Japan’s Ministry of Health, Labour and Welfare (MHLW) on Friday published, for the first time the names of generic drug makers it rates as dependable suppliers, but it did not name the 83 companies in the lowest group. Hospitals and pharmacies can now see 38 A-rated and 64 B-rated makers by name, including Sawai Pharmaceutical and Towa Pharmaceutical in the top tier. A maker missing from both lists is in the lowest group, according to DGS Online’s release text, which treats every company outside A and B as C.

The release matters beyond Japan because the United States is testing a similar idea. The FDA is piloting a voluntary quality management maturity program for drug manufacturing sites to curb shortages, and the design choices Japan made (public names, a link to pricing, and an unnamed bottom tier) show what that policy looks like in practice. The people most directly affected are patients in a market where generics accounted for an 88.8% preliminary volume share in the ministry’s September 2025 figures.

Ministry Names 38 A-Rated and 64 B-Rated Makers, Withholds 83 C-Rated Names

The ministry evaluated 185 companies on their fiscal 2025 performance (April 2025 through March 2026) and sorted them into three groups. Names of the top group of 38 and the second group of 64 were published, while the 83 lowest-rated names were not disclosed. Together the named groups total 102 companies with positive overall evaluations, and the 83 others are about 45% of the 185 evaluated.

According to the ministry’s release text, the lowest group is not published and every company outside A and B counts as C. None of the reports reviewed gives the ministry’s reason for withholding that tier, and none says whether the full roster of 185 companies is public. That matters for buyers: the only way to identify a C-rated firm from the published lists is to notice its absence. Any company that markets even one generic product was eligible for scoring.

How Do Japan’s Generic Drug Ratings Work?

The tiers are relative. The top 20% of scorers receive an A, companies with negative scores receive a C, and everyone else gets a B. Thirty-eight of 185 is 20.5%, close to that top-fifth cutoff.

Scoring draws on shipment volume, inventory levels and whether a company discloses manufacturing information, according to Kyodo News. ABEMA TIMES also lists fiscal 2025 shipment performance, disclosure under ministry guidelines issued in 2024, and whether a company secured raw materials. Those disclosure guidelines took effect with a notice to the industry federation in March 2024.

Grades carry money. Nikkei reports that A-rated makers can be priced higher than rivals’ products with the same ingredient for drugs where stable supply is especially needed. In the fiscal 2024 trial, 124 products were grouped (78 ingredient-and-strength combinations) into a higher price band than the usual rule of about three bands. A December 2025 industry association statement says the draft fiscal 2026 pricing outline keeps the company-indicator exemption from standard price-band consolidation.

Spare Capacity and Dual-Sourced Ingredients Are Engineering Tests Behind Grades

The A and B tiers include companies that kept spare manufacturing capacity and inventory, or raised output when competitors halted or restricted shipments. An industry association newsletter lists scoring items including disclosure, supply record, manufacturing capacity, and whether a company buys the same active pharmaceutical ingredient (API) from more than one source.

The API test targets a known weak point. Asia News Network reported that Japanese makers of infectious disease drugs rely on low-cost API sources such as China and India, and that a global demand surge during the COVID-19 pandemic left Japan short of supply.

A second structural cause sits behind the capacity problem. Researchers Masaki Yasue and Mamoru Narukawa tied small-volume, many-product manufacturing to joint development, in which several companies bring versions of the same generic to market. A 2023 ministry research brief noted that joint development lets many companies without sufficient manufacturing capacity launch new products.

Daito President Says Scores Ignore Contract Manufacturing; LDP Caucus Urged Release

The ratings are contested. Hiroshi Matsumori, president and CEO of Daito, opposes publishing the indicators before they are revised. Matsumori said Daito was rated B, and he argues that publishing a generics rating under the label “company indicator” could make his firm’s API manufacturing, contract manufacturing and health food businesses look troubled. He says contract manufacturing that supplies 20% to 30% of the market for some ingredients earns no credit, that in-house API production lowers a firm’s dual-sourcing ratio, and that dual sourcing is often nominal because one supplier provides the regular purchases.

Other makers split. An unnamed large generic specialist told Jiho it uses the indicators internally as a report card and supports publication, while an unnamed mid-sized maker raised similar contract-manufacturing concerns but did not oppose release. The Liberal Democratic Party’s generic-drug caucus, chaired by Yoko Kamikawa, urged prompt disclosure of results on June 3, per Pharma Japan’s report.

The industry federation took a middle path in 2024. Japan Generic Medicines Association president Tomomi Kawamata backed publishing results but asked for time after the method was fixed so companies could improve first. Jiho reporter Ebisawa proposed renaming the measure “stable supply indicators” and revising the rules on contract manufacturing, in-house API and single-source products, which could be discussed for fiscal 2027 onward. Health Minister Kenichiro Ueno told the upper house health committee on July 14 that a research group was reviewing the indicators, including how in-house API is evaluated.

Scandals and Small-Lot Production Left 18.5% of Products Limited or Suspended

Japan’s generic supply problems trace to December 2020, when a sleep-aid ingredient was found in an antifungal drug made by Kobayashi Kako. The product reached 237 medical institutions and pharmacies in 39 prefectures, and 245 people reported health problems. Kobayashi Kako later withdrew its marketing license in 2023. By April 2024, 21 companies had received administrative dispositions for violating the country’s pharmaceutical law.

In May 2024, 3,906 products, or 23% of approved drugs, were under shipment suspension or restriction, and 2,589 of them were generics. A survey by the Federation of Pharmaceutical Manufacturers’ Associations of Japan found 3,103 of more than 16,000 products, or 18.5%, limited or suspended at the end of October 2024, with over 60% of them generics.

The structure amplifies each failure. About 190 firms compete in the sector, and the eight largest account for roughly half of volume. Then-Health Minister Takamaro Fukuoka said structural inefficiencies may have contributed, including small-scale production of many different products. The ministry is pushing product consolidation and corporate restructuring in response.

C-Rated Share Fell From 58% in FY2024 Trial to 45% in First Public Round

In the fiscal 2024 trial, 40 of 190 companies placed in A, 39 in B and 111 in C. By TechTimes’ arithmetic, the C share moved from 58.4% (111 of 190) in that trial to 44.9% (83 of 185) in the first public round.

Because A is defined as roughly the top fifth of scorers, the A count barely moves by design, so the improvement shows up as firms migrating from C to B. Rule changes between rounds make the comparison rough rather than exact: the trial omitted two indicator groups and some supply-record items, with full implementation from April 2025.

Does FDA Publish Quality Ratings for US Generic Drugmakers?

Not on the evidence reviewed. The FDA’s Quality Management Maturity (QMM) program grew out of a 2019 interagency drug shortage task force and remains voluntary. Nine establishments took part in the 2024 pilot, a second cohort ran from September 2025 to April 2026, and a protocol evaluation notice ran through April 13, 2026.

QMM scores each site out of 5 across five practice areas: management commitment, business continuity, advanced quality systems, technical excellence, and employee engagement. Pilot participants scored highest on management commitment and employee engagement, with many receiving 4 of 5, and lowest on advanced manufacturing areas, averaging about 3. QMM does not assess compliance with current good manufacturing practice. The FDA presentation reviewed does not say whether individual ratings will be public.

The motive is the same as Japan’s. An FDA presentation attributes 42% of new shortages from 2022 to 2024 to quality problems or manufacturing delays. ASHP counted 225 active US shortages in its third-quarter 2026 report, below the record 323 in early 2024. The difference is that Japan rates companies, ties tiers to price treatment and now publishes names for the top two tiers, while QMM rates manufacturing establishments.

Minister Ueno Links Market Reward to Price Support in FY2027 Revision

At a post-Cabinet press conference on Friday, Nikkei reported Ueno said he hopes companies that supply quality-assured generics steadily will be rewarded by the market, and that the ministry will work to support prices in the fiscal 2027 revision to encourage stable supply. In his January new-year message, Ueno said a new fund would support companies that end small-lot, many-product production, and that a certification framework would back company efforts.

Whether buyers act on the tiers is the test. The ministry introduced the system to make company efforts visible after repeated quality fraud among generic makers.

For hospital and pharmacy buyers in Japan, the published A and B lists are the first documented basis for choosing suppliers, but the missing 83 names, a contested scoring method and a ministry review of the indicators now under way mean the lists are a starting point, not a verdict. For American readers, the lesson is design: Japan chose public names for the top two tiers and price consequences, and kept the bottom tier off the page, while the FDA materials reviewed do not say QMM ratings will be public. The question to watch is whether publishing rankings reduces shortages or simply shifts them to the companies nobody can see.

Frequently Asked Questions

Why did Japan leave the 83 lowest-rated generic drug makers unnamed?

Kyodo News reports that the ministry published names for the top 38 and second-tier 64 companies and did not disclose the 83 lowest-rated. None of the reports reviewed states the ministry’s reason, so buyers can only infer a C rating from a company’s absence.

Why are generic drugs in short supply in Japan?

Quality scandals that forced production halts since 2020 combined with a structure in which many firms make many products in small volumes, according to the Japan Times account of the then health minister’s remarks.

Do the ratings change what Japan pays for generics?

For A-rated companies, yes: eligible products can be grouped into a higher price band, and the draft fiscal 2026 pricing outline keeps a related exemption from standard consolidation.

Does an A rating guarantee a drug will stay in supply?

No source reviewed describes it as a guarantee. The score reflects fiscal 2025 performance and preparation, and a Jiho reporter argues it measures supply-related efforts rather than overall company quality.