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 decreasing labour force, a widening gap in healthcare disparities between regions and increasing social security costs. In recent years, there have been moves towards resolving these problems through the use of technologies such as artificial intelligence (AI) and the internet of things (IoT). As a result, new businesses and start-ups have emerged that are creating new technologies and services in this area.

These developments were intensified especially because of the COVID-19 pandemic. As in other countries, remote working and non-contact activities have become routine in Japan since 2020, and this has aided in an accelerated uptake of the practical application of digital health technologies. In addition, the ruling Liberal Democratic Party (LDP) announced policies aimed at promoting Digital Transformation (DX) in the medical field in 2023.

Although the COVID-19 pandemic and relevant regulations have now begun to wind down, progress was made in 2023 in various digital health areas, such as the expansion of remote medical care, the increase in healthcare-related apps, and the utilisation of healthcare data.

Government Policies

In May 2022, the LDP released their proposal for the “Medical DX Reiwa Vision 2030” and in April 2023, to implement this vision, the LDP released a policy entitled “Towards the Realisation of the Medical DX Reiwa Vision 2030: a Country Where All Citizens Can Receive Optimal Healthcare through the Digital Use of Health and Medical Information”, which included:

• grand design;
• reinforcement of governance;
• establishment of a national medical information platform; and
• standardisation of electronic medical record information.

In June 2023, the Ministry of Health, Labor and Welfare (MHLW) launched a project team to scrutinise initiatives intended for bolstering start-up companies within the healthcare sector. The team devised a blueprint to consolidate tangible policy recommendations across four areas, encompassing medical DX and medical devices.

Additionally, the government issued its “Timetable for the Promotion of Medical DX”, clarifying the fundamental concepts and specific measures aimed at fostering medical DX, including:

• development of information-sharing infrastructure;
• expansion of sharable medical information; and
• standardisation of electronic medical records.

Expansion of Remote Medical Care

Background

Previously in Japan, medical services were basically administered in a face-to-face manner, while 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 has traditionally 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 in Japan.

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 MHLW formulated its 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 specified 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 these Guidelines in January 2022 and March 2023 in response to the increased use of telemedicine during the COVID-19 pandemic, and in June 2023, the MHLW published its “Basic Policy for Promoting Online Medical Treatments and Other Forms of Telemedicine” in order to ensure the widespread and appropriate promotion of online medical treatment and other telemedicine. 

The Telemedicine Guidelines include certain limitations, such as when symptoms are not suitable for an initial treatment by telemedicine or when certain medicines are 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. Moreover, telemedicine requires information and communication methods that include both visual and auditory information.

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

Moreover, the Telemedicine Guidelines allow for telesurgery in which a highly skilled physician operates on patients with separate physicians at a distant place using information and communication devices under certain conditions. This telesurgery makes it possible for physicians in remote areas to provide medical care that takes advantage of the specialised knowledge and skills of such physicians. The Telemedicine Guidelines also state that telesurgery must be implemented in accordance with certain guidelines by the respective associations, etc, which determine the detailed coverage, such as specific target diseases and patient conditions. 

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 the Quality, Efficacy and Safety of Products Including Pharmaceuticals and Medical Devices (the “Pharmaceutical and Medical Devices 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.

Then, the revision of the Pharmaceutical and Medical Devices Act made it possible to provide online medication guidance, and the Ordinance for Enforcement of the Pharmaceutical and Medical Device Act was revised to facilitate such online medication guidance. Telemedicine requires video and audio communication, and voice-only (telephone) support is not permitted.

Example of a telemedicine system

Recently, the number of companies offering telemedicine systems has increased in Japan. For example, Medley, Inc provides the “Clinics Telemedicine System”, which is a popular telemedicine system in the Japanese medical platform sector. One of its applications allows for online appointments, video chat examinations, medication guidance, etc, thereby allowing patients to continue receiving treatment without leaving their homes. LINE Healthcare Corporation also provides a telemedicine system called “Line Doctor”, which enables users to schedule medical appointments, engage in free video calls, and make payments using LINE, the most popular messaging application in Japan.

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

Increase in Healthcare-Related Apps

Background

In 2020, a therapeutic app made by Cure App, Inc became the first Software as a Medical Device (SaMD) approved in Japan. This app is designed to help nicotine-dependent patients 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 as licences and approvals are not required under the Pharmaceutical and Medical Devices Act.

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 as follows:

• as “SaMD”, they must be developed, manufactured and sold in accordance with the Pharmaceutical and Medical Devices Act;
• approval to manufacture and sell SaMD 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; and
• as a long period of time is required until the apps are covered by insurance, it can take considerable time and money until they reach the market.

Symptom-recording apps are used for “managing the health condition” of a healthy person and “recording the 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 classified as “SaMD”, it is not necessary to perform procedures based on the Pharmaceutical and Medical Devices Act; and
• their price can be freely set since they are not covered by insurance.

Such “SaMD” 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 are regulated by procedures based on the Pharmaceutical and Medical Devices Act. Therefore, even if they are defined as symptom-recording apps, they may be found to constitute SaMD, depending on their functions and their proposed effects. It is necessary to confirm whether such apps constitute SaMD when they are provided.

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 will be found to constitute a medical device program in cases where:

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

In addition, in November 2023, the MHLW issued an administrative notice indicating the handling of the two-step approval process for certain SaMD: a first-step approval with a limited scope based on the results of non-clinical studies and mechanical performance; and a second-step approval based on clinical evidence after the market launch of the SaMD. It is important to note that this two-step approval approach is optional, and manufacturers can still obtain approval for their SaMD products without applying this approach. It is expected that this two-step approval process will allow manufacturers to bring their SaMD products to market more quickly. 

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 SaMD.

Example of a therapeutic app

In addition to the above-mentioned app for quitting smoking, Cure App, Inc. also received pharmaceutical approval for a therapeutic app for hypertension (accepted name: Hypertension Treatment Assistance Program) in April 2022. This was 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 aims to achieve digital therapies that support improving lifestyles through apps for hypertension, rather than relying solely on drugs, and the app was launched in and has been covered by insurance since 2022. In February 2023, SUSMED, Inc. received pharmaceutical approval for a therapeutic app designed to treat insomnia disorders, marking the third such case in Japan. This app supports cognitive behavioural therapy conducted by physicians. 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

The digitalisation of healthcare has made the use of healthcare data increasingly important. Healthcare data refers to, for example, patient data obtained from electronic medical records, medical fee statements or clinical trials, as well as user data obtained from wearable devices or healthcare applications.

Given the expectations for data utilisation in the digital healthcare field, Japan has established several legal systems to facilitate the use of such data. However, data protection and security regulations have become increasingly complex and modernised and, therefore, digital healthcare businesses are facing challenges in complying with such regulations. Such businesses are also required to comply with overseas data protection and privacy laws, which are often stricter than Japanese laws.

Growing expectations for utilisation of healthcare data

In Japan, there have been growing expectations for the utilisation of valuable data in digitised healthcare businesses. In order to promote such utilisation, the government has introduced several mechanisms in the Act on the Protection of Personal Information in Japan (APPI) and the Act on Anonymised Medical Data That Is Meant to Contribute to Research and Development in the Medical Field (“Next Generation Medical Infrastructure Act”).

Regarding the APPI, the 2015 amendment introduced the information category of “anonymised processed information”, making it easier to provide anonymised data externally. The 2020 amendment also added “pseudonymised processed information” to the APPI and encouraged the utilisation of pseudonymised data internally. Moreover, the 2021 amendment to the APPI ensures that the same rules apply to public authorities and private companies in the medical and academic sectors, thereby promoting joint public-private partnerships.

For example, Japanese healthcare service providers provide healthcare data as anonymised processed information to pharmaceutical companies and research institutions. These providers include JMDC Inc., Medical Data Vision Co., Ltd. and IQVIA Solutions Japan G.K.

The Next Generation Medical Infrastructure Act introduced an accreditation system for medical data providers, allowing accredited providers to receive medical information from medical institutions on an opt-out basis. Initially, such accredited providers could only create “anonymised processed medical information”, but the 2023 amendment allowed them to produce “pseudonymised processed medical information”. This has broadened the use of medical information under the Next Generation Medical Infrastructure Act.

Currently, only a limited number of healthcare data providers have received accreditation. The major accredited providers are Life Data Initiative (LDI), Japan Medical Association Medical Information Management Organization (J-MIMO) and Fair and Safe Use of Anonymized Standardized Health Data of Japan (FAST-HDJ).

Increased complexity of data protection regulations

The regulation of healthcare data has become increasingly complex due to the frequent amendments to the APPI. The APPI has been significantly amended in 2015, 2020 and 2021, since it was first legislated in 2003. These amendments have increased the burden of legal compliance in handling healthcare data.

In 2015, the APPI established new regulations by creating “special care-required personal information.” This information includes medical history, physical/mental disabilities, medical test results, and medical treatment/dispensing. Under the amended APPI, collecting special care-required personal information requires consent from the data subject and it can no longer be provided to third parties in an opt-out manner. The 2015 amendment to the APPI also introduced a requirement for international transfer and obliged businesses to obtain the data subject’s consent to such transfer.

In 2020, the APPI expanded the rights to cease use and to erase so that the data subject can broadly exercise these rights if there is a risk of harm to their rights or interests. The 2020 amendment to the APPI also introduced a new reporting obligation for data breach incidents. If such incident exceeds certain thresholds, the business must report to the regulator and the data subjects. Moreover, the 2020 amendment strengthened the data transfer requirement. Businesses must now explain the name of the foreign country in question, the legal system of such country and the data compliance system of the data recipients when obtaining consent to the data transfer.

In 2021, Japan’s data protection laws, which had been fragmented by applicable entities, were merged into the APPI, but the data protection regulations remain different for the public and private sectors. This amendment has also embodied the blanket academic research exception into separate exceptions for the acquisition, use and provision scenarios.

Modernisation of healthcare information security

Healthcare data security used to be governed by four guidelines across three ministries, but these were merged into two guidelines by such three ministries. This has been done to organise the overly complex security guidelines and to encourage compliance by healthcare organisations and their vendors. In 2023, these two guidelines were further revised and modernised due to the diversification of linking medical information and the increasing cleverness of cyber-attacks.

Importance of global data compliance

Given the trends towards global data protection, Japanese companies are increasingly being required to establish healthcare data compliance systems not only for Japanese law but also for foreign laws. This is due to the fact that foreign data protection and privacy laws are becoming more and more stringent over time. For example, the EU enacted the General Data Protection Regulation (GDPR) in 2016. In the US, the California Consumer Privacy Act of 2018 (CCPA) was enacted in California in 2018, followed by a series of laws and regulations in other states. In China, the Personal Information Protection Law (PIPL) was enacted in 2021. In light of this situation, Japanese companies need to comply with these laws, as well as Japanese laws, when handling healthcare data.

Other Topics

Individual number card

The Individual Number Card (My Number Card) is an official identification card issued by the Japanese government which allows individuals to access their personal health insurance information, including drug prescriptions, health check-up results, and medical expense notifications, through a government portal. With the user's consent, such health insurance information can also be shared with third parties via an API.

Furthermore, the Individual Number Card will replace current health insurance cards by December 2024. If individuals use their Individual Number Card as a health insurance card and provide the necessary consent, doctors can access such patient’s health insurance information, enabling doctors to provide better-suited medical services based on such information.

Remote clinical trials

“Remote clinical trials” have recently begun to increase in Japan. A remote clinical trial involves clinical research for the 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 previously progressed due to concerns about cost-effectiveness, the spread of COVID-19 increased the tendency for people to stay at home, thereby clarifying the need 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.

The MHLW released guidelines on how to proceed with clinical trials during the COVID-19 pandemic in the spring of 2020, as well as an administrative notice on explanation and consent using electromagnetic methods in clinical trials and post-marketing clinical trials in March 2023, thereby making it easier for pharmaceutical companies to introduce remote clinical trials. 

Medical AI

In recent years, the use of artificial intelligence has gradually resulted in more efficient work, collection and utilisation of medical data, a reduction of the burden on patients, and the 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 more than 20 medical devices have been officially approved by the MHLW, most of them are medical devices that analyse images by AI. According to the MHLW notification issued in 2018, when providing treatment using AI medical devices, it is necessary for a physician to be the primary provider of the diagnostic treatment and for a physician to be responsible for making any final decision on treatment. 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 April 2024, the Ministry of Internal Affairs and Communications and the Ministry of Economy, Trade and Industry published their “AI Guidelines for Business.” These guidelines integrate three previously existing AI guidelines and aim to “actively co-create a framework with related parties for persons involved in AI to correctly identify the risks of AI in light of international trends and stakeholder concerns, encourage the voluntary implementation of necessary measures throughout the life cycle, and both promote innovation and mitigate risks over the life cycle”. These guidelines are “intended for all parties (including public organisations such as governments and municipalities) responsible for the development, provision, and business use of AI in various business activities”. Consequently, developers, providers, and business users of medical AI are expected to adhere to these guidelines when engaging in AI-related activities within the healthcare industry.

The development of AI that can reproduce physician examinations, such as visual examinations, auscultation and palpation, is anticipated in the future.

Metaverse

Companies from a variety of industries have recently explored the possibility of utilising metaverse applications in the healthcare field. For instance, Okayama University has created a metaverse to connect and support young patients hospitalised with a rare form of tumour known as an osteosarcoma. This virtual platform allows these patients, who often struggle to find patients of a similar age with the same disease, to share their concerns and encourage each other, and also provides a space for their families to connect.