REGULATORY OUTLOOK

Japan's long recession is over. After a frustrating period of starts, stops, and even reverses in economic growth from 1990–2002, Japan's gross domestic product (GDP) growth has stayed near or above 2% since 2003.

With its affluent and aging population, Japan is the second-largest medical market in the world. Over the past 10 years, Japan has seen its elderly population rise sharply, with those over 65 years of age increasing from 10% of its total population to more than 20%. With a declining overall population, a low birthrate, and a shrinking ratio of productive population to aging population, maintaining adequate healthcare has been a priority of the Japanese government. From 1997 to 2003, government spending on healthcare increased from 6.8% of the GDP to approximately 8%. Japan remains a key market for medical devices, especially high-end products, with its medical device market still towering over the rest of Asia's at $25 billion.

Despite increased spending and the general acceptance of more foreign products, Japan's healthcare market is quite different from the U.S. market. The United States can be characterized as often having the best technology and striving to provide an A-level of healthcare to those who can afford it. Of course, about 45 million people in the United States do not have health insurance and thus have no access to such a high level of care. By contrast, in Japan, the healthcare system is universal. So, in general terms, Japan policymakers are often seeking to provide a B-level of healthcare universally. Therefore, these policymakers may not want to accept a recent new product that may only help a small fraction of the population, or spend a lot of money keeping almost-­terminal patients alive.

Japan is a huge, sophisticated market, but it also has a powerful regulatory system and many unique requirements. To enter or expand in the Japanese device market, it is crucial to stay on top of regulatory developments.

The 2005 Pharmaceutical Affairs Law (PAL) amendments to Japan's medical product laws contained a number of significant regulatory changes. These changes include requirements for importing, clinical trials, and postmarket surveillance. Also included was a new implementation of GMPs for medical devices, which affected all device manufacturers selling their products on the Japanese market. Passing audits under these new standards is essential to get one's device registered in Japan. This article outlines the audits Japan's Pharmaceuticals and Medical Devices Agency (PMDA) now conducts for foreign manufacturers. It reviews the objectives and best practices for handling these audits.

Inspections

There are two main types of inspection conducted by PMDA. The first is simply to accredit the buildings and facilities of a manufacturer and to issue a foreign manufacturer accreditation. The second is to evaluate the manufacturer's quality management system (QMS) to ensure that it meets Japanese QMS standards, as part of obtaining registration for a specific device. Only the second inspection is a GMP-based inspection. The first is called an accreditation inspection, and the second is called a QMS compliance inspection. Although these are called audits or inspections, they do not necessarily involve on-site inspections.

To date, all reported accreditation inspections have been conducted through document review, with no on-site inspections. At this point, PMDA is not planning to use on-site inspections in accreditation. The only possible future exception is if a particularly risky device comes up that it wishes to examine more closely, but this situation is unlikely.

QMS compliance inspections, unlike accreditation inspections, may often be on-site. Their structure is discussed later in this article.

Accreditation Certification

It is necessary to receive accreditation as a foreign device manufacturer before receiving registration for a device. The main requirement for this is an inspection focusing on a company's building and facilities. It should be noted that for Class I devices, no inspection is required for accreditation. For Class II devices, a notified body can do the inspection, but only if the Japanese government has issued technical standards for the device. (These standards, issued by PMDA to standardize various devices such as stents, tend to correspond to ISO/ASTM standards.) For everything at higher risk levels, PMDA itself must do the inspection. This means that devices in Class II without technical standards, Class III, or Class IV require inspection by PMDA.

The initial application should be made to PMDA's evaluation and licensing division (ELD). The quality control division then performs the actual assessment. It passes its results to the ELD, which gets the official manufacturer certification from the Ministry of Health, Labor, and Welfare (MHLW), and then passes the foreign manufacturer certification (nintei) to the applicant.

PMDA requires the submission of a number of documents to receive accreditation. Although these may vary, they can be divided into a few categories. First is information on the staff: an organizational chart, the quality management representative's curriculum vitae, and the plant manager's self-declaration of health. Second is information on the product, including details of its manufacturing process, as well as its certificate to foreign government or free-sale certificate. Last is information on the manufacturing site itself: outline, floor plan, area map, etc. Any site involved in production of the device is subject to inspection. This includes subcontractors, but does not include suppliers of raw materials.

After document submission, PMDA reviews the submission and may conduct a Q&A phase before approval or rejection. Accreditation generally takes a total of about six months and is valid for five years.

As of March 2006, PMDA had accredited the facilities of 126 overseas device manufacturers. Another 142 inspections were under way. As mentioned above, none of these accreditations has required an on-site inspection yet. However, procedures have been set up in case an inspection is called for. Besides paying for accommodations and travel, the manufacturer must pay a daily allowance for the inspectors' time. Allowance and accommodation fees are scaled based on the inspector's rank and the expense of the city visited.

QMS Compliance Inspections

The type of inspection that is more likely to have an on-site phase is the QMS compliance inspection. This is an implementation of the Japanese quality management system, which was established in its current form in April 2005, the same time that the amended PAL went into effect. The Japanese QMS is broadly equivalent to ISO 13485:2003, or, in other words, medical device GMPs. Therefore, this article will not go into its contents in detail but will describe the main ways in which it is different from its ISO counterpart.

QMS compliance inspections are divided up by risk level similar to accreditation inspections. For Class I, no inspection applies; for Class II with technical standards, inspection by a notified body; for all other Class II as well as all of Classes III and IV, inspection by PMDA. Again, PMDA can choose whether to conduct the required inspection on-site or through documentation only. An inspection is a mandatory part of a new medical device application, or of a partial change application that involves the manufacturing or quality control process.

However, if the plant has already received QMS approval for another device of an equal or greater risk class, it will not need another inspection. This means that even though technically QMS inspection is part of the process of product registration, in practice, the approval is tied to the manufacturing site, not the product.

It is also important to keep in mind that the Japanese government requires that manufacturers submit applications through their marketing authorization holder (MAH) in Japan. (The MAH is the legal entity importing devices into Japan on a manufacturer's behalf.) This is because the MAH holds responsibility for the quality of the devices it sells, and for application purposes, it is considered as a single unit with the manufacturer. Accreditation of the original manufacturer is also a requirement for the separate accreditation of the MAH itself.

PMDA generally looks for devices in a high-risk class (i.e., Classes III and IV) with past compliance issues or with manufacturing process complexity when deciding the devices for which to do an on-site inspection rather than document review. Most attention rests on new devices, or cellular or tissue-based devices.

In addition, QMS approvals do not last indefinitely. QMS approval expires after five years, and the manufacturer must apply for renewal six months before expiration. This renewal inspection can apply to all devices manufactured at the plant and registered in Japan. PMDA can also conduct inspections at its own discretion, in case of reports of quality problems.

QMS inspections are performed on all facilities involved in the quality management process. This can include outside design and development facilities or testing labs, whether they are done by the manufacturer itself or subcontracted. However, these outside facilities are not included in inspections for license renewal.

Documentation Requirements

A key difference between Japanese QMS and ISO 13485:2003 requirements is the production and maintenance of a document called the Seihin Hyojunsho, roughly equivalent to a device master record (DMR). The purpose of this document is to detail the relationship between the individual product's specifications and the site's overall quality system. As such, it has a large number of required items.

Items one through eight in the DMR are items that also appear in a standard form in a product registration document: device name, specifications, operation procedures, manufacturing method, design and drawings, countries of origin and sale, labeling and packaging, etc. But there are 12 more items besides these. They range widely from testing methods and storage conditions to the document of agreement between the manufacturer and its MAH. In addition, if more-stringent testing methods than those required are used, they too must be detailed. Every item in the DMR must connect to a provision in the plant's general QMS that is applicable to that specification. In that way, the renewal inspectors can examine the QMS in the context of any individual device.

In a preapproval inspection (i.e., to get product registration), PMDA needs to review the following documents before it determines whether to also perform an on-site inspection: a detailed floor plan, the quality management manual, device information (including the Seihin Hyojunsho), manufacturing process flow, etc. If the inspection is intended to cover multiple devices, device information for each one should be provided.

In a postapproval inspection (i.e., for renewal), additional documents must be submitted. Further required documents include, for the plant as a whole, a record of all product recalls in the previous five years and a declaration of compliance with Japanese QMS standards. Documents for selected products include the Japanese product registration application, any partial or minor change applications, ISO 13485:2003 certification, and QMS surveillance reports for the past two years. The documentation should also include the number of products manufactured per year for the past three years, as well as explanations for any changes to the quality control system.

PMDA will, of course, issue a complete list of the documents it requires to the manufacturer being audited. It has the authority to request other documents at its discretion.

Inspection Process

In the auditing process, there will be a document review phase regardless of whether there is also an on-site phase. This means that, first of all, the various documents described above should be submitted to PMDA or a notified body. PMDA reviews them, and only afterward will it decide whether it also intends to do an on-site inspection. The documents submitted should be approved or rejected separately, before the audit. PMDA also uses those documents to help draw up its own inspection plan.

As a rule, PMDA informs a manufacturer of an on-site inspection with three to six weeks' notice, usually closer to six weeks. Daily fees, travel, and lodging reimbursement apply, as previously described for accreditation inspections. The team usually consists of two or three inspectors who work as a group. If they request any additional information, they will want to receive it within one to two weeks of their trip.

The inspection process is fairly straightforward and comparable to an FDA inspection. An inspection is typically scheduled to take about three days. The main processes reviewed are those of product quality management, management review, resource control, product realization, and measurement, analysis, and improvement.

The standard sequence of events is as follows: opening remarks; document review; plant tour (inclusive of questions and comments by auditors); internal meeting among inspectors; and closing meeting between inspectors and participants. At the closing meeting, auditors discuss any observations or compliance issues, which are put into written form later. A full and complete list of participants should be prepared in advance for each of these events.

If there are compliance issues, the inspectors issue a corrective action report, followed by a verification phase. This step puts the auditing process on hold, but does not increase fees. Once there are no compliance issues remaining, a conformity report is sent directly to the manufacturer, and the full audit ­results are sent to the applicant (i.e., the MAH).

Preparing for an Inspection

The most significant factor that affects the inspection process is a close understanding of the Japanese QMS regulations. They are available from PMDA as MHLW Ministerial Ordinance 169, issued December 17, 2004 (in Japanese only).¹ Besides the requirements for the device master file, a manufacturer should also familiarize itself with the minor ways in which the Japanese QMS is different from ISO 13485:2003. Obviously, an interpreter is necessary to communicate effectively with the inspectors. However, it is even better to get an interpreter who also has some competence in Japanese QMS. It is also helpful to translate some major quality-related documents, such as SOPs, in advance for the inspectors' reference.

Inspectors also appreciate being able to go through their items in an orderly fashion, so try to set up their tour schedule with a focus on efficiency. They come with their list of inspection items already prepared, which cannot be changed during the inspection.

QMS Inspection Activity

Over the first year after the amended PAL went into effect (April 2005 to March 2006), PMDA approved a total of 32 applications for Japanese QMS certification. Of those 32, only four underwent on-site inspections, and two of those four were for foreign manufacturers. The rest of the inspections were done through document review only. There were no failures or withdrawals, although another 69 applications were still in process in March 2006. Currently, PMDA may be focusing more on pharmaceutical manufacturing sites, for which 35 out of 53 applicants underwent on-site inspections over the same 12-month period.

Conclusion

The inspection of primary importance for product registration in Japan is the QMS compliance inspection, whereas the accreditation inspection is more basic and does not involve on-site inspections. The best strategy for compliance is to make certain that the small differences between Japanese QMS and ISO 13485:2003 are provided for in a company's quality system. An OEM should also facilitate communication with inspectors through close understanding of Japanese QMS rules, preparatory translation of key documents, and a skilled interpreter. Audits are a critical gateway process to selling products in Japan, and applications should be prepared with a great deal of care.

Ames Gross is founder and president of Pacific Bridge Medical ( Bethesda , MD ). John Minot is an associate at the firm. To contact the authors, visit Pacific Bridge Medical's Web site at www.pacificbridgemedical.com.

References

1. “MHLW Ministerial Ordinance 169,” (Tokyo: Minister of Health, Labour and Welfare, December 17, 2004), available in Japanese only.

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