Law and Practice
Contributed By Jones Day
Authors
Jones Day assists with all facets of clients' marketing, promotion, and advertising efforts by devising marketing strategies, developing packaging and labelling, obtaining internal and governmental approvals and implementing compliant advertising campaigns, including print, radio and television advertising, website development and social media platforms. The firm's Life Sciences team helps clients to preserve their advertising position and challenge infringing competitors. Its lawyers provide assistance with pharmaceutical, medical device and biological regulations, including counselling and representation on diverse issues such as product development, product clearance and approval, clinical trials, biosafety, licensing agreements, facility and establishment registration, product listing, government inspections, product and ingredient notifications, recalls, corrective actions, regulatory and due diligence projects, and audits and compliance with good manufacturing practices and the quality systems regulation. The team has successfully defended clients against FDA enforcement actions including warning letters, seizures, product recalls, inspections, civil monetary penalties, adverse agency determinations, consent decrees and corporate integrity agreements. The views and opinions set forth herein are the personal views or opinions of the author; they do not necessarily reflect views or opinions of the law firm with which [he or she] is associated.
11. Enforcement
11.3 Penalties for Violating Advertising Rules and Rules on Inducements to Prescribe
Penalties or Measures Imposed by Regulators
In practice, Japanese regulatory authorities, such as the MHLW or the Prime Minister, will be likely to issue an administrative guidance against a pharmaceutical company to remedy the illegal conduct – if the company does not follow such guidance, the authority will issue an administrative disposition.
For example, under the PMD Act the MHLW or the competent prefectural governor may take the following administrative dispositions, among others:
- conduct an on-site investigation (Article 69);
- order a pharmaceutical company that violated the PMD Act to comply with a 'business improvement order' (eg, an order to improve internal review systems for advertisements) (Articles 72-4);
- order a pharmaceutical company that advertised a pharmaceutical product before obtaining the necessary marketing authorisation (prohibited under Article 68) to take certain measures to prevent any such violation in the future (Article 72-5); and
- withdraw a pharmaceutical company’s manufacturing and/or marketing licence or suspend all or part of its business for a certain period, as determined by the MHLW, for a company that violated the PMD Act (Article 75).
A company that has had its manufacturing and/or marketing licence withdrawn has the right to appeal such a disposition above under the Administrative Appeal Act (Act No 160 of 15 September 1962, as amended).
The JPMA Code Compliance Committee may take actions against pharmaceutical companies that violate the JPMA Promotion Code to address the companies’ violations in accordance with the ,Rules of Actions against the Breach of the Promotion Code'. Actions the aforementioned committee may take include, among others, serious warning, suspension of membership or expulsion from the JPMA.
The Fair Trade Council may order companies violating the Fair Competition Code to take certain measures. If the violator does not comply with such an order, the council may impose a penalty, including a fine of up to JPY1 million or expulsion from the council. The council may also request the Consumer Affairs Agency to take necessary actions.
Penalties Imposed by Courts
Courts may impose criminal penalties on pharmaceutical companies and/or on their officers and employees who violate the relevant laws. The major criminal sanctions for the violation of pharmaceutical advertising rules and rules on inducements to prescribe are as follows:
- false or exaggerated advertising and advertising for an unauthorised drug: imprisonment with labour for not more than two years and/or a fine of up to JPY2 million (PMD Act Article 85);
- advertising to the general public pharmaceutical products intended for use in the cure of cancer, sarcoma or leukaemia: imprisonment with labour for not more than one year and/or a fine of up to JPY1 million (PMD Act Article 86);
- violation of a cease-and-desist order from the Secretary General of the Consumer Affairs Agency: imprisonment with labour for not more than two years or a fine of up to JPY3 million (UPMRA Article 36);
- bribery of a public official: imprisonment with labour for not more than three years or a fine of up to JPY2.5 million (Penal Code Article 198); and
- bribery of a foreign public official: imprisonment with labour for not more than five years and/or a fine of up to JPY5 million (UCPA Article 21 (2) (vii)).
While only individuals are subject to criminal sanctions under the Penal Code, both individuals and companies may be subject to criminal sanctions under the PMD Act, the UPMRA and the UCPA (PMD Act Article 90 (ii), UPMRA Article 38 (1) and UCPA Article 22 (1) (iii)).
Jones Day
Kamiyacho Prime Place
1-17, Toranomon 4-chome
Minato-ku
Tokyo 105-0001
Japan
+81 334333939
+81 354012725
www.jonesday.com/tokyo/Authors
Jones Day assists with all facets of clients' marketing, promotion, and advertising efforts by devising marketing strategies, developing packaging and labelling, obtaining internal and governmental approvals and implementing compliant advertising campaigns, including print, radio and television advertising, website development and social media platforms. The firm's Life Sciences team helps clients to preserve their advertising position and challenge infringing competitors. Its lawyers provide assistance with pharmaceutical, medical device and biological regulations, including counselling and representation on diverse issues such as product development, product clearance and approval, clinical trials, biosafety, licensing agreements, facility and establishment registration, product listing, government inspections, product and ingredient notifications, recalls, corrective actions, regulatory and due diligence projects, and audits and compliance with good manufacturing practices and the quality systems regulation. The team has successfully defended clients against FDA enforcement actions including warning letters, seizures, product recalls, inspections, civil monetary penalties, adverse agency determinations, consent decrees and corporate integrity agreements. The views and opinions set forth herein are the personal views or opinions of the author; they do not necessarily reflect views or opinions of the law firm with which [he or she] is associated.
