Distribution and marketing of drugs in Japan: overview
A Q&A guide to distribution and marketing of drugs law in Japan.
The Q&A gives a high level overview of distribution and marketing of drugs law, including pre-conditions for distribution; licensing; wholesale distribution; marketing to consumers; marketing to professionals and engagement with patient organisations.
To compare answers across multiple jurisdictions, visit the Distribution and Marketing of Drugs Country Q&A Tool.
This Q&A is part of the global guide to Distribution and Marketing of Drugs.
Pre-conditions for distribution
The placing of pharmaceutical products on the market in Japan is regulated by the Law on Securing Quality, Efficacy and Safety of Pharmaceuticals, Medical Devices, Regenerative and Cellular Therapy Products, Gene Therapy Products, and Cosmetics (PMDL) formerly known as the Pharmaceutical Affairs Law. Drugs must be authorised prior to their distribution and a marketing authorisation (MA) is required from the Minister of the Ministry of Health, Labour, and Welfare (MHLW). The term "marketing" used in the PMDL refers to the retail, rental or handover of drugs (excluding active pharmaceutical ingredients) that a person has manufactured (including through subcontracting) or imported.
A person intending to start a drug manufacturing/marketing business must obtain a manufacturing/marketing business licence from the prefectural governor depending on the type of business to be conducted. Two new pharmaceutical business categories were created in 2014:
In vitro diagnostics.
Regenerative medical products (that is, cellular and tissue-based products).
Manufacturers intending to manufacture drugs overseas and export them to Japan are required to be accredited by the MHLW as "accredited foreign manufacturers". Foreign manufacturers must have an in-country representative (that can be an affiliate) known as the Japanese marketing authorisation holder (MAH) to import and commercialise drugs in Japan. The MAH must be licensed by the MHLW to act in this capacity.
The main licences needed for the manufacture, importation and marketing of medicinal products in Japan are as follows:
Marketing business licence for MAH (Article 12, PMDL).
Manufacturing business licence (Article 13(1), PMDL).
Accreditation as foreign manufacturer (of drugs manufactured overseas) (Article 13 (3), PMDL).
MA for each product (Article 14, PMDL).
There are limited exceptions to the MA requirement (for example, if the drug is intended to be used in a clinical trial or in a named patient programme (see Question 2)).
Japan has created provisions for granting access to drugs prior to approval for patients who have exhausted alternative treatment options. Certain rules define access criteria, promotion, and the control of drug distribution in this context. Exceptions to the licensing requirement include imports by doctors for use by their own patients. Under the relevant Minister of the Ministry of Health, Labour, and Welfare (MHLW) guidelines, imports by doctors can be permitted when:
There is an emergency that necessitates a treatment.
No alternative product is distributed in Japan.
The products are solely to be used for their own patients' diagnosis or treatment.
There is a restricted approval system under Article 14 (3) of the Law on Securing Quality, Efficacy and Safety of Pharmaceuticals, Medical Devices, Regenerative and Cellular Therapy Products, Gene Therapy Products, and Cosmetics (PMDL). The restricted approval system is a special procedure for importing a medicinal product that is urgently needed to prevent a dangerous disease from reaching epidemic proportions and has received a foreign marketing authorisation.
The marketing authorisation (MA) application must be filed with the Minister of the Ministry of Health, Labour, and Welfare (MHLW) through the Pharmaceuticals and Medical Devices Agency (PMDA). A number of conditions must be satisfied before an MA can be delivered by the MHLW Minister. This includes set criteria relating to:
Safety of the drug.
The applicant's marketing business licence.
The proposed manufacturer's manufacturing business licence or accreditation as a foreign manufacturer.
The drug must be manufactured using a method that complies with the manufacturing control and quality control standards based on a proper quality and safety management system as generally applied in Japan. Appropriateness for healthcare usage is determined in light of state of the art medical and pharmaceutical technology. In the process, the MHLW will review the product including:
Dosage and administration.
A good manufacturing practice (GMP) compliance review is carried out to ensure that the manufacturer complies with manufacturing control and quality control standards. An MA is granted to products meeting these standards.
Clinical trials must be conducted using the standards provided by the MHLW. For MA applications filed from fiscal year 2016 onwards, clinical trial data must be submitted in accordance with the specifications in the Clinical Data Interchange Standards Consortium (the CDISC standards). This is to allow the PDMA to analyse or investigate clinical data, and to establish a more efficient evaluation process. Under the CDISC specifications, application documents are required to be submitted in the form of eCTD (Notification No. 0620-(6) of the Evaluation and Licensing Division, PFSB dated 20 June 2014). If the standards are satisfied, clinical trials can also be conducted in a foreign country.
The standard time period from filing an application until the grant of the MA for a new drug is approximately one year. However, an abridged procedure and shorter standard review time can apply to generic products subject to the satisfaction of certain conditions.
The MA is ultimately delivered by the MHLW, but the approval review process is conducted by the Pharmaceuticals and Medical Devices Agency (PMDA), an independent administrative organisation. The PMDA's activities can be divided into three main categories:
Offering guidance and conducting scientific reviews of MA applications.
Monitoring post-marketing safety.
Providing relief compensation to those who have suffered from adverse drug reactions or infections caused by pharmaceuticals or biological products.
Drug approval reviews are normally processed in the order of application. However, the following can be given review priority:
Drugs labelled as orphan drugs (a drug that has been developed specifically to treat a rare medical condition).
Other drugs considered to be of particular importance from a medical standpoint (that is, new drugs for the treatment of serious diseases).
An approval can be secured under the restricted approval system without the need to comply with ordinary approval review procedures (see Question 1). The system applies to drugs that are:
Already marketed overseas.
Needed in an emergency to prevent the spread of disease (that can have a major effect on public health) and are specifically defined by an administrative order.
In 2014, a new approval system was introduced for regenerative medical products. Under the system, non-uniform quality tissue-engineered medical products can be approved earlier than under the standard approval system if they are assumed to be effective and proven to be safe.
It is possible to distribute drugs virtually from Japan. A Japanese manufacturer/distributor/wholesaler can carry out distribution/wholesale activities (under a Japanese marketing authorisation) in/into another country subject to compliance with the laws and regulations of the country where the medicinal products are distributed.
Where an application is refused, an applicant can appeal the decision to the Minister of the Ministry of Health, Labour, and Welfare (MHLW) under the Administrative Appeal Act. Alternatively, the applicant may seek a judicial review of the Pharmaceuticals and Medical Devices Agency's (PMDA's) decision-making procedure by filing an administrative action with the Japanese district courts under the Administrative Case Litigation Act.
Distribution to consumers
Pharmaceutical products are defined as the products listed in the Japanese pharmacopoeia in addition to certain other materials intended for use in the diagnosis, treatment, or prevention of disease and substances intended to affect the structure or functions of the body (excluding equipment and instruments).
The Law on Securing Quality, Efficacy and Safety of Pharmaceuticals, Medical Devices, Regenerative and Cellular Therapy Products, Gene Therapy Products, and Cosmetics (PMDL) categorises pharmaceutical products into two categories according to use and supply:
Prescription (or ethical) drugs that can only be dispensed with a prescription issued by a medical practitioner or a dentist.
Drugs that can be sold without a prescription (over-the-counter (OTC) drugs) and that are intended for use by consumers at their discretion through direct purchase in a pharmacy or a drugstore under the guidance of a pharmacist or a person duly licensed to retail drugs.
Prescription drugs are described by the Minister of the Ministry of Health, Labour, and Welfare (MHLW) as:
Drugs that cannot be used effectively or safely without proper selection based on a doctor's prescription.
Drugs that require periodic medical checks to prevent serious adverse effects.
Drugs that can be used for other improper uses.
OTC drugs can be divided into three subcategories (in addition to the "behind-the-counter drugs" category (see Question 9) based on the potential risk of an adverse effect:
Type 1 (high risk). Type 1 drugs require special attention for use.
Type 2 (moderate risk).
Type 3 (relatively low risk). Type 3 drugs are OTC drugs other than Type 1 and Type 2 (for example, vitamin B and C tablets and digestive aids).
Certain conventional OTC drugs have been recently categorised as "drugs requiring instructions" and the sale of which requires a consultation with a pharmacist (Question 9).
Prescription drugs can only be distributed to consumers by a person conducting a retail pharmacy business as a pharmacy owner licensed by the governor of the prefecture where the pharmacy is located (or by medical institutions). The drugs must be dispensed by or under the supervision of a registered pharmacist. No special permission is required for the provision of prescription drugs by medical institutions.
In 1956, the Act on the Partial Amendment of the Medical Practitioners Act, Dentist Act, and Pharmaceutical Affairs Law (the so-called law for the separation of dispensing and prescribing functions) came into effect, making it mandatory for prescriptions to be issued by medical doctors and dentists.
Over-the-counter drugs (OTC drugs)
OTC drugs can be purchased directly at:
Pharmacies from a pharmacist.
Drugstores from a person who is duly licensed to retail drugs (Article 24, Law on Securing Quality, Efficacy and Safety of Pharmaceuticals, Medical Devices, Regenerative and Cellular Therapy Products, Gene Therapy Products, and Cosmetics (PMDL)).
Licences to retail drugs are divided into (Article 25, PMDL):
Licences to retail drugs at a store. This refers to the business of selling non-prescription drugs at a store. The store retailer must appoint a pharmacist or a retail person authorised by a prefecture governor as having the knowledge and experience necessary to engage in retail activities (Article 28, PMDL).
Licences to retail drugs by way of household distribution. This refers to the business of selling non-prescription drugs (with a relatively long shelf life) door-to-door by visiting customers' homes, delivering the drugs and returning to replenish the stock of drugs, and collect payment for any used drugs.
Licences for the wholesale of drugs.
The subject of the sales of OTC drugs on the internet has sparked a heated debate. As a result, the PMDL was amended in 2013 and now permits the sale of all OTC drugs. The amendment also led to the establishment of a new category of drugs called "drugs requiring guidance (behind-the-counter drugs)". These drugs include powerful drugs and the so-called "switch OTC drugs" (that is, items that have recently been switched from prescription drugs to OTC drugs), and whose risks as OTC drugs have yet to be identified. All the drugs must be sold in person by pharmacists. Internet sales of these drugs will be permitted after three years has passed following their change of status and once the risks have been assessed.
The supply of prescription drugs in Japan by mail order (including online sales) is prohibited and prescription drugs must be sold in person. Since the 2013 revision to the Law on Securing Quality, Efficacy and Safety of Pharmaceuticals, Medical Devices, Regenerative and Cellular Therapy Products, Gene Therapy Products, and Cosmetics (PMDL) (see Question 9) over-the-counter drugs can be sold online (with a few exceptions).
Cross-border sales can be conducted by any business or individual by mail from Japan to a foreign country if the drugs have been approved under the PMDL and are sold without any change to the packaging.
The importation of drugs for business purposes is subject to a marketing authorisation and other licensing requirements. In principle, the importation of drugs by an individual for personal use (private imports) requires a filing with the Regional Health and Welfare Bureau to obtain a certificate confirming that the import is not for business purposes.
Licences are needed for export business (a manufacturing business licence must be held by a local manufacturer). Drugs must also comply with Japanese good manufacturing practice even if they are intended for export and distribution outside of Japan.
The distribution of drugs to consumers is supervised by the Minister of the Ministry of Health, Labour, and Welfare (MHLW) and the competent prefectural governor. A prefectural governor can:
Request a pharmacy, a licensed retailer of drugs at a store, or a retailer carrying out household distribution in his prefecture, to submit a status report as specified under MHLW Ministerial Ordinance on their compliance with the applicable laws and ordinances.
Send officers to carry out on-site inspections of premises at which the distribution of a drug is being carried out. The officers can inspect buildings and facilities, audit records and question employees or other personnel (paragraph 2, Article 69, Law on Securing Quality, Efficacy and Safety of Pharmaceuticals, Medical Devices, Regenerative and Cellular Therapy Products, Gene Therapy Products, and Cosmetics (PMDL)).
Order a pharmacy, a retailer at a store, or a door-to-door retailer to make certain improvements when quality assurance or post-marketing surveillance procedures do not comply with the standards provided in the MHLW Ministerial Ordinance (Article 72, PMDL). He can suspend all or part of a business until completion of the improvements.
The MHLW Minister can revoke the licence of a marketing authorisation holder or drug manufacturer or order the suspension of their business, while a prefecture governor can do the same for a pharmacy owner or drug retailer for violations of the PMDL (paragraph 1, Article 75, PMDL). Through delegation of authority from the MHLW, the Pharmaceuticals and Medical Devices Agency (PMDA) can conduct inspections, question staff, collect materials and samples and thereafter submit its investigation report to the Minister in accordance with the MHLW Ministerial Ordinance.
The regulator can monitor drugs subject to a marketing authorisation (MA) and new drugs are subject to reexamination. Manufacturing/marketing authorisation holders must perform post-marketing surveys on new drugs so that safety can be reconfirmed by the MHLW's reexamination for a specified period after the MA grant. All drugs, including those that have been reexamined must undergo a reevaluation to check their efficiency, safety, and quality in accordance with progress in medical and pharmaceutical sciences.
A distribution decision can include an order by the regulator to dispose of, recall medicinal products or take some other measure for:
The protection of public health.
A licence cancellation.
A temporary shutdown of operations/business.
The steps (whether taken by the Minister of the Ministry of Health, Labour, and Welfare (MHLW) or a prefectural governor) can be appealed under the Administrative Appeal Act. Alternatively, the applicant can seek a judicial review of the decision by filing an administrative action with the Japanese courts under the Administrative Case Litigation Act.
Under Article 84 of The Law on Securing Quality, Efficacy and Safety of Pharmaceuticals, Medical Devices, Regenerative and Cellular Therapy Products, Gene Therapy Products, and Cosmetics (PMDL) provides that a person who is guilty of participating in drug retail without a license will be liable to either or both:
A fine not exceeding JPY3 million.
Imprisonment for a term of up to three years.
In addition, if a person licensed to market drugs violates any of the marketing methods prescribed by the PMDL (see Question 9), he will be liable to either or both:
A fine not exceeding JPY2 million.
Imprisonment for a term of up to two years.
The wholesale distribution of drugs is mainly governed by the Law on Securing Quality, Efficacy and Safety of Pharmaceuticals, Medical Devices, Regenerative and Cellular Therapy Products, Gene Therapy Products, and Cosmetics (PMDL). Any company wanting to wholesale drugs in Japan must hold a wholesaler's licence issued by the prefectural governor competent for each business establishment (Article 25 and paragraph 1, Article 31, PMDL). Supplying wholesale refers to selling or supplying drugs to the proprietor of a pharmacy, a marketing authorisation holder, a manufacturer, a retailer of drugs, or a hospital, a clinic, or any other such persons or places (other than the end-user of the medicinal product). Wholesale supply will be permitted if there is a marketing authorisation in place for the drug in Japan. A wholesaler can wholesale drugs that are non-prescription drugs to store retailers and door-to-door retailers engaged in household distribution (Article 156, PMDL Enforcement Regulations). In principle, a wholesaler must have a pharmacist based at each business establishment in charge of overseeing the business establishment (paragraphs 1 and 2, Article 35, PMDL).
The Minister of the Ministry of Health, Labour, and Welfare (MHLW) and the competent prefectural governor are responsible for overseeing the wholesale supply of drugs in Japan. Some authority can also be delegated to the Pharmaceuticals and Medical Devices Agency (PMDA).
A prefectural governor can request a wholesaler located in his prefecture to submit a status report as specified under the MHLW Ministerial Ordinance. It can also send officers to enter and carry out on-site inspections of premises where the distribution of a medicinal product is being carried out. The officers can inspect buildings and facilities, audit records and question the employees or other personnel involved (paragraph 2, Article 69, Law on Securing Quality, Efficacy and Safety of Pharmaceuticals, Medical Devices, Regenerative and Cellular Therapy Products, Gene Therapy Products, and Cosmetics (PMDL)). A prefectural governor can order a wholesaler to make certain improvements when quality assurance or post-marketing surveillance procedures do not comply with the standards provided in the MHLW Ministerial Ordinance (Article 72, PMDL) or the governor can suspend all or part of a business until completion of the improvements. In cases of violations of the PMDL and related laws and ordinances, the MHLW Minister can revoke the licence of a marketing authorisation holder or drug manufacturer or order the suspension of their business, while a prefectural governor can do the same for a wholesale dealer (paragraph 1, Article 75, PMDL).
Rights of appeal
See Question 14.
The wholesaler's licence can be revoked or suspended. A breach of the requirements applicable to wholesalers can also constitute a criminal offence under the Law on Securing Quality, Efficacy and Safety of Pharmaceuticals, Medical Devices, Regenerative and Cellular Therapy Products, Gene Therapy Products, and Cosmetics (PMDL). Under Article 84 of the PMDL, a person who is guilty of the offence of participating in drug wholesale without a licence will be liable to either or both:
A fine not exceeding JPY3 million.
Imprisonment for a term of up to three years.
If a wholesaler is in breach of the obligation to have a pharmacist supervise each of its business locations, it will be liable to either or both (paragraph 1, Article 1, PMDL):
A fine not exceeding JPY1 million.
Imprisonment (for the representative of a juridical person, or an agent, an employee, or any other worker in the service of a juridical person) for up to one year.
The Law on Securing Quality, Efficacy and Safety of Pharmaceuticals, Medical Devices, Regenerative and Cellular Therapy Products, Gene Therapy Products, and Cosmetics (PMDL) and other relevant laws and ordinances regulate marketing activities applicable to drugs. Promotional activities are not expressly regulated by the PMDL, except for drug information or the advertising of drugs. The PMDL and the Standards for Fair Advertising Practices concerning Medicinal Products (PAB Notice No. 1339 of 9 October 1980) (MHLW Guidelines) set basic standards for the advertising of drugs. The expression "advertising" is defined in the PMDL as referring to advertisements clearly intended to induce consumers, specifying the name of a medicinal product and recognisable as such by the general public.
General competition laws can also be relevant, in particular the:
Act on the Prohibition of Private Monopolisation and the Maintenance of Fair Trade (Antimonopoly Act).
Unfair Competition Prevention Act (UCPA).
Act against Unjustifiable Premiums and Misleading Representations (AUPMR).
National Public Service Ethics Act.
Limits to marketing activities
The AUPMR regulates premiums and representations relating to transactions of goods and services to ensure fair competition and protect the interests of consumers. The Act prohibits unjustifiable premiums and misleading representations, including through advertisements (Articles 3 and 4, AUPMR). Industry organisations have established self-imposed industry standards in pursuance of Article 11 of the AUPMR (see Question 20).
Articles 66 to 68 of the PMDL prohibit the advertising of or dissemination of false or exaggerated statements on the:
Name, manufacturing method, indications or performance of a drug.
Endorsement by healthcare professionals.
Advertising of drugs for specially designated diseases (treating cancer, sarcoma and leukaemia).
Advertising of the name, manufacturing method and/or indications of a drug before the grant of a marketing authorisation.
The MHLW Guidelines prohibit the advertisement of prescription drugs aimed at the general public. They include specific restrictions on advertisements under the PMDL and also limit the use of premiums, prizes and awards in this context.
The marketing of drugs is governed by a combination of legislation and codes of practice. Various industry self-regulations apply to promotional activities. The Japan Pharmaceutical Manufacturers' Association (JPMA) is a voluntary industry group that unites and represents large pharmaceutical companies that are present in Japan. It is active through its self-regulation initiatives supplementing laws and regulations. The JPMA requires its members to comply with its code of practices for the promotion of prescription drugs to the healthcare professionals (HCP) sector (Promotion Code). The code is part of the JPMA Code of Practice established in 2013 following amendments to the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA) Code of Practice that provides guidance to pharmaceutical companies on how to interact with HCPs, institutions and patient organisations. The IFPMA is a global voluntary organisation that represents the research-based pharmaceutical industry and its code applies to JPMA members.
In addition, the Fair Trade Council of the Ethical Pharmaceutical Drugs Marketing Industry has adopted a code for fair competition and fair trade that limits the benefits and premiums that can be offered for the promotion of ethical drugs (Fair Competition Code). The Fair Competition Code (along with corresponding guidelines and interpretive commentary) has been approved by the Japan Fair Trade Commission (JFTC). It is a voluntary code but has semi-legal binding aspects and the JFTC can step in to prevent violations. The Fair Competition Code is, to some extent, a specific adaptation for the pharmaceutical industry of the wider body of rules contained in the Act against Unjustifiable Premiums and Misleading Representations (AUPMR).
The JPMA Promotion Code and the Fair Competition Code are among the most significant codes of conduct. The JPMA Code of Practice gives a number of basic principles regarding members' materials (brochures, adverts in medical journals, websites targeting HCPs, audiovisual materials) in addition to the fact that the statements contained therein must be correct, objective and based on scientific data. For example:
Statements regarding indications, dosage and administration, and any other statements, must not deviate from the approved items.
No false, exaggerated, or misleading labels, layout or expression can be used regarding efficiency and safety.
Fair statements must be made by presenting both efficiency data and safety data, including adverse reactions.
Comparisons with other drugs must be based on scientific data, in principle made using generic names.
Competitors or competitors' drugs must not be slandered or defamed.
Extraordinary data must not be presented to give the impression that the data has universal value.
Where an advertisement is aimed mainly at promoting only the name of a drug, the items described in an advertisement must include the:
therapeutic category (product title);
national health insurance (NHI) price listing status; and
contact details to request more detail.
In addition, the Japan Generic Medicines has adopted its own code of practice for the promotion of generic drugs (JGA Promotion Code). For over-the-counter (OTC) drugs, the Federation of Pharmaceutical Manufacturers' Associations of Japan (FPMAJ) and the Japan Self-Medication Industry (JSMI) jointly issued a Voluntary Code for OTC Medicine Advertising. Although voluntary, the Voluntary Code is considered by the Minister of the Ministry of Health, Labour, and Welfare (MHLW) as the most appropriate advertising standard for the industry. These codes apply to association members but they are also carefully scrutinised by other industry players as the rules can serve as reliable indicators of the views of the MHLW, the JFTC or the Consumer Affairs Agency (the Japanese consumer protection authority) on topics that deserve clarification or benchmarking.
Marketing to consumers
Legal regime/ Products
The advertising of prescription drugs to the general public is prohibited (see Question 19) under the:
Law on Securing Quality, Efficacy and Safety of Pharmaceuticals, Medical Devices, Regenerative and Cellular Therapy Products, Gene Therapy Products, and Cosmetics (PMDL).
Standards for Fair Advertising Practices concerning Medicinal Products (PAB Notice No. 1339 of 9 October 1980).
In addition, misleading representations to the effect that the use of a particular drug will cure cancer, diabetes, hyperlipidaemia, heart diseases, hepatitis or other diseases which generally require a medical practitioner's diagnosis and treatment, are prohibited in advertisements targeting consumers.
By contrast, over-the-counter (OTC) drugs can be freely advertised in Japan like other consumer goods. This is because OTC drug advertising is regarded as an important means of conveying useful health-related information to the general public. This (relative) freedom is subject to strict compliance with certain regulatory and voluntary checks. OTC drug advertising control in Japan has two key features:
Control is post-publication or post-broadcast (not a unique feature as the same applies to other drugs).
Existence of a Voluntary Code that is well established and strictly observed by the industry.
The Standards for Fair Advertising Practices concerning Medicinal Products (PAB Notice No. 1339 of 9 October 1980) permit the provision of free samples to consumers if the drugs are:
For external use.
Commonly used at home.
The following is prohibited:
The provision of free samples of powerful drugs or prescription drugs.
Advertising drugs as a premium/prize or award.
Advertising that free drugs will be given in exchange for empty containers or packages of drugs.
See Question 22.
The following are responsible for the supervision of marketing activities to consumers:
Minister of the Ministry of Health, Labour, and Welfare (MHLW).
Consumer Affairs Agency (CAA).
Prefectural governors are responsible for the supervision of marketing activities to consumers.
See Question 13.
In addition, if an entrepreneur acts in violation of Articles 3 and 4 of the Act against Unjustifiable Premiums and Misleading Representations (AUPMR) the Prime Minister (or Secretary General of the CAA by delegation) can:
Order that the entrepreneur stops the violating act (Article 6, AUPMR).
Take the measures necessary to prevent the reoccurrence of the violation (Article 12, AUPMR).
This is in addition to the right to request compliance reports from the offender, conduct on-site inspections, and to question staff. The prefectural governor can also give instructions to the entrepreneur on the necessary measures to be taken.
Rights of appeal
If an entrepreneur is subject to an administrative sanction for a breach and the punishment is illegal or unreasonably harsh, the entrepreneur can appeal the decision (see Question 6).
Breaches of the Law on Securing Quality, Efficacy and Safety of Pharmaceuticals, Medical Devices, Regenerative and Cellular Therapy Products, Gene Therapy Products, and Cosmetics (PMDL) and the texts governing advertising is subject to administrative punishment by the Minister of the Ministry of Health, Labour, and Welfare (MLHW). Serious breaches of the PMDL can trigger criminal sanctions of:
Imprisonment for a term of up to two years.
A fine of up to JPY2 million.
Both a fine of up to JPY2 million and imprisonment for a term of up to two years for certain offences including (Article 85, PMDL):
false and exaggerated claims and advertising (Article 66, PMDL);
advertising before delivery of a marketing authorisation (MA) (Article 68, PMDL).
Violations of the Act against Unjustifiable Premiums and Misleading Representations (AUPMR) are punishable by:
Imprisonment for a term of up to two years, and/or a fine not exceeding JPY3 million (Article 16, AUPMR).
A fine up to JPY300 million (for corporations) (Article 18, AUPMR).
A 2014 amendment introduced the imposition of an administrative fine for a business that has made the following misleading representations (Article 4, AUPMR):
Where the quality or standard of goods is portrayed to general consumers as being much better than that of the actual goods, or much better than those supplied by other businesses.
If the price or any other trade terms of the goods can be misunderstood by general consumers to be much more favourable than the actual goods supplied, or to be much more favourable than those supplied by other businesses.
The following can take measures to stop or prevent breaches of the Fair Competition Code:
Fair Trade Council of the Ethical Pharmaceutical Drugs Marketing Industry.
Japan Fair Trade Commission (JFTC).
Consumer Affairs Agency (CAA).
In the case of breaches of voluntary standards by industry organisations, corrective measures or disciplinary sanctions can be taken by the industry organisations against their respective members. For example, for breaches of the Japan Pharmaceutical Manufacturers' Association (JPMA) Code of Practices, the Promotion Code Committee of the JPMA can take action (within the limits of its authority as a self-governing regulatory body).
Marketing to professionals
Marketing activities relating to healthcare professionals are not expressly prohibited. However, they must comply with the:
Article 68 of the Law on Securing Quality, Efficacy and Safety of Pharmaceuticals, Medical Devices, Regenerative and Cellular Therapy Products, Gene Therapy Products, and Cosmetics (PMDL) provides that no person can advertise the name, manufacturing process, indications or performance of a drug before the granting of a market authorisation (MA). In accordance with commentary of the Japan Pharmaceutical Manufacturers' Association (JPMA) Promotion Code, this should not deprive medical/pharmaceutical experts (or the general public) of the right to know about scientific advancements. For example, the provision does not restrict the:
Appropriate exchange of scientific information about a drug through the presentation of research findings in a meeting of an academic society or scientific journal.
Display of scientific exhibition materials about a drug yet to be approved in Japan in accordance with separate guidelines at a meeting of an international academic society.
Supply of peer-reviewed scientific literature, such as a reprint of a research paper at the request of a doctor.
Lawful disclosure of medical information on products under development to the pharmaceutical company's shareholders. This also applies to off-label information. Article 5(2) of the Fair Competition Code authorises the supply of information or explanatory materials concerning medical data or a drug manufactured by a company.
In certain special circumstances, gifts and promotional items can be offered to healthcare professionals (HCPs) but they must comply with good ethical practices and remain within the limits of decency imposed by the pharmaceutical industry and its core objectives. In accordance with the Fair Competition Code, inappropriate financial benefit or benefit in-kind should not be offered to medical practitioners to induce them to prescribe drugs. This does not preclude the supply of after-sales services in the ordinary course of business. Article 3 of the Fair Competition Code provides that a Japanese marketing authorisation holder (MAH) cannot provide premiums to HCPs, such as hospitals or pharmacies, as a means of unjustly inducing transactions.
The JPMA Promotion Code generally prohibits its members from offering any gift or cash that could potentially affect the appropriate use of drugs to HCPs. The impact of the gift or cash offering must be considered, in particular whether the practice may:
Affect the proper use of drugs.
Be perceived by the public as interfering with neutral, independent and scientifically based prescription methods and consequently undermine the social role of drugs.
The JPMA Promotion Code requires member companies to set clear standards for gifts and cash offerings in their own in-house codes and strictly observe them in accordance with the principles of the JPMA Promotion Code and the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA) Code of Practice. Seasonal gifts must not be offered even when they are customary because, depending on value and frequency, they can be seen as interfering with the independence of an HCP's decision to prescribe, recommended or purchase drugs.
If a pharmaceutical company makes inappropriate gifts or donations of money to, or entertains, a Japanese medical practitioner who is also a public official, the pharmaceutical company and the medical practitioner may be charged with bribery under the Criminal Code or the National Public Official Moral Code. Under the Unfair Competition Prevention Act, the provision of gifts, travel expenses, meals or entertainment to foreign public officials can be treated as bribery in the same way as the provision of cash or any other benefits.
There is no clear restriction set by laws or ordinances. The industry self-regulations provide that medical representatives visiting a medical institution must act in an orderly manner and observe the rules established by the institution.
Provision of hospitality
Various industry self-regulations apply to promotional activities relating to pharmaceutical products and medical devices. The JPMA Promotion Code requires that seminars for members' products be held at appropriate venues and, if food and drinks or any social event or gift is offered in conjunction with a seminar, they must not be extravagant. The IFPMA Code of Practice provides that refreshments and meals incidental to the event can be offered only when they are restrained and reasonable by reference to local standards. In the JPMA Promotion Code commentary, "restrained and reasonable" is interpreted as the amount of money usually payable by healthcare professionals and considered as a first impression by the general public not to be extremely high. The Fair Competition Code contains similar provisions.
The Standards for Fair Advertising Practices concerning Medicinal Products (PAB Notice No. 1339 of 9 October 1980) (MHLW Guidelines) (see Question 19) require certain minimum information to be provided to healthcare professionals, including the:
Product's name for distribution.
Generic classification name.
Product's indications and effects.
Method of administration.
Information regarding adverse reactions, precautions and contraindications, and dosage.
Contact address for further information.
Date of preparation of the advertisement.
The Act against Unjustifiable Premiums and Misleading Representations (AUPMR) does not prohibit comparative advertising. However, in accordance with the Guidelines for Comparative Advertising under the AUPMR issued by the Japan Fair Trade Commission, the following comparative advertising is considered as misleading representations and likely to affect the appropriate selection of products by consumers:
Comparison by indicating matters that have not been proven and are incapable of being proven.
Comparison based on unfair grounds, for example, by putting the emphasis on the importance of certain aspects that are inconsequential to product selection by consumers, or on an arbitrary selection of the products compared.
Advertising that disparages competitors or their products.
The Standards for Fair Advertising Practices concerning Medicinal Products (PAB Notice No. 1339 of 9 October 1980) (MHLW Guidelines) prohibit a pharmaceutical company from disparaging other companies' products in relation to quality, potency/effect, safety, or other drug-related aspects.
The Japan Pharmaceutical Manufacturers' Association Code of Practices provides that comparisons with other drugs must be conducted properly and based on scientific data, in principle made using generic names. Competitors' drugs must not be slandered or defamed. Under the Code's commentary, comparing new drugs with drugs that have been previously used and finding out where and in what way they differ is extremely important in deciding which drug to use. Therefore, it is imperative that they be introduced based on accurate data with scientific backing, in compliance with the Guidelines for Specifying Product Information Summaries for Prescription Drugs, while avoiding ambiguous expressions that may lead to misunderstandings. When making a comparison with another drug, the drug that is being compared against, must be referred to using its generic name (the use of rival manufacturers' logos or brands is prohibited unless their consent has been received and this is unlikely to happen).
There is no express statutory restriction or prohibition dealing with discounts for drugs.
The provision of free samples is permitted under the:
Japan Pharmaceutical Manufacturers Association Promotion Code.
Japan Generic Medicines Association Promotion Code.
However, only the minimum requisite number of samples should be supplied (together with information on the drug).
The Fair Competition Code includes detailed provisions on the supply of samples. A medical institution is prohibited from providing free medical drugs as a means of inducing the institution to buy drugs (Article 4(2), Fair Competition Code). However, the provision of free drugs is permitted for clinical trial purposes in order to test the quality, effectiveness, safety, and characteristics of a medicinal product. Free samples can also be supplied to medical institutions at the time of the product launch to allow medical staff to become familiar with the formulation, colour, taste, appearance or other characteristics of the product prior to use (Article 5 (3) and Article 2, Implementing Regulation of the Fair Competition Code).
Sponsorship of professionals
The Fair Competition Code provides for the:
Payment of compensation and costs and expenses for medical or pharmaceutical studies/research that are entrusted to a medical institution (for example, post-marketing surveillance studies, clinical trials, other medical or pharmaceutical research) (Article 5(4), Fair Competition Code).
Donation of equipment or supply of services to medical institutions (as long as they are not luxurious or excessive) for use in lectures relating to the company's own drugs (Article 5(5), Fair Competition Code).
Pharmaceutical companies must comply with the Fair Competition Code guidelines (in particular the Standards for Premiums and Standards for donations) issued by the Japan Fair Trade Commission (JFTC) and the Consumer Affairs Agency (CAA).
Under Article 5 (5) of the Fair Competition Code, it is possible to:
Pay reasonable honoraria (payment given for professional services that are rendered nominally without charge).
Reimburse out-of-pocket expenses (for example, travelling and accommodation) for conference speakers and presenters.
Bear some of the expenses of an attending medical practitioner.
These payments must be kept at a modest level.
Other promotional items or activities
The Fair Competition Code states that the provision of the following is permissible (conditional on the purchase of drugs):
Equipment or services necessary for the use of the offeror's own prescription drugs by medical institutions (Article 5(1)).
Equipment or services that enhance the efficiency and benefit of the drugs (Article 5(1)).
Medical or pharmaceutical information and explanatory materials on the company's own drugs (Article 5 (2)).
See Question 25.
For a breach of the Fair Competition Code, the Fair Trade Council can (Article 10, Fair Trade Council):
Issue a warning.
Impose a penalty up to JPY1 million.
Order the expulsion of the violator.
If the Fair Trade Council decides to impose a penalty or order the expulsion of a member company, it must first submit its decision as a draft to the company. The company then has ten days to file an objection (Article 11 (2), Fair Trade Council). The Fair Trade Council will give the company the opportunity to submit its own arguments before making a final decision on the measures to be taken (Article 11 (3), Fair Trade Council).
See Question 26 for criminal punishments for violations of laws and ordinances and breaches of self-imposed industry standards.
Engagement with patient organisations
There is no specific restriction placed by laws or ordinances. The Japan Pharmaceutical Manufacturers Association Code of Practice provides that member companies must act ethically and respect the independence of patient groups in all types of collaboration with patient organisations. Member companies collaborating with patient organisations must establish guidelines for their own companies on the basis of the Guideline on Collaboration with Patient Organisations. When providing financial support to patient organisations, each member company must ensure transparency by:
Making it clear that it is involved.
Secure written consent for the objectives.
Other support to a patient group must be established in the members' own guidelines based on the Patient Group Transparency Guidelines. Similarly, with respect to relationships with patient organisations, the Guidelines for Transparency of Relationship between Corporate Activities and Patient Organisations (Patient Group Transparency Guidelines) trigger spend disclosure obligations on members.
Healthcare laws, regulations and industry self-regulations are currently evolving at a fast pace to deal with political and demographic (ageing population) pressures and to follow technological and scientific progress and international trends. This includes strengthening drug safety, introducing rules dealing with regenerative medicines, including a specific approval system, and the treatment of patients with cell therapy and gene therapy products.
Shinya Tago, Partner, Head of the International Practice Committee
Iwata Godo Law Offices
Professional qualifications. Admitted in Japan and New York
Areas of practice. General corporate; M&A; anti-trust; litigation.
Atsushi Ueda, Partner
Iwata Godo Law Offices
Professional qualifications. Admitted in Japan and New York
Areas of practice. General corporate; banking; M&A; litigation.
Ryohei Kudo, Associate
Iwata Godo Law Offices
Professional qualifications. Admitted in Japan and New York
Areas of practice. General corporate; M&A; litigation.
Landry Guesdon, Registered Foreign Attorney-at-law, International Practice Committee
Iwata Godo Law Offices
Professional qualifications. Admitted in France and Japan as Gaikokuho Jimu Bengoshi (French law).
Areas of practice. General corporate; M&A; anti-trust (including in the life sciences and healthcare sectors).
Landry represents a wide range of healthcare industry clients. He has extensive experience representing clients on M&A and healthcare regulatory and other transactional matters. Prior to joining Iwata Godo, Landry was a member of the healthcare practice group of a magic circle firm.