Points of View A Survey of the Characteristics and Related Factors of New Drugs Approved Prior to the Japanese Market - Perspectives on NHI Drug Price Calculation and Overseas Situations

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The Office of Pharmaceutical Industry Research Kumi Yoshino, Senior Researcher
The Office of Pharmaceutical Industry Research Takahiro Shiraishi, Senior Researcher

Summary

1. Introduction

In recent years, many drug development projects have become globalized and are now conducted not in a single country but in multiple ^{countries1, 2)}. Against this backdrop, various systems have been established to promote early development in Japan in order to speed up access to new drugs for domestic patients. For example, the NHI ^system3), which includes pioneering drugs (Pioneering Drug Designation System), consolidation of the need for Japanese Phase I studies when participating in international joint clinical trials, and an increase in the number of designated orphan drugs, as well as the NHI price ^system4), which includes an additional fee for pioneering and rapid introduction of new drugs.

On the other hand, country drugs/local drugs (hereafter referred to as "local drugs") have also been discussed for some time as drugs approved only in Japan in relation to the order in which they are launched in Japan. Especially in recent years, the discussion has been presented in various ways by several literatures with different research objectives and definitions. The following are some examples of the discussion after 2020.

In 2022 OPIR Views and ActionsNo. 65, the percentage of local drugs was surveyed with the aim of understanding the current status of globalization of ^{pharmaceuticals2)}. At that time, the survey concluded that globalization had progressed because drugs containing new active ingredients not yet approved in Europe and the U.S. were considered local drugs, which decreased from 32% in 2010-2014 to 24% in 2017-2021.

The subsequent JRI Review Vol. 8.No. 111 in 2023 mentions local drugs as one of the arguments for the merger of drug ^benefits5). Specifically, it was based on two points: "The number of approved drugs containing new active ingredients from 2010 to 2019 is higher in Japan than in the U.S." and "Drug lag/loss is occurring." "In short, many new drugs that are not accepted overseas are being approved. This argument is based on the results of two ^reports6) with different survey targets and objectives, and is organized around the number of ^{approvals7, 8)}. However, the number of approvals in each country has changed over time, with more in the U.S. than in Japan from 2014 to 2023 and from 2015 to ^{20249, 10)}.

In addition to citing a portion of the above literature, the 2024 Council on Financial Institutions cites ^{literature11)} that examines the availability in the U.S. of new drugs launched in the U.S. and 26 OECD member ^countries12). According to the report, "as many as 39% of new drugs marketed in Japan between 2018 and 2022 are not available in the U.S. by the end of 2022," making it a "notable exception. However, unlike the previous two ^{reports2, 5)}, the cited survey covers all new drugs, including those other than drugs containing new active ingredients. In addition, it is not clear whether or not the drug was approved in Japan before the Japanese market, since the situation in other countries, including Europe, is not taken into account. Furthermore, without mentioning the target diseases of the drugs in the document, there were expressions that seemed to suggest that local drugs were "new drugs that lack novelty and are not accepted overseas.

And in 2024, Shiraiwa et al. surveyed "Japanese-approved items that have not been approved by the pharmaceutical affairs bodies in Europe and the United States" as local drugs and reported that 19% of new active ingredient-containing drugs approved from 2017 to 2023 were local ^drugs13). In light of the results presented in OPIR Views and ActionsNo. 65, which are closer in definition (32% in 2010-2014 and 24% in 2017-2021), it is possible that the proportion of "local drugs" has further declined and globalization has progressed as the years progress, although it should be noted that the survey design is different, and the results of both There does not appear to be a significant contradiction between the two results.

In light of this situation, OPIR Views and ActionsNo. 74 surveyed the overseas status of Japan's leading drugs, including countries outside Europe and the United States, and organized the number of items approved only in Japan. Furthermore, we examined the applicability of these drugs to the additional payment for promotion of new drug creation and resolution of off-label drug use (hereinafter referred to as "additional payment for new drug creation, etc.") and whether the target disease is unique to Japan or not, and found that the situation of drugs containing new active ingredients calculated based on the cost accounting method or similar drug effect comparison method I, which are "approved only in Japan," is not "applicable overseas. The results suggest that "approved only in Japan" does not directly lead to the judgment of "not applicable overseas" or "less useful than those already approved overseas" for drugs containing new active ingredients calculated by the cost accounting method or the Comparable Pharmaceutical Effects Comparison Method ^I14).

In the first half of this paper, following the previous survey, we additionally surveyed drugs containing new active ingredients listed by November 2025, regardless of the calculation method. As a result, we once again confirmed that the number of local drugs is limited, and we also discussed based on the contents of the drugs, again indicating that the usefulness of drugs cannot be univocally evaluated based only on the order of approval. Based on the above results, and recognizing the importance of creating an environment that encourages early access to Japan regardless of the order of approval, the latter half of this report also examines factors related to the order of approval, such as Japan first (over 6 months), almost simultaneous approval, and overseas first (over 6 months). We hope that this will help in the future consideration of how to create an environment that encourages the early development of new drugs in Japan.

The term "Japan prior approval" in this paper was determined based on the information on the country of first approval listed in the Central Social Insurance Medical Council (hereafter referred to as Chuikyo) ^data15) when the drug was newly listed as a drug containing a new active ingredient.

Survey Methodology

The survey in this paper covered drugs containing new active ingredients that were listed as new drugs from April 2018 to November 2025.

Survey Related to Calculation Status

The country of initial approval, calculation method, projected peak number of patients administered, projected peak market size, manufacturer and seller (hereafter referred to as "pharmaceutical company" in this report), and whether or not the new drug falls under the additional fee for new drug creation, etc. and the additional fee for pioneering (including the additional fee for the system of designation as a pioneer reviewer) are shown in the "New Drug List" and "NHI Price Calculation for New Drugs ^"15) of the Chuikyo materials, ⁽ 15 ⁾ and materials at the time of NHI drug price ^revision16). Items with the same ingredients and the same dosage form (oral, injectable, or topical) were analyzed as one item, and one item for which the country of initial approval was not listed was excluded from the analysis.

The number of patients and the market size treated in this report are based on the figures provided in the Chuikyo data. In other words, they represent the number of patients treated with newly listed drugs and the market size projected by pharmaceutical companies, both of which are the figures for the peak period (one year) in Japan.

Surveys related to overseas status

The overseas approval/development status of new drugs tomorrow (Technomic production) and interview forms for each drug were used as the basis for the survey (as of December 2025). Only the status of approval for the same indication and the same formulation was surveyed separately according to whether the drug was approved in Europe or the U.S. or outside the U.S. and Europe; otherwise, no distinction was made between Europe and the U.S. and outside the U.S. and Europe. For other information, no distinction was made between Europe and the U.S. and non-Europe/non-U.S. Other information was not distinguished between Europe and the U.S. and non-Europe/non-U.S. The information on approved indications, formulations, and specifications were distinguished, and those that differed in any of these were surveyed as "approved (different indications)". Overseas development information was only included for drugs that were in Phase 1 or higher clinical trials. Therefore, drugs that were discontinued, had no follow-up information (i.e., new drugs for which it was determined that there was no information on continued development), or were in the preclinical stage were included in "No development information".

When classifying drugs into the two categories of Japan-first and overseas-first, those approved in Japan for the first time are classified as Japan-first and those approved overseas for the first time are classified as overseas-first, and one drug approved simultaneously in Japan and the U.S. is included in the Japan-first category. In the case of the three categories of Japan-first (over 6 months), near-simultaneous approval, and overseas-first (over 6 months), the items were classified as those approved in Japan over 6 months earlier than overseas, those approved within 6 months difference between Japan and overseas, and those approved over 6 months earlier overseas than in Japan, respectively. In this paper, the approval dates in Japan and overseas were surveyed on a monthly basis and the difference between the two was calculated. Therefore, if the approval dates in Japan and overseas were actually a few days apart but in different months, the difference was counted as a one-month difference, and if the approval dates in Japan and overseas were about three weeks apart but in the same month, the difference was counted as zero months (no difference). Generally, "simultaneous" approval applications are often interpreted as within 3 months, as can be seen from the definition of "simultaneous application" in the pioneering drug designation ^system17), etc. In this paper, however, the emphasis is not on strictly simultaneous approval, but rather on the perspective of whether new drug access was generally contemporaneous with the rest of the world. Therefore, we defined "approximately simultaneous approval" as approval within six months, based on the fact that a delay of six months or less under the NHI drug price system is evaluated as an expedited introduction of a new drug into Japan.

Surveys related to pharmaceutical companies

The domestic and foreign affiliated pharmaceutical companies were determined based on the location of their headquarters and investors, etc., based on the websites of each company as of November 2025. The ratio of overseas sales is defined as the ratio of sales in regions other than Japan to total sales, and the ratio was calculated using figures for FY2023. The ratio was calculated based on information disclosed in securities reports and other ^documents19) for companies established in Japan and headquartered in Japan (domestic-capital companies + 3 foreign-capital ^companies18), and assumed to be less than 25% if such information was not available. On the other hand, for Japanese subsidiaries of foreign/multinational firms and other foreign-affiliated firms, we assumed 75% or more, based on the business status of the entire corporate group. Although the overseas sales ratio of each company increased or decreased during the period covered by this report, from April 2018 to November 2025, for the sake of analysis, we have categorized the companies into four groups based on data for FY2023. Fluctuations during the period have not been incorporated into the analysis, but we have confirmed that only a small percentage of companies changed their sales ratio rankings even when based on data outside of FY2023.

Other Surveys

Information on the status of international joint clinical trials was tied to the "Database of Approved Products " ²⁰⁾ compiled by the Japan Pharmaceutical Manufacturers Association Drug Evaluation Committee based on information such as review reports from the Pharmaceuticals and Medical Devices Agency ("NIH"). Specifically, items for which data from international clinical trials were submitted as evaluation data at the time of application for approval in Japan were designated as "with international clinical trials including Japan," and items not listed in the above database were separately investigated in the review report for each item on the PMDA website.

The applicability to the U.S. designation system Breakthrough Therapy was calculated based on the information in Tomorrow's New Drugs (Technomic Production) and the U.S. Food and Drug Administration (hereinafter, FDA) website. The survey included items listed in New Drugs of Tomorrow (produced by Technomic) as of January 2026, and thus included indications other than those approved in Japan as drugs containing new active ingredients.

Notes

Although "prior approval in Japan" can be defined in various ways, this report includes an analysis from the perspective of NHI drug prices, so the decision was made based on data from the Chuikyo. In other words, even if a drug has already been approved for another indication overseas, it is treated as "Japan Prior Approval" if it is listed as "first approved in Japan" in the Chuikyo data, and the analysis of "Japan Prior Approval" in this report is based on the definition in the Chuikyo data. The status of overseas approvals is also uniform as of the time of this survey (December 2025), not after a certain period of time has elapsed from the time each drug was listed on the market.

The next section of the analysis is presented in 2-1 to 2-2.

2-1. NHI drug price calculation status and overseas status

Drugs containing new active ingredients were classified into two categories, Japan Prior Approval and Overseas Prior Approval, and the percentage of each category that fell under each calculation method was investigated. In addition, the availability of overseas approval and development information as of December 2025 for items with prior approval in Japan was surveyed, and the percentage of drugs containing new active ingredients that are approved only in Japan was also investigated.

2-2 Analysis of Factors Affecting the Order of Approval (Japan First/Simultaneous Approval/Overseas First)

Factors affecting the order of such approvals were analyzed, with drugs approved in Japan more than six months earlier than those approved overseas being classified as "Japan Preceding Approval (over 6 months)," drugs approved in Japan and overseas within six months of each other as "Almost Simultaneous Approval," and drugs approved overseas more than six months earlier than those in Japan as "Overseas Preceding Approval (over 6 months). The characteristics of the pharmaceutical companies (domestic or foreign capital, overseas sales ratio), the characteristics of the target disease (projected peak number of patients, projected peak market size), and the characteristics of the product (presence or absence of international joint clinical trials, cost accounting method, and applicability to the New Drug Discovery Program or Breakthrough Therapy in the U.S.) were analyzed using statistical methods to determine whether there was an influence and to compare the influence of these factors on the order of approval. The statistical method was used to estimate the presence or absence of influence and to compare the degree of influence among the factors.

Results

3-1. NHI Calculation and Overseas Status

(1) Calculation method

The survey covered 325 drugs containing new active ingredients (excluding one that did not list the country of first approval) listed from FY 2018 to FY 2025 (April, May, July, August, October, and November for FY 2025), including 38 drugs listed after last year's survey, The number of items with prior approval in Japan was 77, while the number of items with prior approval overseas was 248. The breakdown of NHI drug price calculation methods was as follows: cost accounting method, about 30% (27% and 30% in Japan and overseas); similar drug effect comparison method I, about 60% (63% and 64% respectively); and similar drug effect comparison method II and special exceptions, about 10% in total (9.1% and 5.2% respectively, and 1.3% and 0.4% respectively) (Figure 1). As in the previous survey, there was no significant difference in the percentage of NHI drug price calculation methods between Japanese and overseas prior approvals.

(1) Approval status of new drugs approved only in Japan

As for the overseas situation, as of December 2025, 51% (39/77 products) had the same indication and formulation approved in one of the overseas countries, 66% (51/77 products) had the same ingredient approved in one of the overseas countries including other indications and formulations, and 84% (65/77 products) had not been approved but for which development information was available. When including those that are not yet approved but for which development information is available, 84% (65/77 products) were approved (Figure 2). The overseas status by calculation method is summarized in Supplement 1.

Percentage of drugs containing new active ingredients approved only in Japan

Based on the information in Figure 2, the overseas approval status of drugs containing new active ingredients listed in Japan from FY 2018 to FY 2025 (November) is summarized in Figure 3. As a result, 92% (299/325) of the drugs containing new active ingredients had been approved overseas as of December 2025, and 96% if the 14 drugs with overseas development information are included, while only 4% (12 drugs) were being developed only in Japan at the time of this survey. Five of these 12 products were approved as "additions to the new drug creation category" (not shown in the figure), due to the addition of a usefulness system at the time of listing (not shown in the figure). ²¹⁾ The list also included several drugs that meet specific needs in Japan, such as drugs for diseases for which there are few patients in the world but a large number of patients in Japan, drugs designated under the Pioneer Review Designation System, drugs that were publicly solicited for development by the Study Group on Unapproved Drugs, drugs for rare diseases, and drugs for pediatric use.

The 12 products that were approved overseas for different indications and different formulations included three products by specification/formulation, seven products for diseases with some similarity, and two products for different diseases. These included drugs for diseases for which there are few patients in the world but a large number of patients in Japan, as well as drugs for which there is a history of public solicitation for development or submission of requests at the Review Conference on Unapproved Drugs, and other drugs that address unique needs in Japan.

The overseas status by calculation method is summarized in Supplement 1, and the overseas status of Japanese first-approved products by Europe and the U.S. is summarized in Supplement 2.

4-4. Yearly trend

Next, we examined the annual trends in the percentage of prior approvals in Japan, and found that the number of prior approvals in Japan was as low as 10-20% after 2023, and the number of prior approvals in Japan was less than 10% for items with no information on development overseas (Figure 4a). On the other hand, the percentage was 20-30% when "almost simultaneous approval" (i.e., approval in Japan within 6 months of approval overseas) was included, and 30-50% when approval within 1 year was included, which has been a constant in recent years (Fig. 4b). Since the situation for FY2025 is up to November, it is necessary to confirm future trends for the entire fiscal year.

Looking at the countries of first approval for items that received prior overseas approval, approximately 70% of the items with prior overseas approval (approximately 50% of items with new active ingredients) were first approved in the U.S., although this varied from year to year (Figure 4c).

3-2 Analysis of Factors Affecting the Order of Approval

(1) Framework and explanatory variables for multinomial logistic regression analysis

Next, factors related to the order of approval were examined. The factors were categorized as "Japan first approval (over 6 months)," "almost simultaneous approval," and "overseas first approval (over 6 months)," and statistical methods were used to estimate the presence or absence of factors related to the order of approval and to compare the influence of these factors (Table 1, Supplement 3).

The order of approval is considered to be influenced by the size of existing domestic and foreign assets that pharmaceutical companies can utilize for clinical trials and sales, as well as by the shareholder structure of the company, while it is also assumed to be affected by the characteristics of the target disease and product-specific factors. In this analysis, we examined the factors that could affect the order of approval by dividing them into three broad categories: (1) characteristics of pharmaceutical companies, (2) characteristics of target diseases, and (3) characteristics of product items.

Specifically, we considered the possibility that capital (a dummy variable for domestic/foreign capital) and overseas sales ratio (a dummy variable for the four categories), as characteristics of pharmaceutical companies, are related to the order of approval. As characteristics of the target disease, we used the predicted number of patients administered at the peak and the predicted market size at the peak. In addition, the applicability to ultra-orphan (dummy variable) based on the predicted number of patients was also considered, assuming that a special decision would be made in cases where the number of patients is extremely small. As for the characteristics of the products, we assumed that the presence of international clinical trials including Japan (dummy variable) and the fact that the product is subject to the cost accounting method and is eligible for the additional allowance for new drug creation (dummy variable assumed to represent innovativeness) may be related to the order of approval. In addition, as shown in Figure 4c, approximately 70% of the items that received prior approval overseas were first approved in the U.S. Therefore, the presence or absence of Breakthrough Therapy designation in the U.S. was also added as an explanatory variable, taking into account the impact of special measures in the U.S. pharmaceutical affairs.

The "projected number of patients at peak dosage" and "projected market size at peak dosage" were log-transformed for analysis, as they are considered to have large variability. For the applicability to ultra-orphan, we used the most specific number of patients (less than 20) after confirming the distribution trend in the order of approval in units of 10 (Supplemental 4).

As a dummy for innovativeness, this paper uses a cost accounting method and an index of additional cost for new drug creation. The reason for this is that drugs falling under this category are considered to have a certain degree of innovativeness because there are no similar drugs and they are considered to be drugs that are judged to be useful or to meet unmet needs.

In this paper, the addition to the usefulness system and the applicability to pioneering drugs were not used as explanatory variables. First, although the addition to the usefulness system can be an indicator of innovativeness, some of the requirements for the addition to the usefulness system are considered to be more likely to be met if there is more evaluation information (clinical trial data, adoption in guidelines, etc.) ^overseas22). Judging that there is a strong concern about endogeneity, we did not use it as an indicator this time.

Next, for the Pioneer Review Designation System/Pioneer Drugs, this system is considered to have a significant impact on the order of approval. However, the requirement is that the application must be filed in Japan prior to or at the same time as the application in the rest of the world (i.e., in a country that has an approval system at the same level as Japan's) (the date of application in the first country is the starting date, and applications filed within three months of the date are considered simultaneous). and was excluded as an explanatory variable in this study.

The characteristics of each variable are summarized in Supplement 4 and Supplement 5.

(2) Results of multinomial logistic regression analysis

A multinomial logistic regression analysis was conducted using data for 325 products, with Japan prior approval (over 6 months), almost simultaneous approval, and overseas prior approval (over 6 months) as explained variables (Table 1, Supplement 3, overseas prior approval (over 6 months) was used as the standard.) For the Japanese prior approval (>6 months), the three factors of "overseas sales ratio of the pharmaceutical company is 75% or more (including foreign capital)," "predicted peak number of patients is less than 20 (ultra-orphan dummy)," and "U.S. Breakthrough Therapy designation" were more significant than those of the overseas prior approval (>6 months). The three factors were statistically significant (P < 0.01, P < 0.01, P = 0.026) in decreasing the propensity for Japanese prior approval (>6 months) compared to foreign prior approval (>6 months) (Table 1, Supplement 3).

With regard to near-simultaneous approval, "peak predicted number of patients administered is less than 20 (ultra-orphan dummy)," "increase in peak predicted market size" and "implementation of international clinical trials" were statistically significant as factors increasing the tendency toward near-simultaneous approval (P = 0.011, P < 0.01, P < 0.01).

On the other hand, there was no significant effect of "pharmaceutical company is internally-owned" and "cost accounting method and the product is subject to an additional drug development subsidy" on the order of approval for any of the factors.

Next, looking at the average marginal effect of each explanatory variable, it was estimated that a 1% increase in the predicted number of patients administered at peak increases the probability of being ahead of Japan (over 6 months) by about 1.7 points (P=0.070). The probability of being ahead of Japan (more than 6 months) decreased by approximately 7.5 points and 23.1 points, respectively, on average, for firms with overseas sales of 50% to 75% and those with overseas sales of 75% or more (including foreign firms) compared to those with overseas sales of less than 25% (including unknown domestic firms) (P = 0.083, P < 0.01). 01). For diseases considered to be ultra-orphan with a projected peak dosing of less than 20 patients, the probability of being ahead of Japan (>6 months) decreased by about 18.8 points, while the probability of being almost simultaneously approved increased by 38.3 points. A 1% increase in the peak market size projection was estimated to decrease the probability of a Japanese or overseas lead in excess of 6 months by approximately 2.5 and 6.4 percentage points, respectively, and increase the probability of near-simultaneous approval by 8.9 percentage points. The probability of a Japanese lead (>6 months) decreased by approximately 13.0 points and the probability of an overseas lead (>6 months) increased by approximately 18.0 points for items with Breakthrough Therapy designation in the U.S. When international clinical trials were included in the evaluation documents at the time of approval, the probability of near-simultaneous approval was estimated to increase by about 26 points, while the probability of overseas prior approval was estimated to decrease by about 25 points.

No statistically significant effects were found even for the marginal effects for domestic firms and for items with a cost accounting method and an additional drug discovery benefit.

In order to examine the importance of each factor, we then multiplied the mean marginal effect by the standard deviation for the two non-dummy factors, "projected number of patients at peak" and "projected market size at peak," among the explanatory variables used in this study, to confirm the effect corresponding to a change of one standard deviation. As a result, the effect on the probability of Japan's prior (>6 months) when increasing by one standard deviation was an increase of approximately 4.9 points (marginal effect 1.71 x standard deviation 2.861) for "projected number of patients administered at peak" and a decrease of approximately 4.3 points (marginal effect -2.53 x standard deviation 1.695) for "projected market size at peak". This result indicates that the inverse effect of the two is not statistically significant.

This result suggests that the opposite effects they have may be about the same in magnitude. Although it is difficult to generalize because of the influence of each drug's price, it is quite possible that the market size will increase as the number of patients treated increases, and these two factors may offset each other in a realistic range of fluctuation.

Furthermore, an increase of one standard deviation in the market size forecast increased the probability of near-simultaneous approval by about 15.2 points (marginal effect 8.94 x standard deviation 1.695) and decreased the probability of overseas precedence by about 10.9 points (marginal effect -6.41 x standard deviation 1.695). Given that the probability of near-simultaneous approval is estimated to increase by about 26.2 points and the probability of overseas precedence is estimated to decrease by about 25.0 points when international joint clinical trials are conducted (dummy variable), the results suggest that the presence of international joint clinical trials may have a greater impact than the forecasted market size.

The fact that only the mean marginal effect was significant for the effect of "companies with overseas sales ratio of 50% to less than 75%," "projected number of patients administered at peak" and "projected market size at peak" on the probability of being ahead of Japan (more than 6 months), and that some results were at the 10% significance level, suggests that the effect itself is relatively weak, or that the estimates may be unstable, This may indicate that the effect itself is relatively weak or that the estimation is unstable.

Correlation coefficients and Variance Inflation Factors (VIF) were calculated as reference information on the presence or absence of multicollinearity among the explanatory variables. The absolute value of the correlation coefficient was 0.725 for one item, but less than 0.5 for all others, and the VIF was less than 3.5 for all explanatory variables (Supplement 6).

Summary and Discussion

This paper investigates the characteristics and related factors of 325 drugs containing new active ingredients that were listed from April 2018 to November 2025 (excluding one that did not list the country of first approval), from the perspectives of the NHI price calculation status and overseas status.

4-1. Calculation Status and Overseas Status of Japan Precedence

First, as in the previous survey, there was no significant difference in the ratio of NHI price calculation methods between Japan and overseas prior approvals (Figure 1).

Although the overseas approval status may be an underestimate because the results were uniformly surveyed as of December 2025 and include drugs approved in Japan less than one year ago, those with the same ingredients currently approved in one of the overseas countries accounted for 66% of the Japan-precedent cases, while those that have not yet been approved but The number of items that have not yet been approved but for which active development information has been confirmed was 84% (Figure 2). When items with overseas prior approval are included, the number of items approved overseas is 92%, indicating that drugs approved only in Japan account for only 8% of all drugs containing new active ingredients (Fig. 3).

As summarized at the beginning of this paper, it is sometimes pointed out that drugs approved only in Japan are treated as local drugs, as if they are not accepted overseas and are of little importance, and that there are more such local drugs in Japan than ^{overseas5, 12, 13).} Again, many of these comments are based on the fact that the analysis covers all new drugs, including those other than new active ingredients, or that whether a drug is a local drug or not is based solely on its approval in the U.S., and the definitions and survey methods are not uniform, making simple comparisons difficult.

However, based on the results of the analysis in this report, it is clear that the number of drugs containing new active ingredients that have been listed on the NHI drug price list in Japan over the past eight years is very limited, with only 8% currently approved only in Japan and 4% as "completely local drugs" with no confirmed development information from overseas. In addition, of the 12 drugs for which no overseas development information was confirmed, about half (5) had been recognized as useful at the time they were listed on the NHI drug price list, and thus were eligible for the additional drug price for new drug creation, etc. In addition, while the number of patients overseas is small, several drugs were included that are considered to meet the needs in Japan, such as drugs for diseases with a large number of patients in Japan, drugs designated under the Pioneer Review Designation System, drugs that were publicly solicited for development by the Study Group on Unapproved Drugs, drugs for rare diseases, and drugs containing pediatric dosage and administration, among others. In particular, drugs for diseases for which the number of patients overseas is small, even if they are important drugs that address patient needs, are likely to be developed only in Japan and consequently become local drugs.

In light of the above, the number of "drugs approved only in Japan" is itself small, and it is not appropriate to judge that a drug is "not applicable overseas" or "less useful than those already approved overseas" based on this situation alone. Therefore, it is important to create an environment that facilitates the development and approval of new drugs in Japan, regardless of their approval status overseas, in order to ensure good access to new drugs in Japan in the future.

4-2. Factors Affecting the Order of Approval

Next, we examined the factors influencing the order of approval for Japanese prior approval (>6 months), simultaneous approval, and overseas prior approval (>6 months). Statistical analyses of drug approvals have been conducted in the past, and The Office of Pharmaceutical Industry Researchhas organized drug lag and drug loss situations and their ^{trends23, 24)}. In addition, Shiraiwa et al. defined local drugs as "those approved in Japan but not approved by the pharmaceutical affairs bodies in Europe and the U.S." and quantitatively clarified the actual situation of access to drugs in Japan through international comparison of local drugs and drug ^lag13). Although the assumptions and conditions for analysis differ from these, this paper also conducted a multinomial logistic regression analysis that considered multiple factors simultaneously in order to examine the factors affecting the order of approval.

(1) About pharmaceutical companies

No significant difference was found between domestic/foreign pharmaceutical firms. On the other hand, the probability of prior approval in Japan (>6 months) tended to decrease for companies with a high ratio of overseas sales. These results suggest that the presence or absence of an overseas development and sales infrastructure affects the ease of considering simultaneous approval and overseas prior approval more than the difference between domestic/foreign companies.

(2) Target disease

For the subject disease, the results suggest that the probability of a Japanese prior (>6 months) tends to increase as the number of patients expected to receive the drug at peak administration increases. This result may be considered reasonable in that the greater the number of patients expected to receive a new drug in Japan, the more likely it is that a Japan-first development strategy will be adopted. On the other hand, this result was obtained at the 10% level of significance, and as indicated in the results, the effect per standard deviation can be assumed to be offset by the effect of market size on the order of approval. Therefore, the real impact of the peak projected number of patients administered on the order of approval should be interpreted with caution.

The dummy variable for ultra-orphan (predicted number of patients administered at peak less than 20) suggests that the probability of a Japanese advance (>6 months) is lower and the probability of near-simultaneous approval is higher than that of 20 or more patients. Although the estimates may be unstable due to the very small number of cases, it can be inferred that for diseases with extremely small numbers of patients in Japan, domestic development is difficult unless overseas sales prospects are good, and it is possible that this reflects such a situation.

Furthermore, the results also suggest that the probability of a Japanese or overseas lead-in exceeding 6 months decreases as the market size forecast increases, and the probability of near-simultaneous approval increases. Although the analysis method used in this paper differs in some respects from that used in the past The Office of Pharmaceutical Industry Researchsurveys, the characteristics of long-term lag items include a peak market size forecast of less than 10 billion yen (median lag period: 28.9 months), and these results are consistent with these previous ^{studies23, 24)}. However, again, the possibility of an offsetting effect of the projected number of patients administered at peak time is assumed, and a more detailed analysis is required in the future.

(3) About the product

As for the characteristics regarding the items, the probability of simultaneous approval increased significantly with the implementation of international joint clinical trials, and the probability of overseas precedence (>6 months) decreased. The results for international joint clinical trials were consistent with the results of analyses reported previously at OPIR Views and Actionsand elsewhere ^{,23, 24)} although the survey subjects and analysis conditions differed from those in this paper. In addition, the probability of a Japanese lead-in exceeding 6 months decreased and the probability of an overseas lead-in increased for items designated as Breakthrough Therapy in the U.S. In addition to special support measures provided by the FDA from development to review, Breakthrough Therapy also offers preferential treatment, such as direct involvement of experienced reviewers, etc. In addition to special support from the FDA from development to review, experienced reviewers are directly involved, and other preferential measures are taken to ensure early approval in the U.S. ⁹⁾. On the other hand, the approval review period in Japan continues to be the smallest compared to Europe and the U.S. ^{9, 10)}, and in fact, in the survey conducted for this report, there were some products that were approved in Japan before the U.S., although the application dates were the same. However, it is expected that the reversal due to the shorter review period in Japan is less likely to occur for Breakthrough Therapy-designated products than for regular products, and it is reasonable to assume that the probability of a Japanese lead (more than 6 months) will decrease. In addition, when we checked the percentage of Japanese regulatory application data that included international clinical trials by whether the product was designated as Breakthrough Therapy or not, the percentage of designated products that included international clinical trials was higher (Supplemental 4). Therefore, it is possible that the development of items evaluated as innovative in the U.S. is proceeding without significant delay, although the likelihood of a Japan lead (>6 months) is weakened.

The indicator "cost accounting method and additional drug development subsidy," which was used as an indicator for "items judged to be innovative in Japan," showed no significant difference from the order of approval. This suggests that the indicators used in this study may not have a significant impact on the order of approval. In this analysis, the Pioneer Review Designation System/Pioneer Drug, a domestic system somewhat similar to Breakthrough Therapy in the U.S., was not included as an explanatory variable due to systemic limitations. However, this system is considered to be a factor that may increase the probability of a Japanese lead-in (>6 months), contrary to the case of Breakthrough Therapy.

Factors that may affect the order of approval include the overseas presence of pharmaceutical companies, the projected peak number of patients, global clinical trials, the projected peak market size, and special regulatory measures in the U.S. Although the research in this report did not lead to a systematic discussion of the factors that increase the probability of prior approval in Japan beyond 6 months or almost simultaneous approval with overseas markets, we hope that it will help to improve the future environment as a means of understanding the current situation.

5. conclusion

In this paper, we summarize the NHI price calculations for Japanese prior approval items and the status of their approval and development overseas, and examine factors that may be related to the order of approval.

What is important is not the order of approval or the overseas approval status itself, but the early availability of needed drugs. From the viewpoint of early access, prior approval in Japan is considered to be as significant as or more significant than simultaneous approval overseas. In addition to the possibility that the drug is only approved in Japan, it is also possible that the drug is a temporary phase of Japan's prior approval and that it is a drug that meets Japan's unique medical needs. If this situation is viewed negatively, there is a possibility that early access will be reduced and drug development based on Japan's unique medical needs will be less likely to progress.

The order of approval is determined by multiple factors, including company, disease, product characteristics, and overseas systems. Therefore, it is important to improve various systems and development environments to promote early access to new drugs in Japan, rather than focusing only on the order of approval or the status of approval at a particular point in time.

Acknowledgements

I would like to thank Professor Emeritus Sadao Nagaoka of Hitotsubashi University for his invaluable guidance and advice in the statistical analysis of this report. We would like to express our deepest gratitude to him.

Details of statistical analysis

The impact on approval order was estimated by multinomial logistic regression analysis using the statistical analysis software Stata/IC14.0 for Windows (Stata Corp LP, CollegeStation, TX, USA). The 325 products surveyed in this paper were included in the estimation. The explained variable was a dummy variable that took 1 if the product was approved prior to the Japanese approval (more than 6 months), 2 if the approval was almost simultaneous (within 6 months gap), and 3 if the product was approved prior to the overseas approval (more than 6 months).

The explanatory variables used were those related to the pharmaceutical company, the target disease, and the product.

For pharmaceutical companies, we used a dummy variable that takes 1 if the company is a domestic company and 0 if it is a foreign company, and a dummy variable that takes 1 if the company is classified into one of four categories based on its overseas sales ratio and the corresponding ratio of overseas sales.

For the target disease, we used the predicted number of patients at peak (natural logarithm), a dummy variable for whether or not the patient is an ultra-orphan (takes 1 if the predicted number of patients at peak is less than 20), and the predicted market size at peak (natural logarithm).

For the characteristics of the product, we used a dummy variable that takes 1 if the product is being used in an international clinical trial including Japan, a dummy variable that takes 1 if the product is a cost-accounting product and if it is eligible for the additional drug discovery benefit, and a dummy variable that takes 1 if the product is a Breakthrough Therapy product in the United States.

As reference information for examining concerns about multicollinearity, we confirmed that the absolute value of the correlation coefficient between each explanatory variable was less than 0.8 and that the Variance Inflation Factor (VIF) was less than 3.5.

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