Opinion Toward a Stronger Commitment to Regulatory Reform in the Pharmaceutical Industry

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Yuji Takasago, Senior Researcher, National Institute of Biomedical Innovation Policy

Currently, regulatory reform efforts in Japan are being promoted more strongly than ever before. This may be due to the recent government trend toward regulatory reform, the impact of the new coronavirus (SARS-CoV-2) infection (COVID-19) that has transformed society, and the progress of digitalization in all fields, which has gradually made society as a whole aware of the importance of such reforms. In particular, the review of all written documents, stamps, and face-to-face meetings based on laws and regulations, and the promotion of online medical treatment in the healthcare field, which were discussed at the Cabinet Office's Council for Regulatory Reform under the circumstances of the spread of COVID-19, are fresh in our memories as examples of regulatory reforms that relentlessly pressed for change by restricting various activities that involve face-to-face contact with each other. These are just a few of the examples of regulatory reforms that have forced us to relentlessly change by restricting various activities that are face to face. In the midst of such drastic changes in the social structure, the pharmaceutical industry needs to further strengthen its regulatory reform efforts in cooperation with the government and other industries in order to provide various medical solutions, including innovative new drugs, to the public and patients more promptly. The Pharmaceutical Industry Policy Institute (PIPI) has been working on a number of issues.

Introduction

In the past, the Pharmaceutical and Industrial Policy Research Institute (PIIPRI) has focused on Japan's regulatory reform system in general, as shown in Figure 1, and reported on trends in regulatory reform specific to the healthcare sector, ²⁾ but this report focuses on the Council for Regulatory Reform, which can request nationwide uniform regulatory reform, and examines the Cabinet Office's Office of Regulatory Reform, which serves as its secretariat, and the Cabinet Secretariat's Office of Government Reform Promotion. This paper focuses on the Council for Regulatory Reform, which is the secretariat of the Council, and examines regulatory reform proposals submitted to the "Regulatory and Administrative Reform Hotline (Vertical 110), " ³ which was jointly established by the Cabinet Office's Office for Regulatory Reform and the Cabinet Secretariat's Administrative Reform Headquarters.

Scheme for Requests for Regulatory Reform through the Council for Regulatory Reform

The scheme of requests for regulatory reform through the Council for Regulatory Reform is shown in Figure 2. Regulatory reform requests proposed to the Regulatory and Administrative Reform Hotline by the public and organizations are requested to be considered by the ministry or agency with jurisdiction over the regulation in question, based on discussions in the five working groups (WGs) established in the Office of Regulatory Reform. The ministry or agency in charge will always respond with the results of its study and the status of its response, so that the proposer of the request can check the response published on the Cabinet Office website. In other words, all regulatory reform proposals that are requested to be considered by the ministry or agency in charge will receive some kind of response. In addition, once a year, the Council for Regulatory Reform will report to the Prime Minister on the regulatory reforms necessary to promote structural reform of the economy and society, and these reports will be reflected in the government's "Regulatory Reform Implementation Plan. The ministries and agencies with regulatory jurisdiction will conduct regulatory reviews based on this plan.

Research and analysis of regulatory reform requests proposed to the Cabinet Office's "Regulatory and Administrative Reform Hotline

Based on the information in the "List of Proposed Items (Titles), Proposing Entities (Names of Companies and Organizations), etc. " ⁴⁾ on the Cabinet Office's Regulatory Reform website, we surveyed regulatory reform requests that were requested for consideration from January 2014 to August 2021 to the competent ministries via the Regulatory Reform and Administrative Reform Hotline. Note that administrative reform requests are excluded from the scope of this survey.

Figure 3 shows the annual number of proposals, from January 2014 to August 21, 2021, a total of 5,187 proposals were requested for consideration by the competent ministries and agencies, with the number of proposals from individuals increasing from 2020. This is probably due to the launch of the Yoshihide Kan Cabinet, which has placed regulatory reform in the "center of its administration" and the need to respond to COVID-19. While the number of proposals from individuals has recently surged, the number of proposals from non-individuals (companies, organizations, etc.) has been stable at around 400-500 per year since 2017. Considering that this survey does not include the "Request for Review of Regulations and Systems in Response to Coronary Infections " ⁶⁾ submitted by four economic organizations (Nippon Keidanren, Japan Association of Corporate Executives, Japan Chamber of Commerce and Industry, and New Economic Federation), which was compiled in April and May 2020, the number of proposals from non-individuals has also increased significantly in 2020 due to COVID- 19, it can be concluded that the number of proposals from non-individuals has also increased significantly in 2020 due to the impact of COVID- 19. It can also be seen that the number of proposals in the health and medical fields, which are closely related to the pharmaceutical industry, will also increase significantly in 2020, in line with the increase in the number of all proposals. The average period from the date of the request for consideration to the date of the compilation of responses was 68.5 days.

Table 1 and Figure 4 show the results of the survey of the entities proposing requests for regulatory reform in all fields. While the Nippon Keidanren (Japan Business Federation) and other business organizations proposed the largest number of requests, a similar amount of requests were proposed by industry associations (financial and insurance industry). The finance/insurance industry is one of the most regulated industries, subject to the Banking Law, Trust Business Law, Insurance Business Law, etc., and it is easy to imagine that industry associations are taking the lead in submitting many requests for regulatory reform in order to break through the strict regulations and systems. One reason for the large number of regulatory reform requests submitted by industry associations (in the finance and insurance industries) is that many of them have been proposed more than once. On the other hand, what about the pharmaceutical industry? While the number of requests from the manufacturing industry as a whole tends to be small, the number of requests from industry associations (manufacturing chemical industry) including the pharmaceutical industry was very small, and no pharmaceutical companies were found among the private companies that disclosed their company names. Table 2 and Figure 5 show the results of the survey limited to requests for regulatory reform in the health and medical fields that are relevant to the pharmaceutical industry. The Keidanren and other business organizations accounted for just under half of the respondents, indicating their large presence in this field. In addition, the percentage of requests from industry associations (manufacturing chemical industry), including the pharmaceutical industry, is slightly higher than in all fields.

Table 3 lists the specific requests submitted to the Regulatory and Administrative Reform Hotline by industry associations related to pharmaceuticals during this survey period, showing that there were no requests proposed after 2018.

Examples of regulatory reforms related to the "Act on the Protection of Personal Information (Personal Information Protection Law)

The Act on the Protection of Personal ^{Information7),} officially called the Act on the Protection of Personal Information, is a law for the proper handling of personal information and is a regulation that pharmaceutical companies must comply with in all aspects of drug discovery research and clinical development. The current Personal Information Protection Law does not permit the acquisition of personal information without the consent of the individual concerned, nor does it permit the provision of such information to third parties. However, there are some exceptions to the limitations on the purpose of use and provision to third parties, such as "when it is particularly necessary to improve public health or promote the sound growth of children and it is difficult to obtain the consent of the person concerned," which may allow the use of personal information for purposes of public interest. However, the interpretation of "improvement of public health" is not clear, and it is difficult to determine whether medical research by pharmaceutical companies to create pharmaceuticals and other products using personal information falls under the category of "improvement of public health" as described in the Personal Information Protection Law. With the 2015 amendment of the Personal Information Protection Law, a provision was established to review the law every three years due to the remarkable progress of information and communication technology, among other factors. Therefore, the government has a history of conducting a specific review approximately three years after the enactment of the revised law.

On December 13, 2019, the Personal Information Protection Commission publicly announced the "Outline of the System Revision for the So-Called Triennial Review of the Personal Information Protection Law, " ^{8) which} describes the items to be considered for the revision of the law, and solicited opinions from the public to collect a wide range of opinions and information about it. In the Outline of Amendments to the Personal Information Protection Law, the government clarified that "the use of personal information by medical institutions and pharmaceutical companies for the purpose of contributing to the development of medical research in order to realize safe and effective medical services, drugs, and medical devices with high quality" is considered to fall under "improvement of public health" with regard to the clarification of the operation of exceptions for the handling of personal information for public interest purposes. The amendment clearly states that "the use of such information by medical institutions and pharmaceutical companies for the purpose of contributing to the development of medical research," is considered to fall under the category of "improvement of public health. In response to this statement, the Industrial Policy Committee of the Japan Pharmaceutical Manufacturers Association (JPMA) considers that the promotion of research and development of pharmaceuticals contributes to the public interest in realizing a healthy society with longevity, and thus recommends that "the use by private companies for the purpose of promoting research and development of pharmaceuticals that contribute to the improvement of medical care should be clearly defined as a public interest purpose under the Personal Information Protection Law. Therefore, we would like to see the guidelines and Q&A clearly state specific examples of the use by private companies for the purpose of promoting research and development of pharmaceuticals and other products that contribute to the improvement of medical care. The ^committee also expressed the opinion that "the use by private companies for the purpose of promoting research and development of pharmaceuticals, etc. should be clarified as a public interest purpose under the Personal Information Protection Law.) In addition, the Japan Federation of Medical Devices Industries expressed a similar opinion, and at the same time, other industry associations requested that examples be provided to clarify exceptions not only in the medical field but also in all other fields.

In relation to the clarification of exceptions to the Personal Information Protection Law, the Cabinet Office received the same request from Keidanren via the Regulatory and Administrative Reform Hotline as the Pharmaceutical Manufacturers Association and others mentioned above, and on May 21, 2020, requested the Personal Information Protection Commission to consider the matter. Subsequently, the response from the Personal Information Protection Commission obtained on July 29, 2020, confirms that the Commission plans to provide specific examples of exceptions in the future as it updates its guidelines and Q&A (Table 4).

On June 30, 2021, the Personal Information Protection Commission updated the "Q&A on 'Guidelines on the Law Concerning the Protection of Personal Information' and 'Response to Incidents of Leakage, etc. of Personal Data,'" and added an "exception to the limitation based on the purpose of use" for cases where pharmaceutical companies utilize personal information (Table 5). The new Q&A is listed in Table 5. The Q&A has been updated to state that research conducted by pharmaceutical companies to elucidate disease mechanisms, discover new drug targets, identify biomarkers, and search for new diagnostic and therapeutic methods for diseases for which effective treatments and drugs are insufficient will contribute to the development of medical and pharmaceutical sciences, the improvement of medical standards, and the enhancement of public health if the results are widely shared and utilized. The committee believes that the results of such research will be shared and utilized widely, contributing to the development of medicine, pharmaceuticals, etc., and to the improvement of medical standards and public health.

Toward Cooperation with Various Stakeholders through Regulatory Reform

The following is a summary of what has been described so far. A survey of requests submitted to the Regulatory and Administrative Reform Hotline revealed that most requests were submitted by economic organizations and trade associations in the financial and insurance industries, one of the regulated industries, and only a few requests were submitted by pharmaceutical-related trade associations and companies. In addition, the case study on the regulatory reform related to the Personal Information Protection Law showed that various entities other than the pharmaceutical industry, such as business associations and other industries including the medical device industry, have been effectively using multiple regulatory reform-related channels to address a single issue, utilizing not only the regulatory and administrative reform hotline but also other opportunities to solicit opinions. The above confirmed that the pharmaceutical industry is taking effective measures to promote regulatory reforms. Based on the above, we would like to discuss how the pharmaceutical industry needs to deal with regulatory reform, focusing in particular on the use of the Regulatory and Administrative Reform Hotline, while addressing some of the issues it faces.

The first concern is that the pharmaceutical industry's use of the Regulatory and Administrative Reform Hotline may currently be limited to a small number of cases. In the medical field, which directly affects people's health and sustains their lives, there are many regulations and systems in place, and there should be regulations that should be reviewed in order for the pharmaceutical industry to provide new drugs to people around the world as quickly as possible. In particular, those who are engaged in the field do not seem to feel much discomfort in conducting their business within the framework of regulations. It is necessary to reaffirm the significance of the existence of regulations to be complied with in conducting one's business, and to identify their necessity and points to be improved. Are there any operations that require complicated and lengthy procedures due to the existence of regulations and systems? Are there any substances that, due to high hazardousness or other reasons, require labor-intensive handling such as transportation under the regulations? Are there any regulations that do not allow online interviews but require face-to-face interactions, even in times of emerging and re-emerging infectious disease epidemics, in order to visually check documents and other physical items? Are there any regulations that hinder the creation of new drugs by making full use of various medical data in the midst of a strong push for digital transformation? Are there any regulations that are a barrier to the promotion of new business? It is necessary to reassess such regulations and systems throughout the value chain of drug discovery, including drug discovery research, clinical development, manufacturing, and post-marketing surveillance, as well as in the process of creating various medical solutions other than pharmaceuticals. Specifically、「 Pharmaceuticals、 Quality of Medical Devices, etc.、 Law Concerning Assurance of Efficacy and Safety of Medical Devices, etc.（ Pharmaceuticals and Medical Devices Act）」、「 Pharmaceuticals Ministerial Ordinance（GCP Ministerial Ordinance）」、「 Pharmaceuticals Ministerial Ordinance（GMP Ministerial Ordinance）」、「 Ensuring the Safety of Regenerative Medicine, etc. The "Law for Ensuring the Safety of Regenerative Medicine, etc. (Law for Ensuring the Safety of Regenerative Medicine, etc.)" and so on. It is also very meaningful to examine specifically what issues the pharmaceutical industry has and how regulations should be reviewed to solve them.

If there are regulations that need to be reformed, it is necessary to request regulatory reform through one of the channels, focusing on the scheme presented in Figure 1. Currently, the pharmaceutical industry has many opportunities to make requests directly to the ministry or agency in charge. However, if the ties with the ministry or agency are weak, the regulatory and administrative reform hotline introduced in this report should be used more proactively. In this way, we can obtain some sort of response from the ministry to our requests, and at the same time, we can promote cooperation with other companies, industries, organizations, etc., that wish to pursue similar regulatory reforms. First, we believe that it is important to raise voices that have issues and concerns about regulations and systems and request that they be reviewed.

The second issue to consider is which entity should make the proposal when making a request through the Regulatory and Administrative Reform Hotline. As shown in Table 2 and Figure 5, about half of the proposals in the health and medical sectors related to the pharmaceutical industry come from economic organizations such as Keidanren, to which member companies from various industries belong. This can certainly add weight to regulatory reform requests, and the channel through which economic organizations propose regulatory reform requests for the pharmaceutical industry is an important option. However, if a business association tries to propose industry-specific regulatory reform requests, it may encounter difficulties in submitting such requests due to differences of opinion with the business association and its member companies in other industries, etc. In order to avoid such difficulties, it may be necessary for the industry association to take the initiative in proposing regulatory reform. In the pharmaceutical industry, the Pharmaceutical Manufacturers Association of Japan (PMAJ), whose members are R&D-oriented pharmaceutical companies that have relatively many opportunities to develop new modalities of drugs and start new businesses, and whose business development is easily impeded by unexpected regulations and systems, needs to be more proactive in its efforts for regulatory reform than ever before. The role of the main submitting body will be established, with the economic organizations submitting requests that straddle multiple industries and provide a broad direction for Japan as a whole, and the pharmaceutical industry submitting requests specific to the pharmaceutical industry. In addition, individual companies may submit their own requests if there is no consensus on the direction of regulatory reform within the business groups and industry associations. At the same time, the author believes that it is necessary to establish a system that allows for close collaboration among economic organizations, the pharmaceutical industry, individual pharmaceutical companies, and other industries, depending on the content of the proposals. In this way, the revised regulations will create an environment conducive to the creation of new drugs, and new drugs and medical technologies will be made available to the public and patients in a timely manner (Fig. 6).

Summary

In this report, we focused on the Council for Regulatory Reform in Japan's regulatory reform system and surveyed the regulatory reform proposals received by the Regulatory and Administrative Reform Hotline. Based on the results, the paper presents challenges and considerations for the pharmaceutical industry in promoting regulatory reform efforts as an industry.

A survey of regulatory reform requests requested for consideration to the competent ministries and agencies via the Regulatory Reform Hotline and the Regulatory and Administrative Reform Hotline between January 2014 and August 2021 revealed that only a small number of requests came from pharmaceutical-related industry associations and companies. In addition, by investigating trends in regulatory reform cases related to the Personal Information Protection Law, we were able to infer that efforts by various entities to raise their concerns about issues with the government through multiple channels, including the Regulatory and Administrative Reform Hotline, are proving effective. The above indicated the importance of creating opportunities for the pharmaceutical industry, which is also one of the regulated industries, to more proactively review relevant regulations. In addition, the author offered some thoughts on the classification regarding the entity to propose requests when utilizing the Regulatory and Administrative Reform Hotline.

On August 23, 2021, the government convened the Council for Regulatory Reform under a new formation and began discussions for a report next ^summer12). In the midst of calls for the digitization of administrative procedures, etc., coupled with the COVID-19 epidemic, it is expected that the government's regulatory reform efforts will be promoted at an even faster pace than before in order to make up for the delay in the healthcare sector. The pharmaceutical industry has been requesting reform of several regulations and systems that it is aware of as problematic, and some regulations, such as the Personal Information Protection Law discussed in this report, have even been reviewed. However, there are some regulations and systems that have not been improved for a long period of time, despite the fact that we have communicated our concerns about them to the government. For such regulations and systems, there is a need to continuously lobby the government and promote regulatory reforms in cooperation with stakeholders other than the pharmaceutical industry who share the same awareness of the issues. Such efforts will be effective even in cases where awareness of regulatory issues is shared with competent ministries and agencies, but no improvements are made over a long period of time.

As the level of difficulty in creating innovative drugs and medical technologies increases, we hope that the pharmaceutical industry will work more closely with various stakeholders through regulatory reform efforts in order to deliver medical solutions, including new drugs, to the public as quickly as possible.

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