Japan constitutes the world’s third-largest pharmaceutical market, presenting substantial opportunities for companies seeking to expand internationally. With a market size that achieved USD 82.27 billion in 2024 and a projected growth to USD 101.90 billion by 2033, Japan’s pharmaceutical landscape offers both considerable potential and distinct regulatory challenges. However, Japan’s pharmaceutical market is governed by a complex and stringent regulatory framework.
The Ministry of Health, Labour and Welfare (MHLW) serves as Japan’s principal regulatory authority, responsible for issuing marketing approvals for pharmaceuticals. The Pharmaceuticals and Medical Devices Agency (PMDA), functioning under the auspices of the MHLW, undertakes scientific evaluations of drug applications to ensure products meet the required standards of safety, efficacy, and quality. The MHLW retains final decision-making authority for product approvals. Following the PMDA’s review, an expert council within the MHLW provides recommendations regarding approval, leading to the formal issuance of marketing authorization by the MHLW. For pharmaceutical companies contemplating market entry, a thorough comprehension of Japan’s intricate regulatory framework is paramount for achieving success.
This blog offers a comprehensive regulatory guide, encompassing approval processes, clinical trials, pricing, intellectual property, and post-marketing responsibilities to assist companies in successfully entering Japan’s pharmaceutical market.
Marketing Authorization Requirements of Japan's Pharma Market
Drug Approval Pathways in Japan
Japan offers both standard and expedited approval pathways designed to ensure timely access to safe and effective medicines, each with distinct eligibility criteria and timelines.
Standard Approval Process
The standard drug approval process in Japan follows a well-defined pathway that typically takes 12 months for New Drug Applications (NDA). Companies must submit their applications in the Common Technical Document (CTD) format, which aligns with international standards. The PMDA conducts comprehensive reviews, including Good Manufacturing Practice (GMP) inspections, to ensure compliance with quality standards.
Expedited Approval Pathways
Japan offers several expedited pathways for innovative and priority drugs. The Sakigake (pioneer) designation provides the fastest route with with potential approval in as little as 6 months, including a prioritized pre-submission consultation. This pathway is designed for breakthrough therapies developed in Japan that show remarkable efficacy in early-stage clinical studies.
For drugs addressing serious diseases with limited treatment options, the Priority Review System reduces approval times to 9 months for orphan drugs. The Special Approval System can expedite products needed to prevent disease spread that may seriously affect public health.
Type of Review | Typical Review Timeframes |
Standard | 12 months |
Priority (Orphan Drugs) | 9 months |
Sakigake (with pre-review) | 6 months |
Intellectual Property Protection
Pharmaceutical patents in Japan have a standard term of 20 years from the filing date, with extensions of up to 5 years available to compensate for regulatory delays. Unlike some countries, Japan does not have a formal data exclusivity system but offers market exclusivity through the re-examination period, a post-marketing surveillance phase during which generics cannot be approved.
The re-examination period is typically 8 years for standard new drugs and can extend to 10 years for orphan drugs, as shown below:
Drug Type | Re-examination Period |
Standard New Drugs | 8 years |
Orphan Drugs | Up to 10 years |
Pediatric Medicines (Under discussion) | Up to 12 years (proposed) |
Clinical Trial Requirements in Japan's Pharma Landscape
Clinical trials in Japan often require data from Japanese subjects due to due to recognized ethnic differences in pharmacokinetics and pharmacodynamics that may affect efficacy and safety. Foreign sponsors without a local subsidiary can conduct clinical trials by appointing an In-Country Clinical Trial Representative (ICCR), a Japanese entity or individual who oversees trial operations and ensures regulatory compliance. All clinical trials must comply with Japanese Good Clinical Practice (J-GCP), which places strong emphasis on oversight by institutional review boards (IRBs), stringent documentation, and robust informed consent procedures.
Pricing and Reimbursement Framework
National Health Insurance System
Japan’s universal National Health Insurance (NHI) system provides a quick pathway to market access, with new drugs typically listed within 60-90 days after marketing approval. The NHI-listed price functions as both the reimbursement benchmark and final market price across Japan. However, the pricing environment has undergone significant reforms in recent years. The 2024 pricing reform introduced several pro-innovation measures, including premiums for the rapid introduction of new therapies and enhanced rewards for pediatric medicines. These changes represent the first positive pricing developments in many years, aimed at addressing drug lag and loss issues that have historically impacted the Japanese market.
Price Revision System
Japan implements biennial price revisions based on actual market prices compared to NHI reimbursement prices. The system includes an “R-zone” tolerance of 2% to allow reasonable discounting while controlling overall healthcare spending. Products granted the Price Maintenance Premium (PMP) are eligible to retain their NHI listing price during revisions, providing better predictability for innovative drugs.
Post-Marketing Requirements
Japan enforces rigorous post-marketing surveillance standards, which foreign companies must incorporate into their regulatory planning. One distinctive requirement is the Post-Marketing All-Case Surveillance (PMACS) system. PMACS mandates Marketing Authorization Holders to collect real-world safety and efficacy data from every patient receiving the drug in Japan.
In addition, firms must establish robust pharmacovigilance systems that align with Japan’s Good Vigilance Practice (GVP) guidelines. These include the monitoring and reporting of adverse drug reactions and the submission of Periodic Safety Update Reports (PSURs) throughout the product’s re-examination period—typically 8 years for standard drugs and up to 10 years for orphan products.
Language & Localization
In Japan, regulatory documentation must be submitted in Japanese, as required by the PMD Act. The PMDA generally does not accept submissions in English or any other language, with the exception of a limited pilot program launched in 2024 allowing English-language CTD submissions under specific conditions. In-house or professional translation services are essential. Foreign companies are typically required to appoint a Japanese Marketing Authorization Holder (MAH) or Designated MAH (DMAH), who manages regulatory submissions and communications with authorities. Companies without a local affiliate may apply under the Foreign Exceptional Approval pathway but must still designate a licensed MAH. In all cases, maintaining Japanese-speaking regulatory and pharmacovigilance staff is essential to ensure compliance and an effective link with the PMDA.
Conclusion
Japan’s pharmaceutical market offers immense opportunities but demands careful navigation of its regulatory framework. By understanding the roles of MHLW and PMDA, preparing for Japanese-specific clinical trials, anticipating pricing dynamics, securing intellectual property, leveraging special designations, adapting to regulatory expectations and cultural nuances, and staying updated on regulatory changes, pharmaceutical companies can successfully enter this rapidly growing market.
How can DDReg Help?
DDReg offers comprehensive regulatory support across the entire product lifecycle in Japan—from regulatory strategy development and due diligence to new product authorizations, CMC advisory, and post-approval lifecycle management. Our team of experts provides up-to-date guidance on evolving regulatory requirements.
Whether you’re launching a new drug, managing post-market obligations, or navigating complex regulatory changes, DDReg provides the local insight and global perspective you need to succeed.
Read more about Japan’s Pharma market from our experts: Japan’s Approach to eCTD V4.0