Japan Expands its Orphan Drug Designation System

Japan has always been a good orphan drug market with high reimbursement and oftentimes government financial support for development. However, in the past, it was not flexible on designation unless 3 criteria were met – 1. the drug had to treat fewer than 50,000 patients for a specific disease or a government-chosen disease, 2. there was a strong healthcare demand, and 3. there was good development potential. If a drug applicant reduced the patient numbers by claiming that their product addressed a subset of a disease, an orphan drug designation was still not available.

On January 16, the MHLW outlined a notification to amend the current criteria for orphan drug designation and agreed that their previous requirements were too stringent. As a result, even if the overall number of patients with a specific disease exceeded 50,000, orphan drug designation could now be granted if the subset of patients requiring treatment with a particular drug was under 50,000. This allowance is contingent upon clear clinical and pharmacological justifications for identifying patients under the 50,000 threshold (subset), such as the patient’s age, the relevant treatment therapy, and other related factors. For example, if the treatment is only used for patients who are positive for a particular gene, and the number of these patients are fewer than 50,000, orphan drug designation can be granted. The notification also further defines medical need. In the past, medical need was defined as there are no alternative drugs, or the new drug is better than existing therapies. Now, if the existing drugs are not sufficient, new innovative drugs can receive the orphan status.