Recommendationsof theEU-Japan Business Round Table
to the Leaders of the European Union and Japan
Brussels, 15 May 2019

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
Chairman of the Board of
Directors
Chairman
Chugai Pharmaceutical Co.,
Ltd.

Working Party 2: Life Sciences and Biotechnologies, Healthcare and Well-being
EU-Japan BRT 2019 Recommendations Report
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List of Abbreviations
Abbreviation
ADI
ARCB
CAS
CE
CEFP
CHUIKYO
ECPA
EFPIA
EPA
ESA
EU
FSC
GCP
GDP
GLP
GMO
GMP
HTA
IEC
ISO
JIS
J-PAL
J-PMD Act
JVPA
LLPs
LS & BT
MAFF
MDD
MDR
MDSAP
METI
MHLW
MNC
MRA
MRL
NB
NHI
NVAL
PIC/S
PMDA
PMP
PPS
OALY
QMS
RMP
TPP
VICH
WP

Meaning
Acceptable Daily Intake
Association of Registered Certification Bodies under J-PMD Act
Chemical Abstracts Service
Conformité Européene
Council on Economic and Fiscal Policy
Central Social Insurance Medical Council
European Crop Protection Association
European Federation of Pharmaceutical Industries and Associations
Economic Partnership Agreement
European Seed Association
European Union
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
Long-listed productsLife sciences and Biotechnologies
Ministry of Agriculture, Forestry and Fisheries
Medical Device Directive
Medical Device Regulation
Medical Device Single Audit Program Pilot
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
Price Maintenance Premium
Plant Protection Station
Quality-adjusted life years
Quality Management System
Risk Management Plan
Trans Pacific Partnership
International Cooperation on Harmonization of TechnicalRequirements for Registration of Veterinary Medicinal ProductsWorking 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. But under
the headline and in-principle agreements, there is much work to be done todeliver the specific improvements needed to bring our economies closer together.
If the signing of the EPA marks the end of the current phase of deregulation andharmonization, then we will have wasted an opportunity to maximize the benefits
for our industries and our citizens.
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.
An asterisk (*) identifies “priority” recommendations.

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Recommendations from both
European and Japanese industries
HEALTHCARE
WP-2 / # 01 / EJ to EJ
Extension and clarification of coverage for mutual recognition of
Pharmaceuticals GMP
The BRT calls on the EU and Japanese Authorities to:

Cover pharmaceutical products derived from human blood or blood plasma
and medicinal gases by the Mutual Recognition Agreement (MRA) on Good
Manufacturing Practice (GMP) between the EU and Japan.

The BRT believes that:

If the government and industry work together, clarity on exactly which
products should be covered in the MRA can be achieved.

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.
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.

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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, and

Monitor whether the switch from the Medical Device Directive to MDR does
indeed accelerate the mutual recognition of clinical trials results in Japan.

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,

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Page 5 of 15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 rationale 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
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,which are relevant for plant breeding, and Work with industry and other stakeholders to increase trust in the regulatory
science and gain greater societal acceptance.
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The BRT believes that: A fact-based platform for dialogue and sharing of information as well as a riskproportionate, predictable, science-based treatment of new technologies isrequired, 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 and DMF (Drug Master File) of veterinary medicines, Include veterinary products within the scope of the MRA (Mutual Recognition
Agreement).
The BRT believes that: Mutual recognition of GMP certification and DMF 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 topatients/users and pharmaceutical and cosmetic industries
The BRT calls on the EU to: Ensure harmonization and continuity around the single regulatory system andmaintain a stable EU Regulatory System and smooth functioning of the European
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 andthe UK. More specifically, the recommendations are:Working Party 2: Life Sciences and Biotechnologies, Healthcare and Well-being
EU-Japan BRT 2019 Recommendations Report
Page 7 of 15-Secure ongoing alignment, cooperation and mutual recognition
between the UK and the EU regarding the authorization, testing andsurveillance of pharmaceuticals and cosmetics,-

Achieve alignment on safety evaluation of ingredients used in cosmetic
and pharmaceutical products between UK and EU before UK leaves
the EU,-

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.

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:

Review the current pricing system to strengthen the reward of innovation,
maintain an incentive for companies to develop new drugs, and to bringthem rapidly to meet patients’ needs in Japan,

Expand the Price Maintenance Premium (PMP) system to cover all
innovative products, incl. incremental innovations during their patentexclusivity period to implement the above at the next drug pricing system
reform in April 2020,

Abolish 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,

Limit the scope of annual price revisions from 2021 onwards,

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Reflect broader range of values each product provides beyond its price todecide 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:

Last year’s reform of the pharmaceutical pricing system could result in adelayed access to the latest treatments for Japanese patients. Unlessinnovation is properly evaluated, it becomes increasingly challenging for theindustry to continuously create innovative drugs to fulfil unmet medical needs.
This will not be beneficial for the patients nor for the society,

Under the new system introduced in April 2018, PMP eligibility is largely
dependent on the timing of launch, how the drug was evaluated in the initial
pricing, and the past record of R&D performance/output; however, in manycases those criteria do not sufficiently address the degree of innovation of theindividual product,

The company indicator for the PMP system that has been created to rankcompanies based on their contribution to new drug development is a limited
and inexact measure of a company’s commitment to bringing innovation
through individual products to Japan. Although the introduction of PMP has
initially reduced the drug lag, recent reforms have led to inaccurate evaluation
and appreciation of innovation.

Drug costs are only one part of the overall healthcare costs: a holistic view isneeded 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 allhealthcare 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.
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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 andthe 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.

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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.

WP-2 / # 9* / 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 access
The 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 this April relies on a single measure such as the
Incremental Cost Effectiveness Ratio (ICER), but this indicator does not reflect
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 as additional factors inevaluating the true value of drugs. Through this approach 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 theexperiences and failures of other countries are duly evaluated and considered.

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;

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Page 11 of 15-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,Draw a grand design for integration of various health-related data in Japan,Accelerate the integration according to the grand design under crossministerial guidance.

The BRT believes that:

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.

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PLANT PROTECTION & BIOTECHNOLOGY
WP-2 / # 11* / EJ to J
Reviewing period for Plant Protection & Biotechnology products should beshortened
The BRT calls on the Japanese Authorities to:Further shorten reviewing period through harmonization in data requirement for
agrochemical products as well as dossier on human & environment safety, andthrough acceptance of summaries in English, as well asTake advantage of the evaluation results from foreign countries in order toreduce the resource burden on the Japanese authorities,

Abolish local confined field for import of biotechnology products.

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 new technologies,
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 to innovative
products,

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 importuse, while other import countries like EU, Korea and Taiwan etc. leverage thefield data collected in cultivation countries for safety assessment.

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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.

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.

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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 it 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 beensured.

WP-2 / # 15 / E to J
Align naming requirements for product labels of chemicals with the names
used in Japanese law
The BRT calls on the Japanese Authorities to:

Revise the labelling requirement of the Poisonous and Deleterious SubstanceControl Law (PDSCL) to indicate chemicals in accordance with the naming usedin 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 thelabel would allow users to quickly assess the toxicity and regulatory relevance ofthe materials they handle,

The discrepancies between naming in Japanese regulations and product labelling
requirements poses a risk that substances are used without a clear understandingof the regulations they relate to. This should be avoided.
(Document ends)

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