Digital Healthcare 2022

Last Updated June 30, 2022

Japan

Law and Practice

Authors



Anderson Mori & Tomotsune is a large, international Japanese law firm. The firm is known for its long history of advising overseas companies doing business in Japan and in cross-border transactions. The main office in Tokyo is supported by offices across Japan, China and the South-East Asian region. Anderson Mori & Tomotsune has considerable experience in matters relating to the life sciences field, including expertise in licensing, regulatory, intellectual property and corporate transactions such as mergers and acquisitions and venture investments. The firm works with increasingly diversified international and Japanese-based healthcare companies, including pharmaceutical manufacturers, medical device manufacturers, distributors and e-health providers. The team, which consists of about ten partners and 20 associates, provides comprehensive advice from the set-up of a Japanese entity to all stages of the product life cycle and helps clients to navigate a broad range of regulatory matters.

Definitions of Digital Healthcare and Digital Medicine

While Japanese law does not provide formal definitions of Digital Healthcare and Digital Medicine, there is a difference in those terms based on whether a product constitutes a “pharmaceutical” or a “medical device” under the Securing Quality, Efficacy and Safety of Products including Pharmaceuticals and Medical Devices Act (Pharmaceuticals Act). Digital Medicine may be viewed as relating to products that have been approved by the relevant authorities in Japan, such as the Ministry of Health, Labour and Welfare (MHLW), as a pharmaceutical or medical device, while Digital Healthcare may be viewed more broadly as relating to those products and services that do not constitute pharmaceuticals or medical devices and, therefore, do not require approval from the MHLW.

Difference From the Regulatory Perspective

These differences are important because if a certain product constitutes a pharmaceutical or medical device under the Pharmaceuticals Act, the provider of that product must obtain the relevant licence, such as a marketing licence, a manufacturing licence and/or a distribution licence, and must also obtain marketing authorisation, certification or notification for the product in question.

Difference From the Patient/Consumer Perspective

From a patient’s perspective, if a doctor prescribes a pharmaceutical item at a medical institution, the patient’s cost for that pharmaceutical will be covered by national health insurance and the patient will be required to pay only a portion of the cost of that pharmaceutical. By contrast, if a digital healthcare product does not constitute a pharmaceutical item, the consumer must pay the full price of the product to the provider.

Determination of a Medical Device

Sometimes, it can be difficult to determine whether a certain product, such as a medical-device program, may be categorised as a medical device, so the MHLW issued the Guideline Concerning the Determination of Software as a Medical Device on 31 March 2021 (the SaMD Guideline).

The SaMD Guideline clarified that a program that records, stores and displays personal health data for the purpose of a user (ie, a patient) to monitor their own health information does not constitute a medical-device program. By contrast, a program that is intended to diagnose, treat or prevent a disease is a medical-device program.

Definitions and Regulations Under the Pharmaceuticals Act

Japanese law, including the Pharmaceuticals Act, does not provide formal definitions of Digital Healthcare and Digital Medicine.

However, the Pharmaceuticals Act contains definitions of “pharmaceutical” and “medical device,” which include medical-device programs.

In general, a product or instrument (including a computer program) that is intended for use in the diagnosis, treatment or prevention of disease in humans would constitute a “pharmaceutical” or “medical device” under Article 2, Items 1 and 4 of the Pharmaceuticals Act.

Thus, if a digital medicine product is classified as a pharmaceutical or medical device under the Pharmaceuticals Act, that product would be subject to the relevant regulations under that Act. However, if a digital-medicine product or a digital healthcare product is not classified as a pharmaceutical or medical device under the Pharmaceuticals Act, that product would not be subject to that Act and only the general regulations relating to a general consumer product would apply.

Use of Internet and Artificial Intelligence

Technologies using the internet and artificial intelligence (AI) have been adopted in digital healthcare products and medical device programs.

There are many digital healthcare products, such as applications for smartphones, that use the internet to transmit healthcare information among users.

Also, some medical device programs adopt AI for their functions to enhance their effects, such as diagnosis of a certain disease.

From Face-to-Face to Online

Due to new technologies, medical treatment and medication counselling may be conducted remotely by using information communications equipment. However, medical treatment and medication counselling have been traditionally conducted on a face-to-face basis, so the existing regulations had to be amended to regulate remote medical treatment and remote medication counselling appropriately. In this regard, the MHLW issued Guidelines for Appropriate Performance of Online Medical Treatment, dated March 2018 (amended in January 2022). Also, the Pharmaceuticals Act was amended as of September 2020 to allow online medication counselling under certain conditions.

Online Medical Treatment and Medication Counselling

Due to the spread of COVID-19, the MHLW temporarily relaxed regulations regarding online medical treatment and online medication counselling on 10 April 2020.

Accordingly, under certain circumstances, a doctor may conduct a patient’s first medical examination remotely and provide online medical treatment to that patient using information communications equipment.

Also, under certain circumstances, a pharmacist may conduct online medication counselling by telephone or through information communications equipment.

Business Licences and Marketing Authorisation

As a general rule under the Pharmaceuticals Act, any person intending to market a medicinal product must have a business licence and obtain a marketing authorisation, certification or notification, depending on the risk classification for the product.

The MHLW has primary jurisdiction over matters concerning pharmaceuticals, medical devices, medical treatment, health insurance and other healthcare matters, including matters in the digital health sector. Authority over matters concerning clinical trials, authorisations, registrations and post-marketing safety measures of pharmaceuticals and medical devices is delegated from the MHLW to the Pharmaceuticals and Medical Devices Agency (PMDA), an organisation established under the Law for the Pharmaceuticals and Medical Devices Agency. Furthermore, the grant of business licences that are required for the manufacture, marketing or sales of pharmaceuticals and medical devices, and the monitoring activities in relation to those licences, including violation of advertising regulations, are partially delegated to local governments.

In brief, the procedure for obtaining marketing authorisations for medicinal products is as follows.

Clinical trials must be performed to collect data that is necessary for the application. In essence, clinical trials performed prior to the application include phase I (for a small number of healthy adults), phase II (for a small number of patients), and phase III (for a large number of patients).

After clinical trials, any person intending to market a medicinal product must file an application with the PMDA for approval to market that product. The PMDA reviews and examines the application and reports the results of its review to the Minister. The Minister then decides whether to grant the approval to market the products, based on the report of the PMDA.

Reimbursements Under the National Health Insurance System

The National Health Insurance System (NHIS) is a public healthcare system that covers the entire country. Under the NHIS, everyone in the country is, in principle, entitled to all types of medical care services (including medical treatments and drugs) provided by medical institutions. Patients receive treatment at a medical institution and pay a portion (10% to 30%) of the cost of treatment at that medical institution. The remaining cost is billed to the assessment and payment agency, which reimburses the medical institutions from the insurance premiums collected from the insured by the health insurance association, with the government covering any deficit.

The MHLW Welfare ordinance prescribes the coverage by the NHIS for medical examinations, diagnoses or treatment and usage of pharmaceuticals and medical devices, including digital health products or services. Insurance reimbursement for medical devices varies, depending on the category of the device. For example, the cost of certain products, primarily disposable products, is specifically reimbursed as for pharmaceuticals. More commonly, however, the cost of the medical device is included in the medical diagnosis or treatment fee. For example, the use of software that processes image data of the human body taken by an imaging device is assessed as a technical fee in connection with a medical diagnosis. In other words, insurance reimbursement is provided for the act of diagnosis using specific software, not for the purchase or payment of a service fee for the software. Insurance reimbursement is also available for online medical treatment.

Software as a Medical Device

Whether certain software is regulated as a medical device under the Pharmaceuticals Act is often a nuanced question. The SaMD Guideline is the latest guideline on whether certain software should be regulated as a medical device under the Pharmaceuticals Act. The Guideline indicates how to determine whether a software is deemed a medical device. See 6.1 Categories, Risks and Regulations Surrounding Software as a Medical Device Technologies for details.

Telemedicine

The provision of medical diagnoses over the telephone, by video or using other online tools (Online Medical Treatment) is becoming more common in Japan. However, the Medical Practitioners’ Act prohibits doctors from providing a diagnosis without examining a patient. Thus, the issues of whether an online examination may be construed as the examination required under the Medical Practitioners’ Act, and of the extent to which an online examination is permitted, are controversial. The MHLW has been accepting Online Medical Treatment, but with certain requirements, such as that the initial medical examination be held face to face.

In 2020, however, the MHLW issued Temporary and Exceptional Measures for Medical Treatment Using Telephones and Other Communication Tools Under the Spread of the COVID-19 Infection, which temporarily permit the online performance of a patient’s initial medical examination. Now, a patient may receive medical treatment online even if they have never been examined at a hospital for the specific disease or symptom. See 7.2 Regulatory Environment for details.

The MHLW, and prefectural governments as delegated by the MHLW, have vast authority in enforcing the regulations. That authority includes the ability to issue various administrative orders against regulatory violations, such as a revocation of a marketing authorisation and/or business licence, a business suspension order, a temporary suspension of sales and disposal of stocks or a recall order. Certain violations of the Pharmaceuticals Act, such as violation of administrative orders, the sale of unauthorised drugs or medical devices and off-label promotion, are also subject to criminal penalties.

The regulators use these administrative orders and criminal penalties, but sometimes only administrative guidance, based on the severity of the violation and the risk to national health. There is no other significant trend or tendency in regulatory enforcement.

Whether a certain digital health product or service is regulated within the Pharmaceuticals Act, the Medical Practitioners’ Act or the Medical Care Act makes a substantial difference. Once the relevant product or service is determined as falling outside the healthcare regime, the applicable regulations are significantly less stringent than the laws described above, but there are still some notable regulations.

The Act Against Unjustifiable Premiums and Misleading Representations, administered by the Consumers Affairs Agency, governs all consumer products, including digital health products and services marketed towards consumers. The Act prohibits any representation in which the quality of a product or service is portrayed as being significantly superior to the quality of the actual product or service, and any representation regarding price or any other term of a product or service that could be misunderstood to be significantly more advantageous than the term of the actual product or service. Medical devices and other products governed by the Pharmaceuticals Act are also governed by this Act, but in most cases the promotion and advertising rules under the Pharmaceuticals Act are stricter than the corresponding rules under the Act Against Unjustifiable Premiums and Misleading Representations.

Further, a health-related product or service that would, by its nature, not be regulated as a medical device or a medical service, may be regulated as such if an advertisement, sales promotion or other communication portrays the product or service as applicable for use in diagnosis, treatment or prevention of diseases. In this respect, the Pharmaceuticals Act, the Medical Practitioners’ Act and the Medical Care Act limit advertisements and other communications regarding non-medical devices and services.

The Electric Appliances Safety Act may apply to some categories of electrical appliances. Manufacturing or importing those electric appliances requires notification to the Ministry of Economy, Trade and Industry, and the products must conform to designated technical standards.

Privacy is one of the most crucial issues relating to digital health-related services. The Consumer Affairs Agency also plays an administrative role in the privacy regime. See 10.1 The Legal Relationship Between Digital Healthcare and Personal Health Information for details.

The Pharmaceuticals Act defines a medical device as an instrument that is intended for use in the “diagnosis” “treatment” or “prevention” of disease. Similarly, an item that is intended for use in the “diagnosis”, “treatment” or “prevention” of disease can be categorised as a pharmaceutical under the Act. Therefore, when developing an instrument or an item that can be used to prevent disease, it should be carefully determined whether the instrument or item falls into the category of a medical device or a pharmaceutical, which are subject to the Pharmaceuticals Act.

Also, only a medical practitioner may engage in medical practices under Medical Practitioners’ Act. So, if a certain act involves a medical intervention, such as surgery, it cannot be performed via a computer or by a layperson, only by a medical practitioner.

Due to the increasing cost of medical care in Japan, the Japanese government, as well as private enterprises, are focusing more on measures to help people live healthy lives and prevent early onset of serious diseases. While developing pharmaceuticals requires is enormous amounts of money and time, developing an instrument or software that can promote better health requires less resources. Therefore, many start-up companies and traditional companies, whose core business is not healthcare, are now entering the healthcare sector by developing instruments or software that can be used for preventative medicine.

Under Act on the Protection of Personal Information (APPI), medical information is classified as "special care-required personal information", and care must be taken when handling such information. In order to acquire special care-required personal information, it is necessary to obtain the prior consent of the individual concerned, except for certain exceptions. Fitness and wellness information not classified as special care-required personal information can be acquired without the prior consent of the individual concerned. If the information is a combination of medical information and fitness and wellness information, the entire information would be classified as special care-required personal information. There have been no court precedents that explicitly ruled on handling of such combined information.

As it is often difficult to differentiate a software program which should be categorised as a medical device and one that is not a medical device, the authorities are developing a guideline and a list of examples to help a company that develops such a program determine whether its software program should be categorised as a medical device or not.

For example, a program to be used personally at home to record an individual’s healthcare status for fitness purposes is not categorised as a medical device, so it is not subject to the Pharmaceuticals Act.

As pharmaceutical and medical devices are highly regulated by the Pharmaceuticals Act and other relevant regulations, it is often a challenge for a company that is new to the healthcare business. Such companies tend to join forces with a traditional healthcare company that has already obtained the necessary licences and approvals. Alternatively, a new entrant first develops a device or product that is not categorised as a medical device or a pharmaceutical so that they do not have to obtain and maintain the requisite licences or approvals, which tend to incur substantial costs and time.

The internet of medical things (IoMT) and connected devices have completely changed the medical scene. They are extremely useful for in-hospital use. Radio frequency identification attached to specimens such as blood or urine samples, are now indispensable to prevent mix-ups. A recently developed bed can monitor the patient’s vital signs and transmit the data to the hospital’s central computer system. These devices are, however, most notable for in-home use. Wearable devices enable continuous and real-time monitoring of outpatients. One Japanese pharmaceutical company has developed a drug with a microsensor to enable monitoring of the patient’s compliance with the dosing instructions.

There is no specific legislation or other rules governing liability in the case of health injury arising from the IoMT or connected devices malfunctions. There has been no case law establishing any specific rule for such liability, either.

The Product Liability Act (PLA) governs product liability litigation along with the Civil Code. The liability under the PLA can be regarded as “strict” liability as, by replacing “negligence” with the existence of “defect,” victims are not required to prove the negligence of the manufacturer. Nevertheless, victims still have to prove the defect and the other conditions for tort liability (namely, the existence of damage and the causation between defects in the product and the damage) to claim the damage under the PLA.

Defect is defined as a lack of safety that the product ordinarily should provide, taking the following into account:

  • the nature of the product;
  • the ordinarily foreseeable manner of use of the product;
  • the time when the manufacturer delivered the product; and
  • other circumstances concerning the product.

A product may be deemed defective where there is a lack of safety that the product ordinarily should provide. Any factor related to the product is considered in this standard, including the nature of the product, the ordinarily foreseeable manner of use of the product, and the time of delivery. The claimant bears the burden of this proof under the PLA. However, a court may lower the burden of proof regarding the existence of a defect, depending on the parties involved (eg, in the instance of a consumer acting against a large corporation), the nature of the product (such as the complex operational functions of a product) and the ordinarily foreseeable manner of use of a product.

Under the PLA, the manufacturer will be exempted from product liability if it proves that the defect in the product could not have been discovered given the state of scientific or technical knowledge at the time the manufacturer delivered the product (PLA Article 4).

The number of cyber-attacks against the healthcare industry has increased significantly. The Japanese government has designated the healthcare industry as one of the 14 important sectors that require elaborate counter measures to combat cyber-attacks swiftly and efficiently.

There is no specific legislation or rules governing cybersecurity issues concerning the IoMT or connected devices malfunctions, but the MHLW, the Ministry of Economy, Trade and Industry and the Ministry of Internal Affairs and Communications have introduced two guidelines on health information at large, namely, the Safety Management Guideline for Providers of Information Systems and Services that Handle Medical Information, and the Guideline on Safety Management of Medical Information Systems.

The Guideline on Safety Management of Medical Information Systems provides guidance for medical institutions and applies to information created or recorded by healthcare providers.

The Guideline requires the preparation of the following:

  • internal standard operating procedures for safety management;
  • the establishment of committees for management and incident response;
  • the implementation of staff training and incident reporting and responding standards; and
  • measures to prevent eavesdropping, falsification or security breaches when exchanging information with outside parties via the network.

The Guideline also contains a specific check list of cybersecurity measures that should be employed by medical institutions.

The Safety Management Guideline for Providers of Information Systems and Services that Handle Medical Information contains guidance for providers that supply medical information systems and resources and the services necessary for those medical information systems, and providers that receive medical information from medical institutions based on the instructions of patients, including providers of applications (“application service provider/service as software"), platforms, infrastructure (“infrastructure as a service”) and communication lines (“Providers”). The Guideline sets out specific and detailed guidance on the recommended practices to be adopted by the Providers, such as measures against ransomware, and also requires Providers to obtain a privacy mark or an information security management system certificate. In addition, the guideline provides detailed requirements regarding the risk management process (ie, risk assessment, risk analysis, risk management and risk communication) to be followed by the Providers.

The Guideline on Safety Management of Medical Information System was updated in January 2021 and The Safety Management Guideline for Providers of Information Systems and Services that Handle Medical Information was updated in August 2020. Since then, there has been no notable change or proposed change in the regulations or guidance.

Legislation Framework

There is no specific legislation for the digital health sector, including SaMD. Rather, existing legislative schemes apply to digital health products.

A product, which may be either a device or software, that constitutes a medical device is governed by the Pharmaceuticals Act. That Act defines a medical device as an instrument (including a computer program) that is intended for use in the diagnosis, treatment or prevention of disease in humans or animals, or is intended to affect the structure or function of human or animal bodies (excluding regenerative medicine products, which are separately regulated), and that is specified by a Cabinet Order.

If a company’s digital health product constitutes a medical device, the company must obtain a marketing licence, manufacturing licence and distributing licence in order to conduct marketing, manufacturing and distribution of the device, as well as authorisation, certification or notification for the specific device, according to the statutory classification. This is determined in accordance with the risk that the device would injure the human body in the case of malfunction. The classification is harmonised through the International Medical Device Regulators Forum, which succeeded the Global Harmonisation Task Force founded by Japan, the US, the EU, Canada and Australia.

More specifically, a Class I medical device is classified as a general medical device under the Pharmaceuticals Act and requires only notification to the regulator. A Class II medical device is usually classified as a controlled medical device and requires a marketing authorisation from the PMDA, but certain categories of Class II medical devices designated as relatively low risk are exempt from the requirement for a marketing authorisation and require only certification by an accredited body. Similarly, Class III and Class IV medical devices are classified as specially controlled medical devices requiring a marketing authorisation from the PMDA, with a few exceptions (designated specially controlled medical devices) requiring only a certification by an accredited body.

The question of whether a clinical trial is required depends on the classification of the product, the difference between the product and existing products on the market and the possibility of establishing the efficacy and safety of the product by means other than a clinical trial. However, a medical device with an apparently different structure, usage, effect or performance from existing medical devices will most likely be subject to a clinical trial and application for authorisation to the PMDA, regardless of the aforementioned classification.

Software as a Medical Device

The MHLW and other governmental bodies have issued guidance regarding the digital health sector. Notably, the MHLW issued the Basic Concept on whether a Computer Program falls under the Medical Device, which provides a clearer indication than is provided in the Pharmaceuticals Act, and the ministry ordinance of whether certain software constitutes a medical device. The guideline states that the question of whether certain software constitutes a medical device should be decided based on the impact that the software has on the diagnosis and treatment of a disease, considering the significance of the results obtained by the software, and the risk of affecting the life and health of a person in the event of software malfunction. Even if certain software is used in the diagnosis, treatment or prevention of disease, it will not be treated as a medical device if it has a very low risk of injury to humans that is comparable with the risk of a Class I (hardware) medical device. Furthermore, the guideline contains examples of software that does and does not constitute medical devices.

The SaMD Guideline mentioned in 2.2 Recent Regulatory Developments further distinguishes various types of software according to their purpose and function, especially whether the software is to be used by medical professional or by laypersons. Therefore, the purpose and function of the software must be clarified first. The Guideline then requires comparison of the purpose and function of the software with the purpose and function of existing software already categorised as a medical device. If the software has a similar purpose and function as those that are already categorised as a medical device, the software is also likely to be categorised as a medical device.

Guidelines Regarding Online Medical Treatment

In Japan, telehealth is mainly discussed in the context of Online Medical Treatment. Under the Guidelines for Appropriate Performance of Online Medical Treatment, dated March 2018 (amended in January 2022), the MHLW describes “matters to be complied with at minimum” and “matters recommended” with respect to online medical treatment in order to promote appropriate online medical treatment.

Article 20 of the Medical Practitioners’ Act stipulates that “no medical practitioner shall provide medical treatment or issue a medical certificate or prescription without personally performing an examination” so, arguably, in the past, an online medical treatment might violate Article 20. However, the Guidelines clarified that an online medical treatment does not violate Article 20 if that treatment is performed in compliance with the “matters to be complied with at minimum” under the Guidelines.

Definition of Online Medical Treatment

Under the Guidelines, Telemedicine is defined as “an act concerning health improvement and medical treatment using information communications equipment.” Also, Online Medical Treatment is defined as “a type of telemedicine, which is an act of medical treatment, such as carrying out examinations, making diagnoses, transmitting examination results and prescribing medicines in real time by using information communications equipment.”

Matters to Be Complied With at a Minimum

The Guidelines describe the “matters to be complied with at minimum,” which include, among others, the following:

  • A doctor and a patient must agree to the performance of an online medical treatment.
  • In principle, online medical treatment from the first medical examination must be conducted by a primary care doctor.
  • A doctor must prepare a medical treatment plan based on the result of the face-to-face medical examination and maintain that plan for two years.
  • In principle, the identity of the doctor and patient must be verified through identity-verification documents.
  • A prescription for certain pharmaceuticals must not be issued at the first medical examination.
  • An online medical treatment shall be conducted using information communication tools with real-time visual and auditory information in order to obtain as much medical information as possible.

Regulation Regarding Online Medication Counselling

Another development of telehealth in Japan is Online Medication Counselling.

Formerly, the Pharmaceuticals Act stipulated that medication counselling must be conducted face to face.

However, the Pharmaceuticals Act was amended as of September 2020 to allow online medication counselling under certain conditions.

The conditions for online medication counselling are as follows:

  • medication counselling was previously conducted face to face;
  • online medication counselling shall be conducted using a medication instruction plan that describes certain matters; and
  • pharmaceuticals to be sold or given away must be prepared using a prescription issued by an online medical treatment or home-visit medical treatment.

Temporary Relaxation of Regulations

Due to the spread of COVID-19, the MHLW issued a notice on 10 April 2020 temporarily relaxing regulations regarding online medical treatment and online medication counselling.

Relaxation of Regulations Regarding Online Medical Treatment

Physicians were permitted to conduct a patient’s initial medical examination using online medical treatment if the doctor determined that it is medically possible to make diagnoses or prescribe medicines through a medical examination using a telephone or information communications equipment. However, a doctor must attempt to gather and confirm information regarding a patient through past medical records, the medical information provision form, a local medical information collaboration network or medical examination result.

Also, in order to conduct the initial medical examination by telephone or information communications equipment, the following conditions must be satisfied:

  • a doctor must provide a patient with sufficient information, such as possible risks, policy in the case of emergencies and must record the content of the explanation in the patient’s medical records;
  • a doctor must secure a system to switch smoothly to face-to-face medical treatment if necessary; and
  • a doctor must verify a patient’s identity and eligibility.

Furthermore, a medical institution must report the implementation status of online medical treatment on a monthly basis to the prefecture in which the medical institution is located.

Relaxation of Regulations Regarding Online Medication Counselling

Pharmacists were permitted to conduct online medication counselling if the pharmacist determined that it is possible to conduct medication counselling appropriately by telephone or information communications equipment, based on information regarding the patient and their medication status.

Also, in order to conduct medication counselling by telephone or information communications equipment, the following conditions must be satisfied:

  • a pharmacist must provide a patient with sufficient information, such as possible risks, procedure of delivery and confirmation of medication status, and must record the content of the explanation;
  • a pharmacist must confirm medication status and side effects by telephone during the medication period for a drug prescribed for the first time, in order to encourage medication adherence and secure appropriate usage of a drug;
  • a pharmacist must switch smoothly to face-to-face medication counselling if necessary; and
  • a pharmacist must verify a patient’s identity and eligibility.

In Japan, payment by a patient for medical treatment at a medical institution is generally covered by national health insurance and a patient is required to pay only a portion of the cost of medical treatment at a medical institution.

Also, medical fees for medical treatment are prescribed by the MHLW.

Medical fees for online medical treatment and online medication counselling are also prescribed by the MHLW, therefore, insurance reimbursement is available for a patient who receives online medical treatment and online medication counselling.

The IoMT makes it possible for various and multiple smart devices, including wearables and implantables, to connect with each other through the internet. 5G networks, which have been available in Japan on a limited commercial basis since March 2020, enable high-speed data exchange with other devices and hospital networks. The large volume of data to be collected through the networks is useful for AI to study.

As for the security risks associated with use of the networks, such as use of a cloud storage service for storing electronic medical records and images, the MHLW issued the Guidelines regarding Security Management of Medical Information System, with which medical institutions must comply, and the Ministry of Internal Affairs and Communications (MIAC) and the Ministry of Economy, Trade and Industry jointly issued the Security Management Guidelines for Information System Service Providers dealing with Medical Information, with which service-providers must comply. The Guidelines appear to take a risk-based approach, ie, requiring the parties to:

  • identify the risks;
  • analyse the level of each risk;
  • evaluate how to treat the risk, based on the analysed level of each risk;
  • treat the risk, evaluate the remaining risks and the record thereof;
  • reach an agreement; and
  • continue risk management.

Various types of digital assistants for human health have been introduced recently. To the extent that certain digital assistants fall within the scope of medical devices to be regulated by the Pharmaceuticals Act, the digital assistants would be subject to the same regulations. Whether the digital assistants fall within the scope of medical devices depends on the importance of the results to be generated by them and the seriousness of the risk that may be caused by a malfunction or defect in the digital assistant. For example, in 2020, the PMDA approved, as regulated medical devices (i) a program for curing nicotine addiction, and (ii) Apple’s electrocardiograph program and heart-rate monitoring program for Apple Watch. By contrast, the MHLW found that a tool for predicting the onset of diabetes, which was uploaded for the public by the National Centre for Global Health and Medicine on its website in 2018, did not fall within the scope of regulated medical devices. A program that takes an important role in a doctor’s diagnosis of diabetes would appear to be a medical device, while a program that only shows the possibility of developing diabetes in the near future would not be considered to be a medical device.

5G networks are wireless telecommunication networks with high speed, large capacity, low latency and multiple connections, and they are expected to enable telemedicine, remote surgery, online medication instruction and online collection, storage and use of medical data and images. These are especially valuable for medical treatment in disaster areas. 5G Networks are also considered to be able to mitigate the reduced access to medical treatment of residents, including elderly people, in rural areas that may be caused by the uneven distribution of doctors in urban and rural areas in Japan.

However, the areas in which 5G Networks are available are still limited. Further, when healthcare institutions enter into arrangements with telecoms providers to deploy and manage 5G networks, those institutions must address the allocation of the risks that may arise, such as interruption, malfunction and defects of the networks. Similarly, allocation of the risk of potential infringement of intellectual property rights owned by third parties may also be an issue.

Law to Protect Data Relevant to Personal Health

The APPI provides protection for personal data handled by private entities. While the APPI does not provide a special protection and management scheme for data relevant to personal health, it defines “special care-required personal information” as personal information that may lead to discrimination against, or other disadvantage to, an individual, such as information regarding race, religion, social status, medical records and criminal records. Therefore, data relevant to personal health usually falls within the definition of special care-required personal information.

Disclosure of Personal Data to a Third Party

Under the APPI, disclosure of personal information to a third party requires consent from the data subject. Consent may be obtained through an opt-out procedure. Pursuant to an opt-out procedure, disclosure of personal information to a third party will be permitted without the individual’s explicit consent if the individual was informed (or was otherwise notified in a way that made it possible for the individual to acknowledge) that their personal information would be disclosed to a third party, and the individual had the opportunity to refuse disclosure.

However, an opt-out procedure is not permitted for the disclosure of special care-required personal information. Therefore, explicit consent must be obtained prior to providing health data to third parties if that health data is considered to be special care-required personal information.

Anonymisation of Data

The APPI defines the term “anonymously processed information” as information relating to an individual that may be created by processing personal information so as not to be able to identify a specific individual. In particular, processing personal information for de-identification means deleting:

  • descriptions that may identify a specific individual;
  • individual identification codes;
  • codes that link the processed information with the personal information; and
  • idiosyncratic descriptions (ie, descriptions that could identify an individual because of the uniqueness of the information).

The APPI substantially eases the restrictions on the acquisition, disclosure and use of personal information for anonymously processed information.

However, explicit consent is still required when providing special care-required personal information to an outside information processor for the anonymising process. Moreover, medical information is often held by individual hospitals and entities, and explicit consent from the patient is required when the original data, which in many cases constitutes special care-required personal information, is provided to, or used by, an outside information processor. Therefore, the accumulation of medical information and construction of a database has been difficult.

To ease this difficulty, Japan has enacted the Act Regarding Anonymised Medical Data to Contribute to R&D in the Medical Field (Next-Generation Medical Infrastructure Act, or NGHIA) to facilitate the accumulation of medical information and to promote the use of big data for the development of medical technologies, while also protecting patients’ privacy and personal information. Under the NGHIA, the Japanese government authority will examine and authorise entities to be data-processing entities that collect, de-identify and provide medical information to third parties (Authorised De-identified Medical Information Preparer). Provision of medical data to the Authorised De-identified Medical Information Preparer still requires consent from the patient, but the opt-out procedure applies. The Authorised De-identified Medical Information Preparer will identify and link a patient’s data from different medical institutions, adjust the data format and integrate the data into a database. When a third party, typically a healthcare company or a research institution, requests data, the Authorised De-Identified Medical Information Preparer will select the relevant data, de-identify it and provide an anonymised data set for a fee.

Enforcement

Under the APPI, the Personal Information Protection Commission, an organisation within the Cabinet Office, provides the necessary guidance and advice to business operators handling personal information, including health data, collects reports, conducts on-site inspections and makes recommendations and orders regarding legal violations. Japan does not have a long history of using digital healthcare technology, so no notable regulatory or private enforcement actions have yet been published in the medical service sector.

AI and Medical Devices

Artificial intelligence (AI) technology has been developed in recent years and has the potential to design programs with performance that would have been difficult to achieve with conventional algorithms, such as enabling detailed prediction of disease changes in patients and detecting lesions that even a specialist could not identify.

The question of whether a specific AI program should constitute a medical device (and therefore be subject to the Pharmaceuticals Act) is determined based on the same concepts as other programs using conventional algorithms. However, the relationship of AI technology-based programs to medical devices must be considered in connection with the specific risks associated with the level of technology at the time, such as how to add new data for machine learning.

In accordance with the Pharmaceuticals Act, the term “programmed medical device” means programs intended to be used for diagnosis, treatment or prevention of human diseases in the form of tangible objects installed in general-purpose computers, personal digital assistants, or to influence the structure or function of human bodies. However, programs that are unlikely to have an impact on human life and health, even if functional impairment occurs, are excluded from the scope of medical devices.

The following programs using AI technologies will be included in the scope of medical devices:

  • a program in which AI substitutes for diagnoses that can only be performed by specialists, such as detecting cancer with a certain degree of accuracy and predicting life expectancy using medical images;
  • a program in which AI predicts the name of a disease based on information such as body temperature and blood pressure entered by non-healthcare professionals using an original algorithm; and
  • a program that uses AI to identify and assist in the testing of suspected disease areas during the use of a medical device.

By contrast, the following programs will be excluded from the scope of medical devices:

  • a program that allows users to enter health data and self-manage their weight and health based on information provided by AI;
  • a program that provides detailed 3D images of the human body after image correction by AI for use in medical students' learning and patient explanation;
  • a program in which AI extracts necessary information from medical record information and presents the names of potential diseases along with the relevant parts of the guidelines and the basis for the determination according to information on publicly available medical care guidelines;
  • a program utilising AI that presents the information necessary for medical practice from clinical data using publicly available formulas;
  • a program that uses AI to allow doctors to search for publicly available guidelines and package inserts when making a diagnosis; and
  • a program using AI that assists in the use of medical devices in accordance with known guidelines.

Cybersecurity

For details on AI and cybersecurity see 5.3 Cybersecurity and Data Protection.

The MHLW published “Benchmarks for Next Generation Medical Device Evaluation” on 23 May 2019. It included “Benchmarks for Evaluation of Medical Image Diagnosis Support Systems Using Artificial Intelligence Technology”. It provided the MHLW’s view on points to be considered when evaluating the effectiveness and safety of medical image diagnosis support systems using AI technology.

In December 2019, the Ministry of Economy, Trade and Industry (METI) also published “Guidelines for the Development of Medical Diagnostic Imaging Support Systems (Including Systems Using Artificial Intelligence Technology)”, which summarises the points to be considered by researchers and developers during the development of Computer Aided Diagnosis (CAD) systems. These Guidelines are a revision of the developmental guideline on CAD published in the early 2010s and combine the then two existing CAD development guidelines into one, with an additional description on AI technology.

Under APPI, medical information is further classified into special care-required personal information for which care must be taken when handling such information. In addition, it is necessary to obtain the consent of patients when handling such information outside of medical institutions. It is also necessary to obtain consent for the intended use, such as for the learning of AI in medical devices and applying the learning results to products. In the case of academic research, personal information may be used for research without individual consent under Article 76 of the APPI. However, this Article does not apply in cases of product development. On the other hand, the use of medical information in academic research is highly likely to fall under clinical research stipulated in the Clinical Research Act or "research" stipulated in "Ethical Guidelines for Life Science and Medical Research Involving Human Subjects", and the consent of the research subjects is required. The collection, use and storage of data based on clinical trials based on the Pharmaceuticals Act need to comply with GCP Ordinances set forth by the MHLW and are not subject to APPI.

Established IT companies have vast experience and resources to deal with personal information through existing businesses, but they still need to pay close attention to regulations under the Personal Information Protection Act because the information dealt by digital healthcare technology is highly sensitive, personal information and the Personal Information Protection Act itself and the ordinances and guidelines thereof have been updated. Healthcare institutions and other clients need to make sure that their agreements with vendors manage their personal information properly. Further, it is necessary to comply with the regulations under the Pharmaceuticals Act, which is usually new to such companies. Such regulations have traditionally been handled by in-house specialists in pharmaceutical and medical device companies. Some established IT companies have started to hire regulatory specialists as well as seek consultation with independent external experts on the matter.

Japan is the first country in the world to have a rapidly declining birth rate and an ageing population. Under these circumstances, it is necessary to take measures to promote a healthy life expectancy of each citizen, and to ensure the sustainability of social security. Such measures include improving efficiency and productivity, while also maintaining and improving the quality of services at busy medical and nursing sites.

These issues must be addressed by:

  • promoting ICT in the fields of health, medical care, and nursing care;
  • ensuring that each and every citizen and patient makes effective use of their own medical and other data; and
  • ensuring that health and medical facilities and related industries make appropriate use of that data.

Social Changes, Data Protection and Cybersecurity

In addition, the social change known as Society 5.0 is rapidly progressing, through the use of advanced information and communication technologies and data. In the field of healthcare, data is handled not only by entities engaged in healthcare, but also by new entities, including private companies. These social changes have brought about a number of important issues that must be addressed not only in Japan, but also internationally, such as rules for data utilisation, the protection of personal information, and cybersecurity measures.

Special consideration should also be given to privacy regarding health, medical, and nursing care information. For this reason, all actors, including the State, must take necessary measures in promoting these efforts. In particular, it is essential to take all possible measures to ensure information security in the medical field, as one of the important infrastructure fields.

With the advancement of ICT in the medical field, it is also important to confirm the identity of healthcare workers and promote measures to prevent forgery and falsification of electronic documents.

Information Management

From the viewpoint of the availability of user data stored in cloud services, public entities that use cloud services to collect and store medical and other information nationwide must be required to ensure thorough information management by selecting domestic data centres subject to Japanese laws and to conclude treaties and cloud services with jurisdiction over Japan as candidates for adoption, and to make cloud security certification mandatory.

Medical information is also subject to the APPI as personal information requiring special care. However, from the perspective of protecting medical information while also promoting the use of information and the promotion of research and development at medical sites, issues remain, such as how to obtain consent from individuals.

The Japanese government plans to examine the handling of personal information in the medical field while investigating the status of legislation in foreign countries regarding the protection of personal information (including issues related to data portability) in the medical field.

In August 2020, METI and MIAC issued “Safety Management Guidelines for Providers of Information Systems and Services Handling Medical Information” which combines two sets of then-existing guidelines (ie, “Safety Management Guidelines for Information Processing Service Companies Managing Medical Information” issued by METI and “Guidelines for Safety Management by Cloud Service Providers Handling Medical Information” issued by MIAC). The purposes of the combined Guidelines are to:

  • ensure the same level of safety management as compliance with past guidelines, while taking into account consistency with other standards and guidelines;
  • define risk management processes based on a risk-based approach for the purpose of designing necessary and sufficient measures according to the characteristics of medical information systems, etc;
  • emphasise risk communication for the purpose of operating medical information systems, etc based on a correct common understanding and explicit agreement on the efficacy and limitations of security measures; and
  • clarify points to be considered in the handling of medical information and requirements in the system for the purpose of preventing omission of required measures under the laws and regulations related to medical information systems.

In March 2022, the MHLW issued “Guidelines for the Safety Management of Medical Information Systems, Version 5.2”, which describe, from the viewpoint of technical and operation management, necessary measures to ensure the safety management of medical information systems and appropriate compliance to the Act on the Utilisation of Information and Communications Technology in Document Preservation Conducted by Private Business Operators, etc. Section 6.8 “Modification and Maintenance of Medical Information Systems” of the Guidelines states that regular maintenance is necessary to maintain the availability of medical information systems. Such maintenance work includes troubleshooting, preventative maintenance and software revision. As the system maintenance personnel may have direct access to medical information in administrator mode, the Guidelines require sufficient countermeasures against the possible data leakage.

Hardware can be protected by a patent, utility model right or design right, provided that (i) the hardware is novel, and (ii) it has an inventive step over prior art or is not similar to prior designs. Software is eligible for protection not only by copyright, but also by patent and utility model right, and may also be protected as a trade secret. User interface for medical devices may be protected by copyright and design right. Notwithstanding the foregoing, methods for medical treatment are not eligible for protection by patent or utility model right.

Data and databases used in machine learning are eligible for trade-secret protection, provided that confidentiality can be maintained. Big data, which is not managed in such a way as to maintain confidentiality but is collected and managed to be provided to other specified entities, may also be protected under the Unfair Competition Prevention Act. A database is also eligible for copyright protection as long as it is creative in terms of selection or systematic construction of data contained therein.

Despite recent frequent discussions, there is no prevailing view under Japanese law regarding inventions and works of authorship created by AI technologies without direct human contributions. However, a person or entity operating AI technologies with a certain purpose or theme may be recognised as an inventor or author.

Patents for inventions which are claimed as consisting of elements accessible by users and design rights in user-interface are good in the sense that it is easy to identify the infringement carried out by competitors whereas structures and codes that are embedded in competitors’ programs and data are difficult to identify. Further, patents and design rights are easier to enforce in many cases than copyright or trade secrets because alleged infringers’ access to or knowledge on such rights are not required as a condition for enforcement thereof whereas alleged infringers’ access to, or knowledge on, the original works or the trade secrets which have been managed to keep secret is required as a condition for enforcement thereof. Having said that, the life of patents and design rights are limited to 20 or 25 years from filing while copyright protection is eligible for 70 years and there is no periodical limitation for trade secret protection. Further, patents and design rights are easy to design around whereas eliminating contamination of copyrighted codes or trade secrets is not so easy. Therefore, it is important to protect products or processes by a combination of multiple types of intellectual properties.

There are various types of licensing structures in this field but, in some cases, it is preferable for IP holders to charge running fee on a monthly or yearly basis rather than receiving a lump sum payment. In such cases, it is necessary to be careful that patents and design rights can be subject to exhaustion of rights once products protected by such rights are sold by holders or licensees thereof. Combination of granting license of software and data as well as providing support for updating it can be legitimate grounds for claiming a running fee.

As long as university or healthcare institutions (Institutions) have their own rules stipulating that they acquire IP rights over inventions, etc, created by physicians/inventors working for the Institutions in the course of performing their tasks, the Institutions will own the rights to file applications for patents, utility model rights and design rights, provided. However, the physicians/inventors are eligible for reasonable compensation. Also, the Institutions will be recognised as authors and holders of trade secrets and big data. If IP is jointly created by two entities, such as by a university and a private company through their joint research and development, the IP rights will be jointly owned by those entities unless otherwise stipulated in the governing agreement. If patents, utility model rights or design rights are jointly owned by multiple parties, each party may exploit those inventions without consent from the other parties, although assignment and licensing will require consent, unless otherwise stipulated in the governing agreement. Copyrighted works may not be used, assigned or licensed without consent of the other joint owners, unless otherwise stipulated in the governing agreement.

It is most desirable to have all joint ownership assigned to a single entity subject to its control. In such a case, the right to create derivative works and the right of the original author over derivative works under Articles 27 and 28 of the Copyright Act of Japan must be expressly stipulated as included in the assigned rights. Further, as the moral rights of authors are not assignable, authors must promise not to exercise those rights. If the rights are to be jointly owned by multiple parties, a contractual provision should address the exploitation of rights by a single joint owner.

In Japan, final decisions on diagnosis and medical treatment must be made by doctors, regardless of whether the doctors are using healthcare technologies such as data analytics or medical devices driven by AI or software. Accordingly, in principle, doctors and the medical institutions for which they work are considered to be responsible for the diagnosis or medical treatment and also liable for any injury caused to their patients thereby. However, both civil and criminal liability of doctors and medical institutions require a showing of physician negligence, and the burden of proof is on the patient. A doctor’s reliance on digital assistance through healthcare technology is not an absolute defence, but in such a case, an accuser would be required to establish the doctor’s negligence in the selection, maintenance or operation of the device.

If a doctor is successful in proving the possibility of malfunction or latent defects in the medical device, the doctor and relevant medical institution may not be found liable. There is no special legislation under which doctors and medical institutions are immune from liability, or are subject to strict liability, simply because the doctor relied on healthcare technology. Bias in AI, or the possibility, or failure of recognition thereof, are factors that may affect a finding of negligence.

Healthcare institutions that entered into contracts with vendors may choose to pursue contract claims against those vendors. A healthcare institution seeking to bring a contract claim against a vendor would be required to establish that:

  • the vendor’s products or services did not comply with the specifications or service level of the products or services agreed between the institution and the vendor;
  • the vendor was negligent with respect to that non-compliance; and
  • the damages caused to the healthcare institution by the vendor’s products or services were foreseeable by the vendor.

As for claims of healthcare institutions against vendors which are not parties to contract with those institutions, contract claims are not available, but a tort claim may be an option, provided, however, that those institutions have the burden to prove vendors’ negligence or wilful misconduct and predictability of causing the damages.

Further, healthcare institutions may bring a claim under the Product Liability Act, which prescribes manufacturers’ strict liability for damages caused by product defects. The term "defect" as used in this Act means a lack of safety that the product ordinarily should provide, taking into account the nature of the product, the ordinarily foreseeable manner of use of the product, the time that the manufacturer, delivered the product and other circumstances concerning the product.

Further Relaxation of Regulations

Due to the COVID-19 pandemic, the MHLW temporarily relaxed regulations regarding online medical treatment and online medication counselling in April 2020.

The MHLW and other relevant parties are currently studying whether the relaxation of regulations should become permanent, and if so, under what conditions.

Development of New Medical Device Programs

Japanese companies, including traditional pharmaceutical companies, start-up companies and IT companies, have recently developed medical devices using new technologies, such as new medical device programs.

Additional medical devices using new technologies are expected to be developed and approved in Japan in order to promote and accelerate digital healthcare further.

Anderson Mori & Tomotsune

Otemachi Park Building
1-1-1 Otemachi
Chiyoda-ku
Tokyo 100-8136
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+81 3 6775 1000

inquiry@amt-law.com www.amt-law.com/en
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Trends and Developments


Authors



TMI Associates was established on 1 October 1990 and has grown rapidly to become a full-service law firm that offers comprehensive legal services of the highest quality. TMI Associates provides support in the digital health and life sciences field. The firm's healthcare practice group has supported a wide range of clients, including domestic and global healthcare start-ups, universities, pharmaceutical and medical device companies, venture capital and governmental organisations. TMI is proactively engaged in all aspects of the field, such as advising on pharmaceutical regulations, IP acquisition and utilisation, conducting legal and IP due diligence for M&A and IPO, drafting and negotiating licence agreements and assisting patent litigations. The firm is in close contact with the Ministry of Health, Labour and Welfare, to which its attorneys have been seconded. TMI Associates examines risks based on its precise grasp of the practical operation and interpretation of relevant regulations and guidelines in the field.

General

Currently in Japan, people aged 65 years and older make up approximately 30% of the population. Japan's ageing population is unprecedented and poses serious societal problems, such as a relatively decreasing labour force and increasing social security costs. In recent years, there have been moves towards resolving these problems using technologies such as artificial intelligence (AI) and the internet of things (IoT). As a result, new businesses and start-ups have been emerging that are creating new technologies and services in this area.

These developments were intensified because of the COVID-19 pandemic. As in other countries, since 2020 remote working and non-contact activities have become routine in Japan and, therefore, the practical application of digital health technologies has been accelerating.

Progress was made in 2021 in various digital health areas, such as the expansion of remote medical care, the increase in healthcare-related apps and utilisation of healthcare data.

Expansion of Remote Medical Care

Background

Previously in Japan, medical services were administered face-to-face. Remote medical care was regarded as a supplement to face-to-face treatment and its use was limited. Face-to-face guidance on the administration of medication had been mandatory. However, in recent years, in addition to the development of information and communication devices, there has been a temporary relaxation of related regulations as a response to the increased demand for online medical treatment and online medication guidance during the COVID-19 pandemic. This has resulted in the widespread use of telemedicine and online medication guidance.

Telemedicine

The limitations of Japanese telemedicine have been discussed for some time in relation to Article 20 of the Medical Practitioners’ Act, which prohibits physicians from providing medical treatment without an examination. In this context, the Ministry of Health, Labour and Welfare (MHLW) formulated the Telemedicine Guidelines in March 2018, stipulating the minimum compliance requirements for telemedicine and clearly stating that compliance with the Guidelines does not violate Article 20 of the Medical Practitioners’ Act.

These Guidelines specify that an initial medical consultation is to be conducted in person, which did not necessarily lead to the expansion of its use. However, the MHLW revised the Guidelines in January 2022 ("Telemedicine Amended Guidelines") in response to the increased use of telemedicine during the COVID-19 pandemic. It widely approved the use of telemedicine from the initial treatment, even as the pandemic is coming to an end.

According to the Telemedicine Amended Guidelines, telemedicine from the first examination is permitted in the following cases:

  • when the first examination is conducted by a “family physician” (a physician who has an existing direct relationship with the patient, such as one who has been regularly and directly treating the patient);
  • when medical information, such as the medical history, is available and the physician determines it possible to provide telemedicine, in accordance with the patient's symptoms; and
  • when a physician consults a patient before treatment (ie, when a physician checks the patient's symptoms and medical information before formal medical treatment) in cases where the family physician is absent or other specific situations.

However, according to the Telemedicine Amended Guidelines, there are certain limitations, such as when symptoms are not suitable for an initial treatment by telemedicine or a medicine is prohibited from being prescribed at an initial examination. In addition, medical treatment solely by telephone or by an exchange of letters or documents is not permitted. Also, treatments are limited to those who have both visual and aural senses.

Japan has a universal health insurance system that allows all residents to receive insured medical care at a low cost. Previously, there were only a limited number of diseases that could be treated by telemedicine that were covered by insurance, and medical fees were lower than those for face-to-face treatment. However, with the revision of medical fees in 2022, limitations on the number of diseases that could be treated were eased, and medical fees became almost the same as those for face-to-face treatment. It is expected, therefore, that there will be an increased use of telemedicine in the future.

Telemedicine itself can only be provided by a physician, but in cases where the content of the advice does not include medical judgment, such advice may be given by a person who is not a physician without the application of the Medical Practitioners’ Act and the Telemedicine Guidelines. Such health consulting services are positioned as a preliminary step to telemedicine. They remain in high demand to help in the early detection of diseases and there are low barriers to entry into the business.

Online medication guidance

In Japan, the separation of medical and dispensary practices has been adopted. Under this system physicians prescribe drugs and pharmacists dispense the prescribed drugs and sell them to patients. Prior to the revision of the Act on Securing Quality, Efficacy and Safety of Products Including Pharmaceuticals and Medical Devices ("Pharmaceutical and Medical Device Act") in 2020, the proprietor of a pharmacy had to provide face-to-face guidance by a pharmacist when selling or giving drugs prescribed by a physician so that the patient could be instructed in the proper use of the drugs.

While the revision of the Pharmaceutical and Medical Device Act made it possible to provide online medication guidance, it did not become popular because there were many restrictions, such as guidance only being allowed for prescriptions provided for telemedicine or home-visit medical care. However, in response to the high demand for online medication guidance during the COVID-19 pandemic, the Ordinance for Enforcement of the Pharmaceutical and Medical Device Act was revised. From April 2022, the cases for which online medication guidance can be provided have been expanded so that:

  • online medication guidance is available at first-time treatment;
  • online medication guidance is available for all prescriptions and is not limited to prescriptions issued during telemedicine or home visits; and
  • in addition to the drugs previously prescribed, online medication guidance is available for all drugs, in principle.

However, with telemedicine, video and audio communication is required; voice-only (telephone) support is not permitted.

Example of a telemedicine system

Medley, Inc. provides the “Clinics Telemedicine System,” Japan's largest telemedicine system in the medical platform sector. One of its applications allows for online appointments, pre-diagnostic interviews, video chat examinations, medication guidance, credit card payments, and drug/prescription delivery all at once, allowing patients to continue receiving treatment without leaving their homes. This reduces the burden of outpatient visits, improves the rate of continuing treatments and prevents secondary infections at hospitals.

It is expected that online medical services, in conjunction with the provision of test kits and image analysis systems, will increase in the future.

Increase in Healthcare-Related Apps

Background

In 2020, a therapeutic app made by Cure App, Inc. was approved as a medical device program for the first time in Japan. This app is for helping nicotine-dependent patients to stop smoking and is covered by insurance. Since then, the number of applications for pharmaceutical approval of therapeutic apps has been increasing. Moreover, although there is a functional overlap with therapeutic apps, the development of recording apps, which are provided as a preparatory stage for the development of therapeutic apps, is rapidly increasing because, under the Pharmaceutical and Medical Device Act, licences and approvals are not required.

Therapeutic apps and symptom recording apps

Therapeutic apps are used for the "treatment" of a specific disease in a medical setting and may be circumscribed by the following:

  • as “medical device programs,” they must be developed, manufactured and sold in accordance with the Pharmaceutical and Medical Device Act;
  • approval to manufacture and sell them in Japan as new medical devices must be acquired from the MHLW after clinical trials have been conducted, which can take several years and be costly;
  • as a long period of time is required until the apps are covered by insurance, it can take much time and money until they reach the market.

Symptom recording apps are used for "managing the health condition" of a healthy person and "recording symptoms" of a patient. A typical app is one that is used for recording health information, such as weight and blood pressure, daily. Their characteristics are as follows:

  • they cannot express the therapeutic effects of the disease;
  • since they are not “medical device programs,” procedures based on the Pharmaceutical and Medical Device Act are not required; and
  • their price can be freely set since they are not covered by insurance.

Such "medical device programs" are programs (software functions) that are intended to diagnose, treat, or prevent diseases and are likely to affect a person’s health in the event of a malfunction Their manufacture and sale is regulated by procedures based on the Pharmaceutical and Medical Device Act. Therefore, even if they are defined as symptom recording apps, they may correspond to medical device programs, depending on their functions and their proposed effects. It will be necessary to confirm whether such apps correspond to medical device programs when they are provided.

Because the criteria for determining whether a program is a medical device program was unclear, in March 2021 the MHLW established guidelines on the applicability of the term "medical device" to a program. According to these guidelines, it is highly likely that a program corresponds to a medical device program in the following cases:

  • if the diagnosis, treatment or prevention of disease is intended;
  • if the candidate diseases and risk of disease are displayed based on input information; or
  • if the program corresponds to Class II or higher when judged based on the Global Harmonization Task Force rules.

In recent years, many companies have been providing symptom recording apps as a preparatory stage for the development of therapeutic apps, but sufficient attention must be paid to whether they can be defined as medical device programs.

Example of a therapeutic app

In addition to the above-mentioned smoking cessation application, Cure App, Inc. received pharmaceutical approval for a therapeutic app for hypertension (Accepted name: Hypertension Treatment Assistance Program) in April 2022. This is the first case in Japan in which pharmaceutical approval was obtained for the software itself, and it is the world's first pharmaceutical approval for a therapeutic app in the field of hypertension. The company is aiming to accomplishdigital therapies that support improving lifestyles through apps for hypertension, rather than relying solely on drugs, and is aiming for insurance coverage and launch by the end of 2022.

It is expected that various therapeutic apps and symptom recording apps will be introduced in the Japanese market in the future.

Utilisation of Healthcare Data

Background

In recent years, with the improvement of individual health awareness, the collection and use of information (healthcare data) such as personal health status and medication records, including medical treatment, examinations, prescription, vital physiological data (such as walking rates and pulse rates) obtained by a wearable device and clinical trial data, have been widely practised. As this is a global trend, personal data is frequently transferred overseas, creating a variety of businesses in this area. Accordingly, the Act on the Protection of Personal Information of Japan was amended and came into effect in April 2022 (revised Act on the Protection of Personal Information) in order to respond to the increased need for the protection of personal information and the utilisation of personal information across borders.

Healthcare data and the revised Act on the Protection of Personal Information

Under the Act on the Protection of Personal Information, "special care-required personal information" is defined as information based on medical history, results of medical examinations, and the fact that guidance on medical treatment, or dispensing of medicine has been provided based on such results. It is necessary to obtain the consent of the individualfor the use of such data.

In addition, regardless of whether or not such information is special-care-required personal information, it is necessary to obtain the consent of the individual when providing such personal data to a third party, in particular, when the third party is located in a foreign country. In cases where personal data is provided through entrustment, the consent of the individual must be obtained before the transfer overseas of such data.

Although the above regulations have been in force, the revised Act on the Protection of Personal Information requires that when obtaining consent from the individual for the overseas transfer of personal data, information concerning the system for the protection of personal information in the recipient country, and measures for the protection of personal information taken by the recipient third party shall be provided to the individual, except in the following cases:

  • when the recipient country is a country that is recognised by the Personal Information Protection Commission as having a personal information protection system that is on level with that of Japan (currently, the EU and the UK); and
  • when the recipient third party has developed a system necessary for continuously taking measures equivalent to the measures to be taken by a business operator handling personal information in Japan (equivalent measures).

In the case of the first point, measures necessary to ensure the continuous implementation of equivalent measures by the recipient are required, and in the event of a request by the individual, the provider shall be obliged to provide them with information on such measures. Therefore, it is preferable to prepare the information to be provided in advance.

Response to the revised Act on the Protection of Personal Information

Healthcare data, especially information obtained in clinical trials, is often registered in overseas databases such as ClinicalTrials.gov, and since it is highly likely that overseas third parties will obtain such information, providers handling healthcare data will need to respond to the above-mentioned revisions to the Act on the Protection of Personal Information. In addition to clinical trial data, when personal data is stored on overseas servers, it is possible that such acts may be deemed as the provision of personal data overseas, and therefore, such providers will also need to respond to the aforementioned revisions.

Remote Clinical Trials

Recently, in Japan, "remote clinical trials," have begun to increase. A remote clinical trial is clinical research for approval of a drug or medical device, in which a patient participates remotely, such as from home. Although the introduction of remote clinical trials had not progressed because of concerns about cost-effectiveness, the spread of COVID-19 increased the tendency of people to stay-at-home and, thereby, increased the necessity for remote trials.

Participants can use smartphone apps to partially conduct clinical trials at nearby medical institutions or at home, saving travel time. Pharmaceutical companies can also expect a reduction in the costs and time of clinical trials, making the development of new drugs more efficient.

In the spring of 2020, the MHLW released guidelines on how to proceed with clinical trials under the COVID-19 pandemic and by presenting a certain concept of remote clinical trials, made it easier for pharmaceutical companies to introduce remote clinical trials. However, while clinical trials are required to be explained and agreed to in writing, in accordance with the Good Clinical Practice standards, no clear rules for remote clinical trials have currently been established. In the near future, the MHLW intends to compile guidelines on the elements to be considered when conducting remote clinical trials.

Medical AI

In recent years, the use of artificial intelligence (AI) has gradually resulted in more efficient work, collection and utilisation of medical data, reduction of the burden on patients and provision of information in the healthcare setting in Japan. Previously, AI-organised diagnostic interview information and AI-analysed medical images have been the main components of medical AI. Although approximately 20 medical devices have been officially approved by the MHLW, most of them are medical devices that analyse images by AI.

According to the notification from the MHLW in 2018, when providing treatment using AI medical devices, it is necessary for a physician to be the primary provider of diagnostic treatment and for a physician to be responsible for making the final decision. Therefore at present, AI is only a tool for presenting information on the medical process and is not permitted to make definitive diagnoses for patients. In the future, the development of AI that can reproduce physician examinations, such as visual examinations, auscultation and palpation, is anticipated.

TMI Associates

23rd Floor
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Japan

+81 3 6438 5511

+81 3 6438 5522

info_general@tmi.gr.jp www.tmi.gr.jp/
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Law and Practice

Authors



Anderson Mori & Tomotsune is a large, international Japanese law firm. The firm is known for its long history of advising overseas companies doing business in Japan and in cross-border transactions. The main office in Tokyo is supported by offices across Japan, China and the South-East Asian region. Anderson Mori & Tomotsune has considerable experience in matters relating to the life sciences field, including expertise in licensing, regulatory, intellectual property and corporate transactions such as mergers and acquisitions and venture investments. The firm works with increasingly diversified international and Japanese-based healthcare companies, including pharmaceutical manufacturers, medical device manufacturers, distributors and e-health providers. The team, which consists of about ten partners and 20 associates, provides comprehensive advice from the set-up of a Japanese entity to all stages of the product life cycle and helps clients to navigate a broad range of regulatory matters.

Trends and Development

Authors



TMI Associates was established on 1 October 1990 and has grown rapidly to become a full-service law firm that offers comprehensive legal services of the highest quality. TMI Associates provides support in the digital health and life sciences field. The firm's healthcare practice group has supported a wide range of clients, including domestic and global healthcare start-ups, universities, pharmaceutical and medical device companies, venture capital and governmental organisations. TMI is proactively engaged in all aspects of the field, such as advising on pharmaceutical regulations, IP acquisition and utilisation, conducting legal and IP due diligence for M&A and IPO, drafting and negotiating licence agreements and assisting patent litigations. The firm is in close contact with the Ministry of Health, Labour and Welfare, to which its attorneys have been seconded. TMI Associates examines risks based on its precise grasp of the practical operation and interpretation of relevant regulations and guidelines in the field.

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