All questions

The regulatory regime

i ClassificationTypes of productsMedical products

Medical products subject to the PMD Act are categorised into the following five product categories:

  1. drug or medicines;
  2. quasi-drugs or quasi-medicines;
  3. cosmetics;
  4. medical devices; and
  5. regenerative medical products.
Food products

Foods are categorised into the following categories according to relevant acts (note that foods with health claims are currently classified into three categories):

  1. foods in general; and
  2. foods with health claims:
    • foods for specified health uses;
    • foods with nutrient function claims; and
    • foods with function claims.

Foods in general are regulated by the Food Sanitation Act, whereas 'foods for specified health use' and 'foods with nutrient function claims' are regulated by the Health Promotion Act under the supervision of the MHLW, and 'foods with function claims' are regulated by the Food Labelling Act under the supervision of the Consumer Affairs Agency.

There are also approximately 1,000 ingredients on the Food and Drug Classification List that may be distributed as drugs if their effects and efficacy are labelled, and distributed as foods if their effects and efficacy are not labelled.

ParticularsDrugs, quasi-drugs and regenerative medical products

Drugs are defined as the products that are listed in the Japanese pharmacopoeia [current version is Supplement I, the 17th Edition, issued on 1 December 2017], in addition to certain other materials that are specifically used for the diagnosis, treatment or prevention of disease (excluding medical devices, cosmetics and regenerative medical products). Under the definition of the PMD Act, drugs include those for veterinary use. Distinguishing between drugs, quasi-drugs, regenerative medical products, cosmetics, medical devices and foods is sometimes a practical issue that depends not only on the ingredients of the product but also the labelling, advertising and promotion methods utilised for the relevant product, including statements of the product's virtues and its historical background.

'Quasi-drug' is defined as an item for the purpose of: (1) preventing nausea and other discomfort; (2) preventing heat rash, soreness, etc.; (3) encouraging hair growth or removing hair; or (4) exterminating and preventing mice, flies, mosquitoes, fleas, etc. Quasi-drugs include, but are not limited to: deodorants, depilatories, hair growth treatments, hair dyes, perm and straightening products, as well as medicated cosmetics, such as whitening products, anti-ageing products, and oily skin or acne treatment products. Care must be taken for products used for aesthetic purposes, which are often classified as quasi-drugs under Japanese practice.

Regenerative medical products are categorised separately (a requirement introduced in the 2014 Amendment to the PMD Act (the 2014 Amendment)), and the expeditious and conditional authorisation of these products is the aim to meet the high expectations for innovative medicines in this category. Regenerative medical products are defined as processed cells that are intended to be used for:

  1. the reconstruction, repair or formation of structures or functions of the human body, or the treatment or prevention of human diseases; or
  2. gene therapy.

Drugs are further classified into ethical drugs and over-the-counter (OTC) drugs. Most ethical drugs require a prescription. In vitro diagnostics are usually classified as drugs rather than medical devices according to Japanese practice.

Medical devices

Medical devices are devices for treatment, prevention or diagnosis, which are listed in the Cabinet Order of the PMD Act. Medical devices are divided into classes I, II, III and IV, in order of strictness of control. Class I devices are ordinary medical devices, substantially corresponding to Class I devices under the international task force. Class II devices are controlled medical devices, substantially corresponding to Class II devices under the international task force. Classes III and IV are strictly controlled medical devices, which are basically equivalent to Class III and IV devices under international classification by the Global Harmonisation Task Force. These classes depend on the magnitude of the risk to human health and life posed by the subject device. The type of business licence that is required for manufacturing, marketing or distributing a medical device depends on which of the four classes the subject device falls under. Software or computer programs used for data processing for MRI, CT, X-ray, PET-CT and other medical device hardware are also categorised as medical devices, according to the 2014 Amendment.

Cosmetics

Cosmetics are defined as substances that have a mild action on the human body, and that are intended to be used on the human body by rubbing, sprinkling or another method, with the aim of cleaning, beautifying and increasing the attractiveness, altering the appearance or keeping the skin or hair in good condition (excluding drugs and quasi-drugs). Cosmetics generally correspond to their counterparts in other jurisdictions; however, there are a number of discrepancies among various countries and categories. As such, certain products require practitioners' advice before being introduced into the Japanese market. In particular, products that have medical functions are often classified as quasi-drugs.

ii Non-clinical studies

A non-clinical (or preclinical) study of a drug to be authorised shall be included in the application form for obtaining market authorisation, and as such must be in compliance with the Ministerial Order for Good Laboratory Practice (the GLP Order). Requirements stipulated in the GLP Order particularly include requirements for trial facilities, equipment and trial plans, as well as rules for animal care and breeding in relation to experimentation on animals. Non-clinical studies can refer to the guidelines published by the PMDA.

iii Clinical trials

Clinical trials are mainly regulated by the PMD Act and the Ministerial Order for Good Clinical Practice (the GCP Order). Clinical trials are regulated by the governmental organisations (i.e., the MHLW and the PMDA). Drugs for clinical trials are strictly controlled under the Notice from the MHLW. The Centre for Clinical Trials, Japan Medical Association, also provides guidelines for GCP, etc. Clinical trials specifically for marketing approval are called chiken under the Japanese practice, and are different from other types of clinical trial. Some clinical trials other than chiken, classified as 'specified clinical research', are controlled under the Act on Clinical Research, which was enacted on 7 April 2017, and will come into effect within one year from that date.

Prior registration with the authority

Prior registration documents must be prepared and submitted to the authority before performing a clinical trial for market authorisation. A sponsor should prepare a protocol, which shall be reviewed by the institutional review board (IRB) of a hospital. The IRB must include at least one member who is independent and has no conflict of interest with the product at issue. The reviewed protocol shall be registered and reviewed by the MHLW. There is some difference in terms of the order of procedure between conventional clinical trial and investigator-initiated studies. To assist preparation of the prior registration documents, before the formal registration process with the MHLC, applicants can informally consult with the PMDA by presenting a draft protocol. The sponsor can only request pertinent investigators for the clinical trials after the 30-day period for the PMDA's review has passed.

Compensation and insurance for injuries

If any adverse effects are observed in a clinical trial, the sponsor shall ensure that the trial subject is compensated for any damage and losses suffered by the subject. It is therefore mandatory that sponsors engaging in clinical trials always obtain insurance cover before a trial commences, since there is a potential risk associated with this type of liability. In addition, if applicable, remedies for damages under the general civil procedures are also available.

Informed consent/assent

Informed consents, or alternatively informed assents in specific cases, must be obtained from a trial subject before participating in a clinical trial, in a written format. Upon obtaining informed consents, a written explanation must be presented to all trial subjects describing the details of the clinical trial. Hospitals and doctors in charge of the trials must present explanation that includes the expected benefits and adverse effects of the trial drug, and, importantly, the trial subject's right to terminate participating in the trial. Regarding infant patients and those who are not capable of consenting, informed assent may be obtained from the patients in addition to the guardian's informed consent. There is currently no legal binding to this type of consent.

Safety reporting

Any records of clinical trial results must be maintained at the hospitals at which the clinical trial is being performed. Any party relating to the clinical trials must inform the MHLW of all serious adverse effects from the drug subject to clinical trials.

Investigator-initiated studies

In Japan, investigator-initiated studies (IIS) have been accepted since 2004, as a result of the amendment to the Pharmaceutical Affairs Act in 2003 (now the PMD Act). The GCP requirements are mostly applicable with some modification, and therefore the requirements for IIS are different from those applicable to marketer-initiated studies. IIS are typically used for drugs that are now commercially interested but medically important, such as those for rare diseases (i.e., orphan drugs) or those with extremely advanced medical technologies such as regenerative medicines. In the past, IIS have been conducted for those drugs that have already been authorised in another country but have not been subject to a clinical study in Japan for cost reasons.

iv Named-patient and compassionate use proceduresGeneral prohibition against marketing without authorisation

In principle, drugs, quasi-drugs, regenerative medical products and medical devices cannot be distributed without a marketing authorisation. However, there is an exception to this rule that allows for compassionate use, as explained below.

Special procedure for importing drugs or medical devices

With respect to a drug or medical device that has only received a foreign (i.e., outside Japan) marketing authorisation, special conditions and procedures are provided. The requirements for obtaining approval under such special conditions are:

  1. marketing authorisation has been obtained in another country that has a marketing authorisation system equivalent to that in Japan;
  2. immediate use of the drug or medical device is necessary to prevent a disease that can cause death or serious harm to the health of citizens in Japan from rising to the level of a pandemic; and
  3. the drug or medical device is specifically designated through an administrative order.

Any disease, disorder or death that is supposedly related to the drug, regenerative medical product or medical device subject to these special conditions and procedures must be reported to the MHLW.

There was one case in which this special procedure was applied, which involved the importation of an influenza vaccine produced by non-Japanese manufacturers.

v Pre-market clearance

To market drugs, regenerative medical products or medical devices, an entity must have a marketing business licence, which makes it an initial marketing entity. Such a marketing authorisation must be obtained for the respective drugs, regenerative medical products or medical devices it intends to market. Some products, such as regenerative medical products, may be approved for marketing authorisation in an accelerated manner under special conditions. However, such conditional marketing authorisation requires additional clinical data and must be resubmitted for a 'conventional' marketing authorisation.

Application

An applicant must file an application for marketing authorisation with the MHLW. Alternatively, for some limited drugs and medical devices other than Class IV medical devices, applications may have to be filed with the relevant local government (prefectural government) or a registered non-governmental certifying agency. Generally speaking, an application for a medical product generally must be filed with the PMDA in the first place, although the application must be addressed to the MHLW or a prefectural government in writing.

Authorisation conditions

In reviewing an application, key consideration is given to the following:

  1. quality;
  2. efficacy/effectiveness;
  3. safety;
  4. the applicant's marketing business licence; and
  5. the proposed manufacturer's manufacturing business licence or accreditation as a foreign manufacturer in which good manufacturing practice (GMP) is also checked.
Other conditions

To market drugs, a party must obtain both the appropriate authorisation to market the drug and a marketing business licence. It is possible for wholesalers or retailers to distribute the drug that has been approved. Sometimes, such wholesalers or retailers are important, particularly for foreign enterprises that have little experience in Japanese marketing. In such cases, the wholesalers and retailers taking part in the distribution must also obtain business licences in their respective relevant categories.

Applicants located outside Japan

Japan has no 'foreign marketing authorisations' per se. If a foreign manufacturer is interested in exporting a medical product to Japan, the manufacturer must, in principle, obtain marketing authorisation for a foreign-manufactured medical product or let its distributor or licensee in Japan obtain a marketing authorisation. In such a case, the foreign manufacturer must file an application through an agent located in Japan that has a marketing business licence to obtain an appropriate marketing authorisation.

Fee

The application fees for marketing authorisation vary, depending on the type of medical product. The fee for a marketing authorisation for a novel drug ranges from approximately ¥2 million to ¥30 million (note that travel expenses for investigation in a foreign country should also be paid). GMP, GLP and GCP examination fees are also incurred, which together range from ¥3 million to ¥7 million (note that travel expenses for investigation in a foreign country have to be borne by the applicant if the applicant is a foreign entity). For applications for marketing business licences and manufacturer's licences, additional fees shall be incurred, ranging from ¥50,000 to ¥150,000. Thus, in total, the maximum fee may go up to approximately ¥50 million.

Standard review time, special procedures and conditioned procedures

The Japanese government announced that it aims to shorten the standard period for reviewing an application for a novel drug approval to 12 months, commencing from the date of the official acceptance of the filed application, and over the past couple of years this has been achieved for 80 per cent of the newly approved drugs. For prioritised examination, the period for the review is set down to nine months, and 70 per cent of the newly approved drugs so far have achieved this goal. It is of course that the actual period of review time depends on factors such as the type of medical product.

With respect to generic drugs, an abridged procedure is provided. The examination of an application for generic drugs mainly focuses on: (1) the equality of the original drug and the generic drug, including bioequivalence, chemical equivalence of active pharmaceutical ingredients (APIs) and stability; (2) the adequacy of the data attached to the application; and (3) the proposed manufacturing facility's compliance with GMP.

To obtain an authorisation through the abridged procedure for generic drugs, all the following conditions (among others) must be met:

  1. the re-examination period for the original drug must have expired;
  2. bioequivalence – in which the quality, effectiveness and safety of the generic drug are to be equal to those of the original drug;
  3. API equivalence – in which the generic drug is capable of being a substitute for the original drug;
  4. stability; and
  5. the patent for the original drug must have expired. In this regard, there is no equivalent to US-style patent linkage in Japan.

With respect to a 'use' patent, carve-out approvals are possible under current Japanese practice.

With respect to an orphan drug that is being used to cure a rare but serious disease, there is a special rule. Specifically, the review thereof can be expedited and prioritised over applications for novel drugs if the orphan drug is found to contribute to an apparent improvement in the quality of medical care for the subject disease. The conditions for a drug to be qualified as an orphan drug include the number of patients that have the particular disease and whether the particular drug is expected to have significant value if approved. The critical number of patients is currently designated as 50,000 by the Notification from the Director of the Department of Pharmaceuticals and Food No. 0401-11 of 1 April 2015.

No US-style patent linkage

A request form for a market authorisation shall include the relevant patent information. The PMDA is said to stop or suspend a market authorisation if it recognises a patent in issue. However, there is no abbreviated new drug application system, such as in the United States, and thus there is no US-style patent linkage in Japanese practice. Practically speaking, the Japanese practice has an effect of patent linkage practised in the United States. Specifically, the innovator drug company may request suspension of drug approval for which the innovator company believes that the third-party company requested for marketing authorisation. The PMDA shall make an inquiry to the third party regarding the concerns relating to the potential infringement, and the third party must respond to the inquiry. If the response is not reasonable enough, the PMDA shall substantially stay the authorisation process. This is all administrative process, but the parties can file an infringement suit to the relevant court. Patent cases are heard before the special instance courts, which are the Tokyo and Osaka District Courts. The court of second instance is consolidated to the Intellectual Property High Court of Japan (IPHC-J) located in Tokyo.

Procedures for conditional and time-limited approval

Oncology drugs and orphan drugs may be subject to a conditional approval system. Additionally, with respect to regenerative medical products, a new process called the 'conditional and time-limited approval system' has been introduced by means of the 2014 Amendment. Under the new regime, after the safety is confirmed and the results predict 'likely' efficacy, the product may be given conditional, time-limited marketing authorisation to enable timely provision of the products to patients. Applicants can, of course, take a 'normal' authorisation path. In the conditional and time-limited authorisation path, the initial approval is time-limited and post-marketing safety measures must be taken, including priori-informed consent of risk to patients and obtaining 'normal' authorisation by collecting confirmation data of efficacy and safety within a maximum of seven years.

vi Regulatory incentivesPatent protection

Medical products, and the technologies related thereto, can be protected by substance patents (also known as compound patents), medical-use patents, formulation patents and manufacture method patents. Patent protection lasts for 20 years from the filing date of the application. Payment of an annual fee is required to maintain the patent registration. Methods of medical acts per se, such as methods of treatment, diagnosis and surgery, are not patentable subject matter under Japanese patent practice. Note that second medical use and dosage regimen inventions are patentable under Japanese patent practice. However, this requires a special claim format and it is therefore strongly recommended that a local patent attorney with special knowledge and experience is consulted.

Extending term of patent protection

For medical products, the term of a patent can be extended at the request of the patent owner under certain conditions. It is important to note that it is only the patentee who can file a patent term extension application, which may be different from the one who has received a market authorisation. Further, it is also important that the patentee can only file such a patent term extension (PTE) application only after a market authorisation pertinent to the patent is obtained, and more importantly, within three months from the authorisation date. The term of the extension, which may not exceed five years, is generally equivalent to the period during which the patent owner, including its licensees, was prevented from implementing the patented product while waiting for the medical product registration required under the PMD Act. PTE applications may be filed for drugs and regenerative medical products but PTE applications are not allowable for medical devices. It is also important to note that it is NOT possible to file a PTE application on or after the six months from the patent expiry date. Instead, in such a case, the patentee must file prior notice before the six-months due date comes.

According to recent developments before the Supreme Court of Japan, practically speaking, the scope of the claims for a patent to be extended by a patent term extension request is currently substantially limited to the scope of the market authorisation in issue. More recently, the Grand Panel of the Intellectual Property High Court of Japan held that the fact a later approved drug is generic does not necessarily mean that the generic drug infringes a patent covering the original innovator drug, if another ingredient other than an API is different in terms of the scope of the claims.

Protection under the PMD Act

Japan has no explicit data exclusivity or data protection system in an independent format. However, the re-examination period plays a substantially similar role to that of data exclusivity. Specifically speaking, when a novel drug is approved, the new drug is subject to a re-examination. The re-examination period is generally eight years after the initial authorisation for a regular novel drug. As a matter of practice, an applicant for a generic product cannot apply for a marketing authorisation under the PMD Act until the re-examination period for the original (innovator) drug expires (see generic drug requirements above), since such an applicant cannot rely upon the original drug's clinical data. As such, in substance, this re-examination system has an effect that is equivalent to that of data exclusivity. To encourage new orphan drug development, the re-examination period for an orphan drug is extended to a maximum of 10 years. For novel usage for drugs already approved for different uses, the re-examination period is shortened since some of the regulatory data are considered for the same APIs. For example, regarding novel efficacy, for novel dosage and application and other applications that are different from the original innovator's drug, a re-examination period of four years is currently granted, and regarding new combination and novel administration, a six-year re-examination period is granted. For novel formulation or similar that is deemed to be identical to the original innovator's drug, only the remaining period of the original innovator's drug is granted.

vii Post-approval controlsPost-marketing commitments and pharmacovigilance obligations (Phase IV)

After the launch of a drug onto the market, the marketer holding authorisation must conduct post-marketing surveillance regarding quality control, safety and observing adverse effects, etc. If a marketer becomes aware of any issue relating to the effectiveness or safety of the marketed drug during the post-marketing surveillance, the marketer must:

  1. conduct a drug recall campaign;
  2. report the discovery to the PMDA;
  3. issue public notices if the issue is important; and
  4. take other appropriate measures to prevent further damage or loss to patients.
Period of authorisation and renewals

There is another type of checking system under current law and practice, which is called re-evaluation. As the evaluation process is developed gradually according to the time, the prior approval may not be appropriate after certain period of time. Specifically, although approval for a novel drug is generally subject to re-examination eight years after its initial authorisation, there may be cases where, subject to the type of medical product, the approval period may be shortened. In this regard, the MHLW occasionally conducts re-evaluations of drugs. In the late 1990s, a general re-evaluation was conducted and a number of cerebral ameliorator drugs were cancelled from authorisation.

Amendment to, transfer of and cancellation of marketing authorisations

Any amendment to a product subject to marketing authorisation (except for minor amendments) generally requires approval from the MHLW, while a minor amendment can be made by notifying the MHLW. The transfer of marketing authorisations to another marketer is generally permissible, as long as the new marketer holds an adequate marketing business licence, and after prior notice of the transfer has been submitted to the MHLW. Any amendment to the medical packaging insert accompanying a medicinal product must be reported to the MHLW, and the amended insert must also be uploaded to the marketer's website. This regulation has been introduced only recently.

Additionally, criminal and administrative sanctions may be imposed. With respect to criminal sanctions, a pecuniary offence or imprisonment involving hard labour, or both, may be imposed. Regarding administrative sanctions, the authorities may issue a product recall administrative order, or an order cancelling a marketing authorisation or marketing business licence in response to a violation of a marketing authorisation.

viii Manufacturing controlsApplication

There are two types of business licence related to the manufacture of medical products:

  1. a marketing business licence, which is required for the initial marketing of a manufactured or imported medical product in Japan; and
  2. a manufacturing business licence, which is required to manufacture a medical product. (If a manufacturer of an imported product is located outside Japan, accreditation as a foreign manufacturer is also required).

The type of licence can affect the nature of the business being carried out. For example, a business entity that has obtained a manufacturing business licence but not a marketing business licence cannot distribute medical products (manufactured or imported by the company) to others (e.g., a wholesaler). A transferee of a medical product manufacturing facility, such as an entity that acquires and takes over a drug manufacturing business, is also required to apply for its own manufacturing business licence to succeed in such a manufacturing business. This is because it is not permitted to transfer a manufacturing business licence.

Conditions

The conditions required for obtaining a manufacturing business licence include certain facility, staffing and other standards, as set out under a ministerial order of the MHLW. Medical devices have specific conditions. The manufacturer must comply with the GMP regulations stipulated in the relevant MHLW order.

In addition, an applicant for a marketing business licence must satisfy:

  1. standards for maintaining quality assurances, as provided under the GQP regulations stipulated in the Ministerial Ordinance relating to standards for quality assurance of drugs, quasi-drugs, cosmetics and medical devices;
  2. standards for post-marketing safety management, as provided under the good vigilance practice regulations stipulated in the Ministerial Ordinance relating to standards of post-marketing vigilance practice of drugs, quasi-drugs, cosmetics, medical devices and regenerative medical products;
  3. standards for the good post-marketing surveillance practice regulations, which are stipulated in the Ministerial Ordinance relating to standards of post-marketing study practice of drugs, quasi-drugs, cosmetics, medical devices and regenerative medical products; and
  4. standards provided under the Ministerial Ordinance relating to GMP (for drugs), the Ministerial Ordinance relating to quality management systems (for medical devices and in vitro diagnostics) and the Ministerial Ordinance relating to good cell and tissue practice (for regenerative medical products).

With respect to medical devices, manufacturers have to obtain a certificate of ISO standard (i.e., ISO13485). In vitro diagnostic products, which fall within the category of drugs, may require conditions similar to those for medical devices.

Restrictions on foreign applicants

A foreign manufacturer of medical products cannot distribute their products directly in Japan, but must arrange distribution through a licensed marketing business operating entity. In principle, accreditation requirements for a foreign manufacturer are basically the same as those to acquire a Japanese manufacturing business licence. An application for accreditation as a foreign manufacturer can be filed with a marketing business operating entity in Japan.

ix Advertising and promotionRestrictions

False, excessive or misleading advertisements are prohibited by the PMD Act in relation to the name, manufacturing method, effectiveness, etc., of medical products, regardless of explicit or implicit communication. In this regard, the MHLW has issued Guidelines for the Adequate Advertisement of Drugs, with official commentary, which provide detailed explanations, including examples of adverts that the MHLW considers to be false, excessive or misleading. Advertising ethical drugs to the general public is generally prohibited. The Manufacturers Association has also issued standards, called promotion codes for drugs for prescription.

Internet advertising

These advertisement-related regulations apply equally to advertising over the internet. Websites and other channels such as the social networking sites of advertisers that contain hyperlinks to other websites are considered together as a single advertisement in determining whether a violation of the advertisement-related regulations exists (even where each website on its own may not explicitly violate these regulations).

x Distributors and wholesalersWholesaler and retailer business licences

An entity that intends to market drugs, regenerative medical products and medical devices must hold both a marketing authorisation and a marketing business licence. There are differences between business licences for wholesalers and those for retailers; in other words, there are two types of licence and one party can apply for both types. As such, wholesalers and retailers of drugs, regenerative medical products or medical devices are subject to separate business licence requirements.

Marketing through the internet or mail order

Over-the-counter (OTC) drugs can be generally marketed through the internet and by mail order. However, there are some exceptions and certain potent drugs and OTC drugs that were previously classified as ethical drugs (most of which require a prescription, as described below) cannot be sold on the internet or requested by mail order, and require face-to-face communication with a pharmacist before being sold. Under the current practice, such internet or mail order retailers are required to have at least one 'real-world' store where they can receive orders from consumers via the internet or mail.

xi Classification of productsPrescription drug and OTC drug

In addition to the classifications of drugs, quasi-drugs, cosmetics, medical devices and regenerative medical products, drugs are further classified as either ethical drugs (most of which require a prescription) or OTC drugs. In other words, of the drugs authorised in the market, the MHLW designates certain drugs that may not be distributed or sold without a prescription (ethical drugs). The MHLW designates prescription drugs on a case-by-case basis when granting the relevant marketing authorisation in consideration of its prescription drug designation standard. A marketer is required to obtain a marketing business licence to market a prescription drug.

OTC drugs are further classified as either pharmacist's intervention required medicines (PIRMs) or general OTC drugs. PIRMs were introduced in the 2013 Amendment to the PMD Act, wherein PIRMs cannot be sold without a pharmacist's intervention and purchasers are strictly limited and controlled to those patients in need of such drugs. PIRMs include 'switch OTC drugs' and 'direct OTC drugs'. General OTC drugs are categorised as first, second or third class, mainly according to the associated risk factors. First-class OTC drugs must be sold by a pharmacist, whereas second-class and third-class OTC drugs may be sold by a pharmacist or a registered sales clerk. First-class and second-class OTC drugs must only be sold with the appropriate information about the drugs.

Prescription drug designation standard

Prescription drug are designated by the MHLW, which includes the following types:

  1. drugs that cannot be used effectively or safely without proper selection based on a doctor's diagnosis;
  2. drugs that require periodic medical checks to avoid serious adverse effects; and
  3. drugs that can be used for other improper purposes (e.g., recreational addictive use).

Prescription drugs include (1) radioactive drugs; (2) narcotics; (3) psychotropics; (4) analeptics; (5) analeptics raw materials; (6) specific biological products; (7) injectables (excluding (1) to (6) aforementioned); (8) specific substances designated by the MHLW (currently 974 substances) and the derivatives and hydrates thereof, and salts thereof (excluding (1) to (7)); and (9) oxytocin, serum gonadotropin and placental gonadotropin.

xii Imports and exportsLicences and authorisation for imports

To import and sell a drug, regenerative medical product or medical device in Japan, it is generally required to have the following business licences and authorisation:

  1. accreditation as a foreign manufacturer by an offshore manufacturing factory for the products being imported;
  2. a manufacturing business licence held by a domestic factory (if part of the manufacturing process, such as packaging of the imported products, is conducted in Japan before marketing);
  3. a marketing business licence held by a marketer, for marketing the imported products;
  4. a marketing authorisation held by a marketer, for marketing the imported products; and
  5. an import report from a marketer, for customs clearance.
Licences and authorisation for exports

The following business licences and authorisations must be obtained to export a drug, regenerative medical product or medical device from Japan:

  1. a manufacturing business licence held by a domestic factory for manufacturing products for export; and
  2. an export report from a domestic factory for product export.

Even if the products are solely for export and distribution outside Japan, factory manufacturing products for export located in Japan must be subject to a GMP compliance review by the MHLW.

Exportation of medical products from Japan to other countries can be categorised as follows:

  1. when exporting products on the Japanese market that are already approved and licensed or authorised under the PDM Act for domestic markets, without any changes (no further licences are required for such exports);
  2. when exporting products on the Japanese market that are already approved and licensed or authorised under the PDM Act for domestic markets with changes (including changing package designs and attaching further labels with translations, etc), it would be regarded as having produced medical products for export. Therefore, in such a case, it would be necessary to obtain authorisation as mentioned above; and
  3. when exporting products without having obtained authorisation under the PMD Act, it would be necessary to obtain a manufacturing business licence and an export report.

Additionally, when exporting products manufactured in Japan, the country which is importing the products may require a GMP conformance certificate.

xiii Controlled substances

Certain substances are designated as controlled substances in Japan; for example, narcotics and psychotropic drugs are heavily controlled by the Narcotics and Psychotropic Control Act. This act regulates the import, export, manufacture, sale and purchase, possession, use and disposition of narcotics and psychotropic drugs. Doctors, importers, exporters, manufacturers, wholesalers, retailers, hospitals and research institutions are required to obtain special permission to handle narcotics or psychotropic drugs. The MHLW often provides notifications, which are available from its website. Other acts for the control of substances are the Stimulants Control Act, which mainly focuses on (meth)amphetamine, the Cannabis Control Act, the Opium Act, and the Ministry Ordinance for manufacture and handling of radioactive drugs.

Furthermore, certain drugs falling within the scope of substances are controlled by the Poisonous and Deleterious Substances Control Act. This act defines poisonous substances, deleterious substances and special poisonous substances, all of which are high on the list. These substances can be searched for using the database search tool provided by the National Institute of Health Sciences.

xiv Special remarks on traditional medicines

There are some issues regarding 'Western herbs', for which there is no clear definition under Japanese pharmaceutical practice. In terms of 'food', Western herbs are subject to laws and regulations relating to food control, such as the Food Sanitation Act and the like. In terms of agricultural products, they are subject to the Act on Standardisation and Proper Quality Labelling of Agricultural and Forestry Products (JAS Act). Regarding labelling, they are subject to the Act against Unjustifiable Premiums and Misleading Representations. If Western herbs are intended to be used with health claims, they are subject to laws and regulations relating to foods with health claims. Even if a Western herb of interest is already approved in a country outside Japan, that herb must be subject to general procedures for obtaining marketing approval. However, when submitting an application for marketing approval, some of the required documents can be omitted by relying on documents relating to clinical trials conducted outside Japan. Specifically, clinical trial results submitted to a non-Japanese examination authority as exhibits for obtaining marketing authorisation, such as comparative clinical trials using a substantially equivalent formulation to show effects or efficacy, dosages, regimens, or an academic article submitted and published by an internationally recognised medical journal including such results, it is only necessary to submit safety results using Japanese subjects. Some Western herbs previously marketed in Europe have already been approved in Japan.

With respect to Japanese traditional medicine (Kampo), the MHLW has legislated a specific list naming products that satisfy approval criteria as a general OTC drug stipulated by the Japanese government, which require the least documentation of all the OTC categories. As of September 2016, 15 categories are specifically defined, such as analgesics, etc., and types of active pharmaceutical ingredients, formulation types, dosages, administration routes and regimens, effects and efficacies, and packages units. As of April 2017, some Kampo drugs are handled by local administration offices. With respect to Kampo drugs other than the general OTC drugs, it is not possible to rely on 'historical' knowledge and it is therefore necessary to conduct new clinical trials, as either PRIMS or ethical Kampo drugs.

xv EnforcementMonitoring compliance

The MHLW is recognised to be the main regulator, but in practical terms, it is the PMDA and local prefectural governments that are delegated to conduct a substantial amount of its authority. The regulator can monitor a licensed business operating entity's business operations, to ensure compliance with the rules and regulations provided under the PMD Act. The regulator can monitor and oversee medical products that are subject to marketing authorisation. Novel drugs are subject to re-examination after a certain period. In addition, an applicant that receives authorisation must have its medical product re-evaluated upon receipt of an MHLW order.

Imposing penalties

The regulator can take actions against licensed business operating entities, which include:

  1. inspecting offices and factories;
  2. ordering the disposal, recall or other appropriate treatment necessary to protect public health;
  3. requiring that access be granted to the inspector designated by the regulator, who is responsible for the subject investigation;
  4. temporarily suspending pharmaceutical business operations;
  5. ordering the replacement of certain key personnel relevant to the pharmaceutical business;
  6. cancelling a business licence or accreditation it had previously granted; and
  7. demanding a report that includes data about adverse reactions to the medical product, recall information, etc.

Further, criminal sanctions can be imposed in response to violations of certain regulations applicable to pharmaceutical business operating entities.