Japanese Pharmaceutical Market & Registration Strategies – Part 1

Continue to Read:Japanese Pharmaceutical Market & Registration Strategies- Part 2

Prologue

The Japanese market has been generating more and more interest, both, among innovative as well as generic drug companies.  This series of two article on this topic reviews this important topic.

The first article provides an outline of characteristics of the Japanese market, what makes the Japanese market unique, Regulatory bodies in Japan, Pricing and Reimbursement in Japan, the process of registering an innovative drug in Japan and the process of registering a generic drugin Japan

The second article in the series would focus on strategies for success in registering products on the Japanese market, examples of non-Japanese companies successful innovative drug registration in Japan, and examples of non-Japanese companies successful generic drug registration in Japan.

The Japanese pharmaceutical Market is one of the largest in the world, valued at approximately $95 billion USD in 2023, making it the third-largest globally, after the United States and China. Known for its high standards in drug quality and innovation, Japan’s pharmaceutical industry has a unique regulatory landscape, market dynamics, and focus areas.

Characteristics of Japanese Pharmaceutical Market

The market has a few notable characteristics:

1. Aging Population: Japan has a rapidly aging population, driving demand for healthcare and pharmaceutical products, particularly in areas like oncology, cardiovascular health, and neurological conditions.

2. Prescription Drugs Dominance: Prescription drugs make up a significant portion of the market, with less emphasis on over-the-counter (OTC) products compared to Western markets.

3. Generics and Patent Expirations: Japan has been encouraging the use of generics to reduce healthcare costs, aiming for over 80% penetration. Patent expirations also influence market dynamics, as more affordable generic options become available.

4. Innovation and R&D Investment: Japan has a strong focus on innovation in biotechnology, personalized medicine, and specialty pharmaceuticals, with robust R&D investment from both domestic and international companies.

The Japanese government also plays a significant role in pricing and reimbursement, impacting both domestic companies and multinational pharmaceutical firms operating within the market.

What makes Japanese Market Unique

The Japanese pharmaceutical market stands out due to several unique characteristics:

1. Government Control Over Pricing: Japan’s government plays a significant role in drug pricing through the National Health Insurance (NHI) system, which sets prices for nearly all pharmaceuticals. Drug prices are regularly reviewed and often cut to control healthcare costs, which pressures pharmaceutical companies to remain cost-effective and impacts their profitability.

2. Aging Population and Chronic Disease Focus: Japan has one of the oldest populations globally, with nearly 30% of its citizens over 65. This aging demographic drives demand for treatments targeting age-related diseases like cancer, diabetes, cardiovascular issues, and neurological conditions, leading to a strong focus on chronic and specialty medicines.

3. Preference for Domestic and Branded Products: Historically, Japan had a preference for branded and domestically developed pharmaceuticals, although this trend has shifted in recent years with increased generic drug usage. However, the cultural tendency still leans towards established brands, often benefiting local pharmaceutical companies.

4. Rapid Adoption of Generics: While Japan was initially slow in adopting generic drugs, recent government policies aimed at reducing healthcare costs have accelerated generics' penetration. The Japanese government’s target is to achieve an 80% or higher generics share of the market, encouraging more affordable options while reducing overall healthcare expenditures.

5. Unique Approval Process and Regulatory Requirements: Japan has a distinct drug approval process that historically included additional requirements for clinical trials conducted within Japan. Although harmonization with global standards has improved, local clinical trials are often required for regulatory approval. This adds time and cost for foreign companies entering the Japanese market, impacting product availability.

6. Emphasis on Innovation and R&D: Japanese pharmaceutical companies are known for significant investment in R&D, particularly in fields like oncology, regenerative medicine, and rare diseases. Japan’s focus on innovation and long-term support for biotech and pharmaceutical research reflects a drive to create cutting-edge treatments and personalized medicine.

7. Integrated Healthcare System and High Standards: Japan’s universal healthcare system ensures that nearly all citizens have access to affordable medical care. Combined with high healthcare standards, this system promotes the use of quality-assured pharmaceuticals, favoring advanced treatments and rigorous regulatory compliance.

These unique aspects make Japan both a highly regulated and innovation-driven market, attracting multinational pharmaceutical companies that adapt to these requirements and leverage the aging population's high demand for chronic disease treatments.

Regulatory Bodies in Japan

Ministry of Health, Labour, and Welfare (MHLW): The MHLW oversees pharmaceutical regulation, ensuring that drugs meet Japan’s stringent quality and safety standards.

Pharmaceuticals and Medical Devices Agency (PMDA): This is the regulatory body responsible for reviewing drug applications, conducting inspections, and monitoring safety. It collaborates with the MHLW to ensure drugs are safe and effective.

Pricing and Reimbursement in Japan

National Health Insurance (NHI) Pricing: Drug prices in Japan are determined by the NHI system, which includes periodic price reviews to control costs. Price reductions occur every two years based on market prices, and sometimes annually for high-cost drugs.

Reimbursement: The NHI reimburses most drugs at rates set by the government. This policy helps make medicines more affordable for the public but can lead to downward pressure on prices, especially for branded drugs.

Innovative drugs registration process in Japan

The registration process for innovative drugs in Japan is rigorous and specifically designed to ensure safety and efficacy. Following is an overview of the key steps for registering innovative drugs in Japan:

1. Early Phase: Consultation with PMDA

For innovative drugs, engaging with Japan’s Pharmaceuticals and Medical Devices Agency (PMDA) early in the development process is recommended. Sponsors can request face-to-face consultations to discuss study design, regulatory expectations, and ways to meet local requirements. This stage often includes discussions on:

• Target population

• Trial design

• Acceptable endpoints and biomarkers

2. Clinical Trials

Innovative drugs must undergo clinical trials in Japan, though data from global studies can sometimes be integrated. Japan’s Good Clinical Practice (GCP) guidelines are aligned with international standards, but sponsors may need additional data to demonstrate efficacy and safety specifically in Japanese patients.

Trial phases include:

• Phase I: Often conducted in Japan to ensure initial safety in Japanese subjects.

• Phase II: Dose-finding studies to determine optimal dosing and preliminary efficacy.

• Phase III: Large-scale studies to confirm efficacy and safety.

Some innovative drugs can benefit from special pathways for quicker trials or smaller sample sizes if they meet certain criteria.

3. Expedited Review Programs

Japan offers several accelerated pathways for innovative drugs addressing serious or unmet medical needs:

• SAKIGAKE Designation: Designed to encourage early-stage development and expedited approval. Drugs must demonstrate high efficacy or potential in Japan.

• Conditional Early Approval: Permits early approval based on Phase II trial data with conditions for further post-marketing studies.

• Priority Review: Reduces the standard review time from 12 to around 6–9 months for drugs addressing serious conditions.

4. New Drug Application (NDA) Submission

The NDA for innovative drugs includes detailed information on quality, efficacy, and safety. Documents include:

• Clinical trial reports

• Manufacturing details and quality data

• Nonclinical (preclinical) studies

• Pharmacovigilance plans

• Stability data and labeling

Submissions are electronic and follow Japan’s regulatory guidelines and those of the International Council for Harmonization (ICH).

5. PMDA Review and Approval

Once the NDA is submitted, PMDA conducts an extensive review of the drug’s safety, efficacy, and quality. This review process may include:

Committee and Expert Discussions: PMDA collaborates with specialized committees and external experts for high-quality review.

On-Site Inspections: Includes inspections of manufacturing sites to ensure compliance with Good Manufacturing Practice (GMP) standards.

Interviews and Clarifications: PMDA may request additional data or clarifications through direct sponsor interviews.

After completing its review, PMDA provides a recommendation, which the Ministry of Health, Labor and Welfare (MHLW) uses to make the final approval decision.

6. Post-Marketing Surveillance

Approved innovative drugs must undergo post-marketing surveillance to continuously assess real-world safety and efficacy. Companies are required to report adverse events, update risk management plans, and may be asked to perform additional studies on long-term effects or safety. 

Estimated Timelines

For drugs granted priority review or SAKIGAKE designation, approval can occur in as little as 6–12 months. Standard reviews for innovative drugs generally take around 12–18 months.

Summary of Key Requirements

Consultation Phase: Engage with PMDA for trial and study design guidance.

Clinical Trials: Conduct trials in Japan or submit global data with Japanese-specific efficacy data.

NDA Documentation: Provide detailed quality, efficacy, and safety data, following ICH and Japan-specific guidelines.

Post-Marketing Requirements: Implement pharmacovigilance and surveillance programs to monitor safety.

This pathway aims to support the timely availability of new and innovative drugs in Japan while maintaining rigorous standards for public health.

Generic drugs registration process in Japan

The registration process for generic drugs in Japan is generally more streamlined than for innovative drugs, focusing on demonstrating bioequivalence rather than extensive clinical trials. The Pharmaceuticals and Medical Devices Agency (PMDA) and the Ministry of Health, Labor and Welfare (MHLW) oversee this process. Here’s an outline of the steps:

1. Pre-Application Consultation (Optional)

Although not mandatory, sponsors of generic drugs can request a pre-application consultation with the PMDA to clarify regulatory expectations, application requirements, and potential challenges.

2. Bioequivalence Studies

Generic drug registration does not require the same extensive clinical trials as new drugs. Instead, sponsors must conduct bioequivalence studies to show that the generic product has the same bioavailability as the original brand drug:

• In Vivo Bioequivalence Studies: Conducted to show that the active ingredient reaches the bloodstream at a similar rate and concentration as the brand drug.

• In Vitro Studies: May be acceptable for certain drugs, such as those with a low risk of variability or for modified-release formulations, provided specific criteria are met.

3. New Drug Application (NDA) Submission for Generics

The application for a generic drug in Japan is an Abbreviated New Drug Application (ANDA) and is similar in structure to the NDA for innovative drugs but with fewer requirements:

• Quality Documentation: Includes data on manufacturing, stability, and Good Manufacturing Practice (GMP) compliance.

• Bioequivalence Data: Demonstrates that the drug performs similarly to the original branded product.

• Labeling and Packaging: Labels should align with the innovator drug, but brand names should not be used.

4. PMDA Review and Evaluation

The PMDA evaluates the application by reviewing the bioequivalence data, quality standards, and adherence to regulatory requirements. During this phase:

• Inspection: PMDA may conduct inspections of the manufacturing facility to ensure it complies with Japan’s GMP standards.

• Clarifications and Additional Data: PMDA may request additional information or clarifications related to bioequivalence, quality, or safety if needed.

The focus of the review is to ensure that the generic product is interchangeable with the innovator drug in terms of efficacy and safety.

5. Approval and Marketing Authorization

After the PMDA review, the MHLW grants final approval, issuing a Marketing Authorization (MA) if the generic meets all regulatory requirements. The approval allows the generic drug to be marketed and sold in Japan.

6. Post-Marketing Surveillance

Once approved, generic drug manufacturers must conduct post-marketing surveillance to monitor safety and efficacy. Regular adverse event reporting and ongoing quality assurance measures are required to maintain regulatory compliance.

Timelines for Approval

The typical timeframe for generic drug approval in Japan is around 12 months, which is generally shorter than for innovative drugs. However, timelines can vary depending on the complexity of the product and the completeness of the application.

Summary of Key Document Requirements:

• Bioequivalence Studies: In vivo or in vitro studies demonstrating bioequivalence.

• Manufacturing and Quality Data: Evidence of quality control, stability, and GMP compliance.

• Labeling: Should match the innovator drug's instructions but with generic names.

Other points for consideration

• Patent Considerations: Generic companies must ensure that the innovator drug's patent has expired or is not applicable to avoid legal issues.

• Brand Awareness: Generics are typically promoted on the basis of price, as they are expected to be lower-cost alternatives to the brand drugs.

The aforementioned process helps to bring affordable, high-quality generic drugs to the Japanese market while ensuring they meet rigorous standards for quality, safety, and efficacy.

About the author

Deepak Hegde, 

Ph.D., M.F.M, is an industrial pharmacist by training. He has a been involved in development and commercialization of both innovative and generic drugs from a very early phase of development to technical transfers for commercial manufacturing sites, for the past 25 years. During his career, he has worked at Rhone Poulenc, Novartis (Sandoz), USV Ltd., WuXi AppTec, GSK & EOC Pharma. and Shenzhen Pharmacin Co. Ltd. He is currently working with as Cipla (Jiangsu) Pharmaceutical Company Ltd as General Manager & China Site Head.

Email: deepak.hegde@cipla.com