Japan's National Health Insurance (NHI) has confirmed that a slew of generic versions of Sanofi's ($SNY) Plavix will join the reimbursement list after the latest review, a move tipped by the company in its first-quarter earnings call as well.
The NHI, part of Japan's Ministry of Health, Labor and Welfare, conducts a general review of drug prices once every two years that forms the basis for the list, with the patent expiry of Plavix making it a likely candidate. The list takes effect June 19.
Pressure has been building to cut drug reimbursement costs in Japan by using more generics.
The Council on Economic and Fiscal Policy, headed by Prime Minister Shinzo Abe, is weighing an overhaul of the social security system with a domestic debt-to-GDP ratio of 227% and the central bank spending ¥80 trillion annually to buy government bonds.
The dire fiscal situation led Japan's cabinet to tell Health Minister Yasuhisa Shiozaki in May that even setting a goal of an 80% prescription rate for generics by fiscal year 2020 to save about $10.5 billion was not enough.
Jerome Contamine, executive vice president and chief financial officer at Sanofi, highlighted the prospect of changes in the status of Plavix in the first-quarter earning call.
"Please note that we expect generic versions of Plavix to enter the market in Japan as of mid-2015."
The drug already faces generic competition in other markets, but after sales were hit in April 2014 because of the imposition of a general sales tax in Japan, a recovery saw more than $1 billion taken in during the past year at reimbursed prices. Japan's fiscal year ends March 31.
The drug also competes, however, with Takeda Pharmaceutical's Blopress (candesartan) that also faced generic competition last year, making the market for cholesterol-linked drugs highly competitive.
Olivier Brandicourt, CEO of Sanofi, was slated to visit China and Japan in May, according to the first-quarter earnings call, though there were no published remarks available on the trips.
The Sanofi-Aventis drug was approved in Japan in 2006, with rights transferred from Daiichi Sankyo, though the companies cooperated on manufacturing and promotion.
Among companies set to offer generic version are the Novartis ($NVS) generic unit Sandoz as well as Sanofi's own generics arm Zentiva.
Mylan ($MYL), Aska-Actavis ($ACT) and Sawai Pharmaceutical are among dozens of offerings, according to an official from NHI. Japan's NHI reimbursement covers thousands of drugs.