Life sciences: product regulation and liability in Japan

Trends and developments

Legal developments

Are there any notable trends or recent legal developments in your jurisdiction’s pharmaceutical industry?

Under existing laws and regulations, when clinical studies are not directed to new marketing authorisation and thus do not fall under clinical trials, they are governed only by the guidelines. However, the Clinical Studies Act was introduced in 2017 and will enter into force in April 2018. This act will govern clinical studies excluding clinical trials (eg, clinical studies performed after approval and not related to additional approvals).

In 2017 the Ministry of Health, Welfare and Labour initiated the conditional early marketing approval system, in addition to accelerated approval. It is applicable to severe diseases to which confirmatory studies are difficult or take a long time. Under this system, when a Phase II clinical trial shows plausible efficacy and safety, the ministry can issue marketing approval on the condition that post-marketing studies should be performed to verify efficacy and safety. The system provides clear guidance for early launch and can accelerate innovative drug discovery.

In 2018 some innovative companies plan to propose the manner of drug price setting under the pay-per-success model. This model will be discussed in view of suppression of expanding social welfare spending.

Legal framework

Legislation

What is the primary legislation governing medicinal products in your jurisdiction?

The primary legislation governing medicinal products in Japan is the Pharmaceutical and Medical Device Act.

Are any legislative changes proposed or expected in the near future?

The Pharmaceutical and Medical Device Act was amended in 2013 and took effect in 2014. No further large-scale legislative changes are expected at present. However, science and technology in the pharmaceutical and medical device industry are rapidly developing. Conversely, due to Japan’s universal healthcare system and ageing population, the rapidly increasing social welfare costs need to be continually assessed. Therefore, the Pharmaceutical and Medical Device Act will be periodically updated and amended.

Regulation

Which bodies regulate medicinal products in your jurisdiction and what is the scope of their powers?

The bodies that regulate medicinal products are:

• the Ministry of Health, Labour and Welfare;
• the Pharmaceuticals and Medical Devices Agency; and
• the competent governors of prefectures, in a limited capacity.

Under the Pharmaceutical and Medical Device Act, the minister of health, labour and welfare may instruct the Pharmaceuticals and Medical Devices Agency to conduct approval reviews (Article 14-2 of the act). The Ministry of Health, Labour and Welfare and the Pharmaceuticals and Medical Devices Agency have the power to conduct approval reviews, compliance inspections and safety-related activities. In practice, the Pharmaceuticals and Medical Devices Agency examines applications for marketing approval. The authority for approval of a limited scope of over-the-counter and quasi-drugs rests with governors of prefectures.

Are any other legal regimes applicable to the trade of medicinal products (eg, competition, international trade, data protection, consumer protection)?

Articles 66 to 68 of the Pharmaceutical and Medical Device Act relate to the advertising of drugs. Further, the following laws and regulations are applicable to the trade of medicinal products:

• the Act against Unjustifiable Premiums and Misleading Representations;
• the Unfair Competition Prevention Act; and
• the Act on Prohibition of Private Monopolisation and Maintenance of Fair Trade.

Are any medicinal products exempt from regulation (eg, complementary and alternative medicines)?

When products are manufactured and sold as drugs (including Chinese medicines), they are subject to the Pharmaceutical and Medical Device Act. However, if alternative medicines are sold as foods without reference to their medicinal effects, the act does not apply. Instead, food laws are applied separately.

In the case of health emergencies, an abbreviated special approval system is available (Article 14-3 of the act). However, this system is a part of the regulation, rather than an exemption.

Supply

Manufacture

What is the authorisation procedure for the manufacture of medicinal products in your jurisdiction?

A licence is required for the manufacture of drugs, quasi-drugs and cosmetics (Article 13 of the Pharmaceutical and Medical Device Act). A manufacturer can file a licence application with a prefecture, explaining the capability of the drugs to be manufactured. A local bureau of a health, labour and welfare office or the governor of a prefecture can issue a licence.

Under the act, a foreign manufacturer that wishes to export to Japan must receive accreditation from the Ministry of Health, Labour and Welfare for each foreign location where the drugs are manufactured (Article 13-3). When a foreign manufacturer files an application, the authority will examine the application. 

Following a licence application, the Ministry of Health, Labour and Welfare (or governor of a prefecture, depending on the category) will examine the application and issue a decision.

The approval system for medical devices is similar to that for drugs. Under Article 23-2-3 of the Pharmaceutical and Medical Device Act, the manufacture of medical devices must be registered. A foreign manufacturer must obtain a licence for export to Japan for each foreign location where its medical devices are manufactured (Article 23-2-4 of the act).

In Japan, the definition of ‘marketing’ (Article 2(2)(Xiii) of the Pharmaceutical and Medical Device Act) differs from the definitions of ‘manufacture’ and ‘distribution’. ‘Marketing’ means the sale, lease and handover of drugs, quasi-drugs and cosmetics that an entity manufactures (including any subcontract manufacturing) or imports. A marketing licence holder must obtain a manufacturing licence to manufacture a drug by itself (except in the case of contract manufacturing).

Marketing approval for a drug is different from a marketing licence for manufacture.

What is the fee for obtaining authorisation?

Fees for obtaining authorisation depend on the type of examination conducted – namely, on-site examination or documentary examination. The following fees apply for manufacturing licence applications:

• documentary examinations – Y114,700; and
• on-site examinations – Y152,300.

The following fees apply to the accreditation of foreign manufacturers:

• documentary examinations – Y59,700; and
• on-site examinations – Y137,100.

What is the validity period for authorisation?

Licences and accreditation for drugs and registrations for medical devices are valid for five years after each renewal (Articles 10 and 17 of the Pharmaceutical and Medical Device Act’s Order for Enforcement for the licence and accreditation of drugs and Articles 37-7 and 37-13 of the order for enforcement).

How robust are the standard good manufacturing practices followed in your jurisdiction?

The standard good manufacturing practices are stipulated in the ministerial ordinance concerning the manufacturing control and quality control of drugs and quasi-drugs (the GMP ordinance). The GMP Ordinance has not changed significantly since 2004. However, the guidelines for detailed operations are described in its enforcement notification, which has been updated. 

Japan is a party to the Pharmaceutical Inspection Convention and the Pharmaceutical Inspection Co-operation Scheme (PIC/S). Manufacturing operations in Japan must meet the PIC/S requirements. Therefore, the PIC/S is an example of how to meet the GMP ordinance’s requirements (Concept on the Utilisation of GMP Guidelines in PIC/S, dated February 1 2012). The PIC/S’s fundamental aspects are incorporated into the GMP ordinance’s enforcement notification.

What are the consequences of failure to obtain manufacturing authorisation and/or follow good manufacturing practices?

Violation of the GMP ordinance can have an adverse impact on the holder of marketing approval for a drug. The minister of health, labour and welfare may order the holder of marketing approval to make improvements or suspend all or part of its business until such improvements have been made (Articles 14(2)(iv) and 72(2) of the Pharmaceutical and Medical Device Act). When an entity has not complied with an order, the minister may cancel an approval or order practical changes to be made in the approved matters (Article 74-2 of the act). Parties that violate the GMP ordinance will be subject to a prison term of up to one year and a fine of up to Y1 million.

Distribution

How are the distribution and storage of medicinal products regulated?

Only pharmacists and distribution licence holders can distribute drugs (Article 24 of the Pharmaceutical and Medical Device Act). Under Articles 25 to 31 of the act, the distribution licence categories are:

• store-based distribution;
• household distribution; and
• wholesale.

The licence category depends on the type of drug and its potential market. Only pharmacists are allowed to distribute prescription drugs to patients. A store-based distribution licence holder can distribute intervention-required drugs and general over-the-counter drugs. A wholesale distribution licence is specific to the wholesale market and does not extend to distribution to patients. Household distribution is based on the traditional style of business in Japan.

Import and export

How are the import and export of medicinal products regulated?

A marketing licence is required when an entity intends to import a drug into Japan and market it for commercial purposes (see the Manufacture section). As an exception, when an individual imports a drug for personal use, rather than for business purposes (ie, private import), such import is beyond the scope of regulation.

When a manufacturer wants to manufacture a certain drug for export specified by a government ordinance, the minister of health, labour and welfare examination will assess whether the manufacturing methods and quality control in the manufacturing facility comply with the required standards. The examination will be conducted at the start of the manufacturing process and every five years thereafter (Article 80 of the Pharmaceutical and Medical Device Act).

Are parallel imports permitted in your jurisdiction?

When a Japanese pharmaceutical authority does not issue marketing approval for a drug, no party can import that drug into Japan commercially. If an entity wishes to import a drug commercially, it must obtain a marketing licence and marketing approval.

Sale and purchase

What rules govern the dispensing, sale and purchase of medicinal products?

A pharmacist can dispense drugs at a pharmacy. The sale and purchase of medicinal products are described in the Distribution section.

Are there any restrictions on the online sale and purchase of medicinal products?

The online sale of prescription drugs is prohibited, but over-the-counter drugs can be sold via the Internet. However, the online sale of a specific category of intervention-required drugs is prohibited. Intervention-required drugs cover former prescription drugs that are reclassified as over-the-counter drugs. The prohibition for the online sale of such drugs lasts for three years from the reclassification.

The online sale of over-the-counter drugs was recently introduced in response to the January 11 2013 Supreme Court judgment.

Named patient supply

What rules govern named patient supply of pre-launch medicinal products?

The Japanese system has no exact counterpart to the EU’s guidance on compassionate use. Access to unauthorised drugs has been gained through private import by patients or doctors for use by their patients. The private import of medicinal products is outside the scope of pharmaceutical regulation, which regulates business activities only.

Under the Ministry of Health, Labour and Welfare’s instructions, the private import of medicinal products by medical doctors is allowed:

• for emergency therapy;
• if there are no alternative drugs in Japan; and
• if the products are used by the doctors’ patients, under the doctors’ supervision.

However, in some cases, unauthorised drugs have been used under the substantial official control of the Ministry of Health, Labour and Welfare on humanitarian grounds where no alternative drugs are available or in emergency situations (eg, drugs for tropical diseases, Hansen’s disease and HIV). 

In 2016 the so-called ‘clinical trial conducted from a humanitarian viewpoint’ or ’expanded clinical trial’ was introduced. Under this expanded clinical trial, if a patient has no alternative measures of treatment, he or she can take part in a clinical trial even if he or she does not satisfy the enrolment criteria.

Clinical trials

Authorisation

What is the authorisation procedure for conducting clinical trials in your jurisdiction?

When an entity intends to sponsor clinical trials or conduct clinical trials itself, it must submit a prior notification of the clinical trial plan to the minister of health, labour and welfare (Article 80-2(2) of the Pharmaceutical and Medical Device Act). The minister may instruct the Pharmaceuticals and Medical Devices Agency to review a clinical trial plan (Article 80-3 of the act). An entity cannot start a clinical trial within 30 days of submitting the notification (Article 80-2(2) of the act), unless it is an emergency. Within the 30-day period, the minister must conduct a review to assess potential danger to health (Articles 80-2(3) and 80-2(7) of the act). If necessary, the minister can instruct the applicant to amend the clinical trial plan, suspend or change the clinical trial or take other necessary measures.

Clinical practices

How robust are the standard good clinical practices followed in your jurisdiction?

Clinical trials of drugs in Japan are governed by the Ministerial Ordinance concerning the Standard for the Performance of Clinical Trials of Drugs (GCP ministerial ordinance) and the Guidance for the GCP Ministerial Ordinance published by the Ministry of Health, Labour and Welfare, which provides a commentary. These regulations are in line with the international standard (the International Council on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use).

The standard good clinical practices for medical devices and regeneration medical products are separately stipulated in each ministerial ordinance.

Reporting, disclosure and consent

What are the reporting and disclosure requirements for the results of clinical trials?

There is no statutory obligation to disclose the results of clinical trials, except for adverse effects of medicinal products. However, under the International Federation of Pharmaceutical Manufacturers and Associations’ (IFPMA) Joint Position on the Publication of Clinical Trial Results in the Scientific Literature, the registration of clinical trials and the disclosure of results are encouraged. Since the Japan Pharmaceutical Manufacturers Association (JPMA) is a member of the IFPMA, each JPMA member registers its clinical trials and discloses the results.

What are the informed consent obligations with respect to clinical trial subjects?

Before a clinical trial starts prospective trial subjects must:

• be provided with a written explanation of the trial which they can understand; and
• provide written consent for their participation (Article 50 of the GCP ministerial ordinance).

Insurance

What are the insurance requirements for clinical trials?

Any entity that sponsors or performs a clinical trial must make arrangements in advance for the required insurance and other necessary measures for compensation (Articles 14 and 15-9 of the GCP ministerial ordinance).

Data protection

What data protection issues should be considered when conducting clinical trials?

An entity that sponsors or conducts clinical trials, and its executives and employees, must not divulge confidential information pertaining to persons with whom they have become acquainted with in connection with a clinical trial (Article 80-2(10) of the Pharmaceutical and Medical Device Act).

An entity that sponsors a clinical trial or a medical institution that conducts a clinical trial must execute a trial contract which establishes patient confidentiality (Articles 13(1)(xii) and 15-4(1) of the GCP ministerial ordinance).

In addition to the pharmaceutical regulation, the Act on the Protection of Personal Information is also applicable.

Marketing authorisation

Authorisation

What is the marketing authorisation procedure for medicinal products in your jurisdiction?

An entity must file an application for marketing approval with the necessary supporting materials (eg, the clinical trial results) with the minister of health, labour and welfare. The Pharmaceuticals and Medical Devices Agency will then conduct a compliance inspection and approval review. If a problem is found during the compliance inspection, it will be incorporated into the approval review process. After review, the Pharmaceuticals and Medical Devices Agency will submit its conclusion to the minister of health, labour and welfare. The minister will refer the report to the Pharmaceutical Affairs and Food Sanitation Council, which will provide its feedback to the minister. Finally, the minister will approve or reject the application. 

The main issue assessed during a compliance inspection is whether the materials attached to the application are prepared in line with Article 14(3) of the Pharmaceutical and Medical Device Act, including the Ministerial Ordinance concerning the Standard for the Performance of Clinical Trials of Drugs (GCP ministerial ordinance), the Guidance for the GCP ministerial ordinance and the standard for reliability of application materials and Article 40(3) of the Pharmaceutical and Medical Device Act’s Ordinance for Enforcement.

For an approval review, a team is established to review efficacy, safety and quality. After the initial review, the Pharmaceuticals and Medical Devices Agency prepares a first review report. Next, the review team prepares a second review report based on:

• a discussion with outside experts;
• an interview with the applicant; and
• a discussion with outside counsel in response to the interview, if necessary

Finally, the Pharmaceuticals and Medical Devices Agency provides its conclusion to the minister of health, labour and welfare.

What criteria are considered in granting marketing authorisation?

Under Article 14(2) of the Pharmaceutical and Medical Device Act, an application for marketing approval will be rejected if the relevant requirements are not satisfied. If no reason for rejection is found, marketing approval will be issued.

 Licensing issues can arise if:

• an applicant has no marketing licence; or
• a manufacturing site has no manufacturing licence.

 Substantive issues can arise if:

• a medicinal product does not have the claimed indication;
• there is a lack of balance between the product’s efficacy and safety;
• the product’s characteristics or quality are significantly inappropriate to health; or
• the manufacturing process or quality control at a manufacturing site are inappropriate.

What is the fee for obtaining marketing authorisation?

Fees for obtaining marketing authorisation are stipulated by the Pharmaceutical and Medical Device Act’s fee rules. Examples include:

• Y533,800 for an approval application and Y30,535,100 for an approval review and compliance inspection for a drug containing a new ingredient or a drug with a new route of administration (excluding orphan drugs);
• Y533,800 for an approval application and Y23,314,000 for an approval review and compliance inspection for an orphan counterpart; and
• Y28,100 for an approval application and Y948,400 for an approval review and compliance inspection for a generic drug.

Travel expenses for trips to foreign countries as part of an approval review and compliance inspection by the Pharmaceuticals and Medical Devices Agency are added to the fees above.

What is the validity period for marketing authorisation?

A holder of marketing authorisation must file a re-examination application by a certain date from when approval is granted, which is specified depending on the category of drug (Article 14-4 of the Pharmaceutical and Medical Device Act). The minister of health, labour and welfare re-examines approval applications. The main purpose of this system is to ensure a medicinal product’s safety and efficacy.

The re-examination system plays the same role as clinical trial data protection in the United States and the European Union. If a third party wishes to obtain approval for a generic drug, it must perform full clinical trials without relying on the preceding drug during the re-examination period.

The following re-examination periods are stipulated by the Pharmaceutical and Medical Device Act’s Ordinance for Enforcement and the related Ministry of Health, Labour and Welfare notification:

• 10 years for orphan drugs;
• eight years for a drug with new active ingredients;
• six years for a new combination formulation drug and a drug for a new route of administration; and
• four years for a drug with a new indication and a drug with a new dosage (five years and 10 months when the existing indication is only for an orphan drug).

What are the consequences of failure to obtain marketing authorisation?

No entity can sell a medicinal product as a drug unless it has obtained marketing authorisation.

Pharmacovigilance

Monitoring

What post-market monitoring mechanisms are in place to ensure the ongoing safety and efficacy of medicinal products after marketing authorisation has been granted?

The following post-market monitoring mechanisms ensure the ongoing safety and efficacy of medicinal products after marketing authorisation has been granted:

• Early post-marketing phase vigilance (Article 10 of the Ministerial Ordinance concerning the Standard of Post-Marketing Safety Control for Drugs, Quasi-Drugs, Cosmetics, Medical Devices and Regeneration Medical Products) – the general marketing compliance officer and the safety management supervisor of a marketing approval holder must undertake the early post-marketing phase vigilance for six months following the launch of a new drug (an exemption may be granted on reasonable grounds).
• Re-examination (Article 14-4 of the Pharmaceutical and Medical Device Act) – a marketing approval holder must submit results regarding the performance of the medicinal product in question every six months for the first two years following authorisation and for one year thereafter (Article 14-4(6) of the act and Article 63(3) of the act’s Ordinance of Enforcement). 
• Reporting of adverse effects and infection – a marketing approval holder must report any adverse effects of a medicinal product within 15 or 30 days (depending on the object of the report) to the Ministry of Health, Labour and Welfare (Article 68-10 of the Pharmaceutical and Medical Device Act and Article 228-20 of the act’s Ordinance of Enforcement). A marketing approval holder of a biological medicinal product must periodically report any findings of infection to the Ministry of Health, Labour and Welfare (Article 68-24 of the act and Article 241 of the act’s Ordinance of Enforcement). Medical personnel must report any adverse reactions or infections of a medicinal product to the Ministry of Health, Labour and Welfare (Article 68-10(2) of the act).

Re-evaluation (Article 14-6 of the Pharmaceutical and Medical Device Act) – the minister of health, labour and welfare can review the efficacy and safety of an approved drug based on up-to-date medical and pharmaceutical scientific standards.

Data protection

What data protection issues should be considered when conducting pharmacovigilance activities?

When conducting pharmacovigilance activities, due consideration must be given to the handling of personal information under Notification 0812 of the Chief of Pharmaceutical and Food Safety Bureau of the Ministry of Health, Labour and Welfare, dated August 12 2014.

Pricing and reimbursement

Pricing

Are there rules governing the pricing of medicinal products in your jurisdiction?

In Japan, the Ministry of Health, Labour and Welfare determines official drug prices based on report of the Central Social Insurance Medical Council, which is an advisory board of the ministry. Drug prices are revised almost every two years. For a new drug where no similar medicinal product is available on the market, the cost-accounting system is used to determine the new drug’s price. For a new drug that is similar to a medicinal product already on the market, the price of the existing drug is used as a benchmark. When a new drug provides no new efficacy, but is more innovative or useful than existing drugs, certain factors are considered in terms of pricing. Drug prices in foreign countries are also considered.

Reimbursement

What is the structure for state reimbursement of medicinal product costs?

Under the Health Insurance Law and related laws, the self-pay ratios of medical costs, including the cost of prescription drugs, depend on the age of patients and are as follows:

• 20% before enrolment in elementary school at 6 years’ old;
• 30% from enrolment in elementary school to 69 years’ old;
• 20% for 70 to 74-year-olds; and
• 10% for 75-year-olds or older.

Further, the Ministry of Health, Labour and Welfare operates the high-cost disease insurance system, under which an upper limit is introduced for self-pay medical costs. The difference between the upper limit and the age-dependent self-pay amount above is reimbursed to each patient.

Advertising and labelling

Advertising

How is the advertising of medicinal products to healthcare professionals and the general public regulated in your jurisdiction?

Advertising to the general public and healthcare professionals is regulated under:

• Articles 66 to 68 of the Pharmaceutical and Medical Device Act;
• the Code of Fair Practices in the Advertising of Drugs (Notification 1339 of the Ministry of Health, Labour and Welfare’s Pharmaceutical Affairs Bureau, October 9 1980); and
• industry self-standards. 

Detailed advertising regulations are set out in the Code of Fair Practices in the Advertising of Drugs and industry self-standards. Industry self-standards include the Fair Trade Council of the Ethical Pharmaceutical Drugs Marketing Industry’s Fair Competition Code, which is based on Article 11 of the Act against Unjustifiable Premiums and Misleading Representations and authorised by the Japanese Fair Trade Commission.

Articles 66 to 68 of the Pharmaceutical and Medical Device Act establish the general rules prohibiting certain advertising activities. 

False or excessive advertising is prohibited under Article 66 of the Pharmaceutical and Medical Device Act. If advertising creates the impression that a healthcare professional endorses the efficacy of a particular drug, such advertising is prohibited under Article 66 of the act. The advertising to the general public of certain prescription drugs for cancer, sarcoma and leukaemia is prohibited under Article 67 of the act and related regulations. The advertising of pre-approved drugs is also prohibited under Article 68 of the act. 

Further, under Article 3(5) of the Code of Fair Practices, prescription drugs should not be advertised to the general public.

The Fair Competition Code also imposes restrictions on the advertising of medicinal products. Marketing businesses are prohibited from offering economic benefits to medical institutions as an inducement (Article 3). Examples include financial donations, dinner invitations, the provision of entertainment and the payment of travel expenses (Article 4). However, the following exceptions are permitted:

• the supply of items and services necessary for the use of medicinal products;
• the supply of medical or pharmaceutical information and material regarding medicinal products; and
• the payment of fees and costs for medical studies, investigations and trials. 

The Japanese Pharmaceutical Manufacturers’ Association is an association of drug companies that produce innovative medicines. It has its own advertising code which features provisions on ads that particularly target healthcare professionals. 

The Japan Generic Medicine Association, an association of companies that produce generic medicines, also has its own advertising code.

In contrast to prescription drugs, the advertising of over-the-counter products to the general public is not prohibited, even under the Code of Fair Practices. However, the Japan Self Medication Industry, an association of over-the-counter drug companies, has its own mutual agreement and advertising guidelines and a committee for the examination of ads.

The Act against Unjustifiable Premiums and Misleading Representations and the Unfair Competition Prevention Act are also applicable to advertising.

Do any special rules apply to online advertising of medicinal products?

With regard to the prohibition of advertising pre-approved drugs, the minister of health, labour and welfare or the governor of a prefecture may request internet service providers to remove such advertising from the Internet under Article 72-5 of the Pharmaceutical and Medical Device Act.

Labelling

What are the packaging and labelling requirements for medicinal products?

The following information must be displayed on the container or wrapper of a medicinal product (or if a container or wrapper is covered by an additional container or wrapper, on the outer container or wrapper):

• the name and address of the marketing licence holder;
• the product’s lot number;
• the product’s weight or volume;
• the category of over-the-counter drug to which the product belongs, if it falls within the scope of over-the-counter drugs (Articles 50 and 51 of the Pharmaceutical and Medical Device Act).

The dosage, administration and precautions for the use and handling of a medicinal product (Article 52 of the Pharmaceutical and Medical Device Act) should be described on an attached document (eg, a package insert) or its container or wrapper.

The guidelines for an attached document are set out in Notification 606 of the Ministry of Health, Labour and Welfare’s Pharmaceutical Affairs Bureau, dated April 25 1997. Under the guidelines, details of the active ingredient, additives, indication, precautions and contraindication are also requested. Precautions should be located at the beginning of the attached document and contraindications should follow the cautions. 

The required information must be clearly visible, accurate and easy to read and understand (Article 53 of the Pharmaceutical and Medical Device Act). 

The attached document, the drugs themselves and containers and wrapping (including internal wrapping) must not provide false or misleading information regarding unapproved effects, efficacy, function, dangerous dosages, administration or duration of use in terms of health and hygiene (Article 54 of the Pharmaceutical and Medical Device Act).

How is the promotion of off-label use regulated?

Under Article 68 of the Pharmaceutical and Medical Device Act, where the validity of effects and efficacy is verified in clinical trials, the advertising of effects and efficacy of off-label use is not prohibited unless it is false or excessive. Conversely, Article 3 of the Code of Fair Practices requires advertising to remain within the scope of approved effects and efficacy. The Japan Pharmaceutical Manufacturers’ Association advertising code prohibits its members from advertising off-label use. Academic societies occasionally recommend unapproved indications for therapeutic needs.

Relations with healthcare professionals

Gifts and incentives

What rules apply to the provision of gifts, discounts and other incentives to healthcare professionals?

The Japan Pharmaceutical Manufacturers’ Association has a code of practice and transparency guidelines. The code of practice contains an advertising code. Although the code and guidelines are voluntary industry standards, they are guiding principles for member companies. The advertising code is in line with the World Health Organisation’s ethical criteria for medical drug promotion and the International Federation of Pharmaceutical Manufacturers and Associations’ code of practice. The Japan Generic medicine Association also has a code of practice, which contains an advertising code. 

The advertising codes of the Japan Pharmaceutical Manufacturers Association and the Japan Generic Medicine Association include provisions regarding:

• the activities of medical representatives;
• details of printed matters and advertising for promotion;
• post-marketing surveillance activities;
• restrictions on the supply of test drugs;
• seminars for healthcare professionals; and
• restrictions on the offer of gifts and money. 

In addition to its code and guidelines, the Fair Competition Code plays an important role regarding the provision of incentives to healthcare professionals. The Fair Competition Code provides details concerning:

• test drugs (free samples);
• permitted services provided by pharmaceutical companies;
• case report rewards;
• personal medical services and related contract research; and
• medical seminars.

The Japan Pharmaceutical Manufacturers Association’s transparency guidelines stipulate that it is preferable for member companies to establish their own transparency guidelines and list the items to be included therein. If healthcare professionals are public officers, the National Public Service Ethics Act and the Criminal Code are applicable regarding the offering or receipt of improper gifts.

Liability

Defect products

How can a liability claim for a defective medicinal product be brought?

A liability claim can be brought for a defective medicinal product based on tort under the Civil Code and the Product Liability Act. The April 12 2013 Supreme Court judgment (Iressa, MINSHU, 67(4), p899) illustrates the applicability of the Product Liability Act to medical products (liability was not found in this particular case). For medical products, inadequate warnings on a packaging insert can result in defective instructions and warnings.

The Act concerning State Liability for Compensation can be applied to an error in the government’s approval review process and safety issues raised after the launch of a product. However, under the June 23 1995 Supreme Court judgment (chloroquine, MINSHU 49(6), p1600), the scope of government liability is limited. 

Aside from the framework of damages under tort, a system for adverse reactions to medicinal products is available under Article 16 of the Independent Administrative Agency’s Act on the Pharmaceuticals and Medical Devices Agency. Under this system, claimants can seek payment for medical expenses from the Pharmaceuticals and Medical Devices Agency if they followed the instructions of a medical product, but suffered health problems as a result.

Which parties can be held liable for a defective medicinal product?

A marketing licence holder (eg, a pharmaceutical company) and a manufacturer can be held liable under the Civil Code and the Product Liability Act.

Under the Act concerning State Liability for Compensation, the Japanese government can also be held liable for a defective medicinal product.

Remedies

What remedies are available to successful claimants?

Claimants can apply for compensation.

Exclusion and limitation

On what grounds can liability be excluded?

With regard to the “safety that the product ordinarily should provide” under the Product Liability Act, the Supreme Court judgment in Iressa held that:

• the adverse effect that a drug may have on a patient does not necessarily mean that it is a defective product;
• a lack of information about the adverse effects of a product must be examined when judging whether or not a product is defective; and
• information about the adverse effects of prescription drugs should be described on the product’s attached document and the appropriateness of descriptions on attached documents should be judged in terms of whether the risk of the predictable adverse effects is sufficiently revealed to prescribers considering the various circumstances, including:
  • the degree of the adverse effect;
  • the knowledge and skill of the prescriber and user ordinarily assumed from the effect and efficacy of the product; and
  • the format of the description of the adverse effects on the attached document.

What preventive steps can be taken to limit liability?

In light of Iressa, descriptions on a medicinal product’s package insert should be carefully drafted so that information regarding adverse effects is appropriately and sufficiently communicated to prescribers and users.

Compliance and enforcement

Enforcement

What measures are in place to enforce the laws governing medicinal products?

Under the Pharmaceutical and Medical Device Act, the minister of health, labour and welfare and a competent governor of a prefecture may:

• inspect the offices of manufacturers or sellers of drugs to ensure that they comply with the act or request compliance reports;
• issue an order to manufacturers or sellers of drugs to take measures to prevent health and hygiene concerns when necessary;
• issue an order to persons or entities that handle medicinal products to dispose of any drugs that are sold in breach of the act;
• issue an inspection order to manufacturers of medicinal products by an entity designated by the minister of health, labour and welfare or a governor;
• issue an order to improve quality control and safety management methods and stop the manufacture and sale of medicinal products if they do not comply with the act; and
• issue an order to take sufficient measures to prevent the risk of advertising pre-approved drugs.

Dishonest practices

What mechanisms are in place to combat bribery, fraud, collusion, counterfeiting and other dishonest practices in the pharmaceutical sector?

The Japan Pharmaceutical Manufacturers Association and the Japan Generic Medicine Association have their own voluntary standards regarding dishonest practices. The Fair Competition Code details restrictions on the advertising of medicinal products and the provision of gifts to healthcare professionals. 

Due to a recent trend which emphasises regulatory compliance, pharmaceutical companies and their officers and employees are requested to comply with these standards. Any act by a pharmaceutical company that is contrary to these voluntary standards and appears to be inappropriate for users or consumers can have a negative impact on the company’s business activities and lead to a decline in its performance, even if such an act is not illegal under the applicable law.