Japan has become a hub for regenerative medicine startups driven by innovation. The sector is expanding rapidly, supported by favourable regulations and strong market potential. Investment opportunities extend beyond core products to supporting industries.
Japan’s advanced medical access and logistics infrastructure enhance its appeal. These factors create a strategic opening for global companies to enter the Japanese market through partnerships, subsidiaries or direct investment.
Regulatory overview
Dio Inoue
Partner
Tokyo
Atsumi & Sakai
Foreign companies entering Japan’s regenerative medicine market can pursue M&A, offer CDMO (contract development and manufacturing organisation) services, or form strategic alliances. A deep understanding of Japan’s regulatory framework is essential for success. These entry strategies provide flexible pathways, but navigating regulations is critical to establishing a strong and compliant market presence.
The two key legislative pillars are the Act on Securing Safety of Regenerative Medicine, etc. (Safety Act); and the Pharmaceuticals and Medical Devices Act (PMD Act).
The Safety Act governs regenerative medicine by setting clear obligations for medical institutions and establishing a licensing system for manufacturing cell-processed products. Treatments are classified into three categories based on potential health impact, each with procedural requirements. Institutions must submit treatment plans for review.
Manufacturing is regulated through a licensing or notification system. If outsourced, external facilities must meet ministerial standards for equipment, manufacturing and quality control. Institutions must also comply with regulations on staff qualifications, facility standards, cell sourcing, personal data protection, and compensation for health-related harm.
Under the PMD Act, regenerative medical products are defined as human cell-derived substances processed for therapeutic purposes, including gene therapy. To accelerate clinical use, Japan has introduced a conditional and time-limited approval system, allowing early market entry when safety is confirmed and efficacy is reasonably expected based on clinical trial data.
Foreign entry considerations
Yuka Daimon
Partner
Tokyo
Atsumi & Sakai
Beyond core regulation, foreign companies must navigate several other critical factors to ensure a successful and compliant entry into Japan’s market.
Marketing and manufacturing licences. Foreign companies manufacturing regenerative medical products for export to Japan must obtain foreign manufacturer certification from the authority. To market and sell domestically, a marketing licence and approval for each product are required. If local manufacturing is planned, a manufacturing licence must be secured.
A marketing licence is granted only to entities with a registered address in Japan. Foreign companies must establish a Japanese subsidiary or appoint an existing entity with a marketing licence to act on their behalf.
Data protection. Managing sensitive personal data requires compliance with privacy laws and regulations. Genetic data demands special care due to its personal nature and potential harm if mishandled.
Explicit consent is generally required for data acquisition or third-party transfer. For cross-border data processing, companies must follow Japan’s extraterritorial data transfer rules, which impose rigorous safeguards to protect patient privacy.
Establishing medical institutions. Japan prohibits profit-driven medical institutions, meaning stock companies cannot operate them. Instead, medical corporations – non-profit entities – serve as healthcare providers and are barred from distributing surpluses, making external investment difficult.
Acquiring an existing medical corporation is often the most practical entry strategy for foreign companies. Such acquisitions require formal procedures including changes to members (similar to shareholders), equity transfers, and officer appointments. A key requirement is that the chairperson must be a licensed physician or dentist in Japan.
Leveraging foreign expertise. Companies may consider bringing their own regenerative medicine specialists to Japan, but foreign-trained physicians must pass the Japanese National Medical Practitioners Examination, obtain a local medical licence, and demonstrate N1-level Japanese language proficiency. These requirements are stringent and often pose a barrier to entry.
However, Japan’s National Strategic Special Zones offer a key exception, allowing foreign physicians to practise under special bilateral agreements, easing regulatory hurdles and providing a strategic route for leveraging international medical expertise.
Conclusion
As Japan continues to position itself at the forefront of regenerative medicine and gene therapy innovation, opportunities for foreign companies are both promising and transformative. However, navigating the complex regulatory landscape requires strategic foresight and local expertise.
Dio Inoue and Yuka Daimon are partners at Atsumi & Sakai in Tokyo
Atsumi & Sakai
Fukoku Seimei Bldg.
2-2-2 Uchisaiwaicho
Chiyoda-ku, Tokyo 100-0011 Japan
www.aplawjapan.com
Contact details:
T: +81-(0)3-5501-2111
E: dio.inoue@aplaw.jp
yuka.daimon@aplaw.jp
