Last Updated June 11, 2019

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.

The Fair Competition Code and the JPMA Promotion Code regulate offering gifts to healthcare professionals.

The Fair Competition Code lists several examples of permitted gift giving activities, including the following:

  • offers of articles or services that are necessary for the use of or for enhancing the benefits of ethical pharmaceutical drugs marketed by a company;
  • offers of medical or pharmaceutical information on ethical pharmaceutical drugs, including explanatory leaflets; and
  • offers of articles or services not considered extravagant or excessive in relation to seminars, or the payment of expenses for individuals to attend such seminars, which are organised for medical or other similar institutions in order to promote the understanding of certain ethical pharmaceutical drugs marketed by companies.

The JPMA Promotion Code prohibits member companies from offering healthcare professionals and medical institutions, among other entities, any goods that could potentially negatively affect the appropriate use of drugs or damage drug credibility.

The Fair Competition Code and the JPMA Promotion Code impose limitations on providing samples to healthcare professionals.

The Enforcement Rules and the Operating Standards of the Fair Competition Code provide the basic rules for offering samples of drugs. In the case of product samples for reference the following rules apply:

  • the number of units of the drug contained in one package must not exceed the maximum number allowed;
  • the number of packages provided shall be the minimum necessary for the purpose of providing samples;
  • if the drug is provided through a wholesaler, the destination medical institutions must be designated by the pharmaceutical company; and
  • pharmaceutical companies must supply the relevant drug information to the recipient healthcare professionals.

Similar rules apply to the provision of clinical drug samples.

The JPMA Promotion Code states that member companies must provide only the minimum amount of samples and must also provide the relevant drug information.

Pharmaceutical companies are allowed to sponsor scientific meetings or congresses and/or attendance by healthcare professionals to these events, but only in a limited capacity and in strict compliance with the Fair Competition Code and the JPMA Promotion Code.

With regard to a seminar for healthcare professionals concerning a pharmaceutical company’s own drugs, the company can provide non-extravagant articles or services and can bear some related expenses. For example, companies may provide tea and snacks or lunch boxes, hold small social gatherings, cover transportation and accommodation expenses and compensate the lecturer. The seminar should be held in an appropriate place in light of its –purposes it would be sensible to avoid a resort, a place for sightseeing or a location overseas for this reason (the JPMA Promotion Code expressly provides that pharmaceutical companies shall, in principle, hold such seminars in Japan). Even if such seminars are permitted to take place abroad, the payment of travel expenses must be limited to the travel expenses of healthcare professionals who will provide information on the company’s drugs to all participants. Where a pharmaceutical company hosts a seminar unrelated to its own drugs, only meeting expenses may be paid.

The rules under the Fair Competition Code set forth the types of entertainment/hospitality that pharmaceutical companies may or may not provide to healthcare professionals. By way of example, providing the sort of entertainment such as karaoke or golf is prohibited.

Pharmaceutical companies may provide grants or donations to healthcare professionals or healthcare institutions subject to the restrictions under the Fair Competition Code and the JPMA Promotion Code.

Under the Fair Competition Code, pharmaceutical companies may not provide donations to healthcare professionals or healthcare institutions as a means of unjustly inducing drug transactions. The question of whether the donations have such a purpose is decided based on detailed criteria provided in the Operating Standards of the Fair Competition Code. Some examples are discussed below.

With regard to monetary donations, according to the Operating Standards criteria, pharmaceutical companies may make monetary donations to healthcare institutions within the bounds of standard commercial practice; such donations would not be considered a means of unjustly inducing drug transactions.

With regard to non-monetary donations, the Operating Standards criteria state that pharmaceutical companies may voluntarily provide their own drugs to healthcare institutions in the case of a disaster and to the medical faculty of universities as long as doing so meaningfully contributes to the students’ lessons.

Under the JPMA Promotion Code, pharmaceutical companies shall not provide donations to healthcare professionals or healthcare institutions which may influence the appropriate use of drugs.

In practice, pharmaceutical companies in Japan usually sell their drugs to wholesalers, who in turn sell the drugs to healthcare institutions. Thus, since pharmaceutical companies do not tend to sell directly to healthcare institutions, any rebates or discounts would mostly be provided to wholesalers rather than healthcare institutions. As to such rebates or discounts provided to wholesalers, the Anti-monopoly Act (Act No 54 of 14 April 1947, as amended) may prohibit certain conduct such as adjusting the discount or rebate amount in exchange for the wholesaler agreeing to follow a suggested price.

Under the Fair Competition Code, pharmaceutical companies may offer remuneration or expenses for research or certain studies. Also permitted are expenses for post-marketing surveillance for prescription-only medicines, as well as advertising fees for advertising drugs in journals. Such payments must meet the criteria provided in the Enforcement Rules and the Operating Standards of the Fair Competition Code. For instance, remuneration must be appropriate in light of the content of the relevant research.

The JPMA Promotion Code requires that any remuneration must be appropriate in relation to the services provided. Pharmaceutical companies must not pay healthcare professionals to provide consulting services only as a way of covertly providing them prohibited monetary benefits.

No prior regulatory authorisations or notifications are required for the activities described in this section.

With regard to employer consent, some pharmaceutical companies have internal company rules which regulate providing gifts, hospitality, donations or other payments/services to healthcare professionals and institutions. Such internal rules may require obtaining prior consent from or notification to the companies’ compliance divisions.

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.

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