Does Japan have “data exclusivity” system? What is PMS (Post marketing Surveillance) period?

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Generic Entry in the Second Largest Market

The timing of generic entry (often synonymously, LOE or loss of exclusivity) is critically important for both innovative companies and generic companies since it is the timing for an innovative company to lose its market share of its blockbuster drugs built on exclusivity and for a generic company to embark for a promising market.

It is widely known that patent expiration, including patent term extension, is not the only factor that defines the timing of generic entry. However, despite the commercial importance of Japan as the second largest pharmaceutical market, it is not well known what defines the timing of generic entry and how it works in Japan among those stakeholders outside.

Data Exclusivity “per se” is NOT Available

Firstly, Japan doesn’t have data exclusivity system “per se” although such system is widely adopted, for example, both in the US and Europe. However, instead, Japan has Post Marketing Surveillance (PMS) system that practically affects the timing of generic entry. More specifically, A PMS period is set for most of new drug approvals, and until this period is over, generic companies cannot submit their applications for drug approvals as generic drugs. The PMS system is primarily intended to monitor efficacy and safety after commercialization of pioneer (brand-name) drugs and not to protect data. In this sense, the PMS system is different from data exclusivity. However, the PMS system, in effect, provides de facto exclusivity to the innovative companies against generic entry even after patent expiration. Recently, this period is extended to 8 years for typical new drug approvals.

Price Listing System that Affects Generic Entry

Secondly, Japan has unique Price Listing System to control price of drugs. Patients can receive benefit from National Health Insurance (NHI) only for drugs that are listed in so called NHI price listing. Therefore, in most cases, generic companies cannot practically (not legally) market their generic drugs even after they obtain approvals as generic drugs until and unless they further obtain NHI price listing. Even more, in current practice, NHI price listing for generic drugs can be done only twice a year. This provides another de facto exclusivity to the innovative companies against generic entry even after approvals as generic drugs.

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