Manufacturing Application Holder Requirements and Procedures in Japan

February 2012

Japanese people are very conscious when it comes to their health and there is a strong focus on pharmaceutical and biotechnology research both in the academic community and in the corporations that pursue medical treatments. There is also a strong effort in the Japanese government to reduce the drug lag for medicinal products developed overseas and encourage companies with foreign products of medical importance that are on the market in other countries to gain approval for these products in Japan. However, the requirements for creating and maintaining a medicinal product or device in Japan are not well understood for many companies and as a result, these companies often tend to partner out products as opposed to directly filing their NDA and maintaining ownership of the products in Japan. This often results in a significant loss of profit as a result of partnering out products early in the Japanese development process.

For foreign Pharmaceutical or Biotechnology companies, a Japanese based corporate entity or partner is necessary to be a Manufacturing Application Holder (MAH) and thus maintain legal control of a drug, biologic or device application for a product sold in Japan. For these Pharmaceutical or Biotechnology companies there may be additional requirements under the Pharmaceutical Affairs Law (PAL) that involves the manufacturing, trade and distribution of medical products. For these activities the corporate entity must obtain appropriate licenses and approvals. This includes a business license (Kyoka or Gyo-kyoka) and Marketing Business License (Seizo-hanbai-gyo Kyoka). If the company owns a facility a Manufacturing Establishment License (Seizou-gyou Kyoka) is needed to permit to manufacture medicinal products. A Foreign Manufacturing Establishment Accreditation (Nintei) is also required to permit the manufacture medicinal products, which are to be exported to Japan. The period of validity of the Accreditation is 5 years.

The most important aspects of the licensing procedure is the MAH designation as the license holder. The MAH is responsible for purchasing or importing products from a manufacturer. The MAH also must ensure compliance with all applicable GMP, GVP and GQP standards as outlined in the PAL, ICH and PMDA guidelines. The MAH also must ensure that the storage and distribution of products in Japan is conducted only by licensed establishments and in compliance with relevant regulations for that product type. There are also responsibilities to ensure that the product sold is properly accounted for and used in compliance with the label in the Japanese market.

Pharmaceutical or Biotechnology companies must comply with the requirements for the MAH status under the PAL. This status typically requires a minimum of three professional personnel at the company that represent Quality, Medical Safety and Administrative functions and decision making of the company in the release and distribution of pharmaceutical products in Japan (see figure below). The basic structure of the MAH system is that there is a General Manager that is responsible for all MAH duties including GQP and GVP roles. The Quality Assurance Controller is responsible for GQP and ensures that the manufacturing and distribution are done in a compliant manner. The Quality Assurance Controller is also responsible for notifying the MHLW and PMDA of any changes in the manufacturing or controls of the product. The Post-Marketing Safety Controller is responsible for GVP and monitoring the safety of products released into the market. All three key members that make up the MAH have to report to the senior management of the company and should be independent of adverse influence on their role.

The MAH status is both advantageous but also a legal responsibility. Companies can maintain the MAH status through a subsidiary, branch office, or representative office in Japan, or they can create an independent corporation.

Generally, it is difficult to find organizations that are willing to act as a contract MAH for foreign companies. This is mainly due to the liability and legal responsibility the MAH members have if there are problems with the product in the market. Thus, these contract MAH organizations tend to be difficult to find and very expensive. In general, we find that for products that have over $2 million USD in sales that it is more advantageous to establish a corporate office in Japan and maintain the MAH independent of any partner. For smaller products it is generally best to license these to a Japanese company or hire a contract MAH.

Thus, there are several options for a Pharmaceutical, Biotechnology or Device companies who want to maintain the MAH status without partnering and to establish an office or corporate entity in Japan. Each option has various advantages and disadvantages, so a careful evaluation of each option is needed prior to any decision to move forward. Several organizations in Japan, such as the Japanese External Trade Organization (JETRO) are available to provide support for foreign companies attempting to open a branch office or establish a corporate entity in Japan. Thus there are substantial resources to help determine the best options and strategy to facilitate the medicinal product business in Japan and take control of company products as opposed to just distributing through a partner or contract organization in the country.

Richard E. Lowenthal, MSc MBA
Pacific-Link Consulting LLC (San Diego and Tokyo)