Question 1

Do foreign companies need a Japanese subsidiary to enter Japan?

Accepted Answer

No. Many foreign healthcare companies enter Japan through out-licensing or distribution partnership rather than establishing a subsidiary. In order to retain overseas HQ ownership of their Japan marketing authorization, they can appoint a designated marketing authorization holder (DMAH) as their representative in Japan. This enables them to retain the option to transfer the DMAH to another party, including to their own subsidiary, in the future. The right approach depends on the product, regulatory requirements, resources and commercial objectives.

Question 2

Should a company partner Japan rights or build its own subsidiary?

Accepted Answer

The choice depends on the opportunity, resources and desired level of control. Licensing can be a lucrative source of revenue, and may enable optimization of the market opportunity. A subsidiary can provide closer control of strategy, assets and long-term growth, but requires capital, management and compliance infrastructure. Some companies use a phased or hybrid model, beginning by assigning a DMAH and building their own presence if the Japan business develops.

Question 3

Can a foreign company sell directly in Japan?

Accepted Answer

No. A foreign company cannot sell a regulated healthcare product directly into Japan without a DMAH acting on its behalf to manage regulatory, quality and safety responsibilities.

Question 4

What should companies look for in a Japan partner?

Accepted Answer

Companies should look for relevant product experience, regulatory and market access knowledge, commercial capabilities, quality standards, operational capacity and strategic alignment. The partner should understand the intended patients and market-entry goals, communicate efficiently and provide clear accountability. Size alone is not enough. The best fit depends on the product, development stage, required responsibilities and the company’s preferred commercial model.

Question 5

What are common mistakes when selecting a Japan partner?

Accepted Answer

Common mistakes include choosing a partner mainly for size or name recognition, signing before the regulatory and reimbursement pathway is understood, and assuming sales coverage is sufficient. Companies may also leave responsibilities, decision rights, investment commitments and performance measures unclear. Partner selection should reflect the product’s needs, the capabilities required for execution and long-term strategic alignment, supported by practical due diligence.

FAQ

Do foreign companies need a Japanese subsidiary to enter Japan?

Should a company partner Japan rights or build its own subsidiary?

Can a foreign company sell directly in Japan?

What should companies look for in a Japan partner?

What are common mistakes when selecting a Japan partner?