The Best Ways to Control Product Registration in Japan

Japan has the third-largest economy in the world, and the second largest medical device market. The population is currently 127 million people, and the older population is growing by 15 percent per year. Clearly, healthcare is an important concern for the elderly. As this number continues to grow, there will be more opportunities for foreign medical device products in Japan. In addition, the government is paying more attention to advances in the safety and regulatory healthcare environment of Japan. With strict regulations, a very bureaucratic government, and some of the highest healthcare standards in the world, the Japanese market can be very difficult to navigate.

It is important for foreign medical device companies to be aware of what is required by the Ministry of Health, Labor and Welfare (MHLW) and by the Pharmaceuticals and Medical Devices Agency (PMDA) to sell in this market.

Designating a Japan DMAH
The Ministry of Health, Labor and Welfare requires foreign medical device companies to appoint a Market Authorization Holder (MAH) or a Designated Marketing Authorization Holder (DMAH). A company in Japan is a MAH or DMAH if they are registered by the MHLW to provide market authorization holder services. A DMAH is the specific market authorization service provider in Japan that is used by a foreign company that does not have an office in Japan but exports their products there. A MAH or DMAH can be an (1) independent third party; (2) a distributor; or (3) the subsidiary of a foreign medical device manufacturer in Japan.

An independent third-party Japanese DMAH is the best option to control your medical device destiny in Japan, but it also happens to be one of the more costly options. The third-party entity will charge the foreign medical company a fee to register the product, in addition to monthly fees to cover
post-registration DMAH services. Some companies may prefer this route because registering the product via an independent third party will make a possible distributor switch in the future much easier. However, it is important to remember that there are currently only a few trustworthy and reliable Japanese DMAHs in the marketplace.

A foreign medical company instead may choose to use its Japanese distributor as the DMAH because this option, generally, is significantly cheaper. A Japanese distributor DMAH normally would pay for registrations costs and not charge a DMAH service fee. Nonetheless, using your distributor as your DMAH has some serious disadvantages. For example, when the distributor performs both the MAH services and distribution in Japan, an awkward situation may arise in the future, should you decide to change distributors. The Japanese distributor DMAH will not readily hand back the product license to the foreign company, especially if they predict a loss in their profitable business. In this scenario, to change distributors, a foreign device company would need to re-register its products from scratch or undertake an expensive buyout.

If the foreign medical device company has its own office or a subsidiary in Japan, that office can act as the MAH and hold registrations in the company’s name. In this case, changing Japanese distributors should be an easy process.

DMAH Responsibilities and Requirements
The MAH or DMAH structure is composed of three controllers. The quality assurance controller supervises the good quality practice of the products, and the post-marketing Safety controller is charged with good vigilance practice. The general manager supervises all the MAH responsibilities and is the guarantor of product quality, safety standards, and marketing. The number of required personnel for a MAH or DMAH is dependent upon the classification of the medical device. One person can be a MAH or DMAH for general devices (Class I), and he or she would perform all the necessary duties of the three controllers. Two people are necessary for a MAH or DMAH of controlled devices (Class II). One is the post-marketing safety controller, and the other is the quality assurance controller. One of these two people also must be the general manager. Finally, three people are required for highly controlled devices (Class III and IV), with each assigned as one controller.

Should an adverse event occur, it is the job of the three MAH controllers to decide how and when the event should be reported to the PMDA. In the end, the PMDA determines the methods and requirements of dealing with adverse events, which it currently does on a case-by-case basis.

After Product Registration
After product registration in Japan, a foreign medical device company’s products and the classifications of those products will be the basis of the services required for a MAH or DMAH. There are several different fee schedules for ongoing DMAH services. Companies that are willing to pay the fees for an independent third party DMAH, choose to do so in order to have greater control over their product registration, product marketing, and retention of their confidential information.

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Despite a declining population, foreign device companies that are successful in Japan still have significant opportunities to reap large benefits.

Ames Gross is president and founder of Pacific Bridge Medical, a Bethesda, Md.-based consulting firm that helps medical companies doing business in Asia. Founded in 1988, Pacific Bridge Medical has helped hundreds of medical companies with business development and regulatory issues in Asia. For more information on regulatory issues in Japan click here.

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China’s Regulators Now Can Conduct Unannounced Visits

On June 18, China’s equivalent of the U.S. Food and Drug Administration, the State Food and Drug
Administration (SFDA), announced new “Working Procedures for Unannounced Inspection of Medical Device Manufacturers (interim).”

The new procedure is in accordance with regulations already put in place by the agency, officials said.

The English version of SFDA’s website notes that the working procedures were introduced to “strengthen the supervision to the production of medical devices, and standardize medical device supervision and inspection.” The procedures took effect on the date of their announcement.
According to CMS China, a global legal and tax consultation company, the first unannounced inspection program started in April 2006 when the SFDA published an unannounced inspection provision regarding good manufacturing practices (GMP) for pharmaceutical products titled, “The Interim Provision on Unannounced Inspections over GMP of Pharmaceuticals.” Under this provision, which is still in place, the SFDA can make unannounced visits to ensure pharmaceutical companies are satisfying GMP requirements.

The newly published procedure for medical device manufacturers relies on the “Measures for Supervision and Administration of Medical Device Production,” which took effect in 2004, and the “Interim Provision on the Daily Supervision Management of Medical Device Manufacturing,” effective as of 2006. These provisions set out broad circumstances under which inspections may be conducted. They also impose an “enterprise credit system,” a series of files on manufacturers recording all of the observations made by local/provincial SFDA supervisors. The enterprise credit system now will be used as evidence to launch any unannounced inspection.

Manufacturers that may be subject to an unannounced inspection are companies:

• That are suspected of illegal actions;
• That have had a serious product quality accident;
• That have products proven to be of unfit quality in a spot check by the SFDA;
• That lack a quality management system; and
• That have a credit system showing an unsatisfactory history of record keeping.

A final inspection report will be submitted to the local or provincial branch of the SFDA presiding over the unannounced inspection. During or after the inspection, the inspecting team may hand over the case to the local authorities for them to pursue an administrative liability sanction.

According to the framework legislation, this liability sanction may include a revocation of the manufacturer’s business license, a monetary penalty up to five times the value of any illegal income, or an order suspending business activities.