Regulation of pharmaceutical products and medical devices

Monitoring powers

What powers do the authorities have to monitor compliance with the rules on drugs and devices?

The PMD Act authorises the MHLW, itself or through the PMDA, to require marketing authorisation holders and manufacturers to submit reports and, more importantly, issue inspection orders to marketing authorisation holders and manufacturers. The MHLW (or the PMDA) carries out inspections of marketing authorisation holders and manufacturers’ facilities, offices and other sites where the companies carry out business, interview employees, inspect books and records, and test drug samples to monitor compliance with the laws and regulations.

The MHLW also has the power to issue orders to marketing authorisation holders and manufacturers to improve their manufacturing controls, quality controls or post-marketing safety controls, or to suspend their operations until a required improvement is implemented.

In certain cases, local governments, such as prefectural governors and city or ward mayors, have the authority to require certain marketing authorisation holders, manufacturers, sellers of drugs and devices (such as pharmacies and store-based distributors) and clinics and hospitals to submit reports, and to conduct site inspections, interview employees, inspect books, and test drug samples. In certain cases, the prefectural governors may issue orders for these entities to improve their facilities if those facilities fail to meet certain standards.

Investigation time frames

How long do investigations typically take from initiation to completion? How are investigations started?

There is no typical length of time for investigations as they depend on the facts of each case. Investigations usually start upon the initiative of the regulators, especially in areas which are considered important to Japanese society or government priorities, or when regulators receive information of wrongdoing from whistleblowers or complaints from consumers.

Access to investigation materials

What rights or access does the subject of an investigation have to the government investigation files and materials?

As a general rule, under the Act on Access to Information Held by Administrative Organisations, the subject of an investigation has the right to access administrative documents, such as documents relating to an administrative investigation. The administrative authority that receives a request for disclosure of administrative documents is obligated to disclose those documents, unless they fall within information specifically excluded by Article 5 of the Act. Excluded information includes personal information concerning individuals, and information which if made public may pose a threat or risk to state security, prevention or investigation of crimes, maintenance of prosecutions and other matters concerning public safety and public order.

Investigations abroad

If pharmaceutical products or medical devices are made in a foreign country, may the authorities conduct investigations of the manufacturing processes in that other country?

Yes, the MHLW has the authority to conduct the same investigations it can conduct on domestic authorisation holders, as described in question 10 above, and the MHLW conducts investigations outside Japan from time to time.

Enforcement proceedings

Through what proceedings do agencies enforce the rules?

The regulators hold their own proceedings and investigations, which are administrative in nature. They do not need to apply to the courts before initiating and carrying out those investigations.

However, with respect to certain violations that are punishable by criminal penalties, then investigations are initiated by a prosecutor’s office as they are criminal in nature. Generally, prosecutors do not need to apply to the courts to conduct their investigations, although they need to apply to the courts for warrants to conduct searches.

Sanctions

What sanctions and other measures can the authorities impose or seek in enforcement actions against drug and device manufacturers and their distributors?

As discussed in question 10 above, the MHLW and the local governments have the authority in certain cases to issue orders to improve manufacturing control, quality control or facilities, and to suspend business operations of, or the use of facilities by, manufacturers and distributors until the necessary improvement is made. They also have the authority to order manufacturers and distributors to dispose of, recall or take other measures to prevent hazards to public health and hygiene caused by drugs and devices which do not meet the required standards. More importantly, they have the power to cancel the authorisation given to manufacturers and distributors to provide pharmaceuticals, quasi-drugs, cosmetics, medical devices or regenerative medicine products.

The PMD Act imposes penalties consisting of fines or imprisonment, or both, on certain violations of the PMD Act and its regulations by manufacturers and distributors.

Actions against employees

Can the authorities pursue actions against employees as well as the company itself?

An officer or employee who directly violates the PMD Act is subject to fines or imprisonment, or both. Furthermore, the representative and employees of the company may also be subject to fines along with the company.

Additionally, under the PMD Act, the MHLW may order manufacturers and distributors to change certain supervisor-level employees if they are found to be inappropriate as supervisors or technical supervisors or if they are found to have violated the PMD Act. These super-visors include the marketing supervisor-general of pharmaceuticals or medical devices, manufacturing supervisors of pharmaceuticals, and technical supervisors of medical devices.

The MHLW may order pharmacies, or proprietors, sellers or leasers of drugs or devices to change the supervisors of pharmacies or certain managerial level employees of such establishments if these employees are found to be inappropriate or if they are found to have violated the PMD Act.

Defences and appeals

What defences and appeals are available to drug and device company defendants in an enforcement action?

If a person is dissatisfied with an agency’s decision, that person may file a request for a review or re-examination of this decision with that agency in accordance with the Administrative Complaint Review Act. If such a filing is made, the relevant agency will examine its decision-making process and whether any error was made in the process or in its decision.

If a person wishes to cancel an agency’s decision, that person may file a suit in court against the agency to ask the court to cancel the decision in accordance with the Administrative Case Litigation Act.

Minimising exposure

What strategies should companies adopt to minimise their exposure to enforcement actions and reduce their liability once an enforcement action is under way?

One recommendation is for companies to establish and implement internal policies and systems on regulatory compliance, and to have a robust system of regular checks and audits to make sure that these policies and systems are being complied with by everyone in the company. Companies are encouraged to have a more open working environment to encourage employees and officers to report irregularities or possible violations of the standards and requirements of the PMD Act, any other laws and regulations.

Recent enforcement activities

What have the authorities focused on in their recent drugs and devices enforcement activity and what sanctions have been imposed?

Regulators have issued orders for improvements, and have suspended certain business operations for failure to comply with these improvement orders in a timely manner.

Self-governing bodies

Are there self-governing bodies for the companies that sell pharmaceutical products and medical devices? How do those organisations police members’ conduct?

The major self-governing bodies include the Japan Pharmaceutical Manufacturers Association (JPMA) and the Japan Federation of Medical Devices Associations (JFMDA). These self-governing bodies and associations have issued practice standards, compliance guidelines, codes of practice, promotion codes, and transparency guidelines that the members are expected to follow.

JPMA consists of around 70 companies, and is a member of the Federation of Pharmaceutical Manufacturers’ Associations of Japan which consists of 15 industrial organisations and 16 regional organisations. It deals with inquiries and complaints and imposes improvement measures on violating members in accordance with its internal regulations.

JFMDA consists of 21 associations (which represent about 4,280 companies), associate members’ organisations and individual companies. If JFMDA receives complaints of possible violations of one of its codes by a member, it will investigate and examine whether a violation exists. If JFMDA determines that such a violation exists, it will notify the violating member to comply with the code. JFMDA’s members are obliged to cooperate with investigations conducted by JFMDA’s committees.