Table Of ContentOT1S:96/20290P
INFORMATION SERVICE | DC A-T\
-2 JAN 1997 “the
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ENQUIRY: JAPANESE REGULATIONS ON ORPHAN DRUGS
[. We spoke to the Research & Development Promotion Division of the
Pharmaceutical Bureau, Ministry of Health & Welfare (MHW). It was no
surprise to learn that Japan’s regulations are modelled closely on the US
Orphan Drug Act of 1983. In 1993, MHW implemented Japan’s Orphan
Drug Development System by revising Article7 7 of the Pharmaceutical
Affairs Law. Both orphan drugs and devices are covered. However, there
are a few subtle differences in the way that-the Japanese government
supports companies developing orphan drugs.
ZL: To be designated as an orphan drug, a compound must meet the
following three conditions:
e it must bea treatment for arare disease, which effects less than 50,000.
patients in Japan;
e there must be a clear demand for the compound, with no conventional
medicine available; and
e successful development of the compound must be possible.
3" Companies apply to MHW for their compound to be designated as an
orphan drug. MHW then ask one of the panels of the Central
Pharmaceutical Affairs Council (CPAC) to examine the application. If
approved, the Organisation for Adverse Drug Reaction Research (OADR)
steps in. OADR is a QUANGO which administers industrial research
projects for MHW. It also provides capital to establish R&D-oriented
company per year. For approved orphan drugs, OADR provides the
following incentives to companies:
e A grant to cover up to 50% of R&D costs.
e Guidance and advice on the new drug approval process.
e A tax deduction of 6% of R&D costs (excluding the amount of grant
received). This tax deduction is limited to 10% of corporation tax.
e A “fast track”, providing the highest priority in the new drug approval
examination process.
e If needed, an extension of the allowable period for re-examination (the
maximum is otherwise ten years).
U. As of April 1995, 80 drugs and four medical devices have been
designated under this procedure. We have a complete list, in Japanese. I
enclose a copy of an English language leaflet from OADR (System for
Promotion of Orphan Drug Development, nine pages), which lists 46 drugs
and two medical devices.
Comments
S. A close reading of this list reveals that most of Japan’s orphan drugs
have been developed by foreign companies.
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C. We have reported on OADR in recent Embassy reports... Peter
McDonald has copies. Our next report (which we hope to finish by the end
of September) will have details of DNAVEC. This is a company set up with
capital from OADR and six drug companies. It will provide the research
infrastructure to try to establish a viable gene therapy industry in Japan.
DNAVEC hope to develop generic vector technologies with widespread
applications in the drug industry. However, they will also develop specialist
gene therapies for hereditary diseases common in Japan). These are likely
to be classified as orphan drugs.
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SYSTEMS FOR PROMOTION
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In spite of the urgent needs for medicines and medical devices for the treatment of
aplastic anemia, AIDS and others, it is considered to be difficult to carry out adequate
R&D efforts by private companies alone because of the limited number of the patients
involved. To modify the status quo, partial amendments of both the Pharmaceutical
Affairs Law and the Law Concerning the Drug Fund for ADR Relief and R&D
Promotion and Product Review Promotion ware recently made. The Drug Organiza-
tion (The Organization for Drug ADR Relief, R&D Promotion and Product Review) has
provided and*support program to the R&D of these medicines and medical devices
(ORPHAN DRUGS) by private companies via close collaboration between government
and industries, based on the amendments.
WHAT ARE ORPHAN DRUGS?
The requirements to be designated as ORPHAN DRUGS by The Ministry of Health and
Welfare (MHW) are as follows:
1) ORPHAN DRUGS need to aim at serious diseases of which prevalence is less than 50,000
in total patient number in Japan.
2) ORPHAN DRUGS need to be highly demanded, because of the absence of either sub-
stitutional medicines and devices or medical treatments for the disease or because of the
great expectation for far higher effectiveness and/or safety in comparison with the existing
medicines and devices.
3) ORPHAN DRUGS need to be quite within the bounds of probability for successful develop-
ment, supported by enough theoretical justification for the usage of the said medicines and
devices and realistic development schedules.
THE ROLES OF THE DRUG ORGANIZATION
1. Granting
The Drug Organization makes grants to be used for the R&D of the said medicines and
devices to private companies that have been disignated by the MHW as manufacturers
or importers of ORPHAN DRUGS. The R&D cost subject to the granting is the direct
one for the R&D and the amounts of grants are limited to one half of the cost. At the
time of application for subsidies, each private company is required to submit an
outline of R&D, cost, schedules for the R&D activities and other information. The Drug
Organization makes grants after surveying these data (see tables on pages from 4 to 8
which show the orphan drugs to be granted in 1995), The manufacturers or importers
of ORPHAN DRUGS to whom the grants are given will pay a part of their proceeds or
profits (if exceed 100 million yen) after ORPHAN DRUGS are launched into the market
(the total amount of payment is limited to that of the grant).
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