Competition Law and Policy in the Japanese Pharmaceutical Sector (Kobe University Monograph Series in Social Science Research)

This is the first book published that focuses on competition law and policy in the Japanese pharmaceutical sector. It consists of chapters written and edited by academics who research the industry from various perspectives, including economics, competition law, pharmaceutical regulations, and intellectual property law. Competition policies involving pharmaceutical products attract attention from academics and policymakers worldwide. The pharmaceutical industry is regulated by drug laws that vary from country to country and are affected by differing practices and industrial structures. The book begins by examining drug regulations and trade practices in the industry that are peculiar to Japan and its healthcare system. It then presents the Japanese Antimonopoly Act and cases involving it, and discussions of current competition law issues in the Japanese pharmaceutical industry. The book also discusses innovation and intellectual property and economic analyses of pharmaceutical regulations and drug discovery. The chapters include comparative studies on Japanese regulations vs. those in the European Union and the United States. Japan is one of the biggest pharmaceutical markets in the world. With this in mind, the book provides “one-stop shopping” for anyone interested in pharmaceutical regulations in the country. Covering the basics but extending to in-depth explorations of complex problems, this book appeals not only to students and academics, pharmaceutical companies and regulators, but also to those dealing with real-world policy issues that encompass competition policy, intellectual property, and pharmaceutical regulation. Chapter 11 is available open access under a Creative Commons Attribution 4.0 International License via link.springer.com Preface Contents Editors and Contributors About the Editors Contributors List of Figures List of Tables Part I Healthcare and Pharmaceuticals: Innovation and Regulation in Japan 1 Regulation and Competition in the Pharmaceutical Industry in Japan 1.1 Introduction 1.2 Entry Restrictions for Manufacturing and Sales in the Pharmaceutical Sector 1.2.1 Licences for the Manufacturing and Sales of Pharmaceutical Products 1.2.2 Licence for Opening a Pharmacy 1.2.3 Licence for Drug Sales Business 1.3 Elimination of Distance Restrictions on Establishing Pharmacies and Lifting of Bans on Online Sales of Over-The-Counter Drugs 1.3.1 Freedom to Choose an Occupation and Distance Restrictions on the Opening of Pharmacies 1.3.2 Constitution and Prohibition of Online Sales of Over-The-Counter Drugs 1.4 Approval for Manufacturing and Marketing of Pharmaceutical Products 1.5 Price Regulation and Competition for Medical Drugs 1.5.1 Price Regulation of Medical Drugs 1.5.2 Price Competition for Pharmaceutical Products 1.5.3 Price Regulation of Medical Drugs and Promotion of Innovation to Develop New Drugs 1.6 Distribution Regulations for Medical Drugs: AMA and MHLW Distribution Improvement Guidelines 1.7 The Relationship Between the Approval of Generic Drugs and Patents on Original Drugs 1.7.1 Approval of Generic Drugs 1.7.2 Japanese-Style Patent Linkage System 1.7.3 Competition Between Original and Generic Drugs 1.8 Conclusions References 2 Competition and Cooperation: Building a Sustainable Healthcare Delivery System in a Society with a Declining Population 2.1 Introduction 2.2 Laws Relating to the Healthcare Delivery System: From the Perspective of Competition Policy 2.2.1 The Basic Legal Structure of the Healthcare Delivery System 2.2.2 Medical Services and the Antimonopoly Act 2.2.3 Recent Healthcare Reform: From Competition to Cooperation 2.3 Challenges Facing the Healthcare Delivery System 2.3.1 Recent Healthcare Reform: From Competition to Cooperation 2.3.2 Methods of Delivering Healthcare Services 2.3.3 Securing Physicians and Efficient Use of Medical Equipment 2.3.4 Planning Administration Implementation Methods and Ensuring Effectiveness 2.4 Building a Sustainable Healthcare Delivery System and Competition Policy 2.4.1 Re-examination of the Nature of the Competition Policy 2.4.2 Competition and Sustainability in Healthcare Delivery Systems 2.4.3 The Necessity of Securing Service Users’ Interests 2.4.4 Population Decline and Competition Policy as Impediments to Sustainability 2.5 Conclusions References 3 Drug Regulation in Japan 3.1 Introduction 3.2 Necessity and Methods of Medical Research Regulation 3.3 Laws and Regulations Related to Medical Research 3.3.1 Outline of the Clinical Trials Act 3.3.2 Next Generation Medical Infrastructure Act 3.4 Legal Regulations for Pharmaceutical Products 3.4.1 Introduction 3.4.2 The Act on Securing Quality, Effectiveness, and Safety of Pharmaceuticals and Medical Devices 3.4.3 Act on the Safety of Regenerative Medicine 3.5 Relief for Accidents Caused by Medicines 3.5.1 Introduction 3.5.2 Responsibility of the National Government 3.5.3 Product Liability of Pharmaceutical Manufacturers 3.5.4 The Pharmaceutical and Medical Devices Agency and the Health Hazard Relief System 4 Collaboration Between the Patent System and Pharmaceutical Regulations for Drug-Discovery Innovation in Japan 4.1 Introduction 4.2 Incentives for Drug Discovery 4.2.1 Competition in Pharmaceutical R&D 4.2.2 Monopoly Through Patent Rights 4.2.3 Monopoly Under Re-Examination (‘data Protection’) 4.2.4 Summary 4.3 Monopoly Achieved Through Cooperation Between the Patent System and Pharmaceutical Law 4.3.1 The Relationship Between the Patent System and Pharmaceutical Regulations 4.3.2 Impact of Pharmaceutical Regulations on Patent Rights 4.3.3 Patent Linkage: The Impact of Patent Rights on Pharmaceutical Regulations 4.4 NHI Drug Price Standard 4.4.1 How to Calculate the NHI Price 4.4.2 Interaction Between the NHI Drug Price System and Patent Law 4.5 Conclusion References 5 Corruption and Conflicts of Interest in the Pharmaceutical Market: Regulation of Pharmaceutical Companies’ Gift-Giving Practices 5.1 Introduction 5.2 The Impact of Gifts and Payments to Doctors 5.2.1 Medication Choice 5.2.2 Pharmaceutical Company Gift-Giving and Payments to Doctors 5.2.3 Potential Adverse Effects of Gifts and Payments 5.2.4 The Relationship Between Doctors and Pharmaceutical Companies in Japan 5.3 Japanese Laws and Regulations Regarding the Relationship Between Doctors and Pharmaceutical Companies 5.3.1 Current State 5.3.2 The Need to Strengthen Regulations 5.4 Redesigning Regulations 5.4.1 Pharmaceutical Companies 5.4.2 Doctors and Hospitals 5.4.3 Regulatory Bodies and Policy Makers 5.5 Conclusions References Part II The Japanese Antimonopoly Act and Its Relation to the Pharmaceutical Industry 6 Antimonopoly Act and Its Application to the Pharmaceutical Industry in Japan 6.1 Introduction 6.2 Regulation Under the AMA 6.3 Private Monopolisation Cases Relating to Pharmaceutical Products 6.3.1 Private Monopolisation 6.3.2 Nordion, an Exclusion-Type Private Monopolisation Case 6.3.3 Nihon Medi-Physics, a Private Monopolisation Commitment Case 6.4 Unreasonable Restraint of Trade (Cartel) Cases Related to Pharmaceutical Products 6.4.1 Unreasonable Restraint of Trade 6.4.2 National Health Insurance (NHI) Drug Price List and Revisions 6.4.3 Generic Lanthanum Carbonate OD Tablets Price Cartel 6.4.4 Original Drug Calvin Tablets Price Fixing Cartel 6.5 Unfair Trade Practices Related to Pharmaceutical Products 6.5.1 Unfair Trade Practices (UTP) 6.5.2 Cooper Vision Japan Contact Lenses and Suspected UTPs 6.5.3 Regulation of ASBP and Violations of the Subcontract Act Relating to Pharmaceutical Business 6.6 Two Business Combination Cases from the Pharmaceutical Sector 6.6.1 Business Combination Regulation 6.6.2 Takeda’s Acquisition of Shire 6.6.3 M3’s Acquisition of Nihon Ultmark 6.7 Pharmaceutical Product Price Regulation Under the AMA References 7 Horizontal Cooperation and Alliances Amongst Pharmaceutical Companies and the Japanese Antimonopoly Act 7.1 Introduction 7.2 AMA Provisions Regarding Business Alliances 7.3 Sample Cases Involving Pharmaceuticals 7.3.1 Recent JFTC Horizontal Cartel Cases 7.3.2 JFTC Consultation Cases 7.3.3 Co-Promotion and Co-Marketing 7.4 General Analytical Framework of the AMA in Business Alliances 7.4.1 Horizontal Production Alliances 7.4.2 Horizontal Sales Alliances 7.4.3 Horizontal Purchase Alliances 7.4.4 Horizontal R&D Alliances 7.5 JFTC Enforcement Policies Regarding Horizontal Cooperation References 8 Merger Regulations in the Japanese Pharmaceutical Industry 8.1 Introduction 8.2 Cases in the Pharmaceutical Manufacturing Industry 8.2.1 Published Cases 8.2.2 Kyowa Kirin Case (FY 2008 Case 1) 8.2.3 Novartis and GlaxoSmithKline Case (FY2014 Case 4) 8.3 Cases in the Pharmaceutical Wholesale and Retail Industry 8.3.1 Cases 8.3.2 Alfresa Holdings and Tampei Nakata Case (FY2010 Case 9) 8.3.3 Medipal Holdings and JCR Pharma Case (FY2017 Case 1) 8.4 Remedies 8.5 Conclusion References 9 Pay-For-Delay Agreements in Japan 9.1 Introduction 9.2 Pay-For-Delay Agreements Outside Japan 9.2.1 Pay-For-Delay Agreements 9.2.2 Pay-For-Delay Agreements in the United States 9.2.3 Pay-For-Delay Agreements in the European Union 9.2.4 Similarities Between Approaches in the European Union and the United States 9.3 The Japanese Approach to Pay-For-Delay Agreements 9.3.1 Pay-For-Delay in Japan 9.3.2 Pharmaceutical Regulation in Japan 9.3.3 Patent Infringement Lawsuits and Settlements in Japan 9.4 Pay-For-Delay Under the AMA 9.4.1 Scope of the Patent Test Under the AMA 9.4.2 Private Monopolisation and Pay-For-Delay Agreements 9.4.3 Unreasonable Restraint of Trade and Pay-For-Delay Agreements 9.4.4 Unfair Trade Practice and Pay-For-Delay Agreements 9.5 Conclusions References 10 No Challenge Clauses in the Pharmaceutical Industry in Japan 10.1 Introduction 10.2 No Challenge Clauses 10.2.1 Overview 10.2.2 No Challenge Clauses in Japan 10.2.3 No Challenge Clauses in Other Jurisdictions 10.3 Licensing in the Pharmaceutical Industry 10.3.1 Overview 10.3.2 The Pharmaceutical Industry in Japan 10.3.3 Licensing in the Pharmaceutical Industry in Japan 10.4 Some Theoretical Issues 10.4.1 The Role of Market Power 10.4.2 The Role of Patent Validity 10.4.3 The Relevance of the Number of Patents Being Licensed 10.5 Conclusion References 11 Will Authorised Biologics Deter Biosimilars?—Utilising JFTC’s Expertise in Drug Pricing 11.1 Issue: Report of the Japan Biosimilar Association 11.2 The US 11.3 Europe 11.4 Japan 11.5 Implications for Japan 11.5.1 Differences Between the US, Europe, and Japan 11.5.2 Utilising the JFTC’s Expertise in Drug Pricing 11.5.3 Emphasis on Patient Choice and Quality of Healthcare in Drug Pricing References Part III An Economic Analysis of the Pharmaceutical Industry and Trade Practices in Japan 12 The Pharmaceutical Industry in Japan: A History of Its Development 12.1 Introduction 12.2 The History of the Pharmaceutical Industry in Japan: An Overview 12.2.1 The Era of Foreign Technology Introduction: Post-World War II Through the 1950s 12.2.2 The Era of Rapid Growth: The 1960s 12.2.3 The Era of Independent Development of New Drugs: The 1970s to the Mid-1980s 12.2.4 The Era of Innovative Drug Development: From the Mid-1980s Onward 12.3 Lessons from the Development of Innovative New Drugs in Japan 12.3.1 Drug Discovery and Science 12.3.2 Researcher-Initiated Drug Discovery 12.3.3 Developing Researcher and Human Network Capabilities 12.3.4 Global Clinical Development and Sales Capabilities 12.3.5 Patent Protection 12.3.6 Three Types of Competition in the Pharmaceutical Industry 12.3.7 ‘Me-Too’ or ‘Follow-On’ Drugs 12.4 Conclusion References 13 Trade Practices in the Japanese Pharmaceutical Market: A Simulation Analysis of Improvement Policies 13.1 Introduction 13.2 Pharmaceutical Distribution Market and Trade Practices 13.2.1 The NHI Drug Pricing System 13.2.2 Trade Practices in the Pharmaceutical Market 13.2.3 Response to Trade Practices 13.3 Drug Price Revision Rules and Trade Practices 13.3.1 Market Under Drug Price Revision Rules 13.3.2 Rebate, Allowance and Adjustment Rate 13.3.3 NHI Price Margin and Adjustment Rate 13.3.4 Lump-Sum Bulk Purchase as Price Negotiation 13.3.5 Unsettled Provisional Delivery as Price Negotiation 13.3.6 Transaction Model with Trade Practices 13.4 Policy Simulation 13.4.1 Hypothetical Drug 13.4.2 Simulation Setup 13.4.3 Simulation Results 13.5 Conclusion References Index