Recommendationsof theEU-Japan Business Round Table
to the Leaders of the European Union and Japan
Brussels, 28 April 2015
Working Party B
Life Sciences and Biotechnologies,
Healthcare and Well-being(Final Version)

Working Party Leaders:Mr. Michael Koenig
Member of the Board ofManagement
Bayer AGMr. Osamu Nagayama
Chairman of the Board of Directors
President & CEO
Chugai Pharmaceutical Co., Ltd.

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List of Abbreviations
Abbreviation Meaning
ADI
ARCB
CBD
CE
ECFIN
ECPA
EFPIA
EPA
ESA
EU
FQs
FSC
GCP
GDP
GLP
GMO
GMP
HTA
IEC
ISO
JIS
J-PAL
J-PMD ActJVPA
LS & BT
MAFF
MDD
METI
MHLW
MNC
MRA
MRL
NB
NHI
NVAL
PIC/S
PMDA
PPS
QMS
RMP
VICH
WP
WTO

Acceptable Daily Intake
Association of Registered Certification Bodies under J-PMD Act
Convention on Biological Diversity
Conformite Europeenne
Directorate-General for Economic and Financial Affairs of the European
Commission
European Crop Protection Association
European Federation of Pharmaceutical Industries and Associations
Economic Partnership Agreement
European Seed Association
European Union
Fluoroquinolones
Food Safety Commission
Good Clinical PracticeGood Delivery PracticeGood Laboratory Practice
Genetically Modified Organism
Good Manufacturing Practice
Health Technology Assessment
International Electro technical Commission
International Organization for Standardization
Japanese Industrial Standards
Japanese Pharmaceutical Affairs Law
Japanese Pharmaceutical and Medical Device Act
Japan Veterinary Products Association
Life sciences and Biotechnologies
Ministry of Agriculture, Forestry and Fisheries
Medical Device Directive
Ministry of Economy, Trade and Industry
Ministry of Health Labor and Welfare
Multinational Corporation
Mutual Recognition Agreement
Maximum Residue Limits
Notified Body
National Health Insurance
National Veterinary Assay Laboratory
Pharmaceutical Inspection Convention and Pharmaceutical Cooperation Scheme
Pharmaceutical and Medical Device Agency
Plant Protection Station
Quality Management System
Risk Management Plan
International Cooperation on Harmonization of Technical Requirements
for Registration of Veterinary Medicinal ProductsWorking Party
World Trade Organization

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Introduction
Both Japan and the EU are facing numerous challenges such as an aging population,
shifting demands in almost all domestic markets and rising costs in many aspects of
the welfare system with a need to accelerate and focus on high-end innovations. Thisparticularly in the areas of

Healthcare
Plant Protection & Biotechnology, andAnimal health.

The enclosed recommendations of WP-B have the clear aim to improve theinnovation capabilities of both the EU and Japan through concrete action plans in life
sciences and biotechnology, which focus on measures to enhance efficient
healthcare practices, food technology / supply and biotechnology.
The BRT members have seen that the EU and the Japanese governments madesome efforts on regulatory harmonization in these fields. In anticipation of post-EPA
between both regions, we hope the governments will continue further actions forregulatory harmonisation and collaborations.
One asterisk (*) identifies “priority” recommendations, two asterisks (**) identify “toppriority” recommendations.

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Recommendations from both
European and Japanese industries
GeneralWP-B / # 01** / EJ to EJ Sensitive handling of approval / adaption of CBD / theNagoya Protocol on Access to Genetic Resources and Benefit Sharing
The EU government has already ratified the Nagoya Protocol on Access to
Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from theirutilization to the Convention on Biological Diversity. EU-J BRT members strongly callfor the re-examination of several issues in the regulation (EU) No. 511/2014 and/or
the Implementing Acts draft, as these will become serious impediments to thebusiness operations including international trade of a wide range of products andactivities for research and developments. In particular, the requirement to provide adue diligence declaration at the time of market launch in the EU for products
developed or manufactured outside of the EU and utilizing genetic resources must be
removed.
The Japanese government should not ratify the Nagoya Protocol until (1) thesufficient encouragement for denial of the retroactive application to genetic resource
is made, (2) the benefit sharing scheme of the genetic resources is determined that it
will not be applicable for the genetic resources, which companies and institutes havealready held, (3) utilization stage is reached where it can be determined that theretroactive application to genetic resource utilization will be denied for Japan, and (4)the appearance of clear feasible measures, which could be implemented by utilizers
of genetic resources such as companies and research institutions without
unreasonable costs. Furthermore, when discussions are held on feasible measures
toward ratification of the Protocol, the Japanese government must not proceed in a
hasty manner, but reach a conclusion only after conducting sufficient coordination
with the industry.
<Yearly status report>
New recommendation<Background>
The Nagoya Protocol, annexed to the Convention of Biological Diversity (CBD),
went into effect on October 12, 2014. The Nagoya Protocol is a multilateralarrangement, in which the economic scheme for benefit sharing between providers
and utilizers of genetic resources is defined, and it possibly influences the widelyrelated industries such as the food manufacturers, the forestry, the pharmaceutical,
the seeds, the cosmetics, the bio fuel and others, which are utilizing genetic
resources. However, the Nagoya Protocol had been adopted at the 10th Conferenceof the parties of CBD (COP10) in 2010 without sufficient coordination with theindustries.
EU-Japan BRT members are especially concerned about the structural problem,of which the genetic-resource-providing countries may unilaterally legislate theobligations of the resource utilizing countries in accordance with the Provision 1 ofWorking Party B: Life Sciences and Biotechnologies, Healthcare and Well-being
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Article 15 in the Nagoya Protocol. This structure may also impose the utilizers suchas companies in the EU and Japan to obligate for compliance of the legislations of
the resource providing countries, even though the contents of the legislation isfavourable to the provider’s side. Besides, we have another concern that theunreasonable burden for monitoring the proper usage of the genetic resources may
be imposed for utilizing companies.
In addition, it is also a risk that the time of acquisition of the resources may beretroactively determined to the time before the effect of the CBD or the Nagoya
Protocol, because (1) there are opinions claiming that the time of acquisition of thegenetic resources should be retroactively applied for the period after which the CBD
was enacted, or (2) negotiations are underway so that the genetic resources whichwere utilized in the past should be in the scope of the benefit sharing
Furthermore, considerations with research and development (R&D) activities are
not sufficiently defined in the Nagoya Protocol. This may increase the legal instability
and the risk to widely hinder or delay the applications of the innovative outcomesfrom R&D activities utilizing genetic resources, unless the clearer position of eachcountry concerned with regard to the scheme of the benefit sharing is developed.
On the other hand, the EU government has already adopted the Nagoya Protocol.
The Regulation (EU) No 511/2014 of the European Parliament and the European
Council (adopted in March 2014 and April 2014, respectively, became effective as ofJune 9, 2014) defines the intraregional procedures with regard to the Nagoya
Protocol. The EU government has drafted the Implementing Act and they arepreparing for the finalization within the first half of 2015 followed by the effect as of
October 2015. The industries have concern about the specific contents, such as “Duediligence declaration at the stage of the final development of a product” in the Article
7, which may cause significant barriers to the business operations. Different industry
sectors including the European Crop Protection Association (ECPA), the European
Federation of Pharmaceutical Industries and Associations (EFPIA), the European
Seed Association (ESA) and Europa BIO submitted comments to the EU
Commission on 9th of Jan. 2015 addressing issues and areas of uncertainty
associated with the Regulation and the Implementing Acts. With regards to theparticular concern on the requirement for due diligence declaration for the products
developed outside of the EU, it’s addressed in the ECPA letter to the Commission“ECPA believes that no declaration should be made where the utilization has takenplace outside of the Union. There is no legal basis in these paragraphs to extend thegeographical scope of the basic Regulation and such a broad geographical raises
questions as to compliance with WTO rules.”
For the companies in both EU and Japan, it is expected that the financial andoperational burdens to access to the genetic resources in the outside of the region or
country may increase whereas business predictability may be limited by adoption of
the implementing measures from the Nagoya Protocol, unless these many
problematic issues such as unclear scope of the rules are resolved. Furthermore,
there is another concern that it may widen the gap in terms of the businesscompetitiveness against the United States, which is not a member of the CBD.

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Healthcare
WP-B / # 02* / EJ to EJ MRA of GMP for pharmaceuticals
Further extension of “Mutual Recognition Agreement (MRA)” of GMP should beproceeded in order to avoid redundant inspections of manufacturing facilities. In
addition to oral dosage forms, API, Sterile and Bio products are being requested toapply to the MRA. Full support is requested to expand the MRA of GMP to liquids,
and sterile forms, API and bio products to avoid redundant inspections and testing.
<Yearly Status Report>
Japan’s application was approved in May 2014 and Japan officially joined PIC/S
on July 1st 2014. As the guideline enforces the harmonization of the inspections
among PIC/S countries, this issue might be advanced by starting negotiations
between both governments.
<Background>
In March 2012, MHLW applied for PIC/S and the practical inspection by the global
team was completed. However, as currently only oral solid dosage forms areincluded within the MRA between Japan and the EU, there are still a lot of redundantinspections of manufacturing facilities. This is not only a costly process, but it also
slows down the launching of new drugs in Japan creating a significant disadvantage
for Japanese patients. In order to eliminate this problem and integrate EU-Japaneconomics more efficiently, harmonization of standards / guidelines and expansion of
MRA should be conducted under mutual agreements. Below-mentioned are highly
prioritized items for harmonization. Also, the MRA issue is one of the items of the
EPA negotiation between EU and Japan.
<Other prioritized items for harmonization and MRA> Safety measures from surveillance to vigilance should be harmonized withinternational standards.
 Clinical development guideline and biological preparation standards for vaccine.
 Minimum requirements for biological products.
WP-B / # 03* / EJ to EJ Mutual recognition of quality management audit results
for medical devices between EU and Japan
Improve mutual recognition of Quality Management System (QMS) audit results
for lower risk medical devices, e.g. those classified as Class II, ARCB under theJapanese Pharmaceutical and Medical Device Act (J-PMD Act).
All industry-related manufacturers request PMDA and MHLW to further harmonize
and streamline the QMS audit results. MHLW has notified that RCBs can accept nonJapanese QMS audit results. However, ISO13485 continues to be only one part of
the Japanese QMS ministerial ordinance. In addition, the recognition system of“Application for Accreditation of Foreign Manufacturers” should be considered. Even
if QMS is evaluated on ISO13485, all industry-related manufacturers have to beregistered and are obliged to stick to the additional Japanese requirements.
As a result of the implementation of the J-PMD Act in November 2014, theISO13485 audit report is accepted for the QMS process in Japan. However, theWorking Party B: Life Sciences and Biotechnologies, Healthcare and Well-being
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Japanese original requirement still remains. For a real regulatory harmonization,
submission related formats / standards are also to be harmonized. Therefore, the EUside requests a complete harmonization by eliminating Japan’s deviations on top of
ISO13485. As a next step, mutual recognition of medical device products for lower
risk classes should be introduced as soon as possible.
Further improvements are desirable when introducing a new ISO revision. If the
ISO revision differs per country (for example: ISO 60601 rev2 and rev3) the workload
for manufacturers is very heavy. Therefore, the introduction schedule of new ISO
standards should be harmonized including grace period.
About the cost of QMS audit, there is a test calculation that the cost will increasedepending on the number of medical devices under the same “State of conformity”.
We request to review the price of QMS audit after a certain period.
<Yearly Status Report>
Good progress has been seen for this recommendation with the acceptance ofISO 13485.
<Background>
Based on Medical Devices Directive (MDD) of the EU and J-PMD Act, QMS audit
results are required for each application for a license to introduce new medical
devices into the market. In Europe, the regular annual ISO audit results can be used
for all applications during the period in which the ISO audit is valid. Although Japan
has started to accept QMS audit results at a specific manufacturing site for productswith the same generic name under certain conditions, a number of RCBs still require
submitting QMS audit results for each application. Further alignment is necessary.
WP-B / # 04* / EJ to EJ Mutual recognition of medical devices product licenses
Introduce a mutual recognition of medical device product licenses between the EU
and Japan. PMDA and MHLW should introduce a mutual recognition of medical
device product licenses with low risk of class II devices by taking the difference ofclassification of medical devices between Japan and the EU into account. By
harmonizing QMS and classification it should be possible to introduce new products
within the same time frame and in one process. It is desirable that this issue will besolved quickly. Level difference between NBs should also be considered. It should berecognized that the regulatory approval scheme of class II medical devices in Japanis far from that in the EU, i.e. no need to be reviewed by NBs for Conformite
Europeenne (CE) marking of class II medical device in the EU but reviewed by NBs
in Japan.
<Yearly Status Report>
No progress / no dialogue has been seen, however, some improvements throughthe implementation of the new pharmaceutical and medical device law, which makes
Japan accept the audit report ISO13485 issued by the countries.
Improvements are required to accept ISO14155 for clinical trials. Based on the
new pharmaceutical and medical device law, some of Class II and Class III products
will move to “ninsyo” application. As a result, no progress on “mutual recognition”
discussions, but improvement on the speed of approvals for medical devices.
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<Background>
Mutual recognition of licenses for medical devices in Japan and the EU would
make it possible to introduce new products in both the Japanese and European
markets within the same time frame and with one process.
As mentioned before, it could be possible to start with lower risk, class II devices.
The evaluation scheme between the Medical Devices Directive of the EU and J-PMD
Act are quite similar, with
 Evaluation schemes based on registered 3rd party bodies (Notified Bodies) Essentially quite similar requirements
 Based on ISO/IEC or JIS standard complianceWith these similarities, a mutual recognition should be easy to implement.
WP-B / # 05* / EJ to EJ Mutual recognition of clinical trial results for medical
devices
Introduce a mutual recognition of clinical trial results for medical device
development.
Foreign clinical trial data have been accepted as a part of application dossier when:(1) standards for conducting medical device clinical trials are set by the regulations of
the country or region where the trial was performed, (2) the standards are equivalentor surpass the Japanese medical device GCP, and (3) the clinical trial was
conducted in accordance with the standards or considered to have equivalent level ofquality.
The Japanese government encourages active use of consultation service on
individual medical device applications in advance provided by the Pharmaceuticals
and Medical Devices Agency (PMDA) to address use of foreign clinical trial data for
application of the device.
At present, clinical data are often accepted because the standards of clinical trials
in the United States or the EU are seen to be equivalent or sometimes moresophisticated than those required by the Japanese medical device GCP. However,then additional data are required with unclear reasons. In this regard, the ordinance
was released in December 2012 by MHLW and some improvements has been seen
but in our opinion further improvements are required in the actual operation toaccelerate mutual recognition of clinical trial results for medical devices. Japan GCP(J-GCP) has been harmonized with ISO14155, but the EU side requests Japan to
improve the actual operation of J-GCP. The clinical trials performed in EU countries
according to ISO 14155 should be easily accepted and if not accepted, an
explanation with a scientific background is a must.
In addition, Japanese
government should prepare a clear definition of accepting / preparing clinical trial
reports.
<Yearly Status Report>
Some progress has been seen but more progress is required as described above.
<Background>
Differences in the definition of GCP between Japan and the EU currently prevents
the use of non-Japanese clinical trial results in the application for new medical
devices in Japan. Mutual recognition of clinical trial results would make it possible to
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make new products available to patients in Japan and the EU within the same timeframe and through one process, ensuring high level of quality while reducing theburden on manufacturers.
Plant Protection & Biotechnology
WP-B / # 06* / EJ to EJ Shortening review times of plant protection &biotechnology products
Shorten review times for new applications / registrations.
<Yearly Status Report>
Some progress has been seen for this recommendation.
<Background>Research and development of innovative and beneficial Plant Protection &Biotechnology products require high input costs. Therefore, timely access to themarkets is crucial for R&D-intensive companies in order to successfully market theirproducts and recover their initial R&D investments, which then again are used tofinance further innovations.
Establishment and maintenance of science-based, predictable and timely
regulatory systems free from undue political influence and the appropriate protectionof proprietary data are therefore key requirements for sustainable and innovative
research.
Due to the introduction of new risk assessments on humans and environment,
which are necessary to secure safety and should be well-harmonized with othercountries, the required investment and time for preparation of dossiers on new
products are increasing. It is crucial for R&D-intensive companies to secure the timeto-market in a reasonable timeline in order to continue with innovations. Though theministries might be working for improvement of their resources as shown in the
recent change of the guideline for import tolerance application, the process in the risk
assessment might be further improvable to shorten overall time for review, like aparallel review in toxicology and residue chemistry, which are currently sequentiallyconducted. Increase of resources both in administrative and technical reviewer
areas are also crucial in order to achieve a shortening of the review time undergrowing requirements on safety.

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WP-B / # 07* / EJ to EJ Acceleration and dissemination of scientific knowledge
on GMOs by both the governments and the private sector
The governments and the private sector should speed up research in Plant
Protection & Biotechnology and inform consumers regularly and accurately about thestate of play on GMOs, based on sound scientific knowledge. To that effectJapanese and European biotechnology and bio-industry associations should work
closely with other sectorial organisations and their respective authorities.
<Yearly Status Report>
No progress has been seen for this recommendation.
<Background>A stable supply of food is an urgent requirement. While world population keeps
growing, the limits of enhancing conventional culture on existing farmlands are being
reached. GMOs offer the hope of breaking these limits, but remaining doubts about
their safety hamper the development of their utilisation. Considering this situation, it
is an urgent matter to speed up research on GMOs and inform consumers regularly
and accurately about the state of play of that research.
Animal Health
WP-B / # 08* / EJ to EJ Mutual recognition of GMP and marketing authorization
for animal health products
With regard to the mutual recognition of European and Japanese marketing
authorizations and recognition of GMP certification for veterinary products. MAFF andthe European agency should accept GMP certification of the other party where the
GMP requirements are similar or equivalent.
<Yearly Status Report>
MAFF revised regulations to issue accreditation licenses written in both Japaneseand English on 25 December 2014. This change accommodated a request from
JVPA.
<Background>
Any overseas production facilities that are involved in manufacturing veterinary
medicinal products imported into Japan have to be accredited by MAFF even though
their GMP status is authorized by European authorities. This process involves a large
amount of administrative work. An EU-Japan Economic Partnership Agreement
should aim for mutual recognition of European and Japanese marketing authorizationfor veterinary products by starting off with mutual recognition of GMP certification ofveterinary medicines where the GMP requirements are similar or equivalent.

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Healthcare
WP-B / # 09** / EJ to E Evaluation of innovation values for pharmaceuticals inpricesThe EU government should reinforce its innovation policy to member states andclarify its healthcare policy, resulting in the appropriate evaluation of the value ofpharmaceuticals. If member states introduce healthcare technology assessment(HTA) for their reimbursement system, they should carefully adapt appropriate
methods and process not to interfere patient access to new pharmaceuticals anddiscourage innovations.
<Yearly Status Report>
No progress has been seen for this recommendation. The Directorate-General for
Economic and Financial Affairs of the European Commission (ECFIN), issued areport on drug cost containment methods of member states and recommended an“EU reference price”. And several member states are introducing HTA evaluation in
their reimbursement systems. As such, we would suggest following a reimbursement/ pricing system which clearly recognizes innovation and innovative new products.
<Background>
In the EU, innovation policy is stated by the Lisbon declaration and the G10 groupreport indicating the importance of innovation in pharmaceuticals. However, eachstate operates its own healthcare system in different ways, resulting in gaps insurvival rates and the QOL of citizens. Under the current economic condition, pricesof pharmaceutical products are targeted as a major tool for medical cost containment.
BRT members call on the EU and Japan to clarify its healthcare policy and to discussand totally improve healthcare situations in member states by securing appropriate
healthcare budgets, preventing interference with patient access to new medicinesand considering the proper utilization of healthcare technology assessment.
Animal Health
WP-B / # 10* / EJ to E Introduction of “1-1-1 concept” for all animal healthproducts
Introduce 1-1-1 concept for all products (one dossier – one assessment – one
decision on marketing authorization applicable to all EU countries). A concept should
be worked out between the respective governments / authorities.
<Yearly Status Report>
Some progress has been seen for this recommendation.
<Background>
One of the key objectives of the European Union is to create a single market forgoods. This goal has yet to be achieved for the animal health industry, with the
exception of centrally authorized products. In line with the concepts already existingin the EU (i.e. quality, safety and efficacy described in one single EU dossier as thebasis for granting marketing authorizations for veterinary medicinal products, one
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single assessment of the dossier employing the best expertise, resulting in one
decision for marketing authorization) the animal health industry in Europe is seeking
a systemic change based on the one, one, one concept (“1-1-1 Concept”) for all
products. This appears to be the most simple and straightforward way to address allof the major shortcomings of the current system and to finally achieve the goal of asingle market for safe and efficacious veterinary medicines.
Healthcare
WP-B / # 11** / EJ to J The revision of the rules for the pricing and prescriptionof innovative new drugs
1. Full-fledged implementation of the new drug pricing system
The premium for new drug creation and elimination of unapproved / off-label use
drug will be continued until March 2016. It is welcomed as it supports incentives forinnovative drug development; however, it is only the continuation of a trial scheme.
The Japanese government should finalize the implementation of the new,internationally competitive drug pricing system in Japan based on the industry
proposal since in addition to innovation rewards it is also protecting public health.
Furthermore, it adds an element of predictability and stability so that the industry canadequately plan, forecast product requirements and effectively manages inventory as
well as the distribution of products across Japan.
<Yearly Status Report>
No progress has been seen for this recommendation.
<Background>
The National Health Insurance (NHI) price reform proposed by the industry has
been positively reviewed by the Central Social Insurance Medical Council (Chuikyo)
in December 2009 and the government decided to start a pilot implementation in
April 2010. This represented a significant improvement, as it provides price stability
for innovative drugs and was seen as a positive signal that the Japanese governmentis willing to reward innovation in the medical field. The premium for new drugs will be
continued until 2016. As a compensation for this new scheme, the government will
attach a system that fosters the registration of “unapproved / off-label use drugs”.
Companies have received requests on developments of many unapproved / off-label
use drugs and forwarded those constructively. Furthermore, companies received
additional requests on developments of another hundreds of unapproved / off label
use drugs for several times.
However, in the FY2014 drug pricing system reform, Chuikyo concluded topostpone full-fledged implementation of the premium for new drug creation to
FY2016 revision, even though the industry strongly requested. The conclusion brings
the industry deep concerns about sustainability for evaluation of innovations. The
Japanese government should implement the new premium system for innovative new
drugs at the FY2016 drug pricing system revision to evaluate the companies’ efforts
for elimination of the so-called drug lag in Japan and research and development ofinnovative new drugs.

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2. Abolishment of the market expansion re-pricing
The re-pricing system rule by market expansion can adversely affect innovation in
Japan and therefore, should be abolished.
<Yearly Status Report>
No progress has been seen for this recommendation.
<Background>
The abolishment of the market expansion re-pricing was not accepted by Chuikyo
even though industries insisted to eliminate the system. While the agenda for the2014 NHI pricing discussion between Chuikyo and the industry included topics suchas “NHI pricing for long-listed products” and “continuation vs. discontinuation of
incentives for innovative drug development” it did not include “abolishment of market
expansion re-pricing”. Therefore, we urge to discuss this topic to abolish the repricing rule by market expansion in the next pricing system reform in 2016, which iscontrary to the policy of evaluating pharmaceutical innovation.
3. Abolishment of the 14-day prescription rule
EU-Japan BRT members call on the Japanese government to revise the 14-dayprescription rule for all new drugs.
<Yearly Status Report>
New recommendation<Background>
Despite government’s policies to promote new drug development, patient accessto innovative drug is hindered by the 14-day prescription rule, which restricts theprescription lengths to a maximum of 14 days for all new drugs in the first year after
their launch. This practically means a delay of one year in patient access to drugs
which are already in extensive use abroad. The safety of new drugs in Japan is now
underpinned by the post-marketing surveillance system, and by the introduction of a
Risk Management Plan (RMP) in 2013. Accordingly, EU-Japan BRT members call on
the Japanese government to revise the prescription length for all new drugs.
4. Sufficient discussion with stakeholders on introduction of HTA for the drug
pricing system
EU-Japan BRT members urge the Japanese government to sufficiently discusswith all stakeholders on introduction of HTA for the drug pricing system in Japan.
<Yearly Status Report>
New recommendation<Background>
The methods of HTA for drugs and medical devices have been discussed in
Chuikyo. Although the Japanese government intends to determine the introduction of
HTA system for drugs and medical devices until the medical service fee revision in2016, the hasty and insufficient discussions may lead to the inappropriate conclusion.
For instance, some countries have caused the limited patients access to innovative
new drugs.
Furthermore, HTA may hinder the companies’ willingness to the research andWorking Party B: Life Sciences and Biotechnologies, Healthcare and Well being
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development activities for the innovative new drugs in the country. The Japanese
government should consider these possible risks and discuss with all stakeholders sothat HTA may not hinder the improvement of public health.
WP-B / # 12** / EJ to J Appropriate assessment of innovative values of medical
devices in prices
Promote sub-dividing of the current functional classification, enhance thepremiums for C1 or C2 products (class-C products) and introduce a product-based
listing system for new products in order to move towards a product-based, marketoriented reimbursement pricing system in the future.
<Yearly Status Report>
In 2014, no major progress has been seen in general and major progress wasmade in the revision of reimbursement. More detailed division of functions into
subcategories, introduction of multiple prices for medical devices of the same
category as well as the abolition of the reprising system and innovation in homehealthcare
medicaldevicesshouldbeassessed
appropriately.
<Background>
Different from pharmaceutical brand-oriented pricing systems, about 300,000
medical devices are classified into about 800 functional classes in Japan and one
reimbursement price is set for one functional class, based on structure, intended use,
effectiveness and so on.
Currently, various old and new products, having various realized prices, have thesame reimbursement price within one functional class, which means that the pricedrop of old products influences the reimbursement price of new ones on the revisionof the reimbursement price. This is the reason why the introduction of a productbased reimbursement pricing system is desired. In Japan’s 2014 price revisions, thegovernment’s efforts to progress forward the assessment of innovative values can beseen, such as making exception of functional class rule for the excellent andinnovative class-C products to keep the independent functional class within the twice
price revisions. On the other hand, they strengthened the influence of foreignreference pricing. We hope the Japanese government will make further efforts topromote medical device development.

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Plant Protection & Biotechnology
WP-B / # 13* / EJ to J Support research in crop breeding
Support research in crop breeding.
<Yearly Status Report>
No progress has been seen for this recommendation.
<Background>
Overall, in Japan the cooperation between governmental institutes and MNC islimited. Applied science is widely done for instance by the Plant Protection Stations(PPS) in all prefectures, however, this is not basic research. Also agricultural
universities in Japan do some research on an independent basis. In the past, MAFF
has spent around 400 million yen for residue trials on substances used for rice toconfirm the level of the residue in rice for feed and the transfer into livestock (cowand chicken) but the ownership is with the government or some independent
institutes. The project is motivated by the policy to increase food sufficiency rate. The
current target of the government is a vitalization of the agriculture in general. To
achieve this, a more offensive action in regard to new technologies (like application
technology) is necessary.
In the future, MAFF should spend more money on basic research / fundamental
technologies in order to facilitate research activities in general. In biotechnology,
considerable money is spent on plant molecular biological research but the budget isrecently decreasing and no genetically modified (GM) products are developed inJapan. It should be taken into consideration to develop GM rice in order to increase
yield and decrease production costs. In the past, the rice genome project was
supported by the government but the project has been finalized, a smaller post
genome project is still running. The outcome of the project is only contribution todevelop a marker assisting the breeding of rice. From such research where a
considerable amount of Japanese tax payers’ money is invested, yielding practicalapplications is desirable through co-operations among governmental institutes,
universities, Japanese domestic companies and MNC. Recently, MAFF andgovernmental institutes are developing new breeding technologies in order toimprove crop cultivars.

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Recommendations from European industry
Animal Health
WP-B / # 14* / E to EJ Responsible use of antibiotics in animal health
The establishment of a cascading system, prioritizing the use of approved drugs
and formulations where they exist, rather than other available products lacking suchclaims, would be a method promoting responsible use of all drugs in animal health.
<Yearly Status Report>
Progress has been seen in that the product list for 2nd line treatment has been
updated on the web site of NVAL/MAFF.
<Background>
In common with the rest of the world, Europeans and Japanese are concerned by
the development of resistance to antibiotic medicines used in human health and thepotential threat that the use of antibiotics in animal health will accelerate this process.
The use of antibiotics as growth promoters has been prohibited in the EU since 2006.
As a responsible industry, the animal health industry seeks to work with veterinarians,
farmers and the feed industry to dispel the myths about the use of antibiotics inanimals and promote their responsible use.
MAFF requested Marketing Authorization Holders of fluoroquinolones (FQs) toindicate “the 2nd choice drug” on their packages and to specify precautions such as“Veterinarians should change a medication based on their judgment about theefficacy of the drug within 3 days after the initial administration” on the labelling ofproducts for food animals in November 2014.
WP-B / # 15* / E to J Regulatory harmonization for animal health products
The food animal product registration process is particularly cumbersome, involving
a sequential review by MAFF followed by the FSC and the MHLW. Decision criteria
and timelines for the following stages of the review process are not provided,
resulting in extended review times.
In 2014, MAFF held a series of explanatory meetings to update the J-PMD Act andtheir approaches of shortening the review time for animal health products. It is
recognized that MAFF, FSC and MHLW started discussions on how to shorten
review times for livestock products (i.e. introduction of parallel deliberation among theauthorities.) Discussions among the authorities are ongoing.
<Yearly Status Report>
Significant progress was made by MAFF, FSC and MHLW in shortening thewithdrawal period for inactivated oil-adjuvant vaccines based on FSC’s scientificassessment of dietary health impact.
<Background>
Restrictions on withdrawal period for innovative oil-adjuvant vaccines areespecially stringent in Japan. Implementing scientific health risk assessment
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approach in establishing the withdrawal period and increased collaboration ofdifferent ministries involved in food safety would certainly improve access of animals
and animal owners to innovative animal health products which are readily available inEurope. While such global new veterinary medicinal products go already throughrigorous review processes in Europe and the USA prior to registration, it requires
substantial additional testing in J-PMD Act before an approval is granted.
An additional important aspect is the negative impact on animal welfare: since theregulatory requirements are not harmonized, the companies are required to repeat
some tests on animals in Japan, even though results of identical tests are alreadyavailable and are fully compliant with stringent frameworks like GLP or VICH.
Recognition of animal welfare aspect is not yet optimal in the administration ofanimal health products in Japan. Japan should minimize the use of animals by
accepting more overseas data and alternative approach.
WP-B / # 16* / E to J Shortening review times for animal health products
Shorten review times for new product applications for food animals. MAFF, MHLW
and FSC should start harmonization to shorten review times. The process iscomplicated in addition to a review period that already for pet animal products (notrequiring Acceptable Daily Intake (ADI) and Maximum Residue Limits (MRL) is
among the longest in the world. A lot of questions are asked in the process that might
be academically interesting but are not necessarily safety or efficacy related.
Clarifying registration requirements and shortening review times for the import ofrecombinant vaccines from Europe should also be implemented.
<Yearly Status Report>
In 2014, it has been recognized that MAFF is trying to shorten the review timelineamong three ministries, but it seems that MAFF is struggling to negotiate with theother two ministries. It would be appreciated if this recommendation could accelerate
MAFF’s initiative to deal with MHLW and FSC on this matter. It was confirmed that
MAFF established the guideline to develop veterinary GMO products or products
containing GMOs, however it is not clear how this guideline would affect a shorteningof the review timeline.
<Background>
In Japan, marketing authorization of a veterinary medicinal product is granted by
MAFF. For an animal drug intended for use in food-producing animals, FSC andMHLW are also involved in establishing the acceptable daily intake and maximum
residue limit, respectively. The review process, involving three different authorities, israther complex and certainly has some room for efficiency improvement. Also, thereview can take an extremely long time until completion. Hence, it delays the accessof animal owners and animals to innovative animal health products. This is also true
with the introduction of recombinant vaccines from Europe due to lengthy processesof implementing the Cartagena protocol even if the vaccine has already been
extensively used in Europe.

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Healthcare
WP-B / # 17* / E to J Application of GMP on medicinal gases (manufacture of
medicinal gases) in Japan
Reinforce the regulation for GMP on medicinal gases in Japan. MHLW has started
these initiatives along with industries. But industries are protective to non-GMP
facilities because of financial implications.
<Yearly Status Report>
Some progress has been seen for this recommendation. In February 2012, MHLW
noticed to medical gas suppliers to obey voluntary standard by the industry. This
standard is almost compatible to GMP standard. PMDA / MHLW will reinforce the
GMP for medicinal gases through the PIC/S, Japan officially joined in July 2014.
<Background>
Medicinal gases are drugs or medicinal devices and have to be compliant withgovernmental regulations. Main regulations are national Pharmacopeia, GMP (GoodManufacturing Practices), and GDP (Good Delivery Practice). Annex 6 describes
GMP and GDP for medical gases: production and distribution. The currently looseinterpretation of GMP in Japan along with relatively low standards of JapanesePharmacopeia is of lower standards as compared to those applicable in Europe or
the US. We would like to suggest a reinforcement of regulations on GMP for medical
gases in Japan.
WP-B / # 18* / E to J Requirement of Japanese version of the clinical trial
protocol and investigators brochure
The Japanese health authority requires a clinical trial protocol and investigator’s
brochure in Japanese. Translation from English is required for clinical trial notificationin Japan. The acceptance of English-only materials for global clinical trials performed
in Japan requires further English language education of Japanese regulators.
However, if applications could be made in English-only, it would substantiallyaccelerate the process and make innovative drugs available to patients earlier inJapan. MAFF, MHLW and FSC should start harmonized ways to shorten review
times.
<Yearly Status Report>
No progress has been seen for this recommendation but currently, an English
application format is being positively discussed.
<Background>
The Japanese health authority requires a clinical trial protocol and investigator’s
brochure in Japanese. Translation from the original English version is required forclinical trial notification of global trials in Japan. Therefore, the requirement is
considered to be a cause for delay of the start for patients’ enrolment in Japan.

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WP-B / # 19* / E to J Shorten or eliminate national tests for vaccines
For imported vaccines, national tests in both Japan and manufacturing sites havebeen conducted (for more than 20 years in some cases). National tests for vaccines
should be eliminated or reduced to an absolute minimum.
<Yearly Status Report>
Some progress has been seen for this recommendation.
<Background>
Vaccine production is done according to GMP and PMDA periodical audits ofproduction sites. However, the higher quality assurance of vaccines is strongly
demanded by society. The GMP of manufacturing countries should be accepted by
the Japanese authority and the national tests for vaccines in Japan should be
eliminated or reduced to an absolute minimum.

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