Healthcare

January 2008

'Switch' medications next frontier for drug industry
Over-the-counter drugs that employ the same ingredients as prescription drugs, known in Japan as "switch" drugs, are increasingly coming to market due to a recent government campaign to expand the use of OTC drugs, which are entirely paid for by individual users rather than the health insurance system. Because the list of ingredients allowed in OTC drugs is limited, pharmaceutical makers typically use the ingredients of prescription drugs that have been proved safe and efficacious when they produce new OTC medicines or those with broader applications. Foreign-based pharmaceutical firms are more aggressive about this in the Japanese market than domestic companies, taking advantage of the wide variety of authorized ingredients in their medicines and rich experience in selling OTC drugs abroad. SSP Co., which is under Nippon Boehringer Ingelheim Co., introduced an OTC combination drug called S. Tac Eve Fine in December, adding to a regular cold medicine ambroxol hydrochloride, which helps remove phlegm and eases coughs. Developed by Boehringer Ingelheim GmbH in Germany, the same ingredient has been marketed by Nippon Boehringer to health-care organizations in Japan as Mucosal. Since coming under the Boehringer umbrella in 2000, SSP has taken charge of the German firm's OTC drug operation in Japan. S. Tac Eve Fine is the first SSP product to include a Boehringer ingredient, and "is important from the standpoint of creating synergy with Boehringer," said SSP Senior Managing Director Fumio Kita. The firm has been developing other switch drugs as well, with a second one awaiting approval and a fourth in the R&D stage. Switzerland-based Novartis Pharma KK introduced the allergy drug line Zaditen AL in November. Bringing in the allergy ingredient ketotifen fumarate from a prescription drug, the line includes an oral version, a nasal spray and eye drops. Zaditen and Lamisil for athlete's foot are the only two OTC products made by Novartis, but the firm plans to introduce one switch drug each year from now on, hoping to use them to prop up the sluggish OTC drug market. "In the U.S., 70% of medical problems that are not very serious are handled by people themselves (without the help of a physician). This trend will grow in Japan as well," said President Isao Ohashi of Novartis Holding Japan KK, which is in charge of group OTC drug operations in Japan. U.K.-based GlaxoSmithKline KK is offering Activia cream, the first OTC drug for herpes. The product signals the future expansion of the market for switch drugs, demonstrating that the government has begun approving treatments for new applications. Japanese pharmaceutical makers lag behind in the Rx to OTC trend. Lacking original ingredients for prescription medicines to move into OTC drugs, Taisho Pharmaceutical Co. is buying them from foreign firms to develop OTC remedies of its own. Daiichi Sankyo Healthcare Co. has preferential rights to use prescription ingredients owned by the former Daiichi Pharmaceutical Co., Sankyo Co., Yamanouchi Pharmaceutical Co. and Fujisawa Pharmaceutical Co. in OTC drugs, but its next switch drug is not projected to come out before 2009. New switch drugs will continue to appear along with a 2009 legal reform concerning OTC drug sales. The Japan Self-Medication Industry's list of switch candidates includes drugs for cholesterol and hypertension. If these are approved by the government, the presence in Japan of foreign pharmaceutical makers, which use many different ingredients in their prescription drugs, will expand further. (Nikkei Weekly, January 21, 2008)