1. Approval of a Commitment Plan Concerning Tie-in Sales
On February 13, 2025, the Japan Fair Trade Commission ("JFTC") approved a commitment plan prepared by a marketing authorization holder of medical devices, etc. 1 in connection with a suspected violation of the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade ("Antimonopoly Act") by Company X.
Company X is a marketing authorization holder that sells blood coagulation analyzers and coagulation reagents, and has the largest market share in Japan in terms of both volume and sales amount of blood coagulation analyzers. Blood coagulation devices manufactured and sold in Japan such as Company X's blood coagulation analyzers may use coagulation reagents that are not manufactured by the marketing authorization holder of such blood coagulation devices. However, when supplying blood coagulation analyzers to hospitals and other institutions, Company X had allegedly imposed a condition on the hospitals and institutions that they only use Company X's coagulation reagents for the supplied blood coagulation analyzers ("Incident"), which prompted an investigation by the JFTC into the Incident.
According to the Antimonopoly Act, if an enterprise that has a dominant position in the market of a certain product prevents fair competition by forcing its counterparty to purchase other products by tying it to the supply of the relevant product, this is known as tie-in sales and is prohibited as one of the unfair trade practices (Article 2, Paragraph 9 and Article 19 of the Antimonopoly Act, and Paragraph 10 of the Unfair Trade Practices). However, even when the JFTC investigates an alleged violation of the Antimonopoly Act, the JFTC does not always issue a cease and desist order or a surcharge payment order. Instead, the JFTC has established commitment procedures with the aim of effectively and efficiently enforcing the Antimonopoly Act by resolving the matter through an agreement between the JFTC and the relevant enterprise to promptly cease the act suspected to be in violation of the Antimonopoly Act.
The commitment procedures first involve the JFTC initially notifying the enterprise of the outline of the suspected violation of the Antimonopoly Act. If the relevant enterprise wishes to resolve the matter through the commitment procedure, it must submit its commitment plan for cessation measures to the JFTC for approval within 60 days of the notice. The JFTC then approves the relevant plan after consideration and deliberation as to whether the cessation measures set forth in the plan are sufficient to cease the suspected violations of the Antimonopoly Act and whether they can be expected to be reliably implemented.
Company X had prepared and applied for the approval of a commitment plan that included the following:
- to implement measures to ensure that it does not engage in the same conduct as the Incident in relation to its blood coagulation analyzers and coagulation reagents for a period of five years;
- to confirm at its board of directors' meeting that it has ceased the Incident and to resolve to implement the measures stated in (1) above;
- to widely publicize the measures stated in (1) above to hospitals that uses its products and wholesalers of blood coagulation analyzers, and to ensure that the relevant measures are thoroughly understood and implemented by the officers and employees of Company X's related businesses;
- to establish a code of conduct regarding compliance with the Antimonopoly Act in relation to the related businesses so as to ensure strict compliance by its officers and employees by conducting regular trainings, conducting regular audits by legal staff, and establishing a consultation service for hospitals and other institutions that are using blood coagulation analyzers to address any possible violations of the Antimonopoly Act; and
- to allow a third party approved by the JFTC to monitor the implementation of the measures listed in (1) through (4) above, and to report to the JFTC on certain matters.
The JFTC have subsequently approved Company X's commitment plan.
2. Amendment of Notice concerning Self-Inspections
On January 20, 2025, the Ministry of Health, Labour and Welfare (the "MHLW") issued the "Partial Revision to "Approach to Discrepancies Identified in Inspections of Consistency Between the Marketing Authorization of Generics and the Actual Manufacturing and Testing Methods'"2 (the "Notice").
In response to the detection of inappropriate cases where generics were being manufactured using methods that deviated from the marketing authorization, the MHLW requested in a notice dated April 5, 20243 that manufacturers and marketing authorization holders promptly inspect whether manufacturing and testing methods utilized by them were in line with the content of their respective marketing authorization. In particular, the notice requires, among others, that (i) procedures for conducting self-inspections be prepared, (ii) the actual situation be confirmed through interviews with employees in addition to written surveys of manufacturing and quality inspection procedures, (iii) inspection plans be drawn up in line with the actual situation of each company, and (iv) the progress of inspections be made public on the company website, and that the results of selfinspections be reported to the government 4 (i.e., MHLW and prefectural governments) and to progressively publicize on the company's website.
Any "discrepancies" identified between the marketing authorization and the actual manufacturing process as a result of such self-inspections must be dealt with pursuant to the Act on Securing Quality, Efficacy and Safety of Products including Pharmaceuticals and Medical Devices. The approach for determining whether the detected differences between the marketing authorization and the actual manufacturing process fall under the so-called "discrepancies" that require countermeasures and details on the actions to be taken by marketing authorization holders are stated in the "Approach to Discrepancies Identified in Inspections of Consistency Between the Marketing Authorization of Generics and the Actual Manufacturing and Testing Methods5 " issued on October 30, 2024 ("Former Notice").
The Notice mainly revises the method of response to items under the category of "matters that are not immediately deemed as discrepancies" indicated in the Former Notice as well as adding several important points. The main changes are as follows:
- In the Former Notice, it was stated that certain erroneous descriptions "are not immediately considered as a discrepancy, but it is necessary to revise and revise the descriptions of marketing authorization and to consult with the PMDA6 regarding the appropriateness of performing pharmaceutical affairs procedures using a minor change notification form. The Notice maintains the requirement to consult with the PMDA, but the Notice states that "marketing authorization holders need to individually determine the necessity of revising the descriptions of the marketing authorization," and to only consult with the PMDA "if deemed necessary."
- With regard to items other than those specified in the Notice as "items that do not constitute discrepancies" or "items that do not immediately constitute discrepancies", it is still necessary to promptly perform pharmaceutical affairs procedures. However, it should be noted that "the fact that some of the operating conditions, process parameters, etc. described in the manufacturing procedure manuals are not described in the marketing authorization does not immediately constitute a discrepancy" has been added as an additional important point.
- For items that the marketing authorization holder has assessed to not be a "discrepancy," the grounds for such assessment may be required to be disclosed in any future investigations, etc., and in some cases, an application for partial change may be required. This is a new point that has been added to the list of items that are "deemed to be a difference", whereas in the Former Notice it was indicated only in the list of items that are "not deemed to be a difference."
Footnotes
1 https://www.jftc.go.jp/houdou/pressrelease/2025/feb/250213dai4.html
2 https://www.mhlw.go.jp/hourei/doc/tsuchi/T250121I0030.pdf
3 "Implementation of Inspections of Consistency Between the Marketing Authorization of Generics and the Actual Manufacturing and Testing Methods"
4 For the results of the self-inspections, please see p.4 of "Self-Inspections of the Consistency Between Marketing Authorization of Generics and Manufacturing and Testing Methods: Causes of Discrepancies and Formulation of Recurrence Prevention Measures" , Federation of Pharmaceutical Manufacturers' Associations of Japan, January 24, 2025) (https://www.mhlw.go.jp/content/10807000/001383949.pdf）
5 https://www.mhlw.go.jp/hourei/doc/tsuchi/T241101I0030.pdf
6 Pharmaceutical and Medical Devices Agency
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