PMD Act

In Japan, the Act on Securing Quality, Efficacy and Safety of Products Including Pharmaceuticals and Medical Devices (the “PMD Act”) serves as the primary law regulating pharmaceuticals, including their manufacturing, sales, business licences and product approvals, labelling, and advertisements. Psychedelic drugs are the drugs or substances that alter human body functions ‒ specifically, brain activities. They also influence sensory perceptions, cognitions, consciousness and/or other mental capacities. Psychedelic drugs are, therefore, categorised and regulated under the PMD Act as pharmaceuticals.

General rules under PMD Act

For the marketing of pharmaceuticals, the relevant companies involved must obtain a business licence that corresponds to the product category and the form of the business operation (eg, manufacturing or sales). In order for a pharmaceutical product to enter the Japanese market, a Marketing Authorisation Holder has to obtain product approval (Shonin) for each specific item.

Sales and advertisement of unauthorised pharmaceuticals are prohibited under the PMD Act and may result in the cancellation of business licences and/or criminal penalties. It is worth noting that, in Japan, any advertisements for prescription drugs that are directed at the general public are prohibited under the PMD Act, even when the product is approved for marketing authorisation.

Designated substances

In addition, under the PMD Act, substances that are highly likely to stimulate or depress the central nervous system or cause hallucinations (including actions that maintain or enhance such effects), and that may pose a health hazard when used in humans are defined as “designated substances”. Note that narcotics, psychotropic drugs, opium and poppy straw, cannabis, and stimulants are separately defined and regulated by other specific laws, which are explained later in this subsection, and are excluded from the definition of designated substances.

Designated substances are designated by the Minister of Health, Labour and Welfare as either individual substances or as substance groups, using a broad designation for substances with similar chemical structures. This list of substances is periodically updated.

Except for approved pharmaceutical uses or safe uses within the scope of the purposes (such as academic research) recognised under the PMD Act, it is prohibited under the PMD Act to manufacture, import, sell, transfer, possess, store, or display for the purpose of sale or transfer the designated substances or any products containing such substances. Violations of such prohibitions are subject to criminal penalties, including imprisonment.

Additional Regulations and Controlled Substances

The term “psychedelic drugs” is inclusive of common psychedelics such as LSD, MDMA, DMT, psilocybin, amphetamines and methamphetamines, but may also include substances such as ketamine, cannabis, and THC in a broader sense. In addition to the PMD Act, the above-mentioned psychedelic drugs are further regulated under specific laws for each relevant substance ‒ namely, the following (each of which are further explained in the following paragraphs):

• the Narcotics and Psychotropic Drugs Control Act (the “NPC Act”);
• the Opium Control Act;
• the Cannabis Control Act; and
• the Stimulants Control Act.

Together with the Narcotics Special Act, these control acts are sometimes collectively referred to as the “Five Drug Laws.”

Please note that the definitions of “narcotics” and “psychotropic drugs” under Japanese law may not always align with international classifications.

NPC Act

Under the NPC Act, “narcotics” and “psychotropic drugs” are defined as substances listed in the respective schedules of the NPC Act, including substances that have similar abuse potential and harmful effects and are so designated by government ordinance.

Narcotics

Narcotics include substances such as ketamine, DMT, psilocybin, MDMA, mescaline, and LSD. The use of narcotics permitted under law is restricted to medical and academic research purposes. The handling of narcotics is strictly regulated by a licensing system.

Only those entities holding the following business licences ‒ (i) Marketing Authorisation Holder Licence, (ii) Marketing Authorisation Holder Licence or Sales Licence, and (iii) Marketing Authorisation Holder Licence or Manufacturer Licence ‒ under the PMD Act are eligible for licences to, respectively, (i) import, (ii) export, and (iii) manufacture narcotics under the NPC Act. Pharmacies must have a Narcotics Retailers Licence to deliver prescribed narcotics to patients. Those who sell narcotics to narcotics retailers, medical facilities, or research facilities must have a Narcotics Wholesaler Licence.

Only physicians, dentists and veterinarians with a Narcotics Use Licence are permitted to administer, prescribe and dispense narcotics. When there are more than two such doctors in one facility, it must have a licensed Narcotics Manager to ensure proper handlings and management of narcotics in that medical facility. Researchers also require a licence to conduct narcotics research.

Narcotics business licence holders are subject to strict obligations regarding the handling of narcotics, such as keeping records of quantities and dates of dispensing, as well as administration to the patients and regular reporting to the authority.

Criminal penalties, including imprisonment, are provided under the NPC Act for violations of these regulations.

Psychotropic drugs

Psychotropic drugs are subject to similar regulations under the licensing system. Violation of these regulations may result in criminal penalties.

Further, psychotropic drugs are classified into three categories based on their abuse risk: Category I (eg, methylphenidate), Category II (eg, flunitrazepam, pentazocine), and Category III (eg, triazolam, brotizolam). Import and export of Category I psychotropic drugs require approval from the Minister of Health, Labour and Welfare, whereas Category II drugs require notification to the Minister of Health, Labour and Welfare for each import/export transaction.

Raw materials of narcotics and/or psychotropic drugs

Businesses importing, exporting and/or selling raw materials for narcotics and/or psychotropic drugs require submission of notification to the authority. Such notifications are also required when someone not holding a business licence imports or exports the raw materials.

Opium Control Act

The Opium Control Act defines “opium” as the coagulated liquid juice of poppies and processed products thereof (excluding products processed as pharmaceutical products).

Under the Opium Control Act, the authority to import and export opium, purchase opium from poppy cultivators, and sell opium to licensed narcotics manufacturers or licensed narcotics research institutions is exclusively vested in the Japanese government.

Cannabis Control Act

The cannabis plant (except the portions of grown stalks and seeds), products made therefrom, and resin produced from grown stalks of the cannabis plant fall under the definition of “cannabis” and are subject to regulation under the Cannabis Control Act. By way of example, a cannabidiol (CBD) syrup product would fall under the definition of cannabis and be subject to regulation under the Cannabis Control Act if it is made from portion of cannabis plant other than grown stalks or seeds.

The law limits the lawful uses of cannabis to academic research and the collection of its fiber and seeds, and requires the handlings of cannabis to be licensed. Violations of the Cannabis Control Act are subject to criminal penalties, including imprisonment. Only licensed cannabis handlers (namely, cannabis cultivators and cannabis researchers) are permitted to cultivate, possess and transfer cannabis. Importation of cannabis is restricted to cannabis researchers only, who may import it solely for research purposes with approval from the Minister of Health, Labour and Welfare.

Major amendment due to come into effect

It is very important to note that a major amendment to the Cannabis Control Act was enacted in December 2023 and is due to come into effect on 12 December 2024, changing its name to the “Act Concerning Regulation of Cannabis Plant Cultivation”.

The main topics in the amendment to note include the following.

• The scope of definition of “cannabis” will be revised to the following: cannabis plant (except the portions of grown stalks and seeds) and products made therefrom (excluding those not having the form of the plant). As such, for example, a CBD syrup product (whether from the cannabis plant or chemically synthesised) would not fall under the definition of cannabis ‒ given that it no longer has the form of the plant.
• Cannabis will be categorised and regulated as a narcotic under the NPC Act.
• THC, known as the toxic component of the cannabis plant, will also be defined as a narcotic. That being said, even if an item contains THC (whether from the cannabis plant or chemically synthesised), if the percentage of THC is below the maximum limits set forth by a cabinet order and the item does not contain other narcotics, it shall be exempt from the definition of narcotics.
• Pharmaceutical medicines made from the cannabis plant will be legal, subject to the regulations under the NPC Act. Prior to the amendment, they were banned entirely.
• Inappropriate “use” has now come into the scope of prohibition and criminal penalties, as opposed to regulation before the amendment whereby “use” of cannabis was not punishable.

Stimulants Control Act

Under the Stimulants Control Act, “stimulants” are defined as:

• phenylaminopropane (known as amphetamine), phenylmethylaminopropane (known as methamphetamine) and their salts;
• substances that have a stimulating effect similar to the foregoing and are so designated by a cabinet order; and
• substances containing any of the foregoing.

The Stimulant Control Act limits the legal use of stimulants to medical and academic research purposes and requires designations by the authority for handling the stimulants. Violations of the Stimulants Control Act are subject to criminal penalties, including imprisonment.

The Stimulants Control Act stipulates that no person may import or export stimulants at all.

Raw materials for stimulants (substances that are listed and defined in the attachment to the Stimulants Control Act) can be imported and exported ‒ albeit only with Stimulants Raw Materials Importer/Exporter designations as applicable.

Only the entities holding both a Marketing Authorisation Holder Licence and a Manufacturer Licence under the PMD Act are eligible to be designated as stimulants manufacturers under the Stimulants Control Act.

Facilities that can be designated as stimulants dispensing facilities by the authority are limited to psychiatric hospitals and other medical institutions that require stimulants for medical treatment.

Only researchers who are acknowledged to have sufficient knowledge of stimulants and are proven to need to use stimulants in their research can be designated as stimulants researchers.

These designated individuals and entities are permitted to handle stimulants accordingly during the effective period of their designations only (ie, from the date of designation until December 31 of the following year). They are also subject to strict obligations, including maintaining records of stimulant use, regular reporting to the authority, and ensuring stringent storage and management of the stimulants.

Narcotics Special Act

In addition to the above-mentioned control acts, the Act on Special Measures Concerning the Narcotics and Psychotropic Drugs Control Act, etc. for Aiming the Prevention through International Co-operation of Acts Aiding Fraudulent Activities Related to Controlled Substances (the “Narcotics Special Act”) provides further rules regarding criminal penalties for drug crimes involving narcotics, psychotropic drugs, opium and poppy straw, cannabis, and stimulants (collectively define as “controlled substances” under the Narcotics Special Acts. Examples include confiscations and restraining orders, as well as deprivation of drug crime proceeds.

Other laws

The Customs Act also prohibits the unlawful import and export of controlled substances.

In some cases, in addition to the above-mentioned laws and regulations, local governments may have additional municipal regulations on those drugs that are deemed to have the same effects on the human mind as stimulants or cannabis (eg, excitement, hallucination, intoxication, or other similar effects) and where the abuse of such substance would cause damage to human health.

Options for Early Access, Compassionate Use, or Use in Other Limited or Extenuating Circumstances

There are no expedited or expanded routes (eg, early access or compassionate use systems) that are specifically designed for the introduction of psychedelic medicines into the market. However, there are certain systems that are generally applicable to pharmaceuticals, and psychedelic medicines may also be able to utilise these routes if they meet the requirements.

Some pharmaceuticals, based on factors such as demand for their intended use, receive special designations under pharmaceuticals policy to promote their development. These designation categories include:

• orphan drugs;
• innovative pharmaceuticals; and
• pharmaceuticals for specific uses.

If a drug receives any of these designations, it becomes eligible for preferential treatment, which may include priority reviews and accelerated approval processes.

Orphan drugs are designated based on the rarity of the target patient population, the seriousness of the condition, the high medical need (eg, the availability of alternative treatments and reliability in the effectiveness and safety of the drug), and the rationality and feasibility of the development plan.

Innovative pharmaceuticals must demonstrate innovativeness in their pharmaceutical mechanism of action, target serious or life-threatening diseases for which there is no curative treatment, show high effectiveness, and be developed in Japan ahead of the rest of the world.

Pharmaceuticals for specific uses are designated based on the seriousness of the disease and require that the treatment has been established as the standard international therapy. This designation is limited to drugs for paediatric use or for diseases caused by drug-resistant pathogens.

Priority review might still be granted, even outside these categories, based on the severity of the target disease and whether the drug demonstrates superior effectiveness or safety compared to existing treatments.

Expanded clinical trials

The “expanded clinical trial” is a system in Japan that was introduced in 2016 and is comparable to a compassionate use system. It is a system in which unapproved drugs or medical devices are made available, from a humanitarian perspective, to patients who do not meet the criteria for participation in clinical trials for the treatment of life-threatening diseases for which there are no effective existing treatments. The expanded clinical trial is not a trial performed via an independent route on its own but, rather, is conducted within the scope of the existing clinical trial system. What makes it different from typical clinical trials is that:

• when the sponsor does not start an expanded clinical trial, the patient/doctor has the option to ask the Ministry of Health, Labour and Welfare to issue a request to the sponsor to re-consider conducting an expanded clinical trial; and
• the patient in some cases might bear part of the cost based on informed consent.

The decision as to whether the expanded clinical trial shall be performed is up to the sponsor and is not mandatory.

The requirements for establishing an expanded clinical trial are that:

• the targeted disease is serious and has a fatal influence;
• the product or indication is unauthorised and no effective alternative treatment exists;
• the clinical trial (the “Main Trial”) for the substance is already running and is in the final stage (and after enrolment) or has been completed; and
• no negative impact on the performance of the Main Trial or the marketing implementation of the product will be caused.

Ministry of Health, Labour and Welfare and Its Relevant Regulatory Bodies

The Ministry of Health, Labour and Welfare is the authority responsible for overseeing the PMD Act, which covers a wide range of general regulations concerning pharmaceuticals. These include approval processes, product authorisations, and labelling and advertising regulations, as well as involvement in the enforcement of illegal or unauthorised drug control.

The Pharmaceuticals and Medical Devices Agency (PMDA) is a governmental agency supporting the Ministry of Health, Labour and Welfare. This includes reviewing the marketing approval process of pharmaceutical products.

Narcotics Control Officers, who are part of the Narcotics Control Department in regional health bureaus (which are local branches of the Ministry of Health, Labour and Welfare), have the authority to enforce arcotics control measures. These officers also possess the powers of special judicial police officers under the Criminal Procedure Code when it comes to narcotics enforcement.

Others

The police also exercise their authority in cracking down on illegal drugs.

The import and export of illegal drugs constitute violations of the Customs Act. Customs officials have the authority under this law to inspect, seize, and take other actions against such cargo.

There are no specific self-regulatory authorities that govern the psychedelic medicine industry or psychedelic trials in Japan.

Narcotics, Psychotropic Drugs, and Stimulants

Under the strict regulatory framework of the NPC Act, medical narcotics such as opioid drugs are sold on the Japanese pharmaceuticals market. Narcotic analgesics, such as morphine and fentanyl, are essential for pain management in cancer patients and end-of-life care. The need for cancer treatment and chronic pain management is increasing because of Japan’s ageing society and, as such, the demand for opioid analgesics is substantial in Japan.

Psychotropic drugs, including antidepressants, anti-anxiety medications and antipsychotics, are commonly used as treatments for mental health conditions and neurological disorders.

Stimulants are also legally marketed for medical use. There is, for example, a methamphetamine-based prescription drug for treating narcolepsy, depression, etc.

All of the foregoing are marketed and regulated as prescription drugs.

As an additional information, according to a publicly available database, some clinical studies to access the safety and efficacy of psychedelic drugs for treating depression are underway. For further details, please see “Clinical studies of psychedelic drugs for treating depression” in the Japanese Trends and Developments chapter of this guide.

Cannabis-Based Medicines

However, cannabis-based medicines have not yet been marketed because the Cannabis Control Act – prior to the recent amendment – entirely prohibited such substances, even as prescription drugs.

Earlier in 2024, it was reported that the cannabis-derived anti-epileptic drug Epidiolex (currently pending approval) was designated as an orphan drug. This marks the first case of a cannabis-derived pharmaceutical being designated as an orphan drug in Japan. Thanks to the recent amendment to the Cannabis Control Act that relaxed the prohibition for medical use, once the product obtains marketing approval, this medication can be legally sold and used as a prescription drug in Japan.

Limited Market Scope

As such, there is a limited existing market for psychedelics. However, in Japan, there is currently no therapeutic use of psychedelic drugs outside prescription drug use.

As explained in 1.4 Existing Market, psychedelic drugs can be legally marketed and used in Japan as pharmaceuticals (specifically, as narcotics, psychotropic drugs, etc.) and there is actually demand for such pharmaceutical products in the market. However, the products are heavily regulated.

Notably, in order to manufacture and sell psychedelic drugs as pharmaceutical products in Japan, a relevant business licence must be obtained and a marketing authorisation for each product must be obtained in order for the product to be sold. Additionally, strict controls are implemented under the control acts mentioned 1.1 Primary Laws and Regulations (eg, the NPC Act), which carry the risk of criminal penalties for violations. These may be significant challenges that market participants would need to face in terms of potential legal risks.

In addition, coupled with Japanese society’s conservative views towards controlled drugs, the reputational risk for companies in the event of legal violations or even the suspicion thereof regarding controlled substances (including psychedelic medicines) would be higher than that regarding the usual pharmaceuticals.

When considering activities or business operations related to controlled substances, one question that may arise concerning cross-jurisdictional issues would be the applicability of criminal penalties stipulated by Japanese law. Specifically, a discussion on the applicability of Japanese law may arise regarding whether certain activities or business operations related to controlled substances that may be illegal in Japan but legal in foreign countries are lawful and whether criminal penalties under the relevant Japanese laws may apply.

According to the Penal Code of Japan (Article 2), which stipulates that for some crimes “the following are also applicable to any and all persons who committed the crimes outside Japan” ‒ meaning certain provisions extend to crimes committed outside the country. Article 2 is incorporated by citation into the control acts mentioned in 1.1 Primary Laws and Regulations with regard to several criminal penalties for the acts of possession, use, transfer and import/export of controlled substances (or the financing of such activities).

As a result, at least in theory, certain scopes of handling controlled substances are unlawful under Japanese law – even if it is legal in other countries ‒ and could technically be subject to criminal penalties under the relevant control acts in Japan. However, the possibility of the relevant authority actually enforcing such penalties remains a separate issue.

This issue would be particularly relevant for international corporations with operations in Japan. Companies or their employees may face legal risks when they engage in certain activities abroad ‒ for example, the possession or use of controlled substances, or business operations relevant to controlled substances or investment in such businesses. It is therefore advisable for companies to be aware of the potential for Japanese law to apply to actions taken outside Japan, even if those actions are lawful in the foreign country, and to review the legal risk in this regard in advance.

The legal regulations abroad and legal accessibility within Japan are entirely independent of one another. Foreign laws and regulations generally do not influence access to psychedelic drugs in Japan.

In order to market psychedelic medicines in Japan, an approval under the PMD Act is required. Any substances or actions deemed legal overseas do not necessarily make them lawful within Japan.

Generally speaking, it is possible that broader trends in legal reform abroad indirectly impact regulatory relaxation in Japan. However, the social and legal climate in Japan remains notably conservative, particularly with regard to controlled substances such as psychedelic drugs. Thus, even if certain substances are legalised overseas, there is no particular indication that Japan will follow the trend towards legal relaxation.

One potential scenario is that, should the usefulness and safety of a particular drug become firmly established abroad in the future, this could serve as part of the scientific evidence used when applying for marketing approval in Japan. Additionally, such developments might eventually lead to regulatory easing for medical use of the drug in Japan. Nevertheless, any such influence from overseas will remain indirect.

As explained in 1.4 Existing Market, psychedelic medicines can only be legally marketed in Japan as prescription drugs, which are subject to regulations under the PMD Act (as explained in 1.1 Primary Laws and Regulations). Additionally, they must be controlled under the strict regulations under the NPC Act or other control acts as applicable. Those rigid regulations reflect the Japanese government’s strict attitudes towards drugs and the regulation thereof.

This field is touched on by the regulators’ agenda, for example, in the recent amendment to the Cannabis Control Act (see 1.1 Primary Laws and Regulations). This amendment newly legalised pharmaceuticals made from cannabis. However, this was aimed at improving the availability for patients, and relaxing the regulations was not the goal of the amendment.

Given the Japanese government’s strong stance and strict policies against drug abuse, as well as the generally conservative, non-accepting attitude of Japanese society towards controlled substances, there is little sign of the mood or discussion shifting in favour of further relaxing regulations on controlled substances (including psychedelics).

The general process of legislation, including the enactment of amendments, is as follows.

• A bill is submitted to the Diet during its session, either by members of Congress (in the Upper House or the Lower House) or by the Cabinet of Japan. In the case of a bill submitted by the Cabinet of Japan, the draft is prepared by the relevant Ministries overseeing the subject matter of the legislation.
• Once submitted, the bill is first deliberated in the congressional house in which it was submitted. After going through primary review by the relevant committee in that congressional house, it is debated in a plenary session in the house to be voted on. Then, the bill is passed to the other house and goes through the same review and deliberation process. When both houses pass the bill in agreement, it is enacted into law.
• After its enactment, the law is promulgated and subsequently enforced.

Throughout this process, lobbying activities by the relevant industry groups, patient associations and other stakeholders may also influence law-makers and bureaucrats. A surge in public opinion or social climate can also serve as motivation for law-makers or the Cabinet of Japan to draft legislation. By way of example, one of the driving motivations behind the recent amendment to the Cannabis Control Act was the demand from patients for the legalisation of cannabis-based pharmaceuticals that had already been used in several foreign countries for medical treatment purposes such as intractable epilepsy and yet were prohibited and unavailable in Japan.

Legalisation of adult use (ie, non-medical, recreational use) in Japan is extremely unlikely, considering the circumstances mentioned in 3.1 Access to Psychedelic Medicines Today. With the recent trend for legalisation of some controlled substances overseas, the Japanese government is getting more cautious regarding the spread of inappropriate drug use introduced from abroad and change cannot be expected to take place anytime soon.