Japan: Designated Marketing Authorization Holder (DMAH)

Designating a Japan DMAH

It is a requirement for all foreign medical companies selling in Japan to assign a Market Authorization Holder (MAH) or a Designated Marketing Authorization Holder (DMAH). The MAH or DMAH is required for both medical devices and pharmaceuticals. This MAH or DMAH can be a (1) distributor; (2) an independent third party located in Japan; or (3) the foreign medical company’s subsidiary in Japan.

The Ministry of Health, Labor and Welfare (MHLW) has defined two terms: MAH and DMAH. A MAH refers to a company in Japan that is registered by the MHLW to perform market authorization holder services. A DMAH is the market authorization service provider (either a Japanese distributor or an independent third party) located in Japan, that a foreign medical device or pharmaceutical company uses if they export their products to Japan and do not have an office there.

Responsibilities of a Japan DMAH include: importing the product from an overseas medical manufacturer, product registration, product quality and safety assurance, product storage in an establishment with MAH licensing, product sales to distributors or other sales groups, and post-market surveillance. For a foreign company without an office in Japan, the DMAH will need to get an appropriate Japan DMAH license to cover different products. For a foreign pharmaceutical company without an office in Japan, a drug DMAH is required. For a foreign medical device company without an office in Japan, a medical device DMAH is required. Please note that a separate DMAH license is required for IVD products that is different than the DMAH license for devices.

A cost effective Japan DMAH for foreign medical device or pharmaceutical companies (that do not have their own office in Japan) can be the foreign medical company’s distributor in Japan. The Japanese distributor DMAH will generally register your product for free, unless local clinical trials are required. After registration, a Japanese distributor DMAH is also normally willing to perform most of the DMAH services without any charges or fees because they expect the sale of the foreign manufacturer’s product to be profitable.

However, while the Japanese distributor may be a cheap way for foreign manufacturers to get started in Japan, a distributor DMAH has several significant drawbacks. The first is the potential risk of the company’s confidential information. A Japanese distributor acting as your DMAH may acquire knowledge on important facts such as product development and raw materials to register your product, that may expose your intellectual property. Secondly, in the future you may be in a difficult situation if you decide to change distributors, as your distributor currently provides DMAH services and distribution in Japan. In many instances, when the distributor DMAH suspects a loss in profitable business, they may not be inclined to give the foreign medical company the product licenses back. A “friendly” product license transfer from the initial distributor to another new distributor can be very expensive for the foreign manufacturer or lead to your products not being registered in Japan, hence hurting your sales there.

Using an independent third party entity as a Japan DMAH will cost the foreign medical device or drug manufacturer more money upfront since the DMAH will require fees to register your product as well as monthly fees for the DMAH services. However, by using an independent third party DMAH it will be easier to protect your company’s confidential product information, as the third party would want to preserve its reputation as honest and reliable in the marketplace. At least in theory, such information would be safer with an independent third party DMAH than with a distributor DMAH, who may have a brother-in-law looking to get into medical manufacturing. In addition, a distributor switch will be much easier if the registration were in the third party DMAH’s name. There are currently a number of DMAH companies in Japan, but only a few reputable Japan DMAHs exist.

The final option is using a subsidiary, branch office, or representative office of the foreign medical company in Japan as the MAH. This foreign medical company’s office must be located in Japan and must meet the MAH standards of the MHLW. This tends to be the route used by large companies with substantial sales volumes in Japan.

Japanese Government Requirements

Three Controllers make up a MAH or DMAH, each with its own role in the supervision of marketing, manufacturing and release of the product. The General Manager guarantees outstanding quality, marketing, and safety standards of the products and oversees all MAH responsibilities. The Post-Marketing Safety Controller administrates Good Vigilance Practice (GVP). The Quality Assurance Controller manages the Good Quality Practice (GQP) of products.

The MHLW also has set precise requirements as to the structure of a MAH and the personnel required, depending on the type of medical product in Japan. For example, General Medical Devices (Class I) can have a MAH established and run by one person. This individual acts as all three Controllers and will carry out all obligatory duties. Controlled Medical Devices (Class II) must have two people for a MAH – one acts as the Post-Marketing Safety Controller while the other acts as the Quality Assurance Controller. Additionally, one of these two people will also need to serve as the General Manager. Highly-Controlled Medical Devices (Class III and IV) must have three people for their MAH, and each individual acts as one Controller.

A list of guidelines as to minimum requirements for each Controller is provided by the MHLW. Requisites for the General Manager Controller include a Bachelor’s Degree in engineering or science and experience of at least three years in a post-marketing safety or quality assurance position at a pharmaceutical or medical device company. For the Quality Assurance Controller and Post-Marketing Safety Controller, each is required a minimum experience of three years in their respective fields.

The PAL requires that the Quality Assurance Controller be in charge of compliance with GQP standards and the new Good Manufacturing Practice (GMP) requirement, based on the Japanese adaptation of ISO 13845:2003. Standard Operating Procedures (SOPs) for GQP consist of quality control at local offices, product storage controls, product release into the market, operation of product recalls and audits, and upkeep of all quality assurance reports and documents. Another duty of the Quality Assurance Controller is the formation and application of the plan of design and development. This will include design verification and validation as well as ways to test product safety and efficacy. The Quality Assurance Controller is also charged with assuring that new GMP regulations are met by the manufacturing facility. Before approving a product, the PMDA will conduct GMP inspections, oftentimes even if facilities are overseas. Application and maintenance of a Quality System for the product is the responsibility of the Quality Assurance Controller.

Good Vigilance Practice (GVP) falls under the responsibilities of the Post-Marketing Safety Controller. He must conduct post-marketing surveillance, assess safety information, train other personnel in safety assurance, and design and implement countermeasures to enable better safety. The PMDA must be notified of any adverse events that come about. In addition, the Post-Marketing Safety Controller manages all the proper documentation, including the filing of product safety information. These documents should be available as preparation for a possible inquiry by the PMDA.

The three MAH controllers must determine when and how to report adverse events to the PMDA. Ultimately, the PMDA decides the requirements and means for handling adverse events. While adverse events are looked at individually, the PMDA does have a few general categories and timeframes that are outlined in the New PAL. First, serious illness and death should be stated within seven days. Second, physical disorders, hospitalization or other serious events should be reported within 14 days, while less serious events can be within 30 days. At present, the best action to take should an adverse event occur, as identified by the New PAL, is for an MAH to communicate the effect immediately so as to conclude the best course of action.

Independent Third Party MAH Fees After Approval

After the product is registered in Japan, the range of services and costs of a MAH or DMAH will vary depending on the foreign pharmaceutical or medical device company’s products in Japan. For the Japanese medical device DMAH services outlined above, there are basically two types of fee schedules that independent DMAH service providers offer. The first involves a DMAH that charges a flat monthly rate for its services, which is usually around $5,000 to $10,000 per month, depending on the registration of the device. The second is a DMAH that charges a lower monthly rate (about $3,000), plus a percentage of sales in Japan.

Additional Information

In our opinion, current or expected sales in Japan should be the basis for foreign companies with developing their MAH or DMAH strategy. Foreign medical companies with annual sales less than $500,000 in Japan, will  typically not choose an independent DMAH, as the DMAH fees will significantly reduce their profit margins. Because many foreign medical device companies have sales below $500,000 in Japan, they oftentimes are willing to take the risk of having their distributor as their Japan DMAH (so they do not need to pay upfront fees). If a foreign company falls into this lower sales bracket but is uncomfortable with sharing confidential product information with a distributor DMAH, they may decide not to enter the Japanese market at all.

In order to retain their confidential information and to have more control over their product registration and marketing, some companies choose to pay the fees for an independent third party entity DMAH. These are generally midsize foreign companies that have annual sales of approximately $500,000 to $2 million in Japan but do not want to set up their own office there.

On the other hand, foreign companies with higher annual sales in Japan, let’s say more than $2 million, who do not already have offices in Japan, may decide to set up a branch office or subsidiary office in Japan and use their own employees to act as the MAH. However, setting up a foreign medical device or pharmaceutical company’s own office in Japan (to act as its own MAH) can be an expensive endeavor.

Pacific Bridge Medical can act as your Japan DMAH.