Recommendationsof theEU-Japan Business Round Table
to the Leaders of the European Union and JapanTokyo, 20 April 2016
Working Party 2
Life Sciences and Biotechnologies,
Healthcare and Well-being(Final Version)

Working Party Leaders:Mr. Hans-Dieter Hausner
President, Representative Director& Senior Bayer Representative forJapan
Bayer Holding Ltd.

Mr. 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
MDR

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 theEuropean 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
Medical Device Regulation

MDSAP Medical Device Single Audit Program Pilot
METI
MHLW
MNC
MRA
MRL
NB
NHI
NVAL
PIC/S
PMDA
PPS
QMS
RMP
TPP
VICH
WP
WTO

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
Trans Pacific Partnership
International Cooperation on Harmonization of TechnicalRequirements for Registration of Veterinary Medicinal ProductsWorking Party
World Trade Organization

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Introduction
Both, Japan and the EU face 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. Thisis particularly true in the areas of

Healthcare
Plant Protection & Biotechnology, andAnimal Health.

The enclosed recommendations of WP-2 have the clear aim to improve the innovation
capabilities of both the EU and Japan through concrete action plans in life sciences
and biotechnology, focusing on measures to enhance efficient healthcare practices,
food technology / supply and biotechnology.
The BRT members recognize that the EU and the Japanese governments have 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 collaboration.
One asterisk (*) identifies “priority” recommendations, two asterisks (**) identify “toppriority” recommendations.

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Recommendations from both
European and Japanese industries
GeneralWP-2 / # 01** / EJ to EJ Implementation of the Nagoya Protocol on Access to
Genetic Resources and Benefit Sharing under coordination with industries
EU-Japan BRT members fully support the objectives of the Convention on Biological
Diversity (CBD) and of the Nagoya Protocol on Access to Genetic Resources and the
Fair and Equitable Sharing of Benefits Arising from their Utilization.
The European Parliament and the Council adopted the Regulation (EU) No 511/2014
on 16 April 2014 as a compliance measure for users under the Nagoya Protocol.
Although the Regulation entered into force on 9 June 2014 and all of its provisions
have been applied since 12 October 2015, there are still unclear issues regarding
implementation. The BRT members call for detailed and clear guidance on the scopeof the regulation under full coordination with industries.
The Japanese government is proceeding to develop domestic measures towards
ratification of the Nagoya Protocol. The BRT members call for open discussion to set
up a framework to implement the measures with sufficient coordination withindustries.
<Yearly status report>
Some progress in our recommendation in 2015 has been seen. Namely, therequirement to make a due diligence declaration at the time of market launch in the
EU for products developed outside the EU via utilizing genetic resources has been
removed. The Japanese government has not ratified the Nagoya protocol and is
carefully preparing domestic measures for its implementation.
<Background>
The Nagoya Protocol was adopted at the 10th Conference of the Parties to the CBD(COP10) in 2010 and went into force on October 12, 2014. It is an international
agreement, which aims at sharing the benefits arising from the utilization of genetic
resources in a fair and equitable way. However, it has the possibility to influence awide range of industries, such as the pharmaceutical, plant-breeding, seeds andhorticulture, animal-breeding, food and beverage, biotechnology, cosmetic, biocontrol and other industries, which are utilizing genetic resources. EU-Japan BRT
members are concerned that implementation of the Nagoya Protocol presents many
challenges and areas of uncertainty.
We are especially concerned about the structural problem, namely the obscure
scope of the Protocol based on the ambiguous definitions of some terms, such as“genetic resource” and “utilization of genetic resources”. Therefore, providing
countries of genetic resources may unilaterally and separately take measures foraccess to genetic resources and benefit-sharing. This may impose an excessive
burden on the users of genetic resources, such as companies in the EU and Japan,
to fulfil different access requirements in each country.

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Furthermore, the users would be required to comply with the legislations of theresource providing countries, even though the contents of the legislation might beoverly favourable to the provider’s side. We are concerned about compliancemeasures for users from the EU or Japan that may impose unreasonable burden on
the users of genetic resources because the terms of “research and development”,
related to “utilization of genetic resources”, are not clearly defined in the Nagoya
Protocol. This may increase the legal instability and may widely impede or delay the
R&D activities of utilizing genetic resources.
In addition, we are concerned that the benefit-sharing may be required for the genetic
resources accessed before entry into force of the CBD or the Nagoya Protocol,
because the negotiations of Article 10 of the Nagoya Protocol are underway andthere are opinions claiming that the obligation of benefit-sharing should be
retroactively applied for the genetic resources which were accessed before the CBDentered into force.
The European Parliament and the Council adopted the Regulation (EU) No 511/2014
on 16 April 2014 as a compliance measure for users under the Nagoya Protocol. It
entered into force on 9 June 2014 and all of its provisions have been applied since
12 October 2015. At present, each EU member state is developing domestic
measures for implementation of the Regulation, and the European Commission ispreparing guidance on the scope of the Regulation, as well as guidance on theutilization of genetic resources in several industry sectors.
The Japanese government has not ratified the Nagoya protocol yet and is internallypreparing domestic measures for ratification and implementation of the Nagoya
Protocol. EU-Japan BRT members are concerned that unreasonable financial andoperational burdens may increase in relation to access to genetic resources and in
implementation of the compliance measures, unless the problematic issues such as
the obscure scope of the Protocol and of the compliance measures are resolved.
Furthermore, we have another concern that it may widen the gap in terms of thebusiness competitiveness against the United States, which is not a Party of the CBD.
Healthcare
WP-2 / # 02* / EJ to EJ MRA of GMP for Pharmaceuticals
Further extension of the “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 Biotechnology products are being
requested to apply to the MRA. Full support is requested to expand the MRA of GMP
to liquids, sterile forms and API, as well as biotech products in order 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.
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<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 the EU andJapan economies more efficiently, harmonization of standards / guidelines andexpansion of MRA should be conducted under mutual agreements. Below-mentioned
are highly prioritized items for harmonization. Also, the MRA issue is one of the itemsof 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 guidelines and biological preparation standards for
vaccine.
- Minimum requirements for biological products.
WP-2 / # 03* / EJ to EJ Mutual recognition of quality management audit results
for medical devices between EU and JapanThe EU and Japanese governments should establish a mutual recognition scheme
for Quality Management System (QMS) audit results. In June 2015, the Japanese
government announced it would officially join the Medical Device Single Audit
Program Pilot (MDSAP) to share QMS audit results between United States, Canada,
Australia and Brazil. improvement in efficiency and reduction of workloads for both
authorities and the industry are expected. We call for a similar regulatory
harmonisation approach between the EU and Japan for lower risk medical devices,e.g. those classified as Class II, ARCB under the Japanese Pharmaceutical andMedical Device Act (J-PMD Act).
As a result of the implementation of the J-PMD Act in November 2014, the ISO13485
audit report is accepted for the QMS process in Japan. However, the Japaneseoriginal requirement still remains. For a real regulatory harmonization, submission
related formats / standards also need to be harmonized. We would like to request aclear direction towards a product-based and rationalized annual audit.
The EU side requests a complete harmonization by eliminating Japan’s deviations on
top of ISO13485. As a next step, mutual recognition of medical device products forlower 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 isvery heavy. Therefore, the introduction schedule of new ISO standards should beharmonized, including a grace period. The EU side would also like to suggest thenecessity of disseminating information on QMS ministerial ordinances in English, forthe purpose of MDSAP rationalization of investigation pursuant to Chapter 3,
Production and Marketing.

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<Yearly Status Report>
Under the Japanese Pharmaceutical and Medical Device Act enforced in November
2014, QMS of medical devices in Japan has proceeded to be aligned to international
standards. In addition, Japan announced it would join MDSAP to ensure its
internationalization. Good progress has been seen for this recommendation after the
J-PMD Act was implemented in November 2014.
<Background>
In June 2015, the Japanese government announced it would officially join MDSAP.
MDSAP is an international cooperation programme for quality assurance of medical
devices by the United States, Canada, Australia and Brazil as members, establishedin January 2014. Regulatory authorities of the member countries cooperatively
evaluate QMS audit agencies and share audit results among member countries.
Medical device companies normally have to get a QMS audit in each country.
However, under MDSAP a single QMS audit results will be valid among member
countries. This programme will reduce the burdens on both companies andauthorities. Although there are issues to be solved to implement this programme,
distribution of medical devices will be stimulated between the member countries of
MDSAP. Similar scheme between the EU and Japan should be considered.
Based on the Medical Devices Directive (MDD) of the EU and the 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-2 / # 04* / EJ to EJ Mutual recognition of medical devices product licenses
Mutual recognition of medical device product licenses between the EU and Japan
should be introduced. Regulations of low risk class II devices are similar in the EU
and Japan. Therefore, mutual recognition of this category of products may berealized earlier. After a basic agreement on the Trans Pacific Partnership (TPP), theJapanese government is revising the law proceeding convergence of approvalconditions of medical devices. A similar approach is needed between the EU andJapan. PMDA and MHLW should introduce 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 is solved
quickly.
The EU will pursue MDR, but not enough information is communicated to Japan. We
would like to suggest that the EU communicates with the Japanese government
about the new MDR implementation.

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<Yearly Status Report>
No progress / no dialogue has been seen. However, there have been some
improvements through the implementation of the Pharmaceutical and Medical Device
Act, which makes Japan accept the audit report ISO13485 issued by the countries.
The PMDA’s performance has been improved to shorten approval times for medical
devices. ISO14155 has been accepted but we request further improvement.
Based on the Pharmaceutical and Medical Device Act, some Class II and Class III
products will move to “Ninsho” application. As a result, there has been no progresson “mutual recognition” discussions, but improvement on the speed of approvals for
medical devices has been seen.
<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 timeframe and with one process.
The Japanese government is preparing the amendment of the Pharmaceutical andMedical Device Act in response to the TTP agreement. The proposed amendment
says companies in TTP countries can use certified Notified Bodies in any TTP
country in order to obtain Ninsho approval, which will be valid to distribute approved
Medical Devices in Japan. This can be one step for mutual recognition but it would
negatively impact on the distribution of Medical Devices between the EU and Japan.
As mentioned before, it could be possible to start with lower risk 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, mutual recognition should be easy to implement.
WP-2 / # 05* / EJ to EJ Mutual recognition of clinical trial results for medical
devices
Mutual recognition of clinical trial results for the development of new medical devices
should be accelerated. At present, the standards of clinical trials in the United States,
EU and Japan are seen to be almost equivalent and there are several cases whereclinical trial results are mutually recognized between EU and Japan. EU Japan BRT
members request to both governments in the EU and Japan to accelerate mutual
recognition of clinical trial results by increasing such cases and showing clinical trial
conductors implementing guidelines.
Introduce a mutual recognition of clinical trial results for medical device development.
Foreign clinical trial data have been accepted as a part of the application dossier
when: i) standards for conducting medical device clinical trials are set by theregulations of the country or region where the trial was performed, ii) the standards
are equivalent or surpass the Japanese medical device GCP, and iii) the clinical trial
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level of quality. 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 the use of foreign
clinical trial data for the application of a 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.
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, the Japanese
government should prepare a clear definition for accepting/preparing clinical trial
reports.
While the harmonization between GCP and ISO14155 for medical devices in Japan
has made progress, we hope for early disclosure of a clear guidance for judgment on
the need for clinical studies, conditions for acceptance, etc. in order to make theactual operation of GCP smoother. Regarding the guidance for the preparation of theClinical Evaluation Report, we request the Japanese Government to issue theguidance as early as possible.
We expect that the standard for deciding whether clinical trials are necessary or not
will be clearly established. The Government should publish guidelines for creating
clinical evaluation reports as soon as possible.
<Yearly Status Report>
A certain level of progress has been seen for this recommendation. We expect that
the Japanese Government will publish guidelines for creating clinical evaluation
reports as soon as possible.
<Background>
For the new medical device applications in Japan, the clinical trial results acquired in
the EU could not be accepted so far. However, several cases can be seen where theJapanese medical device companies submit new medical device applications withclinical trial results in the EU and obtain regulatory approval in Japan. Also, there aresome cases reported where the clinical trial results acquired in Japan are applied to
the new medical device applications in the EU. However, environmental improvement
such as showing regulatory authorities in the EU and Japan an implementing
guideline in order to lessen the burden of development costs and to ensure patient
access to the innovative new medical devices is very limited today.
With regards to the procedure between the United States and Japan, mutual
recognition of clinical trial results is already being practiced under the clinical trials bycomprehensive and simultaneous processes, such as “Harmonization By Doing(HBD)” by both regulatory authorities in the United States and Japan.

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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
make new products available to patients in Japan and the EU within the same
timeframe and through one process, ensuring a high level of quality while reducing
the burden on manufacturers. Early disclosure of clinical trial-related guidance will
promote the entry of overseas companies to the Japanese market.
Plant Protection & Biotechnology
WP-2 / # 06* / EJ to EJ Shortening review times of plant protection &biotechnology products
Shorten review times for authorization to place novel plant protection products in themarket and approval of importation of commodities treated with novel plant protection
products and/or derived from biotechnology by the harmonization of safety dossier
and risk assessment as well as streamlining the review process.
Possible area for improvement to shorten times might be:






Further harmonization of the dossier on human safety and acceptance ofsummaries in English.
Opportunistic use of the evaluation results from foreign countries in order toreduce the resource burden in authorities.
MAFF, MHLW and FSC should start harmonization to shorten review times.
Realization of parallel review for human dietary risk assessment within competentauthorities, which is currently undertaken in a sequential manner, MAFF =>MHLW => FSC => MHLW => MAFF.
Association and synchronization of review for domestic registration with that forimport MRLs.

<Yearly Status Report>
Some progress has been seen in the introduction and harmonization of safety
dossiers (J-MAFF) and in the revision on the application timing for import MRLs (JMHLW).
<Background>
Delivering novel and safe plant protection products and seeds has utmost importancefor the plant protection & biotechnology companies in order to meet the needs of thegrowing world population requiring high quality foods and feeds. While R&D-intensive
companies are continuously and heavily investing in research & development oftechnologies, the innovation will not contribute to the food production without
governmental approval. Therefore, early market access of novel plant protection
products is crucially important not only for R&D companies but also for farmers who
have to be competitive on their agricultural production, as well as consumers whose
living is dependent on the sustainability of food production. The delay of market
access of novel products will cause technology gaps resulting in unnecessary
disadvantage to farmers due to the limited access to innovative products which aresafer and more effective. In addition, the delay of review for import approval on
agricultural commodities, including the establishment of import MRLs, may limit theWorking Party 2: Life Sciences and Biotechnologies, Healthcare and Well-being
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access to innovative technology in exporting markets due to trade barriers in theimporting countries.
Though Japanese ministries have taken measures to shorten review times of humansafety studies of plant protection products and some further measures like theharmonization of dossier format for registration application with the OECD dossierformat (J-MAFF) and the revision of the guideline for import tolerance application(J-MHLW), the time-to-approval is still lagging behind other countries, e.g. the US
and Canada. This kind of technology gap should be avoided to give competitivenessin food production.
WP-2 / # 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 implement concrete actions in order
to increase public awareness and societal acceptance on the benefit and contributionof Plant Protection & Biotechnology to the sustainable supply of safety foods.
To achieve these objectives the Japanese and European biotechnology and bioindustry associations should work closely with other sectorial organisations and theirrespective authorities.
<Yearly Status Report>
No progress has been seen for this recommendation.
<Background>
While plant protection and biotechnology significantly contribute to the sustainable
food production for an ever growing population, the contribution of new technologies
has never been well recognized. Moreover, the benefit of improved quality traits onimported seeds has not been fully addressed. Considering the possible limitation of
future access on foods and feeds as a consequence of limited arable land and global
competition on limited foods, new technologies bringing higher productivity are
required.
It is necessary to increase the societal acceptance of GMO as an option to increase
and sustain the agricultural productivity in the world through awareness-building on
the benefit of this technology to better life.
Animal HealthWP-2 / # 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.

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<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. However, there is no example of mutual recognition at product level as ofDecember 2015.
<Background>
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 ofadministrative work. An EU-Japan Economic Partnership Agreement should aim for
mutual recognition of European and Japanese marketing authorization for veterinary
products by starting off with mutual recognition of GMP certification of veterinary
medicines where the GMP requirements are similar or equivalent.
Healthcare
WP-2 / # 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 processes so as not to impede patient access to new pharmaceuticals
and discourage 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 a reporton drug cost containment methods of member states and recommended an "EU
reference price". Several member states have introduced HTA evaluation in theirreimbursement systems. 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 to clarify their healthcare policies anddiscuss the total improvement of healthcare situations in member states by securing
appropriate healthcare budgets, preventing interference with patient access to new
medicines, and considering the proper utilization of healthcare technology
assessment.

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Animal HealthWP-2 / # 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, although there is no
example at product level as of December 2015.
<Background>
One of the key objectives of the European Union is to create a single market forgoods. This goal has yet to be achieved in 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
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.
Plant Protection & Biotechnology
WP-2 / # 11* / EJ to E Maintenance of Import MRLs into the EU to allow free
trade of food commodities
Securing international trade of safety foods avoiding excessive protection measures
for food safety.
<Yearly Status Report>
This is a new recommendation.
<Background>
The EU should maintain sound scientific risk assessment for the Import MRLs as
stipulated in the REGULATION (EC) NO 396/2005, while the REGULATION (EC) NO
1107/2009 governing plant protection products and the active substances containedin those products in the EU, may prohibit introducing certain substances, which are
deemed hazardous based cut-off criteria into the European market.
In the absence of necessary Import MRLs, the food commodities containing theresidue of the active substance is prohibited for importation even though the said
substance is approved in the exporting countries and the residue does not cause any
harmful effect on the human health.

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Healthcare
WP-2 / # 12** / 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
drugs will be continued until March 2018. This is welcome as it supports incentives
for innovative 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>
Although the “new” drug pricing system will be continued until March 2018, it is only
the continuation of a trial scheme. No practical progress has been seen for thisrecommendation.
<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 2018. 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 development of many unapproved/off-label
use drugs and proceeded with those constructively. Furthermore, on several
occasions companies have received additional requests on development of hundreds
more unapproved/off label use drugs.
However, in the FY2016 drug pricing system reform, Chuikyo concluded topostpone full-fledged implementation of the premium for new drug creation to
FY2018 revision, even though the industry strongly requested this. 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 FY2018 drug pricing system revision to evaluate the companies’
efforts for elimination of the so-called drug lag in Japan and research anddevelopment of innovative new drugs.
2. Abolition 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.
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<Yearly Status Report>
The situation has deteriorated, with a proposed revision of the re-pricing ruletargeting “huge selling” drugs with price cuts of up to 50%.
<Background>
The abolition of the market expansion re-pricing was not accepted by Chuikyo eventhough industries strongly requested the elimination of the system. While the agenda
for the 2016 NHI pricing discussion between Chuikyo and the industry included topics
such as “NHI pricing for long-listed products” and “continuation vs. discontinuation of
incentives for innovative drug development”, it did not include “abolition of market
expansion re-pricing”. Furthermore, the government additionally introduced a new
extra (huge sales) market expansion re-pricing at FY2016 revision. Therefore, weurge to discuss this topic to abolish both re-pricing rules by market expansion in thenext pricing system reform in 2018, which is contrary to the policy of evaluating
pharmaceutical innovation.
3. Abolition of the 14-day prescription rule
EU-Japan BRT members call on the Japanese government to abolish the 14-dayprescription rule for all new drugs in line with the recommendation of thegovernment’s Regulatory Reform Council in 2015.
<Yearly Status Repot>
No major progress has been seen for this recommendation.
<Background>
Despite the government’s policies to promote new drug development, patient accessto innovative drugs is hindered by the 14-day prescription rule, which restricts theprescription length 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 drug pricing
EU-Japan BRT members urge the Japanese government to sufficiently discusswith all stakeholders the introduction of HTA for the drug pricing system in Japan.
<Yearly Status Report>
No major progress has been seen for this recommendation.
<Background>
The methods of HTA for drugs and medical devices have been discussed in Chuikyo.
The government decided implementation of HTA evaluation for certain approved
products as a trial basis since April 2016. And also Chuikyo intends to ask
companies to submit HTA results on new drugs at the time of reimbursement priceapplications in future. We strongly ask the Japanese government to sufficiently
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discuss the process of making appropriate framework with the industry, academia,
patients and all stakeholders. We have seen that some countries have caused thelimited patients access to innovative new drugs.
Furthermore, HTA may hinder the companies’ willingness to conduct research anddevelopment 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 patient access to the innovative treatments and theimprovement of public health.
5. Maintain biennial drug price revision and appropriately reflect the increase of
consumption tax ratio into the NHI pricesA) Maintain biennial price revision
EU and Japan BRT members strongly believe that the R&D-based pharmaceuticalindustry is a leading industry of the Japanese economy. From the viewpoint of Japan
being an innovation leader, annual NHI price revision for pharmaceutical and medical
device products would be inconsistent with the government’s growth strategy, andwould damage the companies’ competitiveness. EU and Japan BRT members
strongly request to the Japanese government that comprehensive discussions,
including the viewpoint of evaluation and support for new drug discovery and further
growth of the industry should be initiated.
B) Reflect appropriately the increase of consumption tax into the priceAlso, following the medical service fee revision in 2016, there will be an irregular
price revision for pharmaceuticals in April 2017 due to increase of the consumption
tax ratio in Japan. This price revision in April 2017 should not be based on the actual
market price from a price survey, but only on the increase of the consumption tax
ratio. That is, adding a certain percentage on to the reimbursement prices, which isthe same procedure as in the price revision in 1989, is the preferable option.
<Yearly Status Report>
This is a new recommendation.
<Background>
The R&D-based pharmaceutical industry is anticipated to contribute to the growth of
the Japanese economy as an innovation leader. Several promotion policies, focusing
on the development of the pharmaceutical industry are included in the “Japan
Revitalization Strategy” and “Healthcare Policy” documents, announced by thegovernment last year. On the other hand, the new introduction of annual pricerevisions for pharmaceutical products and medical devices as a medical expenditurecontainment policy have been discussed in the government’s councils, such as theCouncil on Economic and Fiscal Policy, chaired by the Prime Minister of Japan.
Current rules for NHI price revision are developed with biennial medical service fee
revision. Therefore, it is highly inappropriate to discuss only the “frequency” of theprice revision for only pharmaceutical and medical device products, without
consideration about consistency with medical service fee or other NHI pricing rules.
Significant difficulty in annual price revision is anticipated due to the following
reasons, i) market price survey for drugs is not feasible in such a short period, ii) the
accuracy is not secured if the market price survey is conducted in a short period, andiii) annual price revision hinder companies’ incentive for the investment in innovative
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products. Also, from the distribution point of view, significant disorders will occur inthe market such as re-writing price data in the system of hospitals or wholesalers due
to annual price revision for pharmaceutical and medical device products. EU andJapan BRT members have concerns that this unbalanced medical expenditurecontainment policy by the Japanese government could damage industry’s
competitiveness and growth capability.
As for the consumption tax ratio, it will be raised in April 2017. From the viewpointthat this price revision is clearly different from the regular biennial price revision, theprice revision in April 2017 should not be based on the actual market price from aprice survey, but on only the increase of the consumption tax ratio.
WP-2 / # 13** / EJ to J Appropriate assessment of innovative values of medical
devices in prices
1. Sub-dividing the current functional classification
Promote sub-dividing of the current functional classification in the special treatment
material system in order to accelerate appropriate evaluation of the innovativeness.
<Yearly Status Report>
No major progress has been seen in 2015 for this recommendation.
<Background>
Different from pharmaceutical product-oriented pricing systems, about 280,000
medical devices are classified into about 900 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 products, having various market prices, have the same
reimbursement price within one functional class. For the revision of reimbursement
prices the price reduction of old products influences the reimbursement price of new
products. In order to realize the appropriate evaluation of the innovativeness inmedical devices, the reimbursement price of new products should be set separatelyfrom the price of old product. It is desired that the reimbursement pricing systemshould be revised closer to a product-oriented system.
2. Careful introduction of HTA based on characteristics of medical devices
EU and Japan BRT members request both governments in EU and Japan to
examine carefully the appropriate HTA system design by considering the factors:i) QALY, a sort of HTA evaluation index for pharmaceutical products, cannot beapplied for evaluation about medical devicesii) users’ skills and techniques of each medical device must affect the evaluation andiii) medical devices have a shorter improvement cycle.

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In addition, we ask both governments for their consideration in order not to hinder thecreation of innovative products nor delay the listing to the medical insurance
reimbursement and not to impose an excess burden on the industry fordevelopments of databases or human resources for HTA.
<Yearly Status Report>
This is a new recommendation.
<Background>
Following several EU member states, the Japanese government determined to
introduce HTA into approval processes for the medical insurance reimbursement of
medical devices on a trial basis at the medical service fee revision in 2016. QALY
cannot be applied to the evaluation of medical devices, which is different topharmaceutical products as the users’ skills and techniques significantly influence theoutcome of the treatment. Similar issues can be seen in the EU where HTA
procedures are already introduced prior to Japan. Considering this, bothgovernments in the EU and Japan should carefully examine an appropriate HTA
system design by considering such special characteristics for medical devices.
Furthermore, both governments in the EU and Japan should be careful about HTA
not to hinder innovative quality improvements in medicine and patient access to
cutting-edge medical technologies.
3. Abolishment of the foreign price reference system in JapanThe foreign price reference system in Japan should be abolished because theaverage price in Japan is already only 80% of foreign prices according to MHLW
documents and the upper limit of the price variance between foreign countries andJapan no longer makes sense in reality.
<Yearly Status Report>
At the medical service fee revision in 2016, the government determined to lower theupper limit of reimbursement price variance between foreign countries and Japan
from the current level 1.5 times to 1.3 times.
<Background>
As one of a series of medical expenditure containment policies, at the medical
service fee revision in 2016 the Japanese government determined to lower the upper
limit of reimbursement price variance between foreign countries and Japan to 1.3
times so that the shrinkage of the price variance of medical devices can be achieved.
It is required that the reimbursement pricing system should be revised by considering
the special characteristics in Japan, such as the necessity to support wholesalers’
distribution costs (a very important role was played by wholesalers when disaster hit
Japan) and medical institutions because the patients are decentralized in Japan.
4. Maintain biennial price revision
EU and Japan BRT members strongly oppose yearly revisions of reimbursement
prices and support maintenance of the current biennial revision scheme.

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<Yearly Status Report>
New recommendation<Background>Same as the recommendation #12-5

Recommendations from European industry
Animal HealthWP-2 / # 14* / E to EJ Prudent use of antibiotics in animal health
The establishment of a cascading system prioritizing use of approved drugs andformulations where they exist, rather than other available products lacking suchclaims, would promote responsible use of all drugs in animal health.
<Yearly Status Report>
MAFF continues to promote prudent use of antibiotics in animal health.
<Background>
In common with the rest of the world, Europeans and Japanese are concerned by thedevelopment 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 withveterinarians, farmers and the feed industry to dispel the myths about the use ofantibiotics in animals and promote their responsible use.
MAFF requested Marketing Authorization Holders of fluoroquinolones, 3rd and 4th
generation of Cephems, 15-membered ring macrolide to indicate the “2nd choicedrug” on their packages and to specify precautions such as “Veterinarians shouldchange a medication based on their judgment about the efficacy of the drug within 3days after the initial administration” on the labelling of products for food animals in
November 2014.
WP-2 / # 15* / E to J Regulatory harmonization for animal health products
The food animal product registration process is particularly cumbersome, involving asequential 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 for 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.
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<Yearly Status Report>
MAFF did a tremendous job to align the Japanese regulations with that of the EU byshortening the withdrawal period following the administration of oil adjuvant vaccines.
<Background>
Restrictions on the withdrawal period for innovative oil-adjuvant vaccines areespecially stringent in Japan. Implementing a scientific health risk assessment
approach in establishing the withdrawal period and the increased collaboration ofdifferent ministries involved in food safety would certainly improve the access ofanimals and animal owners to innovative animal health products which are readily
available in Europe. While such global new veterinary medicinal products already go
through rigorous 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 aspects 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-2 / # 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)) isamong 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>
Significant progress was made by MAFF. They explained to the industry in August
2015 that a new review process will be introduced to shorten the overall review
period for veterinary medicinal products for food-producing animals by allowing
MAFF, MHLW and FSC to review in parallel in the near future.
<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 processes
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of implementing the Cartagena protocol even if the vaccine has already been
extensively used in Europe.
Healthcare
WP-2 / # 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
notified medical gas suppliers that they should voluntarily obey the industry standard.
This standard, called the JIMGA standard, was almost compatible to GMP standard
but a little looser. PMDA/MHLW reinforced the GMP for medicinal gases through the
PIC/S. Japan officially joined in July 2014. MHLW has announced the GMP standard
only to the JIMGA core team, which is an updated JIMGA standard and almost
equivalent to PIC/S Annex 6. The formal announcement will be made in a couple ofmonths.
<Background>
Medicinal gases are drugs or medicinal devices and have to be compliant withgovernmental regulations. The main regulations are the national Pharmacopeia,
GMP (Good Manufacturing Practices) and GDP (Good Delivery Practice). Annex 6
describes GMP and GDP for production and distribution of medical gases. The
currently loose interpretation of GMP in Japan, along with relatively low standards of
the Japanese Pharmacopeia, is at a lower level compared to those applicable inEurope or the US. We would like to suggest a reinforcement of regulations on GMP
for medical gases in Japan.
WP-2 / # 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 inJapan requires further English language education of Japanese regulators. However, if
applications could be made in English-only, it would substantially accelerate theprocess and make innovative drugs earlier available to patients in Japan.
<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 of delay to the start of patients’ enrolment in Japan.
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WP-2 / # 19* / E to J Shorten or eliminate national tests for vaccines
For imported vaccines, national tests in Japan and manufacturing sites have been
conducted (for more than 20 years in some instances). 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 conducted 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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