Hideyasu Matsuda and Toru Fujieda of the Japan CRO Association argue that, thanks to an updated regulatory framework, Japan is becoming one of the most competitive and operationally attractive clinical development destinations in the world.
Perhaps we could begin with brief introductions – your career backgrounds and your current roles.
Hideyasu Matsuda (HM): I have now been with IQVIA for three and a half years, where I lead the R&D CRO service function. Before joining IQVIA, I spent 29 years at Takeda Pharmaceutical, and the breadth of that career continues to shape my perspective on the industry. I started my career as a clinical research associate, working in medical writing on Japanese local products – including a diabetes treatment that became one of the global mega-blockbuster medicines of its era. From there, I progressed through a series of global roles, including becoming the Global Project Manager and Leader for several projects, where I managed global development activities for around seven years. Back then, I relocated from Japan to Takeda’s UK office in London, where I managed both regional and global projects before eventually returning to Japan.
After that, I spent three years working closely with the chief executive officer, overseeing a broad range of company-wide strategic initiatives, which included expanding business footprint to emerging regions, supporting acquisition activities, including the post-merger integration and selection of large acquisition targets, thereby leading to the establishment of Takeda’s global vaccine business. The dengue vaccine program was one of the flagship initiatives I contributed to, helping build the global program from its inception around 2012. I then moved to an insurance company for two and a half years before returning to the CRO sector with IQVIA.
Toru Fujieda (TF): My background is in clinical development at Daiichi Sankyo, where I spent approximately 30 years focused predominantly on domestic clinical development in Japan. I moved to CMIC in 2016 and became President of CMIC Company Limited, which is one of Japan’s leading contract research organisations. I retired as president of CMIC Company Limited in 2022, and since 2024, I have been serving as Chairman of the Japan CRO Association.
The Japan CRO Association recently marked its 30th anniversary, having been founded in 1994. Looking across that arc of three decades, where would you say the Association made its most significant contribution, and how has the role of the CRO in Japan evolved?
TF: 30 years ago, the model was primarily one of straightforward resource provision. Pharmaceutical companies – particularly when mounting large-scale Phase III trials – needed the operational capacity to manage those studies, and the data management and statistical capabilities to support them. CROs emerged to fill that gap, and CMIC was among the earliest Japanese-local organisations to do so. Global CROs, including IQVIA’s predecessor organisations, also entered the Japan market during that period.
The most meaningful evolution, however, has taken place over the last 10 to 12 years, when the scope of what CROs provide expanded considerably. Increasingly, emerging biopharma companies – many of them small or mid-sized biotechs with no prior Japan experience – began approaching us not only for operational execution, but also for regulatory intelligence. The PMDA, Japan’s Pharmaceuticals and Medical Devices Agency, has requirements that are unique to its regulatory framework, not simply distinct from those of the FDA or EMA, and the PMDA’s official communications are largely in Japanese. A company without deep local expertise can struggle to understand what is being asked of them. Guiding those companies through that regulatory landscape has become one of the most important services the Japanese CRO industry offers.
That shift matters beyond purely commercial considerations, because it connects directly to what has become the central challenge Japan’s healthcare system faces: the drug loss problem. Over 70 percentof 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. The CRO industry is now a key actor in addressing that gap – by making Japan a more accessible, intelligible, and commercially attractive development destination for the companies that hold those products.
Why has that drug loss emerged? Japan is a substantial market. What has historically deterred sponsors from including it in their development plans?
HM: There are several interrelated factors at play. The first, and perhaps most structurally significant, is the nature of who is driving drug innovation today. Much of the novel product development globally is now led by emerging biopharma companies, and many of those companies conduct even their pivotal trials in a single country – sometimes only in U.S. or China. With that data package, companies can often secure approval from regulators such as the FDA or authorities in China, which represent major markets. However, the PMDA 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 10 percent – of the Phase III study population.
From an emerging biopharma perspective, that represents a significant operational burden. It adds complexity to trial management, it requires a separate regulatory engagement with an unfamiliar agency, and it demands incremental investment at precisely the stage when capital efficiency matters most. For a small biotech deciding where to focus limited resources, Japan has historically been perceived as a high-friction addition to an already demanding development programme.
The second factor is market perception, and the data underpinning it. Twenty years ago, Japan represented something in the range of 10 to12 percent of the global pharmaceutical market by value. According to analysis based on IQVIA Institute report data (https://www.iqvia.com/insights/the-iqvia-institute/reports-and-publications/reports/rethinking-clinical-trial-country-prioritization) Japan’s share has fallen to the 4 percent range. This decline reflects deliberate government policy: over the past decades, Japan has driven generic penetration from roughly 30 percent of prescriptions to over 90 percent today. The intent was to contain healthcare costs, but the effect on market attractiveness for branded innovative products has been significant although total pharmaceutical sales growth has stagnated.
However, an important nuance is often overlooked within that headline figure. If you disaggregate the market between generics and cutting-edge innovative products, the innovative segment is actually growing – at approximately 10 percent – which makes it a meaningfully attractive market if you are operating in that space. The misunderstanding that Japan is a uniformly shrinking market has, in our view, contributed disproportionately to the drug gap, and correcting that perception is one of our priorities.
Given those structural headwinds, what is the affirmative case for including Japan in a clinical development plan today? What has changed?
HM: Several important shifts have occurred over a relatively short period. The most consequential regulatory shift is that the Japanese government has removed the mandatory Phase I trial requirement. Companies can now proceed directly to later-phase studies if they can provide sufficient scientific justification to the PMDA. This represents a significant regulatory shift, and it has already produced tangible results: we are now receiving a substantial number of enquiries from emerging biopharma companies specifically seeking to negotiate with the PMDA around skipping Phase I and moving directly into Phase III multinational trials. That would have been almost inconceivable just five years ago.
The second change is cost. Japan has long been regarded as a costly location for conducting clinical trials, and for many years, that reputation was well founded. It is no longer accurate. 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 EBP sponsors who are still operating on old assumptions.
The third dimension is the clinical operating environment itself, which is being systematically reformed. Japan has over one thousand individual institutional review boards and historically each has had its own procedural preferences, documentation requirements, and informed consent form formats. Running a one-hundred-site trial effectively meant submitting one hundred separately customised IRB packages. The government and PMDA have initiated a clinical ecosystem reform programme specifically to address this. 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. These changes are intended to bring Japan’s clinical trial infrastructure into closer alignment with international standards while significantly reducing the administrative burden that has historically complicated study execution in the country.
Alongside these developments, Japan is expected to adopt GCP R3 – the revised International Council for Harmonisation good clinical practice guidelines – by the end of this fiscal year. This will bring a comprehensive update to the country’s clinical trial regulatory framework, aligning it more closely with global standards. Overall, this reflects a period of genuine, rapid, and structural transformation.
Where does Japan stand in terms of therapeutic focus and trial readiness? Are there areas where it is particularly well positioned?
HM: Japan combines population depth, the medical infrastructure, and the investigator quality to support the full range of therapeutic areas at a high level. But 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.
There is also a specifically Japanese dimension to this: induced pluripotent stem (iPS) cell technology platform, developed by the Japanese researcher who was awarded the Nobel Prize for the work, has generated a cluster of domestic biopharma companies pursuing their own iPS-based product pipelines. In other words, cell therapy are not merely areas where Japan is seeking to attract foreign investment – they are areas where Japan has genuine indigenous scientific leadership and ambitions to develop that leadership commercially.
IQVIA Institute published in 2024 assessed countries’ clinical trial readiness across three key dimensions: operational infrastructure, including factors such as internet access, financial stability, government transparency, and safety; clinical infrastructure – covering regulatory capacity, healthy life expectancy, site density, and affordability; and patient availability.
By that composite measure, Japan ranked third globally, behind only the US and Germany. What stands out is the gap between this level of readiness ranking and the actual volume of trials running in Japan. Japan has the infrastructure and capacity to support considerably more clinical activity than it currently hosts. This gap represents a significant opportunity that the industry is actively working to address.
The Association represents businesses that must remain commercially viable through this transition. How are your member CROs maintaining and growing profitability in an environment that has seen some pressure on growth?
TF: The trajectory of the CRO business in Japan closely mirrors the broader evolution I described earlier in the Association’s history. The original model – providing operational resources to pharmaceutical companies for trial execution – remains a foundation, but it is no longer sufficient as the primary growth driver. The expansion into higher-value services is where the commercial opportunity now lies. Regulatory strategy and consultation is the clearest example. Supporting an emerging biopharma company through a PMDA engagement – helping them understand what the agency requires, developing a clinical development strategy tailored to the Japanese pathway, and in some cases supporting negotiations around drug pricing and reimbursement – commands a very different commercial relationship than standard resource provision. CROs in Japan such as IQVIA and CMIC, as the larger players, have dedicated teams for that kind of regulatory and market access engagement. The smaller and mid-sized CROs within the Association are similarly thinking carefully about which of those higher-value service areas they can build credible capabilities in.
How does Japan position itself against the wider regional competitive landscape? China has scaled its clinical trial capacity enormously and rapidly. Australia offers meaningful government subsidies for trial activity. How should sponsors be thinking about Japan in that regional context, and where does multi-regional trial design fit?
HM: The competitive framing is valid, but it is sometimes applied in an overly simplistic way. Japan’s proposition is a combination of quality, speed, and a patient population that is genuinely distinctive.
In terms of the coalition of actors driving change: there are three groups working in parallel, and that coordination matters. The first is the government – the Ministry of Health, Labour and Welfare and the PMDA – who are driven by an imperative to close the drug gap. Japanese patients do not have access to the medicines that exist, and that is a public health and political problem. The second group are the clinical trial sites themselves, particularly the leading academic medical centres and oncology institutes. Key opinion leaders at those institutions are acutely aware that their patients are being denied access to treatments that are standard of care in the U.S. or Europe. They are not passive about it – I know of several KOLs who directly contact emerging biopharma companies after encountering them at conferences, asking why they are not developing their products in Japan and offering to help make it happen. The third group are the Japanese mega-pharma companies, who are under pressure themselves from global headquarters to improve productivity in a domestic market that has become more challenging, and who are therefore also motivated to help simplify and improve the clinical operating environment.
The CRO Association sits at the intersection of all three. We have launched what we call a ‘no more too much’ initiative, which is perhaps the most candid piece of self-examination our industry has undertaken. Japan has a cultural tendency towards precision and thoroughness in every process – it is one of the reasons Japanese clinical data quality is internationally respected. But that same tendency, applied to clinical trial administration, has produced layers of processes that are not required as per GCP standards and that do not contribute to patient safety or data integrity. They simply take time and consume resources. Identifying those processes and eliminating them, while rigorously preserving everything that genuinely matters, is the core of that initiative.
Digital transformation – decentralised trials, AI-driven data management – is reshaping clinical development globally. How prepared is Japan’s ecosystem for that transition, and how is the Association facilitating it?
HM: Digital transformation is firmly on our agenda, and in Japan’s case it is inseparable from the regulatory reforms I have described. The transition to fair market value for investigator fees, for example, requires sites to maintain and submit detailed billing records in a format that is simply not manageable without proper digital infrastructure. The same applies to the proposed single IRB system – standardising and digitising the submission process is a prerequisite for that reform to work at scale.
The Association has a distinct advantage in that its membership spans not only CROs but also IT and digital services companies, including several of the larger players in the field. IQVIA itself operates as much as a data and technology company as it does a clinical services organization. We are actively collaborating with these members to deploy modern digital capabilities across Japan’s clinical trial infrastructure – not simply to drive efficiency, but to align the country’s operating environment with the digital expectations of international sponsors already running technology-enabled trials elsewhere.
Looking to 2030, how do you see Japan’s role in the global clinical development landscape? Will it be a specialist hub for specific therapeutic categories, or something broader?
HM: The honest answer is that the ambition is broad – no one wants to exclude any opportunity – but the strategic focus is clear. Japan wants to be a leading destination for cutting-edge innovative medicine. Oncology is an immediate priority, driven both by the scale of patient need and the strength of Japan’s world-class research infrastructure. Rare disease is equally important, for many of the same reasons. Cell and gene therapy – including CAR-T and the iPS-derived modalities I mentioned – represent the frontier that Japan is most actively preparing for.
The Association’s own priorities between now and 2030 are shaped by the same logic. Our primary focus is on regulatory environment reform – working with the Ministry of Health, the PMDA, key opinion leaders across the clinical community, and major Japanese pharmaceutical companies to complete the transformation of the clinical trial environment that is already underway. The ambition is not incremental improvement; it is to make Japan, in a meaningful and measurable sense, one of the most attractive clinical trial destinations in the world.
As a final message to the international sponsors and emerging biopharma companies who will read this – what is the single most important thing you would want them to take away about Japan?
TF: Japan is, today, an attractive clinical trial destination from a cost perspective, a quality perspective, and a speed perspective. I want to be specific about the speed point, because it surprises people. Japan is one of the fastest countries in the world for clinical trial start up. 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, and in fact that assessment is shared by executives at several major pharmaceutical companies in Japan with whom I have spoken directly.
Alongside speed, there is patient quality in the clinical sense. Japanese patients have exceptionally high compliance rates and very low dropout rates – a completion rate of approximately 90 percent is considered normal. That translates directly into cleaner data, fewer protocol deviations, and more reliable trial outcomes. For sponsors who have experienced the data quality challenges that can accompany trials in other high-volume markets, that is not a trivial consideration.
The final point I would make is about the role of the CRO in Japan’s clinical ecosystem – and this is something I want to emphasise because it represents a genuine shift from even five years ago. Drug development in Japan was traditionally a matter managed between pharmaceutical companies and the regulatory authority, with CROs in a supporting operational role. 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. The invitation to emerging biopharma companies is straightforward: come to Japan, engage early, and work with us. The environment is more accessible, more affordable, and more aligned with global standards than at any point in the past 30 years.
