The Future of Japan’s GDP (Good Distribution Practice)

“Harvoni” Counterfeit Product Distribution Incident

On January 17, 2017, the Ministry of Health, Labour and Welfare announced that counterfeit products of Gilead Sciences’ hepatitis C treatment drug “Harvoni Combination Tablets” were discovered at a pharmacy chain in Nara Prefecture.

This was an unprecedented case in which a pharmaceutical product prescribed by a medical institution and dispensed at a pharmacy turned out to be counterfeit. The incident sent shockwaves through Japan’s pharmaceutical industry.

In Japan, the universal health insurance system and a robust distribution network centered on pharmaceutical wholesale distributors had been thought to prevent the circulation of counterfeit products. The fact that this protective network, which had safeguarded Japan’s pharmaceutical market, was so easily breached has had a significant impact, and the ripples continue to spread.

The problem of counterfeit drugs is widespread globally. According to estimates cited in publications from around 2010, the global counterfeit drug market was projected to reach approximately $75 billion (about 8.6 trillion yen). It is important to note that this figure originated from the Center for Medicine in the Public Interest in the United States, not directly from the World Health Organization (WHO). More recent WHO estimates suggest that approximately 10.5% of medicines worldwide are substandard or falsified. The WHO also reports that countries spend an estimated $30.5 billion annually on substandard and falsified medical products.

“Harvoni” is an extremely expensive drug, costing approximately 55,000 yen per tablet and approximately 1.55 million yen per 28-tablet bottle, making it an ideal target for counterfeiting. Counterfeit pharmaceuticals generally have very low production costs compared to counterfeit watches or designer bags, resulting in significant profits for criminal organizations. Counterfeit pharmaceuticals are reported to be the top product in the global black market, accounting for approximately 20% of all counterfeit goods. The launch of expensive drugs is expected to continue in the future.

Background of the Harvoni Incident

The investigation revealed that a total of 15 bottles of counterfeit products were found—5 bottles in Nara Prefecture and 10 bottles at wholesale distributors in Tokyo. The counterfeit products contained Chinese herbal medicine ingredients (peony, licorice, ephedra, schisandra, and asarum) and vitamin preparations instead of the actual drug. The bottles themselves were genuine, but the contents had been replaced.

A patient noticed something unusual about the tablets before taking them and contacted the pharmacy, leading to the discovery of the counterfeit products. The counterfeit products had entered the legitimate distribution channel through so-called “cash wholesalers” (genkin don’ya)—non-authorized wholesalers that purchase excess inventory from pharmacies and hospitals and resell it at prices significantly below market value.

In response to this incident, the Ministry of Health, Labour and Welfare implemented several immediate measures, including revisions to enforcement regulations in October 2017. These measures mandated identity verification of sellers when wholesale distributors and pharmacies purchase pharmaceuticals, and required establishments to have procedures in place for reporting suspected counterfeit products to authorities.

Additionally, Gilead Sciences changed the packaging of Harvoni from opaque bottles to blister packaging with transparent sheets in March 2017, making it possible to visually confirm the contents. This made it significantly more difficult to execute the simple substitution method used in this incident.

JGSP (Japanese Good Supplying Practice)

Currently in Japan, while there are ministerial ordinances establishing GMP (Good Manufacturing Practice) for pharmaceutical manufacturing through shipment, there is no systematic regulatory framework for managing distribution after shipment. At present, appropriate distribution management is conducted through the voluntary standard “JGSP” established by the Federation of Japan Pharmaceutical Wholesalers Associations (Orenbai).

However, the distribution management under “JGSP” does not extend to cash wholesalers that are not members of the Federation, which was one factor that allowed the circulation of counterfeit products in this incident.

Although there had been discussions about adopting GDP since Japan’s accession to PIC/S (Pharmaceutical Inspection Co-operation Scheme) in July 2014, these discussions have only recently intensified. In previous GDP discussions, it was predominantly argued that “counterfeit product contamination is highly unlikely to occur in Japan, so the focus should be on ‘quality assurance through temperature and humidity management,’ which is one of the three requirements of GDP.”

Following this incident, “counterfeit product countermeasures” suddenly emerged as the top regulatory priority.

What is GDP?

GDP is an abbreviation for Good Distribution Practice and is translated as “appropriate distribution standards.” While current GMP does not include quality verification after shipment determination, GDP aims to deliver pharmaceuticals to patients with the same quality as when they were manufactured by pharmaceutical companies.

GDP consists of standards for appropriate logistics (standards for proper logistics) aimed at ensuring the quality of pharmaceuticals during transportation and storage. Various problems exist in the logistics process, and appropriate management has become increasingly important for maintaining pharmaceutical quality.

Aspect	Description
Temperature Management	Some pharmaceuticals can become unusable due to deterioration if temperature control ranges are exceeded. Temperature sensitivity requires strict temperature management, particularly during summer delivery when concerns arise about temperature increases during loading and unloading operations.
International Transport	When exporting pharmaceuticals from Japan to Australia, for example, the seasons reverse from midsummer to midwinter. In such cases, temperature changes can exceed 40°C.
Cold Chain Importance	Maintaining the cold chain throughout the distribution process is critical for temperature-sensitive pharmaceuticals.

In addition to these Cold Chain considerations, the counterfeit pharmaceutical problem described above has emerged as a critical concern. This is why Japan must urgently promote GDP implementation.

Current Status of GDP in Japan

Japan’s GDP guidelines were issued by the Ministry of Health, Labour and Welfare in December 2018, based on PIC/S GDP guidelines while reflecting Japanese laws and regulations to achieve international harmonization. The Japanese GDP guidelines are not legally binding regulations but rather guidelines intended to encourage voluntary initiatives by wholesale distributors and other stakeholders. The guidelines aim to:

1. Support the operations of pharmaceutical wholesale distributors
2. Ensure quality control and temperature management throughout distribution channels
3. Prevent counterfeit pharmaceuticals from entering legitimate distribution channels
4. Maintain pharmaceutical integrity

The concept of “pharmaceutical integrity” refers to the state in which shipped products maintain their quality without deterioration. Careful attention must be paid during transportation to prevent quality deterioration due to temperature changes or damage from impact.

Challenges in GDP Implementation

However, challenges remain. Management of end-point delivery operations is difficult in practice. Furthermore, the strict implementation of distribution management through GDP adoption may impose a significant burden on pharmaceutical wholesale distributors.

There are significant challenges in determining how to introduce GDP in a manner suited to Japan while meeting international standards. The pharmaceutical industry must balance several competing concerns:

Challenge Area	Considerations
Scope of Management	End-to-end distribution management from manufacturer to patient is ideal but logistically complex
Cost Burden	Implementation costs for wholesale distributors, logistics companies, and other stakeholders
Technology Requirements	Temperature monitoring systems, tracking systems, and data integrity measures
Human Resources	Training requirements for all personnel involved in pharmaceutical distribution
Small-Scale Operations	Ensuring compliance even among smaller pharmacies and distributors

Despite these challenges, the implementation of GDP is essential for protecting public health and maintaining trust in Japan’s pharmaceutical distribution system. The Harvoni incident demonstrated that even Japan’s sophisticated distribution network is vulnerable to sophisticated counterfeit operations, underscoring the urgent need for comprehensive GDP implementation.

International Context and Future Direction

Globally, many countries have already implemented GDP as mandatory regulations rather than voluntary guidelines. The European Union, for example, has legally binding GDP requirements. As pharmaceutical supply chains become increasingly global and complex, international cooperation and harmonization of standards become ever more critical.

Japan’s pharmaceutical industry must continue to work toward full GDP implementation while addressing the unique characteristics of its domestic market. This includes strengthening the role of authorized wholesalers, implementing advanced track-and-trace technologies, and fostering a culture of quality throughout the entire distribution chain.

The lessons learned from the Harvoni incident serve as a stark reminder that vigilance and robust systems are essential to protect patients from the growing threat of counterfeit pharmaceuticals. As the value and complexity of pharmaceutical products continue to increase, so too must the sophistication and comprehensiveness of the systems designed to ensure their safe and effective delivery to patients.