Life Sciences 2025

Last Updated April 03, 2025

Japan

Law and Practice

Authors



Nagashima Ohno & Tsunematsu is widely recognised as one of Japan’s leading international law firms, specialising in all aspects of business and commercial law. The firm represents domestic and foreign clients involved in every major industry sector, including many of the largest and most influential companies, funds and organisations in Japan. The firm has structured and negotiated many of Japan’s largest and most significant corporate and finance transactions, and has extensive expertise across all its practice areas. The pharmaceutical and healthcare team is based in the Tokyo office and consists of more than 14 lawyers, including eight partners. Key areas of the firm’s practice relating to the life sciences sector include pharmaceutical and healthcare, risk and crisis management/compliance, corporate/M&A, data protection and privacy, IP, antitrust/competition, consumer law (consumer litigation), dispute resolution, and labour and employment.

The Act on Securing Quality, Efficacy and Safety of Products Including Pharmaceuticals and Medical Devices (the “Pharmaceuticals Law”), together with related cabinet and ministerial orders, is the primary law that governs pharmaceuticals and medical devices in Japan. Under the Pharmaceuticals Law, pharmaceuticals and medical devices are in principle subject to the same level of regulation in order to maintain the safety and efficacy of these products. Details of the regulations applicable to pharmaceuticals and medical devices are set out in ministerial orders, administrative guidelines and cabinet orders as explained in the next paragraph.

The Ministry of Health, Labour and Welfare (MHLW) is the principal regulatory body for pharmaceuticals and medical devices. The MHLW is the national government body that issues most of the Pharmaceuticals Law-related ministerial orders and administrative guidelines, and drafts relevant cabinet orders. Prefectural governments (ie, independent local governments such as the Tokyo Metropolitan Government) are primarily responsible for monitoring pharmaceutical and medical device marketers, manufacturers and distributors in their respective jurisdictions on behalf of the MHLW. Various business licences for pharmaceutical and medical device marketers, manufacturers and distributors are also issued by the prefectural governments, while marketing authorisations and other product-related approvals are generally handled directly by the MHLW. The Pharmaceuticals and Medical Devices Agency (PMDA), a Japanese independent administrative agency that receives financial support from the Japanese government to cover its operational costs, also plays a key role in reviewing marketing authorisation applications for new pharmaceutical and medical devices. Applications for new pharmaceutical marketing authorisations are first reviewed and commented on (if any) by the PMDA. Therefore, communication with PMDA officials is key to obtaining new pharmaceutical marketing authorisations.

If a pharmaceutical or medical device firm violates the Pharmaceuticals Law or any related regulation, the MHLW or a prefectural government may issue an administrative order to that firm. The recipient may challenge the administrative order through an administrative complaint review process provided under the Administrative Complaint Review Act. A pharmaceutical or medical device firm served with an administrative order may also commence a legal action for the revocation of the administrative order with a competent court in accordance with the Administrative Case Litigation Act. These challenge procedures are also generally applicable in cases involving the issuance of administrative orders for violations of laws concerning other regulated products (eg, certain food products). Recently, a few leading generic drug manufacturers received business suspension orders due to their violations of pharmaceutical regulations, resulting in significant shortages in certain sectors of the generic drug market in Japan.

Pharmaceuticals are categorised into two classes: prescription pharmaceuticals and OTC pharmaceuticals. Prescription pharmaceuticals may only be used by doctors or used in accordance with a doctor’s prescription. OTC pharmaceuticals can be purchased at drug stores or other non-licensed stores. OTC pharmaceuticals are further classified into several sub-categories and, depending on the relevant sub-category, may have certain sales restrictions.

  • Class one OTC pharmaceuticals – can only be sold by a licensed pharmacist, with a mandatory explanation of the key points relating to such pharmaceuticals to be given by the pharmacist to a purchaser at the time of sale.
  • Class two OTC pharmaceuticals – can only be sold by a licensed pharmacist or a registered seller (who has passed a registered seller examination held by a prefectural government), and explanation of such pharmaceuticals at the time of sale is recommended.
  • Class three OTC pharmaceuticals – can be sold without the presence of a licensed pharmacist or a registered seller, and explanation of such pharmaceuticals by the seller is not legally required or recommended.

Medical devices are categorised into three classes:

  • specially controlled medical devices (medical devices that are highly invasive to the patient, and, if a problem were to occur, there is a risk that it would directly affect the patient’s life or pose a relatively high risk to the human body; classes III and IV of the Global Harmonisation Task Force (GHTF) international classification structure);
  • controlled medical devices (medical devices for which the risk to the human body, even if a problem were to occur, is considered to be relatively low; class II of the same); and
  • ordinary medical devices (medical devices for which the risk to the human body, even if a problem were to occur, is considered to be extremely low; class I of the same).

Depending on the relevant class of medical devices, a marketer and a distributor will need to obtain different business licences, as appropriate. A distributor of the specially controlled medical devices is required to obtain a business licence for each of its distribution offices. A distributor for the controlled medical devices is required to submit a notification of its distribution activity for each of its distribution offices. A distributor of only ordinary medical devices is not subject to such business licensing or notification requirement.

The Pharmaceuticals Law, together with the Good Clinical Practice (GCP) ministerial order issued by the MHLW, is the principal law regulating clinical trials. The MHLW and the PMDA are the main regulatory authorities that oversee clinical trials.

The MHLW generally requires all drugs to be tested in clinical trials conducted in Japan and operated by hospitals located in Japan, and to be subject to marketing authorisations in Japan. Even new drugs that have undergone clinical trials and received marketing approval in foreign jurisdictions are required to undergo separate clinical trials in Japan in order to verify such drug’s effectiveness and safety when given to Japanese people. Even for COVID-19 vaccines supplied to Japan, the Japanese government required that a limited number of separate clinical trials be performed in Japan based on this policy. The MHLW insists that such clinical trials are necessary and that they must be carried out in Japan in order to study the differences in pharmacology due to race, lifestyle, etc, in Japan with those in a foreign country.

To conduct a clinical trial, an applicant (a pharmaceutical or medical device marketer) must prepare a protocol and receive approval for such protocol from an institutional review board (IRB). A protocol must cover, among other things, the subject material, purpose, design, methods, statistical considerations and organisation of the proposed clinical trials. The applicant is also required to register the protocol with the MHLW through the PMDA. In practice, the applicant consults with the PMDA informally about its draft protocol before formally registering the protocol with the MHLW.

The website of the National Institute of Public Health discloses certain basic information regarding clinical trials conducted in Japan, including:

  • the title of the study;
  • the subject material of the study;
  • a brief summary of the study;
  • information about the monetary sponsor, the relevant IRB, and other organisations involved;
  • contact information for the parties involved; and
  • a summary of the results.

There is no apparent prohibition on using online tools to support clinical trials, which are generally required to be conducted by doctors or hospitals and include in-person interviews with, and written informed consents from, clinical trial subjects. Recruiting clinical trial subjects can be conducted online. In addition, under a guideline from the MHLW, if an approved protocol for a clinical trial provides for online medical checks in the clinical trial, such medical checks can be conducted on an online virtual examination basis.

Raw data obtained from clinical trials is considered to be sensitive data of clinical trial subjects. Therefore, clinical trial data obtained by a doctor or hospitals (investigators) is usually converted into a form that prevents the identities of clinical trial subjects from being discoverable and only such anonymised information or data is provided to the sponsor of the clinical trial. Furthermore, upon commencement of a clinical trial, investigators must obtain an informed consent letter from each trial subject regarding the use and treatment of such subject’s sensitive personal data as well as potential risks associated with the trial subject’s participation.

As mentioned in 2.5 Use of Data Resulting From Clinical Trials, it is common practice for resulting data to be anonymised, and in such form the data is not regulated as strictly as sensitive data. Disclosure of original, non-anonymised data (raw data) is heavily regulated as sensitive information under the Act on the Protection of Personal Information (APPI). In applying the APPI regulations, data of clinical trial results that “can identify specific individuals through easy matching with other information” (easy matching) is generally considered to be non-anonymised and sensitive personal data. The Federation of Pharmaceutical Manufacturers’ Associations of Japan issues the Guidelines for the Proper Handling of Personal Information by Pharmaceutical Companies. Such Guidelines note that in order to ensure the reliability of clinical trial data collected by medical institutions conducting clinical trials, pharmaceutical companies may sometimes be required to directly inspect medical records, etc, for monitoring or auditing purposes. Whether or not such inspection by pharmaceutical companies comparing clinical trial data managed by subject identification codes with medical records, etc, falls within the category of easy matching, is considered to be “consistent with the actual situation, and easy matching is recognised when matching is possible regardless of whether the name, address, etc, is intentionally visible or not.”

The term “pharmaceutical” is defined under the Pharmaceuticals Law as:

  • items listed in the Japanese Pharmacopoeia;
  • items that are intended for use in the diagnosis, medical treatment or prevention of disease in humans or animals; or
  • items that are intended to affect the structure and functioning of a human’s or animal’s body.

However, quasi-pharmaceutical products and cosmetics are excluded from the definition of pharmaceutical.

The term “medical device” is defined under the Pharmaceuticals Law as appliances, instruments or similar items that are intended for use in the diagnosis, medical treatment or prevention of disease in humans or animals – or that are intended to affect the structure or functioning of the bodies of humans or animals – and that are specified by cabinet order.

The relevant cabinet order specifying medical devices is so broadly worded that it is not clear whether each and every medical appliance, instrument or similar item is classified as a medical device. Software that is intended for use in the diagnosis, medical treatment or prevention of disease in humans or animals can also be classified as a medical device.

To market a pharmaceutical or medical device, the initial marketer is required to obtain marketing authorisation. Key factors that are taken into account when reviewing an application for marketing authorisation or marketing certification are:

  • the quality, effectiveness and safety of the pharmaceutical or medical device;
  • the applicant’s marketing business licence;
  • the manufacturer’s manufacturing business licence; and
  • the manufacturer’s compliance with the good manufacturing practice (GMP) regulation.

Biological pharmaceuticals are generally considered to be proteins or polypeptides produced by the culture of recombinant or non-recombinant cell protein expression systems, highly purified, and characterised by a range of appropriate analytical methods, as well as derivatives thereof or pharmaceuticals containing them as a component.  To obtain marketing authorisation for a biological pharmaceutical, certain additional requirements must be fulfilled, such as:

  • a manufacturer of a biological pharmaceutical must comply with more stringent management and safety requirements; and
  • packaging/packaging inserts of a biological pharmaceutical must indicate that it is a biological product.

The MHLW believes that in the manufacturing of biological pharmaceuticals, it is important to establish appropriate quality control methods to ensure that the intended clinical efficacy and safety are achieved, and it is necessary to conduct a wide range of quality characteristic analyses as a basis for this. Among the quality characteristics, those that may affect efficacy and safety are managed using a combination of various control methods, including raw material control, process parameter control, in-process testing, specifications and test methods, etc, to ensure that the final product quality falls within the target range. The PMDA and the MHLW emphasise the importance of checking these points when reviewing an application for marketing approval of a biological product.

The period of validity of a marketing authorisation is not indefinite. An authorisation for a new pharmaceutical is generally subject to re-examination eight years after the initial authorisation. However, depending on the type of pharmaceuticals, this may be four to ten years after the initial authorisation. Additionally, the MHLW occasionally conducts a re-evaluation of pharmaceuticals based on the recommendation of its advisory board.

A marketing authorisation can be revoked by the MHLW and other competent authorities, when, for example, it is found that:

  • the relevant pharmaceutical does not have the efficacy or produce the effects indicated in the application; or
  • the relevant pharmaceutical has no value because the harmful effects associated with such product outweigh the efficacy or beneficial effects.

Additionally, a marketing authorisation can be revoked if the responsible party has not marketed the relevant authorised pharmaceutical or medical device for three consecutive years without any reasonable justification. The MHLW may vary parts of a marketing authorisation for pharmaceuticals and medical devices if, in the MHLW’s view, it is necessary to do so in light of health or hygiene considerations.

Submission of Application

An application for marketing authorisation must be submitted to the MHLW or – in the case of certain pharmaceuticals and all medical devices (other than medical devices with a GHTF classification of class IV) – to the relevant prefectural government or a particular registered certification body. With regard to an application for a pharmaceutical or medical device that must be submitted to the MHLW, the application must be submitted through the PMDA. The MHLW’s review of applications for marketing authorisation for new medicinal products is substantially outsourced to the PMDA. Once the PMDA is satisfied with the application, the application is forwarded to the MHLW, which then obtains a recommendation from the Council of Pharmaceutical and Food Sanitation before approving the application.

Required information

A marketing authorisation application must include, as an attachment, data concerning the results of clinical trials and other pertinent data – except where the application is for a medicine that is subject to a conditional early approval for market authorisation (an expedited process).

Variation of a marketing authorisation

Variation of a marketing authorisation – such as a change in the therapeutic indication, formulation, dosage, patient population, packaging or labelling – requires the marketing authorisation-holder to complete a formal process. Depending on the materiality of the change, the variation may require approval from the relevant authority or the mere submission of a report.

Transferral of a marketing authorisation

It is permissible for market authorisation to be transferred from the current marketing authorisation-holder to a transferee. A transferee of a marketing authorisation must notify the relevant authority of the transfer, evidenced by providing the application for transfer addressed to the MHLW, at least one month prior to the date of transfer.  The transferee must attach a document evidencing the transfer of the marketing authorisation from the transferor (eg, a short-form sale and purchase agreement) and a supply agreement with a foreign manufacturer if the product is imported from the foreign manufacturer. The transferee must, in addition to obtaining marketing authorisation, obtain a business licence to market the pharmaceuticals. In the case of a transfer of the marketing business of a pharmaceutical product, the business transferee is required to apply for the marketing business licence well in advance so that it is issued on or before the effective date of the business transfer.

The Pharmaceuticals Law provides for an exceptional procedure to allow the importation of a pharmaceutical or medical device that has received foreign marketing authorisation for compassionate use if:

  • the foreign marketing authorisation was obtained in a country with a marketing authorisation system equivalent to the system in Japan;
  • immediate use of the pharmaceutical or medical device is necessary to prevent a pandemic that could cause death or serious harm to the health of Japanese citizens; and
  • the pharmaceutical or medical device is specifically designated under an administrative order.

This special procedure was once used to import an influenza vaccine produced by a foreign manufacturer. It is also used for vaccines and therapeutic drugs for COVID-19 that are produced by foreign manufacturers and supplied for use in Japan.

After the marketing of a pharmaceutical or a medical device commences, the marketing authorisation-holder is required to conduct post-marketing pharmacovigilance and technovigilance. If any issue relating to the effectiveness or safety of the marketed pharmaceutical or medical device is discovered during the post-marketing authorisation surveillance period, the marketer must conduct a pharmaceutical or medical device recall campaign, report the discovery to the PMDA, issue public notices, and take other appropriate measures to prevent patients suffering further damage or losses.

An applicant for a marketing authorisation must typically complete all clinical trials first and then submit its application with the complete accompanying data. However, in the case of conditional early approval for market authorisation for an innovative product exempted for a part of its clinical trials, post-marketing phase IV clinical trials must be performed.

In general, third parties can access information about applications for marketing authorisations by making a request under Japan’s information disclosure law. Under the Act on Access to Information Held by Administrative Organs, anyone may request the disclosure of administrative documents held by an administrative organ.

Under this law, the MHLW is essentially required to disclose an application for marketing authorisation if properly requested. However, the application for marketing authorisation may include or refer to the IP or confidential information of an applicant, and the disclosure of such information to a third party may result in serious damage to an applicant’s rights and competitiveness. Therefore, disclosure of an application is usually made after the relevant sensitive information contained in it has been redacted or masked so that the IP and/or confidential information of an applicant is protected.

In the case of orphan drugs and certain other products that are considered to have particularly high medical needs, the examination of the marketing authorisation application for the product can be granted priority over examination of other products by the examining authority. Products that are eligible for this priority examination route include, for example, pharmaceuticals that are designated by the MHLW as products with unmet medical needs pertaining to paediatric diseases and antimicrobial resistance, as well as pharmaceuticals and medical devices that are designated by the MHLW as innovative products.

The Pharmaceuticals Act also provides for an exceptional abbreviated marketing authorisation application process for certain designated pharmaceuticals and medical devices that satisfy certain criteria prescribed by law, including, for example, that (i) there is urgent need to use the product to prevent the spread of disease or other health hazards that may pose serious effects on the lives and health of the general public, and (ii) there is no other appropriate method available other than to use such product. Currently, the MHLW has designated drugs pertaining to COVID-19 as the products eligible for such abbreviated application process. In the abbreviated application process, the MHLW has the authority to grant the applicant an extended grace period for submitting certain information and documents required for ordinary marketing authorisation application.

As part of the marketing authorisation application documents, the applicant is required to provide information regarding the use of the product outside of Japan, including whether a marketing authorisation for the product has already been obtained outside of Japan. However, such information is one of the various factors to be considered in the course of the MHLW’s marketing authorisation application examination process. The MHLW does not necessarily expedite the issuance of the marketing authorisation in Japan even if marketing authorisation for the product has already been obtained outside of Japan.

Pharmaceutical Manufacturers

A manufacturing business licence is required in order to manufacture pharmaceuticals in Japan. If a manufacturer of an imported product is located outside Japan, that manufacturer will be required to obtain accreditation as a foreign manufacturer. A manufacturing business licence is granted by the relevant prefectural government and such accreditation is granted by the MHLW. Once an application for a manufacturing business licence is formally submitted, the prefectural government reviews the application and – in most cases – conducts an on-site inspection of the applicant’s manufacturing premises. The period of validity of a manufacturing business licence and an accreditation is five years.

Medical Device Manufacturers

Unlike pharmaceutical manufacturers, a medical device manufacturer – whether located in Japan or outside Japan – is only required to satisfy a prior registration (ie, registration with the MHLW as a medical device manufacturer). The registration must be renewed every five years.

In order to market pharmaceuticals or medical devices, the initial marketing entity must hold a marketing business licence and have marketing authorisation for each of the relevant products. A marketing business licence is granted by the relevant prefectural government. Once an application for a marketing business licence is formally submitted, the prefectural government reviews the application and – in most cases – conducts an on-site inspection of the applicant’s office or factory.

Marketing business licences are generally valid for five years; however, the actual validity period will depend on – among other things – the type of pharmaceutical or medical device to be distributed by the applicant. Wholesalers and retailers of pharmaceuticals and medical devices are also required to obtain a distribution business licence.

There are two types of marketing business licences for pharmaceuticals: Type 1 and Type 2. A Type 1 marketing business licence is required for marketing prescription pharmaceuticals. A Type 2 marketing business licence is required for marketing other pharmaceuticals (ie, non-prescription ethical pharmaceuticals and OTC pharmaceuticals).

There are three types of marketing business licences for medical devices:

  • a Type 1 medical device marketing business licence is required for marketing medical devices with a GHTF classification of class III or IV;
  • a Type 2 medical device marketing business licence is required for marketing medical devices with a GHTF classification of class II; and
  • a Type 3 medical device marketing business licence is required for marketing medical devices with a GHTF classification of class I.

The Pharmaceuticals Law governs the import and export of pharmaceuticals and medical devices. Imports of pharmaceuticals and medical devices from outside Japan are, in principle, subject to the same marketing regulations applicable to products manufactured in Japan. Importers of these products are subject to requirements regarding marketing authorisation, marketing business licences and accreditation as a foreign manufacturer.

A manufacturing business licence is required for the manufacture of pharmaceuticals or medical devices that are to be exported from Japan. Although marketing authorisation is not necessary, a separate registration for manufacturing pharmaceuticals or medical devices for export is required.

The relevant prefectural government regulates marketing business licences, whereas the MHLW regulates accreditations for foreign manufacturers.

In principle, an importer of pharmaceuticals or medical devices must obtain a marketing business licence, and is required to present certificates of the marketing business licence and the marketing authorisation for each particular imported product to the relevant customs house. The Pharmaceuticals Law provides for exceptions to these requirements, such as where an individual imports small amounts of these products for their personal use.

In principle, import of pharmaceuticals or medical devices is not permitted unless the importer on record possesses a marketing business licence and a marketing authorisation for each particular imported product. The Pharmaceuticals Law provides for exceptions to these requirements, such as where small amounts of these products are imported by an individual for their personal use. As regards permitted exceptions in the case of emergency situations, see 3.5 Access to Pharmaceuticals and Medical Devices Without Marketing Authorisations.

In addition to obtaining a marketing business licence and marketing authorisation when importing pharmaceuticals or medical devices, it may be necessary to change the product’s packaging to conform to product description and information requirements provided under the Pharmaceuticals Law. By way of an example, packaging and product labelling – and the explanatory written material provided with the products (such explanatory information is usually available online) – must be provided in Japanese and satisfy the requirements under the Pharmaceuticals Law. Changing a product’s packaging is considered part of the manufacturing of the product and, as such, the entity responsible for performing such changes is required to possess a manufacturing business licence.

As of January 2025, Japan has signed 21 economic partnership agreements/free trade agreements with other countries. Among others, Japan is a signatory to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP), as well as economic partnership agreements with such countries as the United States, the United Kingdom, Singapore, Mexico, India, Peru, Switzerland, Thailand and Indonesia.

Prices for the substantial majority of medical services provided and prescription pharmaceuticals sold in Japan are reimbursed by the Japanese universal healthcare system, and the substantial majority of legal residents of Japan participate in and are covered by Japan’s national health insurance system. The cost of prescription pharmaceuticals to be paid through the national health insurance system corresponds to the prices for the relevant pharmaceuticals listed on the drug tariff.

Listing of a prescription pharmaceutical’s price on the drug tariff is based on the Health Insurance Act and is a separate procedure from the marketing authorisation procedure provided under the Pharmaceuticals Law. The profit margin of the hospitals and the pharmacies is usually the difference between the prices for the relevant pharmaceuticals listed on the drug tariff and the prices at which the pharmaceuticals are purchased by the hospitals and the pharmacies (such price is usually lower than the price listed on the drug tariff).

In the case of medical devices, typically, it is not the medical devices themselves, but the medical services provided using the medical devices, that are reimbursable under the Japanese health insurance. However, certain medical device products that are designated by the MHLW are reimbursable under the Japanese health insurance.

The listing of pharmaceuticals on the drug tariff and the price designated for each of the pharmaceuticals listed are determined by the MHLW after reviewing the applications submitted by the market authorisation-holders of such pharmaceuticals. The price of the same product in other countries is one element of background information considered when determining the listing price. The drug tariff is reviewed and updated basically every two years. Recently, an “interim” review and update of the drug tariff is conducted after one year, which essentially means that the drug tariff is generally reviewed and updated every year.

A substantial part of the costs of pharmaceuticals and medical treatments is covered by the health insurance scheme. For the majority of Japanese residents, 70% of these costs are covered by health insurance.

The MHLW considers cost-benefit analysis as a key factor when evaluating new pharmaceuticals. Whether or not pharmaceuticals, medical devices and medical treatments are reimbursed by the Japanese health insurance, and the reimbursement price of such products and services under the Japanese health insurance, are determined and reviewed periodically by the MHLW, upon taking into consideration various factors including cost-benefit analyses.

Historically, Japanese hospitals prescribed and dispensed pharmaceuticals themselves. However, in an effort to address excessive pharmaceutical-related spending, the MHLW began incentivising hospitals to separate the prescription and dispensing of pharmaceuticals functions so that pharmaceuticals are not prescribed unnecessarily. Furthermore, under the Japanese health insurance regulations, Japanese hospitals are prohibited from instructing patients to purchase prescription drugs at a specific pharmacy.

Nagashima Ohno & Tsunematsu

JP Tower
2-7-2 Marunouchi
Chiyoda-ku
Tokyo
100-7036
Japan

+81 3 6889 7000

+81 3 6889 8000

info@noandt.com www.noandt.com/en
Author Business Card

Law and Practice

Authors



Nagashima Ohno & Tsunematsu is widely recognised as one of Japan’s leading international law firms, specialising in all aspects of business and commercial law. The firm represents domestic and foreign clients involved in every major industry sector, including many of the largest and most influential companies, funds and organisations in Japan. The firm has structured and negotiated many of Japan’s largest and most significant corporate and finance transactions, and has extensive expertise across all its practice areas. The pharmaceutical and healthcare team is based in the Tokyo office and consists of more than 14 lawyers, including eight partners. Key areas of the firm’s practice relating to the life sciences sector include pharmaceutical and healthcare, risk and crisis management/compliance, corporate/M&A, data protection and privacy, IP, antitrust/competition, consumer law (consumer litigation), dispute resolution, and labour and employment.

Compare law and practice by selecting locations and topic(s)

{{searchBoxHeader}}

Select Topic(s)

loading ...
{{topic.title}}

Please select at least one chapter and one topic to use the compare functionality.