Japan is resetting itself as a clinical trial destination. Costs have halved, local data requirements are being relaxed, and the country is actively courting the global biotechs that have long overlooked it for trials. The opportunity is real; but so is the ground Japan still must make up.
Japan’s importance to the global biopharmaceutical industry is undeniable. Japanese firms Takeda, Astellas, Daiichi Sankyo, Otsuka, and Eisai are now ranked within the world’s 40 biggest innovative pharmaceutical companies, while its domestic market is the world’s fourth largest.
However, over the last two decades Japan has fallen well behind East Asian peers like China and Korea as a drug development destination. High costs and stifling regulation have deterred multinational investment in clinical development programmes and – while the major Japanese firms continue to engage in Japanese trials – the country lacks a biotech ecosystem to rival those of its neighbours.
This is partly cultural, notes Ken Lee, managing director and region head for clinical development in Asia Pacific at Syneos Health. “The large Japanese conglomerates have historically developed assets internally from discovery through to clinical development in a way that many global multinationals have moved away from – they tend to do it the old-fashioned way, relying on internal capability rather than licensing in,” he notes. “That means Japan’s funding needs are different, and the biotech ecosystem, while present, is considerably smaller in volume than mainland China or Korea.”
Not only are clinical trial numbers down, but Japan’s status as one of the world’s premier pharma markets is under threat too. Whereas Japan accounted for almost 12 percent of the global market in the early 2000s, today it makes up less than four. More companies are choosing to delay launching in Japan (known locally as “drug lag”) and, even more seriously, not launch at all (“drug loss”).
As Toru Fujieda, chairman of the Japan CRO Association sums up, “Over 70 percent of cutting-edge products approved by the FDA in the past five years are not yet approved or available to patients in Japan. Japanese patients, in other words, are being denied access to more than two thirds of the world’s most innovative medicines.”
Regulatory Refresh
To their credit, the Japanese authorities have taken action to try and reverse this trend. Most importantly, the regulatory landscape is now far more welcoming, including to overseas biotechs.
This was not always the case. “The PMDA [Japan’s medicines regulator] has historically required Japan-specific clinical data, often including a dedicated Japanese Phase I trial before broader clinical development could begin, along with a requirement that Japanese subjects make up a meaningful proportion – approximately ten percent – of the Phase III study population,” says Hideyasu Matsuda, vice chairman of the Japan CRO Association.
Now though, mandatory Japanese Phase I studies, long the single biggest deterrent for smaller companies to invest in the country, have been scrapped. Sponsors can now proceed directly to later-phase studies given sufficient scientific justification to the PMDA.
Toshiaki Nagafuji, executive officer, CTO, and head of the innovative drug development business at local CRO Linical, adds that, for the first time, applications can even be submitted with no local data requirements at all.
“Even if Phase III pivotal studies were completed entirely outside Japan, if the results are positive and the target indication involves a serious condition with no available treatment – a rare disease, for example – the PMDA may now agree that an applicant can submit an NDA directly, without any Japanese-specific data,” he explains.
“That is a very significant change, and it reflects how seriously the Japanese government is taking the drug lag and loss problem.”
The PMDA is also quicker than ever. “Japan is one of the fastest countries in the world for clinical trial start up,” proclaims Fujieda. “Once an IND equivalent is submitted, the PMDA review window is 30 days for first IND and 14 days for IND amendment. Site opening timelines are correspondingly rapid. Japan consistently ranks among the fastest countries for subject enrolment initiation.”
Moreover, the clinical operating environment – historically extremely fragmented across over 1,000 institutional review boards, each with their own procedures – is much improved. “The government and PMDA have initiated a clinical ecosystem reform programme specifically to address this,” notes Matsuda.
“The introduction of a single IRB concept, the standardisation of the informed consent form template, and the transition from site-specific investigator fee point systems to the global standard of fair market value are all in progress.”
Finally, while not the result of a deliberate policy move, costs are also way down from historic highs, making Japanese drug development more viable for smaller players. Matsuda adds that “The depreciation of the Japanese yen has reduced the effective cost of conducting clinical trials in Japan to roughly half what it was 20 years ago … Japan is now broadly cost-competitive with other markets.
“That is a fundamental shift in the commercial equation, and it has not yet been fully absorbed into the decision-making of many emerging biopharma sponsors who are still operating on old assumptions.”
Advanced Therapies Push
Still, even with these bolstered fundamentals, why would a resource-constrained biotech from the US or Europe choose to locate part of their clinical development in Japan? It may be that their specialty is closely aligned with the niche expertise of Japanese hospitals and investigators as well as Japanese regulatory pathways for advanced therapies.
“In terms of therapeutic areas, oncology remains the primary driver of demand,” admits Noriyuki Takai, CEO of another CRO, EPS Corporation. “But Japan also has specific and well-developed regulatory frameworks for regenerative medicine, advanced therapies, and new modalities,” adds Takai.
“If I were to identify where the opportunity is most acute and the ambition most clearly stated, it is in cutting-edge therapeutics – oncology above all, rare diseases, and the emerging field of cell and gene therapy, including CAR-T and related modalities,” continues Matsuda.
Notably, the induced pluripotent stem (iPS) cell technology platform, developed by Japanese researcher Shinya Yamanaka, later awarded a Nobel Prize for their work, has generated a cluster of domestic biopharma companies pursuing their own iPS-based product pipelines.
“Cell therapy is not merely an area where Japan is seeking to attract foreign investment – but one where Japan has genuine indigenous scientific leadership and ambitions to develop that leadership commercially,” concludes Matsuda.
CROs Taking the Stage
Supporting greater levels of investment in Japanese trials and attempting to turn the tide on drug lag and drug loss is an emboldened and upskilled ecosystem of CROs. For Takai of EPS, “it is not simply a commercial mandate – it is a mission.” He adds, “Japan has a well-documented issue with patients not having timely access to innovative treatments that are already available in other markets and, as the leading CRO in Japan, we feel a genuine social responsibility to help solve this problem.”
Just as the Japanese state is attempting to simplify and standardise the trial process for sponsors, so too are Japanese CROs. “Our role is to remove the practical barriers that can prevent innovative therapies from reaching patients in Japan,” says Keiko Oishi, president and representative executive officer at CMIC.
“Alongside our CRO capabilities, CMIC has built an extensive site management organisation network spanning approximately 4,050 hospitals and clinics nationwide. By connecting sponsors with the right clinical sites, supporting investigators through experienced clinical research coordinators, and facilitating patient identification and enrolment, we help make clinical development in Japan faster, more predictable, and operationally less complex.”
For EPS, its mission has manifested in two key service offerings. The first is Trial Gate, which Takai labels “a one-stop solution concept for clinical operations. Rather than a sponsor company trying to manage all the different functions, processes, and steps involved in conducting a clinical study – which is genuinely complex and demanding – EPS operates as a single gate through which everything flows.”
The second, EPS BIOPATH, is specifically tailored to the needs of overseas biotechs. “Biotechs entering Japan often face a distinct set of barriers: limited familiarity with the Japanese regulatory framework, language challenges, and financial constraints that make it difficult to justify the investment in building Japan expertise internally,” outlines Takai.
“EPS BIOPATH is a hands-on consulting service that provides integrated support from early development all the way through regulatory submission and commercialisation, with the explicit goal of making successful Japanese market entry feasible for companies that would otherwise struggle to get there on their own.”
CROs’ bolstered positioning is a boon for all actors in the space, suggests Fujieda. “Drug development in Japan was traditionally a matter managed between pharmaceutical companies and the regulatory authority, with CROs in a supporting operational role,” he notes.
“That is no longer the case. CROs are now recognised as central actors in the effort to reform Japan’s clinical environment, and we are being invited into the major conferences and ministerial initiatives accordingly. We have the regulatory knowledge, the international networks, and the operational infrastructure to guide sponsors from first contact with the PMDA through to approval.”
Next Stop: Asia?
Perhaps most excitingly, Japan is increasingly connecting its clinical trial network with those of other countries in its region. This creates the potential for trials, and ultimately medicines, better tailored to the needs of Asian populations.
Notably, ATLAS (the Asian clinical TriaLs network for cAncerS), launched in Japan in 2020, has expanded to more than 40 sites across ten countries and regions, building up clinical trial infrastructure across Asia, supporting early drug development, and advancing genomic medicine through closer regional collaboration.
“This effort reflects a broader shift in how we view the region,” explains the National Cancer Center Hospital’s Kenichi Nakamura, who leads the ATLAS initiative. “Asia represents a large and increasingly important patient population, with a high burden of cancers such as head and neck, gastric, biliary tract, and cervical cancers, which are less prominent in Western drug development and therefore often receive lower priority from global pharmaceutical companies. ATLAS was created to address this gap and to position Asia more clearly within the global oncology research landscape.”
There is also huge excitement about how Japan-generated data can be used to support product registrations overseas. “Japan’s regulatory framework creates real opportunities, because data generated and approved in Japan can be used as reference data for regulatory submissions in other countries under the Reference Country Program,” explains EPS’s Takai. “That means a Japan approval can serve as a stepping stone for broader regional market entry.”
