The Latest Legal Developments Regarding Medical Devices in Japan

1. Introduction

With the advancement of digital technology, numerous medical and health-related software and applications are currently available in the market. Their applications range from those in the medical field to those for home use.

In Japan, the 2013 amendment of the “Act on Quality, Efficacy and Safety Assurance of Drugs and Medical Devices” (the “PMD Act”) made programs (software) that are not tangible objects fall under the category of “medical devices” under the Act. Therefore, software and applications for the purpose of diagnosis and treatment of diseases, etc, must be manufactured and sold under the regulations pertaining to medical devices under the Act.

This article outlines the latest trends in the regulation of software and applications in the medical/health field of digital devices as programmed medical devices under the PMD Act.

2. Software as a Medical Device (SaMD)

One of the biggest concerns for digital device developers in the healthcare field is whether the software and applications they develop fall under the category of “Software as a Medical Device (SaMD)”. If the programs they develop are subject to the medical device regulations of the PMD Act, the costs and time required to obtain approval and to establish a quality management system as required by the QMS will be enormous.

The definition of programmed medical devices under the PMD Act is as follows.

(i) Programs for the purpose of “diagnosis of disease”.

(ii) Programs for the purpose of “treatment of diseases”.

(iii) Programs for the purpose of “disease prevention”.

Business operators must determine for themselves whether their software or applications fall under (i), (ii) or (iii). Even if a business determines that its software or application is not a medical device, if the regulatory authority determines that it falls under any of these categories (ie, is a SaMD), the business may be subject to criminal penalties for violating the PMD Act by manufacturing, selling or advertising an unapproved medical device.

However, since the definition of SaMD is abstract as described above, it is not easy to determine whether or not health-related software or applications fall under the category of SaMD. Therefore, in March 2021 the Ministry of Health, Labour and Welfare (MHLW) established guidelines on the applicability of the term “medical device” to a program, and the guidelines were recently amended in March 2023. 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 potential diseases or the risk of diseases are displayed based on input information; or
• if the program corresponds to Class II or higher when judged based on the Principles of Medical Devices Classification made by Global Harmonization Task Force (GHTF).

The guidelines explicitly state that programs identifying a person and a specific disease, as well as those showing the presence or absence of a disease or the potential future presence or absence of a disease (for purposes of early detection) should be deemed to be SaMD.

Also, note that the “SaMD Case Database” released by the MHLW is helpful in learning the determination criteria for determining the applicability of SaMD.

Businesses considering the development of software and applications in the healthcare field must first utilise these guidelines and other information to carefully determine whether or not their products fall under the category of medical devices. In particular, when attempting to develop software and applications that are not regulated by the PMD Act (ie, not medical devices), it is necessary to design the application so that it does not fall under the purpose of diagnosis, treatment, or prevention of disease (comparison of cases that fall under SaMD and cases that do not fall under SaMD with respect to approximate increasing treatment apps is detailed in section 4).

Then, in order to manufacture and sell software and applications that fall under the SaMD, it is necessary to obtain approval of the SaMD, as described in part 3 below.

3. SaMD approval review

3.1 Examination for the approval of SaMD

3.1.1 Examination for the approval of medical devices

In order to distribute medical devices on the market, they must undergo an examination regarding efficacy, safety, etc, in accordance with the PMD Act, and obtain approval from the Minister of Health, Labour and Welfare. In addition, it is necessary to submit materials regarding the results of clinical trials in order to obtain this review and approval.

3.1.2 Accelerated approval system based on the characteristics of medical devices

Since the amendment of the PMD Act in 2013, which made programs (software) intended to diagnose and treat diseases, etc, regulated as SaMDs, many SaMDs have been developed and approved to date.

As mentioned in section 1 above, the approval review process for medical devices is lengthy, so it takes a long time from the start of SaMD development to the market launch. To solve this problem, there are rational and efficient approval review systems and early approval review systems that can be used for SaMD review, depending on the characteristics and needs of the medical device. In addition to the “two-step approval” mentioned below, the following systems are also available.

• Priority review system for pioneering (SAKIGAKE) medical devices.

This is a system that places emphasis on early development in Japan and allows for priority review of medical devices that are scheduled to be applied for approval in Japan ahead of the rest of the world or at the same time.

• Priority review system for designated medical devices.

The system allows for priority review of medical devices for which medical needs have not been significantly met.

• Conditional and accelerated approval scheme.

The system allows early approval with conditions for innovative medical devices for life-threatening diseases for which there is no effective treatment, because clinical development takes a long time due to the small number of patients and the considerable time required to conduct clinical trials.

• IDATEN (Improvement Design within Approval for Timely Evaluation and Notice) system.

The IDATEN system approves the improvement plan itself for medical devices that are expected to be improved in the future according to the characteristics of the medical device. The approval of a partial change to the approved items is not required for product improvements in accordance with a change plan that has been verified in advance. The future prospects of this system are described in detail in 3.1.5.

3.1.3 Concept of “two-step approval”

In 2017, the MHLW organised cases in which an application for approval may be filed regardless of whether or not a new clinical trial is conducted prior to marketing, taking into consideration the characteristics of medical devices, which are frequently and diversely improved (issuance of “the approval scheme based on Measures through Pre- and Post-Marketing Phases”). This indicated that the following application procedures are possible for diagnostic devices that measure physiological parameters that can serve as reference information for diagnosis. First, even if the ultimate target clinical significance has not yet been established, the application for approval should be limited to the scope of intended use that can be demonstrated by past clinical results and test results related to mechanical performance (measurement performance). Then, after approval and after clinical evidence has been established through use in clinical settings, a partial change application can be submitted as necessary.

3.1.4 Guidance on “two-step approval”

Furthermore, in May 2023, the MHLW published “Guidance for Appropriate and Prompt Approval and Development Based on the Characteristics of SaMD”. This clarifies the handling of cases in which an application for approval can be considered to be filed at a different development stage from that of conventional medical devices by implementing consistent measures to ensure safety and efficacy from pre-market to post-market, with reference to the concept of the above “approval scheme based on Measures through Pre- and Post-Marketing Phases”.

The main points of the concept of two-step approval are as follows.

• If a SaMD satisfies the legal requirements for marketing authorisation through appropriate and sufficient risk management, etc, then Tier I approval is granted to the extent that a certain level of efficacy can be probabilistically confirmed from evaluation data.
• If the evaluation data are collected while the product is used in the clinical setting, and clinical evidence is obtained, Stage II approval can be granted to change the purpose of use or efficacy through an application for approval of a partial change in the approved items.

Subsequently, based on these guidelines, a notice titled “Handling of Two-Step Approval Based on the Characteristics of Programmed Medical Devices” was issued on 16 November 2023. The notice classifies medical devices into two categories – SaMD for disease diagnosis and SaMD for disease treatment – and provides specific examples of medical devices that are subject to the two-step approval scheme and those that are not, along with the basic concept.

3.1.5 The IDATEN system

Currently, the Pharmaceuticals and Medical Devices Agency (PMDA) is planning to reflect in the IDADEN system an assessment of medical devices utilising AI that can change their performance through continuous learning after market introduction not only in the manufacturer and distributor, but also in the actual medical facilities or similar entities. This is aimed to facilitate their social implementation.

In other words, regarding the approach to the review of medical device programs using AI that undergo post-marketing learning, it is necessary to consider:

1. There is a high demand for reusing evaluation data (clinical data used to evaluate the performance of the final model), which is a premise for judging the clinical efficacy and risk of the device, when reexamining the product at the time of product improvement.

2. For MLMDs (Machine Learning-enabled Medical Devices), it is necessary to consider the required conditions for data variation. This is because the machine learning process is a black box characteristic, which makes it difficult for developers to fully understand its performance and anticipate vulnerabilities.

3. Since many MLMDs are scheduled to be upgraded for each medical facilities or similar entities as post-market learning, it is necessary to review medical devices after the upgrade.

The Expert Committee on Programmed Medical Devices Utilizing AI has been convened to discuss (i) the possibility and requirements for reuse of evaluation data, (ii) conditions required for evaluation data (eg, discussion on explanations regarding comprehensiveness of learning data), and (iii) how AI (Adaptive AI) whose performance is intended to change for each facility after market launch should be reviewed. Discussions are underway regarding.

By using the IDATEN system, SaMD developers can reduce the labour and costs associated with the medical device approval review system by eliminating the need to obtain approval for each new version of SaMD, which is upgraded daily using a learning AI.

3.2 Guidance for evaluation of SaMD

3.2.1 Guidance for evaluation established by MHLW

The MHLW has published a variety of guidance for technical evaluation to be used at the time of approval review for next-generation medical devices with high medical needs and practical potential. This is intended to improve the efficiency of product development and expedite the approval process. The MHLW has selected areas for consideration and has been studying these technology evaluation indicators.

3.2.2 Guidance for evaluation of SaMD in medical and healthcare fields to promote behaviour change

In June 2022, MHLW established evaluation indicators for SaMD with behaviour change.

In recent years, with the development of IoT technology, SaMD such as so-called “therapeutic Apps”, which use smartphones and other devices to provide information according to patients’ behaviour and thought patterns, thereby promoting behavioural change in patients and treating and preventing diseases, have been actively developed (see 4.2 and 4.3 for an explanation of the increase in therapeutic apps). In Japan, national strategies include extending healthy life expectancy and revitalising the domestic medical device industry in preparation for a super-aging society. Therefore, such SaMD with behaviour change are expected to be effective and develop as a new industry.

However, SaMD that use psychotherapy to promote behavioural change are a new field of product, and it has been suggested that not only the content of the information to be displayed, but also the timing and method of displaying the information and cultural background may affect the effectiveness, making it difficult to identify factors related to effectiveness and safety.

Therefore, the MHLW developed this guidance for the purpose of appropriate development of SaMD with behaviour change, and compiled points to be noted in the evaluation of safety and efficacy.

This guidance provides basic considerations, items related to non-clinical studies, items related to clinical evaluation, and items to be considered post-marketing. It is expected that this will encourage the development of SaMD that promote behavioural change in Japan, and further development is anticipated.

3.2.3 Other varieties of guidance for evaluation

In addition to the above, the MHLW has published a variety of guidance for, for example, medical diagnostic imaging systems using artificial intelligence technology, home medical devices, devices for treating difficult-to-treat wounds, and devices for treating breast cancer.

3.3 DASH for SaMD2 (Digital Transformation Action Strategies in Healthcare for SaMD2)

In September 2023, MHLW and the Ministry of Economy, Trade and Industry (METI) expressed their view that the following two points need to be promoted in order to further promote the practical application and international development of SaMD in the future.

1. Clarify the various paths to commercialisation of SaMD (two-step approval and SaMD for the general public) to ensure predictability up to regulatory approval and insurance coverage.

2. Accelerate research and development of SaMDs originating in Japan and promote their expansion into international markets.

And as a new packaging strategy, DASH for SaMD2 was announced. The contents are as follows.

• Organisation and publication of the concept of two-step approval.
• Establishment of guidelines for approval review and marketing of SaMD for the general public.
• Promotion of acceptance of Japan’s review results in countries where Japan is subject to simplified review.
• Assistance to developers in the form of development and demonstration funds, etc, and support for the development of local business environments overseas.

The future goals for the next five years include the realisation of early market introduction and establishment of clinical significance, as well as the out-licensing and market acquisition of superior SaMDs developed in Japan.

4. Increase in therapeutic apps as SaMD

4.1 Background

As technology continues to develop and the need for self-care interventions increases, therapeutic apps that replace the physical, in-person administration of medical treatment for patients are generating a significant amount of attention across the world.

In 2020, a measuring device and therapeutic app for patients made by Cure App, Inc. gained approval as the first medical device program in Japan (accepted name: Smoking Cessation Treatment Assistance System). This app was created to help nicotine-dependent patients stop smoking, and it is covered by insurance. Since its approval, the number of applications seeking pharmaceutical approval for other therapeutic apps has continued to increase. Moreover, although there is a functional overlap with therapeutic apps, the development of symptom-recording apps, which are used as a preparatory foundation for the development of therapeutic apps, is rapidly increasing because, under the PMD Act, such apps do not require licences or approval.

4.2 Therapeutic apps vs symptom-recording apps

Therapeutic apps are used for the “treatment” of a specific disease in a medical setting. They are characterised as follows.

• They are supposed to meet the definition of “SaMD”, which must be developed, manufactured and sold in accordance with the PMD Act.
• Approval to manufacture and sell the apps in Japan as new medical devices must be acquired from the MHLW after clinical trials have been conducted, such trials which can take several years and be costly to implement.
• As additional data may be required for insurance coverage, these apps can cost a considerable amount of time and money to market the product covered by insurance. In fact, there has been cases that insurance coverage for a SaMD was not accepted, and additional evidence was required, so that the risk should also be considered at the planning phase.

On the other hand, symptom-recording apps are used for “managing the health condition” of a healthy person, and “recording symptoms” of a patient. A typical app, for example, is one that is used for recording health information for self-care, such as by tracking weight and blood pressure levels daily. These apps can be characterised as follows:

• they cannot express the therapeutic effects of diseases;
• as they are not SaMD, any procedures or guidelines mandated under the PMD Act do not apply to them; and
• their prices can be freely set because they are not covered by insurance.

4.3 Examples of approved therapeutic apps

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 not only the first case in Japan in which pharmaceutical approval was obtained for the software itself (whereas the smoking cessation app also includes a device), but it is also the world’s first pharmaceutical approval for a therapeutic app in the field of hypertension.

Additionally, MICIN, Inc. obtained approval for an app used in measuring the sound of a patient’s breath (accepted name: Biological Sound Recording Program) in January 2023. This is expected to be used by physicians to check their patients’ body condition during telemedicine consultations, leading to higher-quality medical treatment administered through telemedicine.

Also, SUSMED, Inc. obtained approval for a therapeutic app for insomnia (accepted name: Program for Insomnia) in February 2023. This marks the third case of a therapeutic app being prescribed to patients.

Furthermore, as several products for ADHD, alcoholism, etc. are currently under marketing approval review and a number of therapeutic apps for mental health issues, breast cancer, non-alcoholic steatohepatitis (NASH), etc, are in development, it is expected that various therapeutic apps and symptom-recording apps will be introduced in the Japanese market in the near future.

5. Digital medical devices and cybersecurity (cybersecurity measures for medical devices in Japan)

In Japan, MHLW has issued a “Notice on Ensuring Cyber Security of Medical Devices” (so-called “Cyber Security Notice”, dated 28 April 2015) and other notices for manufacturers and distributors of medical devices as cybersecurity measures for medical devices. The “Cyber Security Notice” (dated 28 April 2015) and other notices were issued to manufacturers and distributors of medical devices to provide specific risk management and cybersecurity measures and policies.

Subsequently, the IMDRF Guidelines, an international standard, were established in 2020, recommending the introduction of development goals and technical requirements for cybersecurity of medical devices, and in 2021, the Japan Federation of Medical Devices Associations (JFMDA), a core business organisation in the medical device industry in Japan, issued a “A Guide to Implementing Cybersecurity for Medical Devices” for manufacturers and distributors.

The measures to introduce the IMDRF Guidelines into domestic laws have been realised this year, and as of 1 April 2023, Article 12, paragraph 3 of the Basic Requirements for Medical Devices prescribed in Article 41, paragraph 3 of the Act on Securing Quality, Efficacy and Safety of Products Including Pharmaceuticals and Medical Devices has been revised, and the requirements to ensure cybersecurity as summarised in the IMDRF Guidelines, have been adopted. The three aspects of the requirements, ie, (i) having a plan to consider medical device cybersecurity throughout the product life cycle, (ii) having a design and manufacturing that reduces cyber risks, and (iii) setting minimum requirements for hardware, network and IT security. In other words, it is legally mandated that the primary responsibility for cybersecurity measures lies with the medical device manufacturers.

As of the same date, Article 14, paragraph 2 of the Enforcement Regulations on the Medical Care Act requires the administrators of hospitals, clinics, or midwifery centers to take the necessary measures to ensure cybersecurity.

Furthermore, On 31 March 2023, the JFMDA revised the “A Guide to Implementing Cybersecurity for Medical Devices.” in response to the formulation of the IMDRF supplementary guidance. It outlines best practices for architectural design principles and documentation requirements for medical device manufacturers.

Regarding cybersecurity measures for medical institutions, on 31 March 2022, the Security Guidelines for Medical Information Systems Version 5.2 revised the rules and regulations that medical institutions should follow from the perspective of information security in general.

And the 6th edition of the Guidelines, published on 31 May 2023, the overall structure was reorganised, and a special section on cybersecurity in medical institutions was added as an appendix, which includes specific examples of cyber-attacks and emphasises the importance of cybersecurity measures such as account management and backups.

MHLW has notified medical institutions to fulfil the “Checklist of Cyber Security Measures for Medical Institutions,” which describes the main points of the Guidelines, by 31 March 2025, and medical institutions are required to comply with at least the items on the checklist by the same date.

It is highly probable that domestic regulations will continue to be revised in response to changes in the international IMDRF guidelines in the future.

6. Advertising regulations and surcharge system for digital medical devices

The PMD Act also regulates the advertising of medical devices, and digital medical devices, including SaMDs, are subject to such regulations. The regulations are strict, including, but not limited to, the prohibition of advertising indications for indications that have not been approved or certified, the prohibition of advertising medical devices used by medical professionals to non-medical professionals, the prohibition of testimonials, and the prohibition of advertisements of recommendations by medical professionals.

In order to make these advertising regulations more effective, a surcharge system for those who violate the advertising regulations was introduced with the revision of the PMD Act in 2021. As a result, those who violate the advertising regulations of the Medical Advertising Regulations must now pay a surcharge to the government equivalent to 4.5% of the sales of the product that was the subject of the violation.

In response to these stricter advertising regulations, more strict compliance is required in the promotion of digital medical devices. In particular, for developers of digital medical devices for consumer use, obtaining approval or certification as a “home-use” medical device is extremely important in their promotional strategies. If they do not obtain approval or certification as a medical device for home use, they will not be able to advertise to general consumers other than medical professionals due to advertising regulations under the PMD Act.