Recommendationsof theEU-Japan Business Round Table
to the Leaders of the European Union and JapanTokyo, 5 November 2020

Working Party 2
Life Sciences and Biotechnologies,
Healthcare and Well-being

Working Party Leaders:Dr. Thomas-Peter Hausner
President, Representative
Director & Senior Bayer
Representativefor Japan
Bayer Holding Ltd.

Mr. Osamu Nagayama
Honorary Chairman
Chugai Pharmaceutical Co.,
Ltd.

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List of Abbreviations
Abbreviation
BRT
CAS
CEA
CGP
EPA
EU
GCP
GMO
GMP
HTA
ICER
IP
ISHL
ISO
J-PMD Act
MDD
MDR
MDSAP
METI
MHLW
MRA
NHI
PBT/vPvB
PDSCL
PHR
PMDA
PMP
PRTR
QALY
QMS
R&D
REACH
RMP
UK
WP

Meaning
Business Round Table
Chemical Abstracts Service
Cost Effectiveness Analysis
Comprehensive Genomic Profiling
Economic Partnership Agreement
European Union
Good Clinical Practice
Genetically Modified Organism
Good Manufacturing Practice
Health Technology Assessment
Incremental Cost Effectiveness Ratio
Intellectual Property
Industrial Safety and Health Law
International Organization for Standardization
Japanese Pharmaceutical and Medical Device Act
Medical Device Directive
Medical Device Regulation
Medical Device Single Audit Program Pilot
Ministry of Economy, Trade and Industry
Ministry of Health Labor and Welfare
Mutual Recognition Agreement
National Health Insurance
Persistent, Bioaccumulative and Toxic / very Persistent and very
Bioaccumulative
Poisonous and Deleterious Substance Control Law
Personal Health Records
Pharmaceutical and Medical Device Agency
Price Maintenance Premium
Pollutant Release and Transfer Register
Quality-adjusted life years
Quality Management System
Research & Development
Registration, Evaluation, Authorization, Restriction and Chemicals
Risk Management Plan
United Kingdom
Working Party

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Introduction
Japan and the EU face many similar challenges, such as aging populations,shifting demands for products and services, and rising costs in many aspects of
the welfare system. Life sciences and biotechnologies offer the possibility oftechnologies that will help address these challenges.
Working Party 2 focuses on the following sectors:
 Healthcare (pharmaceuticals, medical devices etc.)
 Life Science & Industrial Chemicals
 Plant Protection & Biotechnology
 Animal Health
The 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. The focus is on measures that will enhance efficient
healthcare practices, food technology and supply, and biotechnology.
The conclusion of the Economic Partnership Agreement was a majorachievement for both sides and will bring mutual economic benefit. There is muchwork to be done to deliver the specific improvements needed to bring our
economies closer together.
These once a year meetings are useful, but their value is limited without active
follow-up between them. Our Working Party would like to see the creation ofworking-level government teams, on both the EU and Japan sides, to proactively
monitor and drive progress throughout the year. Membership of the teams could
perhaps be based on the EPA teams. And these teams should be tasked with
developing and delivering on a plan and timelines.
Too many of the recommendations in this report have seen too little progress for
too long. Instead of an ending, the EPA should be seen as a beginning. It should
be a launch pad: a chance to renew our commitment to removing barriers tobusiness; a chance to find new energy for strengthening our economic
relationship; a chance to deliver on the recommendations in this report. Let us
take those chances.
In addition, in June 2019, the Japanese government introduced the Bio Strategy
2019, aiming at a sustainable development of the Japanese economy by utilizing
and focussing on biotechnology actively. The planning and implementation of
specific measures for this bio-strategy allows for an early opportunity tocooperate and collaborate with European stakeholders engaged in the bioeconomy promotion and is considered beneficial by the BRT as such earlycollaboration supports an improvement of the bio-economy in both Europe andJapan.
An asterisk (*) identifies “priority” recommendations.
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Recommendations from both
European and Japanese industries
COVID-19
WP-2 / # 01 / EJ to EJ
R&D under the new coronavirus situation
The BRT calls on the EU and Japanese Authorities to:support the research and development of diagnosis, treatments andvaccines for the new type of coronavirus and related diseases andcoordinately promote collaborative actions of companies and/or academia toaccelerate their developments, provide appropriate compensation andprotection scheme for those treated and providing treatments andcontinuously promote the research and development for other infectious
diseases especially for AMR (Antimicrobial Resistance).

The BRT believes that:

collaborative approach to combat COVID-19 is key for faster realization ofsolutions for the pandemic. By gathering various expertise of companies
and academia and promoting projects in parallel, it is considered thatdevelopment time can be significantly shortened. Though all the COVID-19
vaccines and therapeutics will undergo rigorous studies on safety andefficacy, health damage may possibly occur with them in some cases.
Legislation should be in place to provide speedy, accessible and effective
compensation to those suffering health damage resulting from vaccinations
and discharge all parties involved in the provision of COVID-19 vaccines
and therapeutics from civil liability to facilitate and protect the healthcare
provision for COVID-19;



overcoming the pandemic is the most important issue, but there are alsosignificant challenges in the medium to long term. The number of drugresistant bacteria is increasing, and if this situation continues, it is predictedthat the annual number of deaths worldwide by 2050 due to drug-resistantbacterial infections will rise to approximately 10 million. At the same time, itis necessary to secure resources for solving such problems.

HEALTHCARE
WP-2 / # 02 / EJ to EJ
Mutual recognition should be improved for Medical Devices
Mutual recognition of quality management audit results for Medical
Devices should be established between EU and Japan.
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The BRT calls on the EU and Japanese Authorities to:introduce a mutual recognition scheme for Quality Management System(QMS) audit results, preferably through EU accession to the Medical Device
Single Audit Program Pilot, or through regulatory harmonization between
the EU and Japan,



harmonize submission-related formats and standards,



ensure post-approval QMS inspection dates coincide with the renewal ofmarketing authorization rather than every 5 years in order to simplify andassure proper renewal operation,

introduce mutual recognition of Medical Devices products for lower risk
classes as soon as possible,

harmonize the introduction schedule for new ISO standards, including agrace period, thereby ensuring they apply the same revision of a particular
ISO standard,address issues above through the next revision of the J-PMD Act.

The BRT believes that:

the QMS inspection process remains complicated and burdensome despite
Japan now accepting the ISO13485 audit report under the 2014 J-PMD Act.

There should be mutual recognition of Medical Devices product licenses.
The BRT calls on the EU and Japanese Authorities to:mutually recognize Medical Devices product licenses. Existing similarities
between EU and Japanese regulations on low risk class II devices makemutual recognition on product licenses for this category of products
possible.

The BRT calls on the Japanese Authorities to:ensure PMDA and MHLW introduce mutual recognition, taking into accountthe difference of classification of medical devices between Japan and theEU.

The BRT calls on the EU Authorities to:

improve their communication with the Government of Japan in relation to
the new Medical Device Regulation (MDR) implementation,monitor whether the switch from the Medical Device Directive to MDR does
indeed accelerate the mutual recognition of clinical trials results in Japan.

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The BRT believes that:

harmonizing QMS and classification should allow new products to be
introduced in both the EU and Japan within the same time frame and in one
process,the EU Authorities are communicating insufficient information to Japan
about the MDR.

There should be mutual recognition of clinical trial results for Medical
Devices.
The BRT calls on the Japanese Authorities to:accelerate mutual recognition of clinical trial results in actual operation,
where the conformity is currently insufficient due to the existing strict
conditions applied when accepting clinical evaluation reports originating
outside of Japan,

provide early disclosure of a clear guidance for judgment on the need forclinical studies, conditions for acceptance, etc. in order to make the actual
operation of GCP smoother, and

develop guidelines for effective utilization of clinical evaluation reports soon.
The EU industry side requests that the Japanese government responds withspecific timelines for this action as this has been a previously listed request
with no practical progress.

The BRT believes that:

although foreign clinical trial data can be accepted in Japan as part of theapplication dossier under specific circumstances, additional datarequirements were sometimes imposed on manufacturers without providing
the rational regarding such request,the acceleration of mutual recognition of clinical trial results for thedevelopment of new Medical Devices would ensure access to new products
for patients in Japan and the EU, both within the same timeframe andthrough one process. This would allow for further reducing the device lag,ensuring a high level of quality whilst minimizing the administrative burden
on manufacturers, and

early disclosure of clinical trial-related guidance would promote the entry ofoverseas companies to the Japanese market.

PLANT PROTECTION & BIOTECHNOLOGY
WP-2 / # 03 / EJ to EJ
Legal clarity for and appropriate regulation of Plant Protection innovation,
including genetic modified plants and gene-edited plants
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The BRT calls on the EU and Japanese Authorities to: regulate agricultural technologies, including crop protection, genetic modified
and gene-edited crops in a science-based and proportionate manner, advance and adhere to global harmonization of genetically modified
organisms’ risk assessments, and support the Global Low Level Presence
Initiative,
 provide legal clarity on the status of techniques such as genome editing andcorresponding labelling requirements (e.g. for genome edited derived food),and work with industry and other stakeholders to increase trust in the regulatory
science and gain greater societal acceptance.
The BRT believes that: a fact-based platform for dialogue and sharing of information as well as arisk-proportionate, predictable, science-based treatment of new technologies
is required, taking a science-based and proportionate regulatory approach to agricultural
technologies will aid gaining societal acceptance and help weeding out
misinformation.

ANIMAL HEALTH
WP-2 / # 04 / EJ to EJ
Ensure mutual recognition of GMP for Animal Health products
The BRT calls on the EU and Japanese Authorities to: agree on the mutual recognition of European and Japanese marketing
authorizations for veterinary products, starting with mutual recognition of GMP
certification of veterinary medicines,
 include veterinary products within the scope of the MRA (Mutual Recognition
Agreement).

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The BRT believes that: mutual recognition of GMP certification for veterinary products between the
EU and Japan will provide for faster access to new useful products.

HEALTHCARE
WP-2 / # 05 / EJ to E
The UK’s withdrawal from the EU should create the minimum of
disruption to patients/users and pharmaceutical and cosmetic industries
The BRT calls on the EU to:ensure harmonization and continuity around the single regulatory system
and maintain a stable EU Regulatory System and smooth functioning of theEuropean Medicines Agency for pharmaceuticals, and

warrant that there is a single regulatory regime for cosmetics with a single
evaluation of the safety of cosmetic ingredients used in products in the EU
and the UK. More specifically, the recommendations are:-secure ongoing alignment, cooperation and mutual recognition
between the UK and the EU regarding the authorization, testing andsurveillance of pharmaceuticals and cosmetics,-

ensure companies can still employ the best talent from around theworld, facilitating UK and EU nationals working across Europe after
Brexit,-maintain scientific research collaboration between the UK and EU evenafter UK leaves the EU in order to strengthen EU’s position in life
sciences and attracting global life science investment,-

ensure that intellectual property (IP) standards and IP incentives
continue to be applied in the EU and UK after Brexit.

The BRT believes that:retaining the functioning of pharmaceuticals’ and cosmetics’ supply chainsby reaching an agreement with a pharmaceutical/cosmetics protocol, which
ensures full alignment between EU and UK legislation is needed toguarantee supply of medicines to patients in Europe or the UK after Brexit.
a stable, predictable environment that rewards innovation


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WP-2 / # 06* / EJ to J
Reform of the pharmaceutical pricing system should provide a stable,
predictable environment that rewards innovation
The BRT calls on Japanese Authorities to:continuously review the current pricing system to strengthen the reward forinnovation, maintain an incentive for companies to develop new drugs,
and to bring them rapidly to meet patients’ needs in Japan,

limit the scope of off-cycle price revisions which will be introduced from2021 onwards. Since drug expenditure has been well controlled by thecurrent pricing system, the scope of off-cycle price revisions must be
limited to exceptional cases, such as e.g. the marketed price issignificantly lower than the listed price. Innovative patented products
should not be subject to off-cycle price cuts,

expand the Price Maintenance Premium (PMP) system to cover all
innovative products, incl. incremental innovations during their patentexclusivity period with the next drug pricing system reform in April 2022,

further revisit corporate indicators as basis for PMP eligibility; corporate
indicators measure the ranking of companies, but are currently
unpredictable and do not reflect the degree of innovativeness of individual
products, including the tangible benefits provided to the patients,

expand the reward for innovation for launching an innovative additional
indication after initial NHI listing and recognizing real clinical and patient
benefit so that it includes real world evidences as well as scientificallyvalidated patient reported outcomes,

in the middle term, improve the PMP system such as to reflect broader
range of values each product provides beyond its price to decide on PMP
eligibility, e. g., patient’s and healthcare provider’s benefit, social
contributions in addition to clinical improvements, and

expand the scope of pricing policy reforms beyond drug costs, as drug
costs are only one part of the overall healthcare costs.

The BRT believes that:

the administrative labour and costs involved in drug price surveys anddrug price revisions, which are required to implement annual revisions area considerable cost driver especially in the midst of the public healthemergency and in consequence hinder a sustainable reduction in medical
costs. Therefore, in order to improve the return on investment and policy
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implications of the off-cycle price revision, it is necessary to limit therevision’s scope,the reforms to the pharmaceutical pricing system introduced since 2018
could result in a delayed access to the latest treatments for Japanesepatients. Unless innovation is properly evaluated, it becomes increasingly
challenging for the industry to continuously create innovative drugs to fulfil
unmet medical needs. This will not be beneficial for the patients nor for thesociety,in April 2020, minor changes were made to product requirements andcompany indicators for PMP; as for the product requirements change, theBRT welcomes that products will be eligible for PMP if their additional
indications are recognized to be innovative or useful,company indicators are evaluation criteria based on past company records
and are not directly related to the innovative value of individual products
and such products or companies’ future contribution to the healthcare
system and patients’ benefits. It is necessary to verify the effects of thissystem and to continually review the system,

expanding the reward for innovative additional indications leads to further
access to innovative treatments and additional benefits for patients,

drug costs are only one part of the overall healthcare costs: a holistic viewis needed, and a fundamental reform should not be limited to managing
drug prices only. Thus, to ensure long term healthcare system
sustainability while securing reward for innovation, future reforms should
include a review of all healthcare costs and revenue sources, including
medical fees, medical procedures, hospital stays, patient co-payments etc.

WP-2 / # 07 / EJ to J
The 14-day prescription restriction rule for new Pharmaceuticals shouldbe abolished
The BRT calls on the Japanese Authorities to:abolish the 14-day prescription restriction rule, orextend the prescription limitation to 30 days and shorten the rule
application period to 6 months.

The BRT believes that:

the 14-day rule is no longer required because the safety of new drugs inJapan is now underpinned by the post marketing surveillance system andWorking Party 2: Life Sciences and Biotechnologies, Healthcare and Well-being
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the introduction of a Risk Management Plan (RMP),


abolishing the rule would provide better patient access to innovative new
drugs.

WP-2 / # 08 / EJ to J
The environment for innovative Medical Devices should be improved in
Japan
Japan should further sub-divide the current functional classification for
Medical Devices
The BRT calls on the Japanese Authorities to:revise the reimbursement pricing scheme bringing it closer to a productoriented system,

improve the reward for innovation by sub-dividing current functionalclassifications, and

set the reimbursement price for old products separately from thereimbursement price for new products.

The BRT believes that:

it would be sensible to allow a certain period-of-time prior to conclusive
assessment, because it often takes time for effectiveness of new products
to become apparent and safety and efficacy to be adequately addressed.

Japan should abolish the foreign price reference system for Medical
Devices
The BRT calls on the Japanese Authorities to:abolish the foreign price reference system for Medical Devices since theaverage price in Japan is already only 80% of foreign prices.

The BRT believes that:

when comparing foreign prices with Japanese prices, it should be
acknowledged that Japanese prices include wholesalers’ and hospitals’
margins as well as distribution costs.

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Health insurance environment for cancer genome profiling (CGP) testingshould be improved for patients to get early access to indicated testing
The BRT calls on the Japanese Authorities to:enable patients to conduct CGP testing and receive their results at optimal
timings using public insurance system.

The BRT believes that:

CGP testing which comprehensively detects cancer-related genes has
been covered by national health insurance and reimbursed as a medical
device since June 2019, but there is a restriction that they are reimbursed
only if CGP testing are performed at the end of the standard of care when
patients already get drug resistance or are in worse general status. An
environment is socially demanded where each patient can get access to
CGP testing at early and optimal timings.

WP-2 / # 09* / EJ to J
Careful introduction of Health Technology Assessment (HTA)
Health Technology Assessment (HTA) for Pharmaceuticals should be
introduced with caution so that it does not become a barrier for patient
accessThe BRT calls on the Japanese Authorities to:keep refining the system of using HTA and Cost Effectiveness Analysis(CEA) for Pharmaceuticals, and

refrain from using CEA in making reimbursement decisions.

The BRT believes that:

CEA/HTA should be positioned as being supplemental to the current drug
pricing system, and that

the scheme introduced in April 2019 relies on a single measure such as the
Incremental Cost Effectiveness Ratio (ICER), but this indicator does notreflect the full value of a medicine and its value varies widely depending on
the choices of data, assumptions and models. Disease severity, unmet
need, ethical and societal considerations should be considered asadditional factors in evaluating the true value of drugs. Through thisapproach Japan should establish a more balanced HTA system,

all stakeholders, including experts from the industry, should fully participate
in the discussion of refining the newly introduced system to ensure that theWorking Party 2: Life Sciences and Biotechnologies, Healthcare and Well-being
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experiences and failures of other countries are duly evaluated andconsidered.

HTA for Medical Devices should be introduced with caution
The BRT calls on the Japanese Authorities to:

be prudent in the introduction of HTA (Health Technology Assessment)
systems for Medical Devices taking into account the following factors:-

QALY, an indicator often used in HTA evaluation for pharmaceuticalproducts is difficult to be applied for evaluation of medical devices;-

users’ skills and techniques of each medical device can affect theevaluation;-

medical devices have a shorter improvement cycle than pharmaceuticals.

The BRT believes that:

it is important that HTA systems do not hinder the creation of innovative
products, delay the listing for medical insurance reimbursement, or impose
an excessive burden on the industry (e.g. development of databases oradding human resources). Such outcomes would delay patient access to
cutting-edge medical technologies. To avoid this, there should be a clear
distinction and balance between assessment and appraisal. There should
be no inappropriate use of the ICER measure.

WP-2 / #10* / EJ to J
A harmonized approach for integration of health-related data andconstruction of data health infrastructures
The BRT calls on the Japanese Authorities to:foster a harmonized approach for integration of health-related data andstrongly promote construction of data health infrastructures in Japan,accelerate the integration according to the grand design under crossministerial guidance.

The BRT believes that:
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Page 13 of 17personal health records (PHR) will directly contribute to individual patients’choice of personalised treatments,

the integrated health data will promote evidence-based policy making in
health areas to improve efficiency of healthcare, medical services andnursing care,utilization of the big data by academia and industries will lead to new
products and services.

Plant Protection & Biotechnology
WP-2 / # 11* / EJ to J
Reviewing period for Plant Protection & Biotechnology products should
be shortened
The BRT calls on the Japanese Authorities to:further shorten reviewing period through harmonization in data requirement
for plant protection product and biotechnology products as well as dossier
on human & environment safety, and through acceptance of summaries inEnglish, as well astake advantage of the evaluation results from foreign countries in order toreduce the resource burden on the Japanese authorities,

expand the scope of the biotechnology products for which local confined
field testing may be excluded to genetically modified soybean and othercrops based on accumulated evidences and scientific justification byleveraging data from foreign countries.

The BRT believes that:

delivering novel and safe plant protection products and seeds is vital for
meeting the needs for food of the growing world population. While R&Dintensive companies are continuously and heavily investing in newtechnologies, the innovation will not contribute to food production without
their governmental approval. Hence, early market access to novel plant
protection products is crucially important,a delayed market access of novel products will cause technology gaps,
resulting in unnecessary disadvantages for farmers due to limited access toinnovative products,

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Page 14 of 17further progress in shortening the reviewing period would bring Japan muchcloser to international best practice standards,



harmonizing international data requirements will enable the industry to
avoid duplicated investment for market access in the respective area.
Currently only China and Japan request local confined field testing for GMO
crops for import use, while other import countries like EU, Korea andTaiwan etc. leverage the field data collected in cultivation countries forsafety assessment.

Recommendations from European industries
HEALTHCARE
WP-2 / # 12 / E to J
Requirements for Japanese versions of the clinical trial protocol andinvestigator’s brochure should be relaxed
The BRT calls on the Japanese Authorities to:accept clinical trial protocols and investigator’s brochures as well as
applications, which are written only in English.

The BRT believes that:

acceptance of English-only protocols and investigator’s brochures would
reduce costs and make innovative drugs earlier available to patients inJapan,

the requirement for translation of the original English version of a clinical
trial notification is delaying the start of patients’ enrolment in Japan.

LIFE SCIENCE & INDUSTRIAL CHEMICALSWP-2 / # 13 / E to J
English translations for issued regulations
The BRT calls on the Japanese Authorities to:provide English translations of all issued regulations from METI (Ministry of
Economy, Trade and Industry) & MHLW (Ministry of Health, Labour andWelfare) at the same time as, or shortly after, the announcement inJapanese.
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The BRT believes that:

Japan’s regulating authorities should provide English translations of issued
regulations, adapting to global practice and thereby enhancing Japan’s
presence in the world market.

WP-2 / # 14 / E to J
Provide a reference to CAS numbers in regulations for Chemical
substances
The BRT calls on the Japanese Authorities to:indicate CAS (Chemical Abstract Services) numbers in addition to chemicalcompound names in regulations issued by authorities, as has become a
global practice.

The BRT believes that:

if METI and MHLW regulations would refer to Chemical Abstracts Service(CAS) numbers in addition to chemical compound names, risks of differinginterpretations and varying degrees of regulatory compliance can be
avoided. In addition, swift and accurate internal alignment of concerned
companies could be ensured.

WP-2 / # 15 / E to J
Align naming requirements for product labels of chemicals with thenames used in Japanese law
The BRT calls on the Japanese Authorities to:revise the labelling requirement of the Poisonous and Deleterious
Substance Control Law (PDSCL) to indicate chemicals in accordance with
the naming used in Japanese law instead of stating the specific names of
the included substance.

The BRT believes that:a harmonization of the labelling requirement regulations (PDSCL, ISHL andPRTR) to list the contained chemical “as regulated by the Japanese law” on
the label would allow users to quickly assess the toxicity and regulatory
relevance of the materials they handle,the discrepancies between naming in Japanese regulations and productlabelling requirements poses a risk that substances are used without aclear understanding of the regulations they relate to. This should be
avoided.

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Recommendations from Japanese industries
INDUSTRIAL CHEMICALSWP-2 / # 16 / J to E
The draft regulations on microplastics for cosmetics in EU under REACH(regulation for chemicals) should be reconsidered
The BRT calls on the EU Authorities to:reconsider the definition of microplastics. Only small plastics withenvironmental risks should be defined as microplastics,



derogate all wiped-off cosmetic products (make-up, lip and nail products)from the restriction of microplastics.

The BRT believes that:

restriction of microplastics only by persistency is not consistent with theprinciples of existing regulatory framework,

polymers and microplastics should not be regarded as the same categoryof chemical substances since they are two different chemical terms with
fundamental compositional differences,

microplastic emission from make-up, lip and nail cosmetic products to theaquatic environment is insignificant, because they are wiped-off after theiruse and, in addition, they are trapped at sewage treatment systems.
Restriction of make-up, lip and nail cosmetic products does not contributeto reducing the environmental impact.

(Document ends)

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