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Japan's generic drugmakers have a China dependency problem

Push for ever-lower prices threatens supply of critical antibiotics

Japanese drug manufacturer Towa has been bringing more production of its pharmaceutical precursors in-house.

TOKYO -- Japanese makers of generic drugs, the cheaper alternatives to name-brand pharmaceuticals, are learning that their relentless efforts to keep prices down come at a cost -- their reliance on chemical ingredients, or drug precursors, from China is opening them up to supply disruption.

"Once stocks ran out, we switched to a different antibiotic, but there is concern about possible side effects," says one doctor at a university hospital in Japan. Nichi-Iko Pharmaceutical, a generics manufacturer, announced in February that it could no longer supply the antibiotic cefazolin, sparking a crisis in the country's hospitals.

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