Medicinal product regulation and product liability in Japan: overview

A Q&A guide to medicinal product regulation and product liability law in Japan.

The Q&A gives a high level overview of key issues including pricing and state funding, manufacturing, marketing, clinical trials, advertising, labelling, and product recall and liability.

For information on pharmaceutical patents, trade marks, competition law, patent licensing, generic entry, abuse of dominance and parallel imports, visit Pharmaceutical IP and Competition Law in Japan: overview.

To compare answers across multiple jurisdictions, visit the Medicinal product regulation and product liability Country Q&A tool.

The Q&A is part of the global guide to life sciences law. For a full list of jurisdictional Q&As visit www.practicallaw.com/lifesciences-guide.

Contents

Regulatory overview

1. What are the main legislation and regulatory authorities for pharmaceuticals in your jurisdiction?

Legislation

The Act concerning Ensuring Quality, Efficacy and Safety of Drugs, Medical Devices, Etc. (Pharmaceuticals Law) is the primary law which regulates drugs, medical devices and other medical products. Medical products are categorised into the following four product categories (medicinal products):

  • Drugs (iyaku hin).

  • Quasi-drugs (iyaku bugai hin).

  • Cosmetics (keshô hin).

  • Medical devices (iryô kiki).

Details of the pharmaceutical regulations are provided in cabinet orders and ministerial orders relating to the Pharmaceuticals Law, and related administrative guidelines.

The main licences and approvals to manufacture or import and market medicinal products are as follows:

  • Marketing business licence (seizô hanbai gyô kyoka).

  • Manufacturing business licence (seizô gyô kyoka).

  • Accreditation as a foreign manufacturer (gaikoku seizô gyôsha no nintei).

  • Marketing authorisation (seizô hanbai shônin) for each of the medicinal products.

Regulatory authorities

The Ministry of Health, Labour and Welfare (MHLW) (www.mhlw.go.jp/english/index.html) is the governmental authority that issues most of the related ministerial orders and administrative guidelines, and prepares relevant cabinet orders. The MHLW is the principal regulatory authority for medicinal products. However, prefectural governments (for example, the Tokyo Metropolitan Government) are primarily responsible for overseeing pharmaceutical companies and so on, on behalf of the MHLW.

The Pharmaceuticals and Medical Devices Agency (iyakuhin iryôkiki sôgô kikô) (PMDA) (www.pmda.go.jp/english), a Japanese regulatory agency, also plays an important role. For an explanation of the regulatory framework in relation to drug pricing and cost reimbursement, see Question 4.

 
2. Briefly outline how biologicals and combination products are regulated in your jurisdiction.

For a bio-derived product (seibutsu yurai seihin), additional regulations apply. This includes, but is not limited to:

  • Regulations requiring the staffing of a doctor or an equivalent medical specialist at each manufacturing site.

  • The printing of specified cautionary language on the packaging of these products.

  • The periodical reporting of any infections arising from the use of the bio-derived product.

Tissue engineering drugs are categorised separately. Emphasis is placed on expeditious approvals of such products, including limited-term or conditional approvals of such products (with final approvals expected at a later stage following further review by a governmental authority), in light of high expectations that innovative new drugs in this category will be developed.

 
3. Briefly outline how medical devices and diagnostics are regulated in your jurisdiction. Is there any specific regulation of health IT issues and mobile medical applications?

The term medical devices is defined as those products which are listed in the Cabinet Order of the Pharmaceuticals Law. Medical devices are divided into three classes, specifically:

  • Specially controlled medical devices. This class covers medical devices that basically fall under classes III and IV of the international classification structure established by the Global Harmonisation Task Force (GHTF).

  • Controlled medical devices. This class covers medical devices that basically fall under class II of the GHTF classification structure.

  • Ordinary medical devices. This class covers medical devices that basically fall under class I of the GHTF classification structure, depending on the magnitude of the risk to human health and life posed by the subject device.

Further, the type of business licence required to manufacture, market or distribute a particular medical device depends on which of the above classes the subject device falls under.

Diagnostics are generally categorised as drugs under the Pharmaceuticals Law. However, regulations applicable to them are basically in parallel with those applicable to medical devices.

Software used for data processing (which can include mobile medical applications) in relation to X-rays, CTs, MRIs, PET-CTs and other medical hardware devices are categorised as medical devices.

 

Pricing, state funding and reimbursement

4. What is the structure of the national healthcare system, and how is it funded?

Japan has a universal healthcare system. Most legal residents are covered by the health insurance system. Costs for a substantial number of medical services provided and prescription drugs sold are covered by it. Costs for prescription drugs cannot be reimbursed unless these drugs are listed on the drug tariff (yakka shûsai).

Having their drugs listed on the drug tariff is economically very important for prescription drug manufacturers and marketing companies. The listing of drugs on the drug tariff, and the prices designated for each drug listed, are determined by the MHLW.

 
5. How are the prices of medicinal products regulated?

Prices of medicinal products are only regulated if the costs of the products are reimbursed under the health insurance system. Hospitals and doctors providing medical services covered under the health insurance system can only use drugs listed on the drug tariff (the drug tariff is used as a type of authorised product list). Medical treatments that are only partly covered by public health insurance and provided concurrently with uncovered medical treatments are basically not reimbursed under the health insurance system. For prescription drugs, prices payable by hospitals and doctors are usually less than those listed on the drug tariffs (that is, prices for drugs, the costs of which are reimbursable under the health insurance system).

 
6. When is the cost of a medicinal product funded by the state or reimbursed? How is the pharmacist compensated for his dispensing services?

Reimbursement under the health insurance system is generally made through the benefit-in-kind (genbutsu kyûfu) system. A large portion of the cost of drugs used for medical services is directly paid out from the health insurance to the hospitals, doctors or pharmacists providing the drugs to patients. A patient is required to pay to the drug-providing hospital, doctor or pharmacist the small portion of the drug's cost which is not reimbursed under this system. The amount of reimbursement is determined based on the prices of the drugs specified on the drug tariff (the drug tariff acts as a price list when determining the amount of reimbursement).

Hospitals, doctors or pharmacists profit from the difference between the reimbursement prices listed on the drug tariff and the purchase price of the drug or product designated by the pharmaceutical companies, drug distributors or retailers. The price of a drug offered by pharmaceutical companies to the hospitals, doctors or pharmacists is usually lower than the reimbursement price provided under the drug tariff.

 

Clinical trials

7. Outline the regulation of clinical trials.

Legislation and regulatory authorities

The Pharmaceuticals Law and the Good Clinical Practice (GCP) ministerial order issued by MHLW are the principal items of legislation regulating clinical trials. The MHLW and PMDA are the main regulatory authorities regulating clinical trials.

Authorisations

To conduct a clinical trial, an applicant (a pharmaceutical company) must prepare a protocol (chiken jisshi keikaku sho) and have it reviewed by an institutional review board (chiken shinsa iin kai) of a hospital, at least one member of which must be an outside independent person. The applicant must then register the protocol with the MHLW.

The applicant usually consults informally with the PMDA about its draft protocol, before formally registering the protocol with the MHLW.

Consent

Doctors, hospitals and so on must explain in writing to a trial subject details about the clinical trial, including the expected benefits and adverse effects of the trial drug, and the trial subject's right to withdraw from the trial. Consent from a trial subject must be obtained in writing, after the trial subject has received a thorough explanation.

Trial pre-conditions

In addition to other requirements, a pharmaceutical company intending to start a clinical trial must execute a clinical trial agreement with the doctors and/or hospitals who will be conducting the trials. This agreement must stipulate certain matters specified in the GCP regulations.

If any adverse effect results from the clinical trials, the pharmaceutical company is generally liable for all damages and losses suffered by any injured patient involved in the trials. Because of this risk of potentially being required to compensate clinical trial patients, pharmaceutical companies engaging in clinical trials always obtain insurance cover before the trial starts.

Procedural requirements

The other material procedural requirements under the GCP include:

  • Reporting all serious adverse effects of the trial drug to the MHLW.

  • Properly monitoring the operation of its clinical trial.

 

Manufacturing

8. What is the authorisation process for manufacturing medicinal products?

Application

There are two kinds of business licence related to the manufacture of medicinal products:

  • A manufacturing business licence, which is required to manufacture the medicinal product (if a manufacturer of an imported product is located outside Japan, an accreditation as a foreign manufacturer is required).

  • A marketing business licence, which is required for the initial marketing of a manufactured or imported medicinal product in Japan.

A company which has obtained a manufacturing business licence, but not a marketing business licence, cannot distribute medicinal product(s) (manufactured or imported by the company) to others, for example, a wholesaler. Applications for these business licences are generally submitted to the relevant local prefectural government.

Different from a drug manufacturer, a medical device manufacturer is only required to satisfy a prior registration requirement.

Conditions

An applicant for a manufacturing business licence must meet certain facility, staffing and other standards, as provided under the ministerial order of the MHLW. There are several classes of manufacturing business licences. The standards can differ, depending on the medicinal product to be manufactured. Also, a manufacturer must comply with the Good Manufacturing Practice (GMP) regulations, which are set out in a MHLW order.

An applicant for a marketing business licence must meet:

  • Standards for maintaining quality assurances, as provided under Good Quality Practice (GQP) regulations (stated in a MHLW order).

  • Standards for post-marketing safety management, as provided under the Good Vigilance Practice (GVP) regulations (stated in a MHLW order).

  • Standards provided under other ministerial orders of the MHLW.

Further, a marketing business operator must comply with the Good Post-marketing Surveillance Practice (GPSP) regulations, which are set out in a MHLW order.

Restrictions on foreign applicants

A foreign manufacturer of medicinal products must distribute its products in Japan through a licensed marketing business operator. Requirements for accreditation as a foreign manufacturer are basically the same as those to acquire a Japanese manufacturing business licence (see above, Conditions). Filing an application for accreditation as a foreign manufacturer can be delegated by the foreign applicant to a marketing business operator in Japan.

Key stages and timing

Before formal submission of an application for the business licence, an applicant usually submits a draft of the application to the relevant prefectural government for informal discussions. Once the application is formally submitted, the MHLW and/or the prefectural government review the application, and in most cases conduct an on-site inspection of the applicant's office or factory.

In Tokyo, it can take about 35 business days from the time of formal submission of the application to obtain the business licence, depending on:

  • The nature of the applicant's business.

  • The type of medicinal product to be manufactured or distributed.

  • The applicant's preparation for the application.

  • Other relevant factors and circumstances.

Fee

The amount of the application fee for a business licence is determined by the relevant local prefectural government, and typically differs depending on the nature of the applicant's business and the type of medicinal product. If the application is filed in Tokyo, the application fee for a:

  • Drug manufacturing business licence ranges from JPY46,500 to JPY88,200.

  • Drug marketing business licence ranges from JPY128,500 to JPY146,200.

Period of authorisation and renewals

Depending on the applicant's business and the type of medicinal product, business licences are generally effective for five years, and can be renewed every five years.

Monitoring compliance and imposing penalties

The main regulator is the MHLW. However, a substantial amount of the MHLW's authority is delegated to local prefectural governments and the PMDA. The regulator can monitor a licensed business operator's business operations, to ensure compliance with the regulations under the Pharmaceuticals Law.

The regulator can take the following actions (in addition to other actions) in relation to licensed business operators:

  • Inspect the office or factory.

  • Order disposal, recall or other appropriate treatment that the regulator deems necessary to protect public health.

  • Require access for an inspector designated by the regulator, who is responsible for investigation.

  • Temporarily shut down the pharmaceutical business operations.

  • Order replacement of certain key personnel relevant to the pharmaceutical business.

  • Cancel the business licence or accreditation which it previously granted.

  • Request a report that includes data about adverse reactions to the medicinal product, recall information, and so on.

Further, criminal sanctions can be imposed for violations of regulations applicable to pharmaceutical business operators.

 

Marketing

Authorisation and abridged procedure

9. What is the authorisation process for marketing medicinal products?

To market drugs and other medicinal products, the initial marketing entity (which must hold a marketing business licence (see Question 8)) must obtain a marketing authorisation (seizô hanbai shônin) for each of the medicinal products it intends to market.

Application

An application for a marketing authorisation must be submitted to the MHLW or, in certain cases (that is, applications for certain limited drugs and all medical devices other than GHTF class IV medical devices), to the relevant prefectural government or a specified registered certifying (non-governmental) agency. Where an application for a medicinal product must be submitted to the MHLW, the application must be submitted through the PMDA.

Authorisation conditions

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

  • Quality.

  • Effectiveness.

  • Safety.

  • The applicant's marketing business licence.

  • The proposed manufacturer's manufacturing business licence or accreditation as a foreign manufacturer.

  • GMP compliance by the manufacturer.

Key stages and timing

Review of applications for marketing authorisation for new medicinal products is substantially outsourced to the PMDA. Once the PMDA is satisfied with the application, the application is forwarded to the MHLW. The MHLW then obtains a recommendation from the Council of Pharmaceutical and Food Sanitation (yakuji shokuhin eisei shingikai) before approving the application.

Although dependent on factors such as the type of medicinal product, the standard time period for reviewing an application for new drug approval is one year after the official application filing.

Fee

The amount of the application fee for a marketing authorisation differs, depending on the type of medicinal product. The application fee for a marketing authorisation for a new drug ranges from about JPY1 million to JPY30 million, plus expenses.

Period of authorisation and renewals

The effective period of an approval for a medicinal product is not permanent. Subject to the type of medicinal product, an approval for a new drug is generally subject to re-examination (sai shinsa) after four to eight years have passed since the initial approval. Additionally, the MHLW occasionally conducts a re-evaluation (sai hyoka) of a drug at the recommendation of its advisory board.

Monitoring compliance and imposing penalties

The regulator can monitor and oversee medicinal products that are subject to marketing authorisation. New drugs are subject to re-examination after a certain period of time (see above, Period of authorisation and renewals). In addition, an applicant which receives approval must have its medicinal product re-evaluated (sai hyôka) if the MHLW orders this.

The following penalties can be imposed for violation of a marketing authorisation:

  • Criminal sanctions.

  • A product recall administrative order.

  • An order cancelling a marketing authorisation or marketing business licence.

 
10. What commitments and pharmacovigilance obligations apply after a company has obtained marketing authorisation? Are there further conditions concerning how the drug is distributed and accessible to patients?

Post-marketing commitments and pharmacovigilance obligations

After the marketing of a drug starts, the marketing authorisation holder must conduct post-marketing surveillance. If any issue relating to the effectiveness or safety of the marketed drug is discovered during the post-marketing surveillance, the marketer must:

  • Conduct a drug recall campaign.

  • Report the discovery to the PMDA.

  • Issue public notices, if the issue is important.

  • Take such other appropriate measures to prevent further damage or losses to patients.

Other conditions

Marketing of a drug must be conducted by a party that obtains both proper authorisation to market the drug and a marketing business licence. If the drug is distributed through wholesalers or retailers, the wholesalers or retailers participating in the distribution must obtain business licences in their respective categories.

 
11. Which medicinal products can benefit from the abridged procedure for marketing authorisation and what conditions and procedure apply? What information can the applicant rely on?

There is an abridged procedure for generic drugs (kôhatsu iyakuhin). The examination of an application mainly focuses on the:

  • Similarity between the authorised original drug and the generic drug.

  • Adequacy of data attached to the application.

  • Proposed manufacturing facility's compliance with GMP.

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

  • The re-examination period (see Question 9, Period of authorisation and renewals) for the original drug has expired.

  • The levels of quality, effectiveness and safety of the generic drug are equivalent to those of the authorised original drug.

  • The generic drug is capable of being a substitute for the authorised original drug.

  • The patent for the original drug has expired.

In addition, the review of an application for an orphan drug (kishô shippei yô iyakuhin), curing a scarce but serious disease, can be expedited and prioritised over applications for new drugs, if the orphan drug is found to apparently contribute to an improvement in the quality of medical care for the disease.

 
12. Are foreign marketing authorisations recognised in your jurisdiction?

Foreign marketing authorisations are not recognised in Japan. If a foreign manufacturer intends to export its medicinal product to Japan, the manufacturer must obtain a marketing authorisation for a foreign manufactured medicinal product (gaikoku seizô iyakuhin tô no seizô hanbai no shônin) in Japan. To obtain marketing authorisation, a foreign manufacturer must file an application through an agent company in Japan that has a marketing business licence.

The Pharmaceuticals Law provides for a special procedure for importing a drug or medical device that has received a foreign marketing authorisation, if:

  • The foreign marketing authorisation was obtained in a country with a marketing authorisation system equivalent to the system in Japan.

  • Immediate use of the drug or medical device is necessary to prevent a pandemic disease which can cause death or serious harm to the health of Japanese citizens.

  • The drug or medical device is specifically designated under an administrative order.

This special procedure was used to import a flu vaccine produced by a foreign manufacturer.

 

Parallel imports

13. Are parallel imports of medicinal products into your jurisdiction allowed?

To commercially import medicinal products into Japan, a marketing business licence (see Question 8) and a product marketing authorisation (see Question 9) are required.

An individual can import medicinal products for his/her personal use (for example, an individual's one-month supply of a prescription drug, or two-month supply of an over-the-counter (OTC) drug). It is not uncommon for parallel importers to fraudulently become an agent to import medicinal products under the personal use exception (such importers can be subject to administrative or even criminal sanctions). The use of adverts to promote the import of a non-registered drug for personal use is considered illegal.

Intellectual property rights are sometimes asserted to oppose parallel imports of approved drugs and medicinal products.

For information on pharmaceutical patents, trade marks, competition law, patent licensing, generic entry, abuse of dominance and parallel imports, see Pharmaceutical IP and Competition Law in Japan: overview ( www.practicallaw.com/6-560-2578) .

 

Restrictions on dealings with healthcare professionals

14. What are the restrictions on marketing practices such as gifts, sponsoring, consultancy agreements or incentive schemes for healthcare establishments or individual medical practitioners?

The Act against Unjustifiable Premiums and Misleading Representations (futô keihin rui oyobi futô hyôji bôshi hô) prohibits the wrongful inducement of customers through the provision of excessive gifts, incentives, and so on.

The Fair Trade Council of the Ethical Pharmaceutical Drug Marketing Industry (iryôyô iyakuhin seizô hanbai gyô kôsei torihiki kyôgi kai) has prepared, and Japan's Fair Trade Commission (JFTC) has authorised, the Fair Competition Code of the Ethical Pharmaceutical Drug Marketing Industry (iryôyô iyakuhin seizô hanbai gyô kôsei kyôsô kiyaku). This code:

  • Sets guidelines in relation to gifts or incentives provided to hospitals or doctors.

  • Provides examples of excessive gifts or incentives which are not acceptable under the Act against Unjustifiable Premiums and Misleading Representations.

This Council has issued more detailed standards, which illustrate through examples what are considered to be excessive gifts and incentives. If a medical representative (MR) offers excessive gifts or incentives to hospitals or doctors in violation of these standards, the JFTC will consider such offers to be violations of the Act against Unjustifiable Premiums and Misleading Representations.

If a public servant (for example, a physician at a government-managed hospital) receives excessive gifts, incentives, and so on, in relation to his official function and capacity, the:

  • Public servant can be prosecuted for bribery.

  • Party offering the excessive gifts, incentives, and so on can face criminal penalties for the violation.

If an act of bribery (for example, payment of money or offer of excessive gifts) occurs in Japan, and the bribe is offered to a public servant of another country, the party offering the bribe can face criminal penalties.

The Japan Pharmaceutical Manufacturers Association (JPMA), a voluntary organisation formed by pharmaceutical companies like the PhRMA, has issued a guideline for disclosure of certain payments made to physicians. This guideline recommends that each JPMA member publicly disclose all such payments made by it for each fiscal year.

 

Sales and marketing

15. What are the restrictions on selling medicinal products? Are there specific regulations for the sale of medicinal products on the internet, by e-mail and by mail order?

If a drug is to be distributed through wholesalers or retailers in Japan, the wholesalers or retailers participating in such distribution must obtain business licences which permit them to operate distribution businesses with respect to the various categories of drugs they intend to distribute.There are two major types of retailer's business licences (that is, pharmacy (yakkyoku) and drug store (tenpo hanbai gyo)). Conditions for a pharmacy business licence are stricter than those for a drug store business licence. Prescription drugs can only be sold in pharmacies by a pharmacist.

Almost all over-the-counter drugs can be marketed through the internet and through mail order, except for certain potent drugs and over-the-counter drugs that have recently been re-classified from ethical drugs (most of which require a prescription) to over-the-counter drugs. Such internet or mail order retailers are required to have at least one "real" store where they can receive orders from consumers through the internet or by mail.

 

Advertising

16. What are the restrictions on advertising medicinal products?

Legislation and regulatory authority

The Pharmaceuticals Law is the main legislation relating to the advertising of medicinal products. MHLW is the main governmental authority responsible for enforcing it. However, prefectural governments (for example, the Tokyo Metropolitan Government) are primarily responsible for overseeing compliance by pharmaceutical companies with the advertising regulations.

Restrictions

The Pharmaceuticals Law prohibits false, excessive or misleading adverts in relation to the name, manufacturing method, effectiveness and so on of medicinal products, communicated either explicitly or implicitly. In its effort to regulate adverts, the MHLW has issued its Guideline for Adequate Advertisement of Drugs, Etc (iyakuhin tô tekisei kôkoku kijun) and official commentary on it, which provide detailed examples of adverts which the MHLW considers to be false, excessive or misleading. For example, the qualities of a drug stated in its adverts must be within those affirmed under the drug's marketing authorisation. Adverts in relation to a prescription drug cannot be presented directly to the general public (they can be presented directly to doctors and hospitals).

In addition, adverts in relation to drugs for cancer, sarcoma (nikushu), leukemia (hakketsubyô) or such other drugs specifically designated by the MHLW cannot be presented directly to the general public (they can be presented directly to doctors and hospitals). Adverts for drugs or medical devices before marketing authorisation has been obtained are also prohibited. Adverts of health foods which may appeal to the public because of their claimed effectiveness to cure certain diseases can violate this regulation.

Internet advertising

These advert-related regulations apply equally to advertising over the internet. Internet webpages of advertisers containing hyperlinks to other webpages can be considered together as a single advert, and may violate the advert-related regulations (while each internet webpage on its own may not violate these regulations).

 

Data protection

17. Do data protection laws impact on pharmaceutical regulation in your jurisdiction?

The Act on the Protection of Personal Information is the main personal information and data protection legislation in Japan. Information regarding any living individual which can be used to identify a specific individual is subject to the regulations under this Act. In particular, a collection of information systematically arranged in such a way that specific personal information can be retrieved by a computer (including personal information relevant to clinical trials, pharmacovigilance, adverse event reporting and patient data) is subject to stricter regulations provided under the Act.

Among other things, the Act and its regulations provide certain restrictions and provisions addressing:

  • The purpose of the use of personal information.

  • The proper acquisition of personal information.

  • Mandatory security control measures to be taken to protect personal information.

  • The provision of personal information to third parties.

  • The disclosure, correction and discontinuance of use of personal information.

Most pharmaceutical firms, medical device firms, wholesalers, retailers and medical institutions maintain their own data protection policies in line with this Act, and take steps to ensure that such policies are properly followed and observed.

 

Packaging and labelling

18. Outline the regulation of the packaging and labelling of medicinal products.

Legislation and regulatory authority

The Pharmaceuticals Law sets out certain regulations concerning the packaging and labelling of medicinal products. The MHLW is the primary authority to enforce these regulations, although a substantial amount of its responsibilities are outsourced to prefectural governments.

Information requirements

Under the Pharmaceuticals Law, a drug container must disclose certain information which is prescribed by law according to the type of drug being provided. Such information includes, among others, the:

  • Name and address of the marketing company.

  • Name of the drug and its serial number.

  • Volume of drugs in the container.

  • Ingredients used to create the drug.

  • Final date by when the drug should be used.

In addition, a package insert (that is, a document inserted in the product packaging which accompanies a medicinal product) must be provided which discloses certain information which are prescribed by law according to the type of drug being provided. Such information includes, among other things:

  • How the drug is to be used.

  • Dosage.

  • Ingredients used to create the drug.

  • Information about the effectiveness of the drug, adverse effects, and the proper method of storage.

If any information in the packaging or labelling of a medicinal product is changed (for example, a relocation of the marketing company's office, and a change of corporate name), all packaging and labelling must also be changed accordingly.

Certain amendments to the package insert must be reported to the MHLW, and the same amended package insert must also be uploaded to the marketer's website.

Other conditions

All information to be provided (see above, Information requirements) must be stated in Japanese.

 

Product liability

19. Outline the key regulators and their powers in relation to medicinal product liability.

Japan's main regulator in relation to medicinal product liability is the MHLW. However, a substantial amount of the MHLW's authority in this regard is delegated to local prefectural governments.

The regulator can take the following actions (in addition to other actions) on determining medicinal product liability of licensed business operators:

  • Order the disposal, recall or other appropriate treatment of a medicinal product if the regulator deems this necessary to protect public health.

  • Request that it be provided with a report that includes, among other information, data about adverse reactions to the medicinal product and recall information.

Non-compliance with requests made by the regulator is punishable by criminal penalties.

 
20. Are there any mandatory requirements relating to medicinal product safety?

The marketer of a drug must implement a recall and/or other necessary measures if it becomes aware of a potential health or hygiene hazard arising from the use of the marketed drug.

If a recall is initiated, the marketer must notify the authorities and the facilities to which the drugs were delivered. Notification to the authorities is made by submitting a summary of information regarding the recall, which is posted on the PMDA website (www.pmda.go.jp/english), and a recall commencement report, both of which must be in the prescribed format.

Whether the marketer is required to issue a press release regarding the recall depends on how the recall is classified. Classification is determined by the regulator based on the level of health hazard risk, from Class I (highest risk) through to Class III (lowest risk). A recall completion report must be submitted to the authorities on completion of the recall.

 
21. Outline the key areas of law applicable to medicinal product liability, including key legislation and recent case law.

Legal provisions

Product liability claims relating to medicinal products are typically based on:

  • The Product Liability Act.

  • Tort principles (Article 709, Civil Code).

  • Contract provisions (non-performance of contractual duties under Article 415 of the Civil Code).

Substantive test

Product Liability Act. The claimant bears the burden of proving:

  • A defect in the product.

  • Damage suffered by the claimant.

  • A reasonable connection between the defect and damage.

The Product Liability Act reduces the claimant's burden of proof by imposing strict liability on manufacturers or importers.

Tort. The claimant bears the burden of proving:

  • An intentional or negligent act (or omission) by the person committing the tort.

  • Damage suffered by the claimant.

  • A reasonable connection between the act and damage.

Negligence is a violation of a duty of care. As it is often difficult for a consumer, who typically has only limited resources, to prove that a manufacturer intentionally or negligently caused the consumer to sustain damages, a presumption of negligence which shifts the burden of proof from the consumer to the manufacturer has been established, in some cases, by case law.

Contract. The claimant bears the burden of proving:

  • A party's non-performance of contractual duties.

  • Damage suffered by the claimant.

  • A reasonable connection between the non-performance and damage.

Unlike in a tort action, the burden of proof is placed on the manufacturer or seller to prove that it was not negligent in its actions.

 
22. Who is potentially liable for defective medicinal products?

Product Liability Act

Claims can be asserted against manufacturers or importers, which include:

  • Persons engaged in the business of manufacturing, processing or importing the product.

  • Persons who represent or misrepresent themselves as a manufacturer by putting their name, trade mark or other similar proprietary markings on the product.

Tort

If the substantive requirements are met (see above, Question 21, Substantive test, Tort), there is no limitation on who can be liable for a tort claim. Tort claims for a defective medicinal product are typically made against manufacturers, importers and sellers. Hospitals, doctors, nurses, pharmacies and pharmacists can also potentially be liable, if, for example, they were negligent in providing inadequate information on the product. Off label use, in principle, is not reimbursed under the health insurance system, and doctors may potentially be subject to tort liability for claims arising from off label use.

Contract

A claim based on breach of contract can only be made against a party which has a contractual relationship with the claimant. A consumer or patient is not usually able to claim for breach of contract against the manufacturer or importer, due to the lack of a contractual relationship.

 
23. What defences are available to product liability claims? Is it possible to limit liability for defective medicinal products?

In product liability cases, a defendant usually argues the non-existence of one or more of the elements required to establish a product liability claim (for which the burden of proof lies with the claimant) (see Question 21). In addition, the following defences are also available.

Product Liability Act

Manufacturers are not liable for damages if they can prove either of the following:

  • It was impossible for the manufacturer to detect the defect in the product, based on the level of scientific or technical knowledge available at the time of delivery by the manufacturer.

  • For a product (component product) used as a component or part of another product (final product), the defect is only created after the manufacturer of the component product has strictly complied with instructions for the component product's design or specifications given by the manufacturer of the final product, and the component product manufacturer was not negligent in creating the defect.

Tort

For tort claims, some case law has adopted a presumption of negligence standard, which shifts the burden of proof from the consumer to the manufacturer. In these cases, the manufacturer is not liable for damages if it can prove that it was not negligent in its actions.

Contract

Manufacturers or sellers are not liable for damages if they can prove that they were not negligent in their actions.

 
24. How can a product liability claim be brought?

Limitation periods

Product Liability Act. The limitation period to bring a claim is the earlier of the following:

  • Three years from the date when the injured party became aware of the damage and the identity of the party liable for the damage.

  • Ten years from the date of delivery of the product by the manufacturer or importer.

For latent injuries or damages, evidence of which is only detected after a certain period, the starting date for the ten-year limitation period is the date on which the damages first appear.

Claims under the Product Liability Act can only be made for products delivered by manufacturers on and after 1 July 1995.

Tort. The limitation period to bring a tort claim is the earlier of the following:

  • Three years from the date when the injured party became aware of both the damage and the identity of the party liable for the damage.

  • 20 years from the date the tortious act was committed.

Contract. The limitation period for a contract claim is ten years (five years for a business contract claim) from the date when the injured party is first able to make a claim.

Class actions

Class actions (as they are known in the US) are not permitted in Japan. The Civil Procedure Act allows claimants to join their cases if their claims, and their grounds for bringing these claims, are the same or similar. Each claimant in a joint action generally remains an independent party.

 
25. What remedies are available to the claimant? Are punitive damages allowed for product liability claims?

The claimant can request monetary compensation for damages that would ordinarily arise from the defect. Damages that would not ordinarily arise but have in fact arisen through special circumstances can also be awarded, if the parties foresaw, or could have reasonably foreseen, these special circumstances.

The courts determine the actual scope of damages on a case-by-case basis, giving consideration to such matters as the:

  • Type of product.

  • Nature of the defect.

  • Circumstances under which the product was manufactured, distributed and consumed.

Subject to the existence of reasonable causation relating to the damage sustained, the scope of possible damages could include actual damage, mental suffering, prospective and consequential damage.

Punitive damages are not allowed under Japanese law.

 

Reform

26. Are there proposals for reform and when are they likely to come into force?

A bill to amend Japan's privacy law, the Act on Protection of Personal Information, was promulgated in September 2015. The amendment, which will be enacted within two years of promulgation, provides for various substantial reforms to the current legal framework, many of which will materially impact activities involving personal information, such as clinical studies and the handling of patient information.

For example, a new regulatory framework will be introduced for anonymised data, which is currently not regulated under Japan's privacy law. Under the new rules, anonymisation of personal information will need to be conducted in accordance with a prescribed method, and anonymised data cannot be provided to a third party without first publicly disclosing the type of personal information contained in the anonymised data and the method of providing the anonymised data.

Further, a new requirement will be introduced for cross-border transfers of personal data. The new rule will prohibit personal information from being transferred out of Japan without the consent of the relevant individual, unless the transfer is made either to a jurisdiction designated under the subordinate ordinance as having an equivalent level of protection for personal information, or to a third party that has established protective measures satisfying the prescribed criteria. These new rules, once effective, will substantially increase the regulatory burden with respect to various activities involving personal information in Japan.

For information on pharmaceutical patents, trade marks, competition law, patent licensing, generic entry, abuse of dominance and parallel imports, see Pharmaceutical IP and Competition Law in Japan: overview ( www.practicallaw.com/6-560-2578) .

 

Online resources

Japanese Ministry of Internal Affairs and Communications

W http://law.e-gov.go.jp/cgi-bin/idxsearch.cgi

Description. Japanese-language text of the Japanese legislation referred to in this article can be found on this website. This website is maintained by the Ministry of Internal Affairs and Communications. The information provided on this website is unofficial and potentially out-of-date.

Japanese Law Translations

W www.japaneselawtranslation.go.jp/?re=02

Description. English-language translations of some of the Japanese legislation referred to in this article can be found on this website. This website is maintained by the Ministry of Justice. The information provided on this website is unofficial and potentially out-of-date. The translations are for reference only and the Japanese-language version is always binding.



Contributor profiles

Kenji Utsumi, Partner

Nagashima Ohno & Tsunematsu

T +81 3 6889 7154
F +81 3 6889 8154
E kenji_utsumi@noandt.com
W www.noandt.com/data/lawyer/index/id/2707/

Professional qualifications. Japan, attorney-at-law, 1994

Areas of practice. Pharmaceutical and medical regulations; corporate transactions; M&A.

Recent transactions

  • Representing one of the world's largest pharmaceutical companies in a strategic collaboration project with another major international pharmaceutical company, concerning a generic drug business in Japan.
  • Advising one of the world's largest pharmaceutical companies on complex legal issues related to its global merger with another large pharmaceutical company.
  • Representing a multinational pharmaceutical company in its dispute with a major Japanese pharmaceutical company over rights arising from a global licence agreement in relation to a blockbuster product.
  • Advising Japanese listed pharmaceutical companies in addressing and resolving various urgent and significant regulatory problems.

Languages. Japanese; English

Professional associations/memberships. Daiichi Tokyo Bar Association

Publications

  • Practical Law Life Sciences Global Guide 2009/10, 2011, 2012, 2013, 2014, 2015, 2016 (Japan chapter).

  • The Life Sciences Law Review, Law Business Research Ltd., 2013, 2014, 2015, 2016 (Japan chapter).

Kensuke Suzuki, Partner

Nagashima Ohno & Tsunematsu

T +81 3 6889 7226
F +81 3 6889 8226
E kensuke_suzuki@noandt.com
W www.noandt.com/data/lawyer/index/id/2745/

Professional qualifications. Japan, attorney-at-law, 2000

Areas of practice. Pharmaceutical, food, medical and healthcare regulations; corporate transactions; securities regulations; fund-related business.

Recent transactions

  • Representing one of the world's leading European-based pharmaceutical companies in joint venture projects in Japan.
  • Representing a multinational pharmaceutical company in various corporate transactions involving development and marketing of pharmaceutical products in Japan.
  • Representing Japanese medical institutions in their acquisitions of other Japanese medical institutions.
  • Advising on Japanese regulatory issues for international pharmaceutical companies, medical device manufacturers, and food/beverage companies.

Languages. Japanese; English

Professional associations/memberships. Tokyo Bar Association

Publications

  • Practical Law Life Sciences Global Guide 2009/10, 2011, 2012, 2013, 2014, 2015, 2016 (Japan chapter).

  • The Life Sciences Law Review, Law Business Research Ltd. , 2013, 2014, 2015, 2016 (Japan chapter).


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