The advertising of medicines in Japan is regulated by both Japanese laws and regulations as well as self-regulatory codes created by trade associations in the pharmaceutical industry. The main law that regulates pharmaceutical advertising is the Pharmaceuticals and Medical Devices Act (Act No 145 of 10 August 1960, as amended) (the "PMD Act"). The major self-regulatory codes include the codes created by the Japan Pharmaceutical Manufacturers Association (JPMA) and those created by the Japan Self-Medication Industry (JSMI).
Laws and Regulations
In Japan, the Act against Unjustifiable Premiums and Misleading Representations (Act No 47 of 19 May 1997, as amended) (UPMRA) provides some general rules concerning advertising. However, in the case of pharmaceutical advertising, the PMD Act, which is the main law that regulates drugs, has several special articles that regulate pharmaceutical advertisements. More specifically, Articles 66, 67 and 68 of the PMD Act provide for the following.
The prohibition of advertisements for unauthorised drugs
The PMD Act states that no person shall advertise the name, manufacturing process, indications or performance of a drug before obtaining the necessary marketing authorisation from the Japanese government.
The prohibition of false or exaggerated advertisements
The PMD Act states that no person shall, explicitly or implicitly, advertise, describe or circulate the name, manufacturing process, indications or performance of a drug using false or exaggerated statements.
The prohibition of advertisements endorsed by a doctor
The PMD Act states that the advertisement, description or circulation of statements giving the false impression of an endorsement by a medical doctor or other person of the efficacy or performance of a drug shall be prohibited.
The prohibition of obscene statements or diagrams
The PMD Act states that no person shall use obscene statements or diagrams or those suggesting illegal abortions in connection with the advertisement of drugs.
The regulation of advertisements for drugs for designated diseases
The PMD Act states that no person shall advertise to the general public drugs intended for use in the cure of cancer, sarcoma or leukaemia, and that are likely to be highly dangerous if used without the direction of medical doctors or dentists.
The PMD Act was amended on 17 November 2019 to introduce administrative fines for violations of the regulations on false or exaggerated advertising as well as cease and desist orders against pharmaceutical companies to correct improper advertising, among other revisions. These amendments will come into effect on 1 August 2021.
The Ministry of Health, Labour and Welfare (MHLW) is the competent governmental authority with regard to medicines in Japan and has promulgated the PMD Act Enforcement Ordinance, the PMD Act Enforcement Regulations and various other notices for the enforcement of the PMD Act. One among these is the "Standards for Appropriate Advertising concerning Medical Goods" (Notification No 0929-4 of the Pharmaceutical Safety and Environmental Health Bureau of 29 September 2017) (the "Standards"), which were issued by the MHLW in the form of an official notice and which have as their central function the regulation of pharmaceutical advertising.
The Standards provide the standards of conduct that must be adhered to by any person or entity when advertising drugs. The Standards consist of two parts: The first part relates to the interpretation of "False or Exaggerated Advertisements", under Article 66 (1) of the PMD Act and the second part sets forth rules to prevent misuse, drug abuse and the deterioration of drug reliability.
The first part of the Standards sets forth specific rules regarding:
The second part of the Standards prescribes the rules or restrictions regarding:
The Detailing Guidelines
In order to prevent dissemination of inappropriate information during the course of promotion activities, the MHLW issued its new "Guidelines Concerning Detailing Activities of Ethical Drugs" (the "Detailing Guidelines") on 25 September 2018. The Detailing Guidelines took full effect on 1 October 2019 and include:
With regard to prescription-only medicines, a trade association of leading Japanese pharmaceutical research companies issues the major self-regulatory codes. In particular, the JPMA Code of Practice (the "JPMA Code") is the main regulatory code that regulates pharmaceutical advertisements. The JPMA Code has two chapters. The first chapter is the Code of Practice (the "JPMA Code of Practice") and the second chapter is the Promotion Code (the "JPMA Promotion Code"). This code establishes the rules that all member companies must comply with when promoting prescription-only medicines.
The JPMA has also issued several additional guidelines relating to pharmaceutical promotion. For example, among these are the Guidelines for the Drafting of Prescription Pharmaceutical Products Informational Material (the "JPMA Drafting Guidelines"), see 5 Advertising to Healthcare Professionals.
With regard to advertising over-the-counter (OTC) medicines, the Japan Self-Medication Industry (JSMI), a trade association of Japanese over-the-counter manufacturers, issued the Guidelines for Proper Advertising of Over-the-Counter Medicines (the "OTC Guidelines"). The OTC Guidelines apply to the advertising of non-prescription drugs to the general public. In particular, the OTC Guidelines regulate advertising through newspapers, magazines, television, radio, websites and other forms of mainstream media to ensure the appropriateness of publicity and advertising activities of non-prescription drugs.
A self-regulatory code will apply to the member companies of the particular trade association that created the code. For example, the codes created by the JPMA apply only to pharmaceutical companies that are JPMA member companies.
Conduct that violates self-regulatory codes does not necessarily violate Japanese laws and regulations; such conduct is only illegal if it independently violates Japanese laws and regulations. However, a violator may face sanctions under the self-regulatory codes, potentially damaging its reputation.
Notice No 148 dated 29 September 1998, issued by the Pharmaceutical Safety Bureau of the MHLW, defines "advertising" for the purposes of the PMD Act. This notice states that "advertising" has all of the following three characteristics:
Advertising and other information are distinguished by the above definition of "advertising". First, advertising must be clearly intended to induce customers to make purchases, for example, it is not likely that a book in a medical library describing certain drugs and targeted at researchers would have such an intention. As to the second requirement – the clear expression of product names – it may be met even in cases where particular product names are not mentioned; this would be the case if the general public could recognise particular medicines based on the pictures or descriptions of those medicines shown in the advertisement. Finally, the third requirement (the ability to be seen by the general public) would not be likely to be satisfied if the relevant information is only provided to patients in a hospital, since the narrow scope of its distribution would limit the potential for the information to reach the general public.
Disease-awareness campaigns and other patient-facing information do not qualify as “advertising” under the PMD Act unless they satisfy all three parts of the definition of advertising set-out above. For example, if a disease-awareness campaign informs the public in a general way about a certain disease and does not name specific medicines, it is not considered "advertising" under the PMD Act. However, a disease-awareness campaign that provides patient-facing information concerning prescription-only medicines to the general public would run a risk of being "advertising" under the PMD Act. In this regard, the JPMA Code of Practice suggests that the content of disease awareness activities targeting ordinary citizens and patients be closely inspected from the planning stages so that they will not be considered prohibited advertising.
Press releases regarding medicines are not prohibited. However, if a press release satisfies the three parts of the definition of advertising mentioned in 2.1 Definition of Advertising, both the regulations concerning advertising under the PMD Act and the Standards will apply.
Generally, the restrictions under the PMD Act are more stringent when the target audience is the general public than when the target audience is healthcare professionals. For example, advertisements for pharmaceutical products used for cancer, sarcoma or leukaemia aimed at the general public are prohibited under Article 67 of the PMD Act.
Comparative advertising for medicines is not prohibited but it is restricted by Japanese law and self-regulatory codes. According to the Commentary of Article 9 of the Standards, a pharmaceutical company’s comparative advertising must only feature its own products and the advertising must specify the name of those products. Comparisons with competitors’ products are prohibited. In addition, when a pharmaceutical company compares two of its own products, the company must ensure that it provides a sufficient explanation of the products.
Further, the JPMA Promotion Code stipulates that comparative advertising “shall be based on scientific data and, in principle, shall be made using generic names”.
Finally, the Consumer Affairs Agency has issued general guidelines for comparative advertising. These guidelines suggest that a comparative advertisement shall be considered a Misleading Representation prohibited under the UPMRA if:
Article 68 of the PMD Act expressly prohibits advertising unauthorised medicines or unauthorised indications. However, providing information on unauthorised medicines or unauthorised indications that falls outside the definition of “advertising” under the PMD Act is allowed.
Guidelines for Providing Information
The Detailing Guidelines include the following conditions for providing information on unauthorised medicines and unauthorised indications:
Cases Permitting Additional Information
The JPMA Promotion Code requires that member companies may only provide certain information, such as indication, dosage and administration, which may not deviate from the approved label for the relevant drug. However, the Commentary of the JPMA Promotion Code lists several cases in which the provision of other information is permitted if the information is provided for the purpose of promoting the right to know about scientific/medical advancements for both medical/pharmaceutical experts and the general public. These cases include:
Moreover, the Commentary notes that, even if the activity consists of providing information as permitted above, the company must take special care not to be involved in any inappropriate promotional activities for its own commercial purposes.
The aforementioned Commentary of the JPMA Promotion Code lists two cases in which providing information on unauthorised medicines or unauthorised indications during a scientific conference directed at healthcare professionals is allowed.
The first case is the presentation of clinical research results during a scientific meeting. However, seminars sponsored by pharmaceutical companies are not covered by this exception.
The second case is the display, by a pharmaceutical company, of educational samples of an unapproved medicine at an exhibition during an international scientific meeting. This only applies, however, when such an unapproved medicine has been approved in at least one other country. If no countries have approved the product, the company may not display a sample of the product. In addition, the pharmaceutical company may not distribute samples of unapproved medicines and related scientific materials to anyone during the meeting.
As mentioned in 3.1 Restrictions on Provision of Information on Unauthorised Medicines or Indications, the Detailing Guidelines provide certain conditions on providing information on unauthorised medicines or unauthorised indication and such conditions will apply to the provision of information during a scientific conference.
The aforementioned Commentary of the JPMA Promotion Code allows the supply, by a pharmaceutical company, of peer-reviewed scientific journal articles, such as reprints of medical journals, upon the request of a medical doctor. However, companies shall not proactively induce a medical doctor to request such scientific journal articles.
As mentioned in 3.1 Restrictions on Provision of Information on Unauthorised Medicines or Indications, the Detailing Guidelines provide certain conditions on providing information on unauthorised medicines or unauthorised indication.
There are no Japanese laws or self-regulatory codes that expressly regulate the sending of information on unauthorised medicines or indications to healthcare institutions to enable them to prepare budgets. Given that there are no laws or self-regulatory codes that permit such transmission of information, there remains a risk that such conduct would be considered a “promotional activity on unauthorised medicines or unauthorised indications”, which is prohibited under Article 68 of the PMD Act.
Japan’s compassionate use programme is intended to promote the expansion of clinical trials for patients who are interested in using unapproved products but are unable to join a clinical trial because they do not meet the inclusion criteria. This expanded trial system applies to investigational products that have gone through or are currently going through a clinical trial that is in the final stage of development; generally clinical trials conducted to verify efficacy and safety after indications and dosage and administration have been established through a separate series of studies (“Main Trials”).
In order to provide such patients with information on the ongoing Main Trials or expanded trials, the PMDA will publish on its website certain information, such as a description of the investigational product (investigational ingredient code), contact information for the trial sponsor, subject disease, and scheduled period of the trial. Provision of such information by pharmaceutical companies is allowed “reactively” (ie, only upon actual request from healthcare professionals, patients, etc) and under strict compliance with all requirements stipulated in the Detailing Guidelines as explained in 3.1 Restrictions on Provision of Information on Unauthorised Medicines or Indications. Accordingly, publication of such information by pharmaceutical companies is not permitted.
Advertising Prescription-Only Medicines
Advertising prescription-only medicines to the general public is prohibited in Japan. Article 5 (1) of the Standards expressly prohibits such advertising. In addition, Article 67 (1) of the PMD Act prohibits advertising drugs for specified diseases and regenerative medicines to the general public.
Advertising Over-The-Counter Medicines
Advertising OTC medicines to the general public is not prohibited but is restricted by the PMD Act and the Standards, as well as by self-regulatory codes.
Advertising for OTC medicines is subject to the rules concerning advertising under the PMD Act and the Standards, which are described above in 1 Pharmaceutical Advertising: Regulatory Framework. In this regard, it should be noted that Article 6 of the Standards stipulates a particular restriction on advertisements to the general public concerning the efficacy of drugs for diseases that cannot be expected to be cured without a doctor’s or dentist’s diagnosis or treatment. This Article provides that any such advertisements targeted to the general public must not suggest that the diseases can be cured without such a diagnosis or treatment.
In addition, the OTC Guidelines regulate advertising through newspapers, magazines, television, radio, websites and other forms of mainstream media to ensure the appropriateness of the publicity and advertising activities for non-prescription drugs.
There is no law or regulation that provides exactly what information must be included in pharmaceutical advertising aimed at the general public. However, under the PMD Act and the Standards, if advertising contains information as to the names of the products, their manufacturing process or their indication, dosage, administration or safety, the advertising must follow the following rules:
Beyond the question of what information to include, the OTC Guidelines identify specific statements that are required or prohibited in advertisements for each category of OTC medicines. For instance, advertisements for cold medicines must use the phrase “relief of cold symptoms” but not “this will not make a patient sleepy”. Also, advertisements for cold medicines on television or through streaming video on the internet must display the statement “this product shall be used after receiving an explanation from a pharmacist and after carefully reading the warning label” for one second or more with clear and distinct characters.
As for the price of the medicine, this information can be mentioned in advertising aimed at the general public, although doing so is not required by laws or self-regulatory codes.
There are no laws or regulations that expressly impose restrictions on interactions between patients or patient organisations and industry.
As for the main self-regulatory codes, the JPMA Code of Practice sets forth the rules concerning collaboration with patient groups. First, when a pharmaceutical company has any relationships or collaboration with patient institutions, the company must respect the independence of the institutions and the company’s activities must meet a high ethical standard. Further, the company must make an effort to promote sufficient mutual understanding with patient groups regarding the purpose and scope of the collaboration.
Second, the fact of the sponsorship itself is required to be disclosed. Further, the purpose and scope of the sponsorship shall be agreed upon between both parties and shall be made in writing and recorded in order to ensure transparency. Finally, the member companies that are collaborating with patient organisations shall establish internal company guidelines based on the "Guideline on Collaboration with Patient Organisations" issued by the JPMA.
There is no national law or regulation that explicitly provides which information must be included in pharmaceutical advertising directed at healthcare professionals.
However, if such advertising contains information relating to the names of the products, the manufacturing process and the indication, dosage, administration or safety of or in relation to the drugs, as well as other relevant items, the advertising shall be subject to the Standards, as described in 4.2 Information Contained in Pharmaceutical Advertising to the General Public.
As for self-regulatory codes, the JPMA Drafting Guidelines provides that advertising directed at healthcare professionals must contain the following information in principle:
Even if an advertisement is intended to promote only the name of a product, statements made in the advertisement shall contain at least the brand name, therapeutic category, regulatory classification, generic name and presence on the NHI reimbursement price list.
Specific Prohibited Statements
Beyond the question of which information to include, the JPMA Promotion Code identifies specific statements that may or may not be used in advertisements to healthcare professionals. For example, it prohibits stating that “there are few adverse reactions” without also citing the conditions of use or without providing a summary of relevant data, including the relevant adverse reactions, to back up such a safety claim. The JPMA Promotion Code also attempts to promote the quality and clarity of the information being presented. For example, the advertising materials must not only emphasise the efficacy of the product but must also include product safety information, including adverse reactions, in order to create a fair and balanced statement of the advertising. Further, the contact and address for seeking more information on the product must be described clearly.
As for the price of the medicine, the advertising must mention whether or not the medicine is registered on the NHI reimbursement price list, rather than the price itself.
Reference in pharmaceutical advertisement to data on file or other clinical studies not included in the Summary of Product Characteristics is not prohibited. However, references to data on file or clinical studies are limited in certain ways by law and by self-regulatory codes.
First, the general rules on advertising (such as prohibition of false or exaggerated advertisements and advertising that recommends unapproved drugs or off-label uses) under the PMD Act will apply.
Second, references to data on file or other clinical studies shall be subject to the specific regulations provided by the JPMA Drafting Guidelines. For example, statements shall only concern indications approved in Japan. In addition, the study must be published in a peer-reviewed journal.
In Japan, combination products are treated as one product (ie, pharmaceutical, medical device or regenerative medicine product) and will have one Summary of Product Characteristics. The fact that a diagnostic is a companion diagnostic for certain drug must be included in the Summary of Product Characteristics.
Reprints of journal articles for healthcare professionals are subject to the conditions set forth in both laws and regulations and self-regulatory codes. Major restrictions on reprints are as follows:
There is no national law or regulation that specifically refers to or governs the activities of Medical Science Liaisons (MSLs) or Medical Affairs (MA) activities in Japan. However, in keeping with global practice, the number of pharmaceutical companies establishing MA sections and MSLs in Japan has been on the rise recently. Against this background, the JPMA issued a “Consensus Statement on Medical Affairs Activities” and “Consensus Statement on Medical Science Liaison Activities” (JPMA MSL Statement) on 1 April 2019. In the JPMA MSL Statement, an MSL is defined to mean “a person who belongs to a division independent from the company’s commercial divisions and whose main role is to interact with external experts in the field of medicine or science”.
The JPMA MSL Statement also provides that MSL activities should not be aimed at promoting sales of the company’s drugs. As the definition shows, an MSL’s main role is to interact with external experts. However, this does not mean that MSLs are prevented from responding passively (but not proactively) to requests from other healthcare professionals, including requests for information on unauthorised medicines or indications. When MSLs provide any such information on unauthorised medicines or indications at the request of healthcare professionals, they must comply with the requirements under the Detailing Guidelines as explained in 3.1 Restrictions on Provision of Information on Unauthorised Medicines or Indications.
In Japan, advertisements for medicines do not require prior authorisation from, nor notification to, any regulator.
The Detailing Guidelines require that companies establish internal systems to ensure appropriate conduct with respect to promotion activities. This includes establishing a “promotion supervisory department” responsible for monitoring promotional materials and promotion activities, which must be separate from the company’s sales and marketing division. Companies are also required to set up a “review and supervisory committee”, which must include members who are independent of the company, to provide independent advice to the promotion supervisory department. In addition, the Detailing Guidelines require, among others:
The JPMA Promotion Code also requires that JPMA member companies establish internal systems to comply with relevant laws, regulations and industry self-regulations, appoint a promotional material officer and establish an in-house oversight system so that only reviewed promotional materials and advertisements are used.
Generally, the same laws, regulations and self-regulatory codes concerning pharmaceutical advertising will also apply to advertising on the internet for medical products. In addition, the Commentary to the JPMA Promotion Code provides specific rules concerning access restrictions on internet-accessible information related to prescription-only medicines.
As advertising prescription-only medicines to the general public is prohibited, when a pharmaceutical company provides healthcare professionals with product-related information concerning prescription-only medicines through the internet, the company must restrict access to the relevant websites so that only healthcare professionals have access to such information.
The question, therefore, is what is considered a sufficient access restriction. In this regard, the Commentary provides the conditions set forth below; if all these conditions are satisfied, then an access restriction will be considered sufficient:
As long as a pharmaceutical company uses a sufficient access restriction, it is not required to use any particular method of establishing passwords.
Generally, the same laws, regulations and self-regulatory codes concerning pharmaceutical advertising will also apply to pharmaceutical advertising on social media. The JPMA Code of Practice in particular describes several issues to which pharmaceutical companies must pay close attention when advertising through social media.
The JPMA Code of Practice defines "social media" as media formed by interactive communication mainly through the internet, where the users, including individuals, send various information. The main feature of social media is that an individual can easily and promptly send information to the general public. Due to this characteristic of the medium, inappropriate information, including false information, may be broadly transmitted to the general public without any confirmation of the accuracy of the information. Therefore, the JPMA Code of Practice requires member companies to take all responsibility for such social media content and before advertising on social media the companies must confirm that all relevant subsidiaries, parent companies, affiliates, planning companies, agencies, employees, etc, comply with the JPMA Code.
Further, the JPMA Code of Practice requires that member companies pay special attention to the following:
As mentioned in 7.1 Regulation of Advertising of Medical Products on the Internet, pharmaceutical companies must include access restrictions on websites containing advertising, or other information intended for healthcare professionals, since advertising prescription-only medicines to the general public is prohibited.
Generally speaking, the provision of disease awareness information to patients online is subject to the same laws, regulations and self-regulatory codes as apply to those activities offline. As mentioned in 2.2 Information or Advertising: Disease Awareness Campaigns and Other Patient-Facing Information, the JPMA Code of Practice suggests that the content of disease awareness activities targeting ordinary citizens and patients be closely inspected from the planning stages so that they will not be considered prohibited advertising.
There are no specific laws, regulations or self-regulatory codes in Japan that address online scientific meetings. As a result, online scientific meetings would be subject to the same laws, regulations and self-regulatory codes that apply to in-person scientific meetings.
pharmaceutical companies and healthcare professionals or organisations are provided in the Penal Code (Act No 45 of 24 April 1907, as amended). In addition, pharmaceutical companies are expected to comply with the National Public Service Ethics Code (the "Ethics Code"). Further, the Unfair Competition Prevention Act (Act No 47 of 19 May 1993, as amended) (UCPA) provides rules regarding bribery to foreign officials. These regulations apply only to benefits provided to recipients who are individuals (eg, public officers).
Article 198 of the Penal Code is the basic anti-bribery regulation that directly applies to officers or employees of pharmaceutical companies. Article 198 provides that any person who gives, offers or promises to give a bribe to a public official shall be punished by imprisonment with labour for not more than three years or a fine of not more than JPY2.5 million.
Bribery under the Penal Code is broadly defined. It covers not only money or goods but also any benefit (material or immaterial) sufficient to satisfy a person’s desires. “Public Official” is also broadly defined. The term includes not only national or local government officials but also individuals deemed government officials under special laws.
National Public Service Ethics Code
The Ethics Code is a code established by the Cabinet based on the National Public Service Act for the purpose of maintaining the integrity of, and citizens’ trust in, public service. The Ethics Code prohibits national public officials from receiving money or goods from interested parties. In some situations, pharmaceutical companies can be considered such "interested parties". The Ethics Code provides for some exemptions, including, among others:
Pharmaceutical companies are expected not to participate in conduct that violates the Ethics Code in order to prevent illegal acts by national public officers.
Unfair Competition Prevention Act
Article 18 (1) of the UCPA prohibits any person from giving, offering or promising to give any benefit to a foreign public official to have that foreign public official act or refrain from acting in relation to the performance of his or her official duties, in order to make any illicit gains in business with regard to an international commercial transaction. An employee of a pharmaceutical company who violated Article 18 would face imprisonment with labour for up to five years and/or a fine of up to JPY5 million. Further, the pharmaceutical company itself may also be subject to a fine of up to JPY300 million.
The UPMRA and the Fair Competition Code concerning Restriction on Premium Offers in the Ethical Pharmaceutical Drugs Marketing Industry (the Fair Competition Code) regulate offering benefits or other inducements to prescribe to healthcare professionals or organisations. The JPMA Promotion Code contains similar rules. These regulations apply to benefits provided both to individuals and organisations.
Article 4 of the UPMRA allows the Prime Minister to restrict the offering of premiums in various ways, including through a prohibition. Under Article 6 (2) of the UPMRA, the Cabinet issued a public notice: "Restrictions on the Offering of Premiums in the Ethical Pharmaceutical Drugs, Medical Devices and Sanitation Inspection Industries". The notice prohibits pharmaceutical companies from offering articles, services or other premiums to healthcare institutions as a means of inducing unjust transactions beyond what is commercially reasonable for the usage or sanitary inspection of ethical pharmaceutical drugs.
Fair Competition Code
"Fair competition codes" are self-regulatory codes set up by the business associations of specific industries based on the UPMRA restrictions on the provision of premiums. Generally, fair competition codes will include UPMRA rules as well as supplemental rules not provided under the UPMRA depending on the nature of the products and transactions in the relevant industry. The pharmaceutical industry established the Fair Competition Code, which pharmaceutical companies are currently complying with.
The Fair Competition Code provides that pharmaceutical companies shall not offer premiums to healthcare professionals or institutions as a means of unjustifiably inducing drug transactions. If, however, based on standard commercial practices the offers of economic benefits are considered to be discounts, after-sale services or benefits in connection with the drugs, they are no longer categorised as offers of premiums. In addition, even if money, goods or economic benefits are considered premiums, there are some cases in which offering premiums is permitted (several examples are listed). In addition, if premiums are "small sum offerings", offering them will not violate the Fair Competition Code.
The JPMA Promotion Code
The JPMA Promotion Code has several provisions regarding offering benefits to healthcare professionals or institutions. It regulates, among other issues:
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:
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:
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.
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 entertainment such as karaoke or golf, for example, 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.
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, 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.
The Clinical Research Act
The Clinical Research Act (Act No 16 of 14 April 2017), which took effect on 1 April 2018, requires that pharmaceutical companies and their subsidiaries disclose certain transfers of value to healthcare professionals and institutions in connection with specified clinical research. Clinical research includes human trials examining the efficacy or safety of pharmaceuticals but would not include a clinical trial for new drug conducted under the PMD Act.
Specified clinical research is defined as clinical research funded by pharmaceutical companies, clinical research on unapproved drugs or clinical research concerning off-label use of a drug.
Transfers of value which must be disclosed under the Clinical Research Act include research funds for specified clinical research, donations provided during the term of or within two years after specified clinical research, and fees for writing, lectures or other services provided during the term of and within two years after specified clinical research. The recipients of payments covered by the regulation include healthcare providers involved in specified clinical research, healthcare institutions or other organisations to which a principal investigator belongs, and organisations managing the specified clinical research. The transfers of value for specified clinical research made in each fiscal year shall be disclosed the following fiscal year on the company’s website.
The JPMA Transparency Guideline
The JPMA "Transparency Guideline for the Relation between Corporate Activities and Medical Institutions" (the "Transparency Guideline") requires that JPMA member companies disclose certain information regarding transfers of value made to healthcare professionals or healthcare institutions.
The Transparency Guideline further requires that each member company create its own internal "transparency policy" based on the Transparency Guideline. Therefore, each JPMA member company has established its own internal transparency policy and has been disclosing information on transfers of value it has made to healthcare institutions based on this internal policy.
The Transparency Guideline creates five different categories of transfers of value (fees or expenses). For each category the relevant fees or expenses must be disclosed in detail. The five categories are:
The types of transfers of value to be disclosed include not only cash but also medicines, medical devices and other goods. Value transferred through a third party, such as a subcontractor or foundation, must be disclosed as well.
Recipients and disclosure
The recipients of payments covered by the Transparency Guideline include healthcare institutions (such as hospitals and pharmacies), research institutes (such as medical and pharmaceutical departments of universities), healthcare associations (such as medical associations and pharmacists’ associations) and persons engaged in medical care and nursing care (such as doctors and nurses) and life-science researchers. The transfers of value made in each fiscal year shall be disclosed in the following fiscal year through the company’s website.
As the transparency requirements under the Clinical Trial Act would apply only to the marketing authorisation holder and its subsidiaries, the requirements would not apply to foreign companies or companies that do not sell products on the market in Japan.
The transparency requirements under trade association rules such as the above-mentioned Transparency Guideline only bind members of such trade associations. Accordingly, the transparency requirements under the self-regulatory rules will not apply to foreign companies and/or companies that do not yet have products on the market, unless such companies are members of trade associations with transparency requirements.
Each Japanese law has one or more government agencies that are responsible for enforcement (ie, the regulatory authority). With regard to the PMD Act, as well as the Standards, the MHLW and the competent prefectural governor are the regulatory authorities. In the case of the UPMRA, the Prime Minister, the Consumer Affairs Agency, the Japan Fair Trade Commission and the competent prefectural governor are the regulatory authorities.
The main role of courts in administrative law enforcement (including for the PMD Act) is to impose criminal penalties on companies and their employees that violate the law. In the case of a serious violation, the regulatory authority will ask the Public Prosecutor’s Office to prosecute the company or its employee, and the Public Prosecutor’s Office will file charges against the company. The court will then render a final judgement.
With regard to the enforcement of self-regulatory codes, the codes usually establish an organ that is in charge of enforcing the code. In the case of the JPMA Promotion Code, the JPMA Code Compliance Committee is responsible for enforcement. As for the Fair Competition Code, the Fair Trade Council of the Ethical Pharmaceutical Drug Marketing Industry (the "Fair Trade Council"), which consists of the pharmaceutical companies designated by the code, is responsible for the code’s enforcement.
In Japan, pharmaceutical companies may initiate civil litigation proceedings against their competitors before courts for certain types of advertising infringements based on the UCPA.
Under the UCPA, a company whose business interests have been infringed or are likely to be infringed by a competitor’s
The company may also claim damages to its business interests resulting from intentional or negligent infringement related to the above conduct.
For example, a pharmaceutical company may file a lawsuit in Japanese court seeking an injunction and/or compensation of damages against a competitor if the competitor creates an advertisement containing falsehoods or slander regarding the pharmaceutical company’s products.
Penalties or Measures Imposed by Regulators
In practice, Japanese regulatory authorities, such as the MHLW or the Prime Minister, will most likely issue an administrative “guidance” in the first instance against a pharmaceutical company found to be in violation, which is basically an official request to remedy the illegal conduct. If the company does not follow such guidance, the authority will then issue an administrative “disposition.”
Under the PMD Act the MHLW or the competent prefectural governor may take the following administrative dispositions, among others:
In addition, as mentioned in 1.1 Laws and Self-Regulatory Codes Regulating Advertising on Medicines, the amendments of the PMD Act, which will become effective on 1 August 2021, include administrative fines for violations of the regulations on false or exaggerated advertising as well as cease and desist orders against pharmaceutical companies engaged in such improper advertising.
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
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
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:
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)).
The procedures before and measures taken by the self-regulatory authority and the courts are conducted separately and independently.
The MHLW is strengthening its enforcement activities in relation to pharmaceutical advertising. In 2016, the MHLW began monitoring the advertising of ethical drugs in order to identify violations early and encourage voluntary measures on behalf of the pharmaceutical companies and trade associations. This endeavour included the appointment of an anonymous healthcare institution to identify problematic items in advertisements and promotional information provided by pharmaceutical companies, including on their websites or in specialist journals.
On 1 October 2019, the MHLW expanded the monitoring activity above to include information from any healthcare institution on a voluntary basis. As a result of these monitoring activities, the MHLW identified 39 cases, including 57 problematic materials, in 2019.
In addition, as mentioned in 1.1 Laws and Self-Regulatory Codes Regulating Advertising on Medicines, the MHLW issued the Detailing Guidelines in 2018 and amended the PMD Act in 2019 to include administrative fines for violations of the regulations on false or exaggerated advertising as well as cease and desist orders against pharmaceutical companies engaged in improper advertising.
The views and opinions set forth herein are the personal views or opinions of the authors; they do not necessarily reflect views or opinions of the law firm with which they are associated.
Analysis of the Administrative Monetary Penalty and Administrative Order Systems targeting False or Exaggerated Advertising under the PMDA
At a plenary session on 27 November 2019, the House of Councillors passed an amendment to the Act on Securing Quality, Efficacy and Safety of Products Including Pharmaceuticals and Medical Devices (PMDA), which was promulgated on 4 December 2019. The draft amendment includes administrative monetary penalty and administrative order systems to address false or exaggerated advertising of pharmaceuticals and medical devices. The systems will be implemented on 1 August 2021.
This article outlines the newly introduced administrative monetary penalty and administrative order systems under the PMDA, and provides commentary on the differences between these systems and a similar system under the Act against Unjustifiable Premiums and Misleading Representations (UPMR) relating to misleading representations.
Outline of the Administrative Monetary Penalty System under the PMDA
The PMDA imposes a monetary penalty for acts constituting false or exaggerated advertising relating to pharmaceuticals, medical devices, quasi-pharmaceuticals, cosmetics and regenerative medicines (Article 66, Paragraph 1). During the legislature’s discussions regarding the amendment to the PMDA, advertising of unapproved pharmaceuticals, medical devices and regenerative medicines (Article 68) was excluded as a basis for the new monetary penalty.
Article 66, Paragraph 1 (Prohibition against False or Exaggerated Advertising)
"No person must, explicitly or implicitly, advertise, describe or circulate false or exaggerated statements regarding the name, manufacturing process, efficacy and effects or performance of pharmaceuticals, quasi-pharmaceuticals, cosmetics, medical devices or regenerative medicines."
Article 68 (Prohibition against the Advertising of Unapproved Pharmaceuticals, etc)
"No person may advertise the name, manufacturing process, efficacy, effects or performance of pharmaceuticals or medical devices, or regenerative medicines… [omitted]… which have not yet been approved… [omitted]…, or which have not yet been certified … [omitted]…"
Scope of false or exaggerated advertising
Only statements regarding the name, manufacturing process, efficacy, effects or performance of pharmaceuticals, etc, may be the basis for a claim of false or exaggerated advertising. False or exaggerated advertising relating to trade terms, such as price or campaign period for pharmaceuticals, is not actionable.
Basis for calculating the monetary penalty
The amount of the monetary penalty is 4.5% of the sales of the subject products for a maximum period of three years.
Exclusion from application of the monetary penalty
If the amount of the monetary penalty is less than JPY2.25 million, ie, if the product sales are less than JPY50 million, the monetary penalty will not be imposed.
Further, a person who becomes subject to an administrative action, such as an administrative order, business suspension order or rescission of business licence, may be exempt from the application of a monetary penalty at the discretion of the Minister of Health, Labour and Welfare.
Reduction of monetary penalties
If a business operator voluntarily reports potential violations of the PMDA prior to commencement of a governmental investigation against it, the amount of the monetary penalty will be reduced by 50%. Further, if an order for payment of a monetary penalty pursuant to the UPMR cumulatively applies, then 3% of the sales, which is the monetary penalty under the UPMR, will be deducted from the monetary penalty under the PMDA.
The authority to issue orders
The Minister of Health, Labour and Welfare has the authority to issue an order for a monetary penalty.
Newly Introduced Administrative Order System under the PMDA
The amendment to the PMDA also introduced a system for administrative orders. Prior to the amendment, only violation of the prohibition against the advertising of unapproved pharmaceuticals, etc, (Article 68) would be the basis for a cease and desist order pursuant to Article 72-5. As a result of the amendment, acts in violation of the prohibition against false or exaggerated advertising (Article 66, Paragraph 1) may be the basis of an order requiring implementation of measures to prevent recurrence of those false or exaggerated advertisements and public announcements related to implementation of those measures, as well as suspension of the violations.
The title of the provision was changed from “Cease and Desist Orders” to “Administrative Orders concerning Violating Advertisements.” The Minister of Health, Labour and Welfare, as well as prefectural governors, has authority to issue administrative orders.
Comparison with the UPMR
Acts that form the basis for monetary penalties
The PDMA authorises a monetary penalty for advertising, describing or circulating false or exaggerated statements concerning the name, manufacturing process, efficacy, effects or performance of pharmaceuticals, etc (Article 66, Paragraph 1).
Similarly, the UPMR imposes a monetary penalty based on representations that mislead people into believing that the quality, standard or any other particulars relating to the content of goods or services are significantly superior to those of the actual goods or services or to those of other business operators (ie, misleading representation of superiority), and representations that mislead people into believing that the price or any other trade terms relating to goods or services are significantly more advantageous than those of the actual goods or services or than those of other business operators (ie, misleading representation of trade terms).
There is some overlap between false or exaggerated advertising under the PMDA and misleading representations of superiority under the UPMR. The PMDA applies to false or exaggerated advertising concerning “the name, manufacturing process, efficacy, effects or performance” of pharmaceuticals, etc, but not to statements concerning the “standard” of a product. Application of the UPMR is not limited to pharmaceuticals, etc, and applies to representations concerning “the quality, standard or any other particular relating to the content” of goods and services in general. Although these criteria are not identical, a false or exaggerated advertisement concerning the standard of a product would also likely constitute a false or exaggerated advertisement concerning its efficacy, effects or performance. Thus, there is significant overlap in the types of statements regarding pharmaceuticals, etc. that would be the basis for monetary penalties under both the PMDA and the UPMR.
However, false or exaggerated advertising concerning trade terms, including price or campaign period for drugs, is not actionable under the PMDA. Therefore, if, for example, a false or exaggerated advertisement regarding price or campaign period of an OTC drug is placed on the internet, the UPMR, rather than the PMDA, would apply.
Persons subject to monetary penalties
The language of Article 66 of the PMDA indicates that there is a possibility that advertising agencies and the media may also become subject to a monetary penalty. By contrast, the UPMR prohibits misleading representations “in connection with the transaction of goods or services that the business operator supplies” (Article 5). Thus, only providers of goods and services (ie, advertisers) may be subject to a monetary penalty under the UPMR.
Calculation of monetary penalties
Both the PMDA and the UPMR provide a maximum sales period of three years as the basis for calculation of monetary penalties.
However, while the monetary penalty under the UPMR is calculated at 3% of the sales of the subject goods or services, the monetary penalty under the PMDA is calculated at a higher ratio of 4.5% of the sales of the subject goods.
Exclusion from imposition of monetary penalties
Exclusion based on sales
The PMDA provides that if the amount of the monetary penalty is less than JPY2.25 million (ie, if sales from the relevant period are less than JPY50 million), then the violator would not be subject to the monetary penalty. The monetary penalty system under the UPMR contains a similar restriction for sales of less than JPY50 million. The minimum penalty amount is set from the perspective of efficient execution of administrative authorities.
Discretionary exclusion based on imposition of other administrative action
The monetary penalty system under the PMDA allows the Minister of Health, Labour and Welfare to exercise discretion not to issue an order for payment of a monetary penalty in the following cases:
The UPMR does not provide for discretionary exclusion.
However, as a practical matter, if an advertisement is so false or exaggerated as to be the basis for an administrative action, such as an administrative order or the rescission of a business licence, the Minister of Health, Labour and Welfare would be unlikely to exercise their discretion not to issue an order for a monetary penalty.
Basis for exclusion that is not included in the PMDA
The UPMR provides that a monetary penalty may not be imposed if the business operator “did not fail to exercise due caution about its lack of awareness” of the false representation (Article 8, Paragraph 1). By contrast, the PMDA does not contain a similar provision.
Provision on reduction of monetary penalties
Reduction based on self-reporting
The PMDA states that if a business operator voluntarily reports its potential violations prior to commencement of an investigation, the penalty amount will be reduced by 50%. The UPMR contains a similar provision.
Reduction based on cumulative application of the UPMR
The PMDA further provides that the amount of the monetary penalty will be reduced by 3% in the following cases:
This provision is based on the premise that the systems for monetary penalties under the UPMR and the PMDA are cumulatively applied. Reference to the interpretation of this provision by the Ministry of Health, Labour and Welfare is necessary to determine whether this provision applies even if an order is issued based on the assertion that the representation is a misleading representation of trade terms, rather than a misleading representation of superiority.
Reduction provision that is not included in the PMDA
The UPMR states that the amount of any refund to consumers will be deducted from the amount of the monetary penalty (Article 10). This provision was not included in the PMDA because the UPMR applies to false representations to general consumers and encourages issuance of refunds to compensate consumers for their damages. Since the PMDA applies not only to general consumers, but also to medical businesses or health care professionals, there is little reason to encourage a refund policy.
Shift in the Burden of Proof from the Administrative Authority to Business Operators
The UPMR places the burden of proof of the advertised efficacy and effect on the business operator that made the representation. A representation will be deemed or presumed to constitute a misleading representation of superiority if the business operator fails to submit data to support a reasonable basis for the representation within a designated period (fujisshou koukoku kisei) (Article 7, Paragraph 2 and Article 8, Paragraph 3). By contrast, the PMDA does not contain a similar system. Thus, pursuant to the PMDA, the administrative authority must prove “that the advertised efficacy and effect are false or exaggerated.”
Violation of Article 68 is Not a Basis for a Monetary Penalty
Only false or exaggerated advertising may be the basis for a monetary penalty. Violation of the prohibition against advertising of unapproved pharmaceuticals will not support imposition of a monetary penalty.
Article 2, Paragraph 1, Items (ii) and (iii) of the PMDA states that “pharmaceuticals” are defined as objects that are intended to have medical effect regardless of whether they actually have that effect:
Article 2, Paragraph 1 (Definitions)
The term “pharmaceutical” as used in this Act refers to the following items:
Thus, health food products distributed with a statement indicating that they have medicinal effects also constitute “pharmaceuticals” under the PMDA, even though those products have not been approved pursuant to the PMDA. Therefore, those health food products constitute unapproved pharmaceuticals, advertising of which violates Article 68. The current amendment to the PMDA excludes violation of Article 68 as basis for a monetary penalty, although lawmakers discussed inclusion thereof.
However, if the advertised medicinal effects of health food products are false or exaggerated, the advertising would constitute a violation of Article 66 and may be the basis for a monetary penalty.