality and information services would be crucial to back drastic change.

Impact of this policy

Quality of Health Care Services	marginal		fundamental
Level of Equity	system less equitable		system more equitable
Cost Efficiency	very low		very high

Quality and Equity - the policy is popoular because it is not likely to lower quality of and access to pharmaceuticals;

Cost Efficiency - generic medicine are more cost-effective, though generic pharmaceutical companies would be required to invest additional resources for good delivery, quality assurance and drug information services.

References

Sources of Information

Isobe, S. (2007). "Policies of promoting generic substitution for pharmaceuticals." Japanese Pharmacology & Therapeutics 35(10): 1023-1028.(in Japanese)

MHLW (2007). An Action Programme to Promote Generic Substitution with a Safe and Secure Drug Supply System.(in Japanese)

Author/s and/or contributors to this survey

Ryozo Matsuda

Ryozo Matsuda is professor for community health and health policy at the College of Social Sciences, Ritsumeikan Univerisity. This report was written when he was a visiting research fellow at LSE Health, London School of Economics and Political Science.

Suggested citation for this online article

Ryozo Matsuda: "Action Plan for Promoting Generic Substitution". Health Policy Monitor, April 2008. Available at http://www.hpm.org/survey/jp/a11/2