Over-The-Counter (OTC) Drug

 In the case of OTC drugs, they generally correspond to products whose clinical safety has been sufficiently confirmed as prescription drugs. Therefore, this is mostly irrelevant to startups, but please see it for your reference.

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Definition of OTC
  • Over-the-Counter (OTC) drugs refer to medicines that can be purchased directly at pharmacies and drugstores without a doctor's prescription. 
  • OTC is an abbreviation for "Over The Counter," meaning drugs that can be bought over the pharmacy counter. 
  • These are intended for use by the general public based on their own judgment, and special emphasis is placed on ensuring safety in addition to efficacy. 
  • Currently, non-prescription drugs available at pharmacies include two types: "Drugs Requiring Guidance" (Yō-shidō Iyakuhin) and "General Over-the-Counter Drugs" (Ippan-yō Iyakuhin). These are collectively referred to as OTC drugs. 
  • Health foods and supplements are legally classified as "food," but OTC drugs are classified as "medicine" intended for the relief and treatment of painful symptoms.

OTC Categories (Classification) 
  • Drugs Requiring Guidance and General OTC drugs are classified as follows according to the degree of risk, such as side effects. In descending order of risk: "Drugs Requiring Guidance" -> "Class 1" -> "(Designated) Class 2" -> "Class 2" -> "Class 3". 
  • Drugs Requiring Guidance (Yō-shidō Iyakuhin) 
    • Overview: Among switch OTCs and direct OTCs, these are drugs for which the post-marketing surveillance period (safety confirmation period) has not yet ended. 
    • Sales Rules: Pharmacists are obligated to provide information and guidance in person using written documents. 
    • Display: Must be displayed in a location where purchasers cannot directly pick them up. 
  • General Over-the-Counter (OTC) Drugs 
    • Class 1 Drugs: Drugs that may cause health damage sufficient to interfere with daily life due to side effects, etc. (Examples: Some gastrointestinal drugs (H2 blockers), some hair growth agents (containing minoxidil)). 
      • Sales Rules: Information provision by a pharmacist is mandatory. 
      • Display: Similar to Drugs Requiring Guidance, they must be displayed in a location where purchasers cannot directly pick them up. 
    • Class 2 Drugs: Drugs that may rarely cause health damage sufficient to interfere with daily life (Examples: Main cold medicines, antipyretic analgesics). Information provision by a pharmacist or registered seller is considered a "best-effort obligation." 
      • Designated Class 2 Drugs: Among Class 2, those containing components with dependency risks or requiring special caution when used by the elderly, children, etc. 
    • Class 3 Drugs: Drugs other than the above with relatively low risk (Examples: Vitamin preparations, intestinal remedies). There is no legal obligation for information provision by a pharmacist or registered seller.

​Application Method 
To manufacture and market general OTC drugs or drugs requiring guidance, companies need approval from the Minister of Health, Labour and Welfare. The general flow from application to approval is as follows, but there is also a system for consulting with the PMDA before the application stage.
  1. Development/Pre-application Consultation (Simple Consultation): Companies can use the PMDA's "Simple Consultation" service for minor matters during the early stages of development or before application. This is a consultation service for general OTC drugs, drugs requiring guidance, quasi-drugs, etc., and is used to facilitate a smooth application process.
  2. Approval Application: The company submits an approval application to the Pharmaceuticals and Medical Devices Agency (PMDA), attaching materials related to the drug's quality, efficacy, and safety (such as test data).
  3. Reliability Inspection/Review: The PMDA conducts a verification of the submitted application data against the original materials (reliability inspection) and reviews the product's effects, side effects, and quality (approval review).
  4. Manufacturing Site Inspection: An inspection is also conducted to determine if the site has the capability (GMP/QMS, etc.) to properly manufacture the applied-for product.
  5. Approval: Based on the PMDA's review results and deliberation by the Pharmaceutical Affairs and Food Sanitation Council, the Minister of Health, Labour and Welfare grants approval.

Switch OTC 
  • Switch OTC refers to drugs whose active ingredients, previously available only as "prescription drugs" requiring a doctor's prescription, have been converted (switched) for use as general OTC drugs. 
  • Characteristics: Targets ingredients with sufficient track records of use and confirmed safety as prescription drugs. 
  • Specific Examples: Includes second-generation antihistamines used for hay fever. 
  • Post-approval Flow: After approval, it is first classified as a "Drug Requiring Guidance." Following a certain period of post-marketing surveillance, if no issues are found, it transitions to a general OTC drug (Class 1, etc.). 
  • Note: Switch OTCs are not necessarily approved for the exact same indications and effects as their prescription counterparts. For example, an ingredient indicated for skin diseases as a prescription drug may have its OTC indication limited to "allergic rhinitis due to pollen or house dust."

Direct OTC 
Direct OTC refers to drugs approved as general OTC drugs from the beginning, without prior experience as prescription drugs. Characteristics: May be approved based on self-medication needs, such as ingredients with extensive track records as OTCs overseas. Specific Examples: Includes "Minoxidil," which has hair-growth effects. Post-approval Flow: Similar to Switch OTCs, after approval, it is first classified as a "Drug Requiring Guidance" and its safety is monitored.
The Difficulty of Switch OTC and Direct OTC 
  • Some people misunderstand that OTC approval is easier to obtain than for prescription drugs, but this is a major misconception. 
  • Famous examples of Switch OTCs include Loxoprofen sodium hydrate and Famotidine, both of which have over 15 years of track records as prescription drugs. For an OTC switch, only those products confirmed to have sufficiently guaranteed safety, through clinical trials and post-marketing surveillance, become OTCs. 
  • It is even stricter for Direct OTCs. The hair growth agent Minoxidil is famous; while it had no approval track record as a prescription drug in Japan, it had many years of use as "Rogaine" (an OTC and prescription drug) in the United States and other countries. Furthermore, it required clinical trials comparable to those for a new drug, taking over 10 years from the start of development to approval.

Self-Medication Tax System 
A system related to OTC drugs is the "Self-Medication Tax System (special provision for medical expense deductions)." This system allows individuals who engage in health maintenance, promotion, or disease prevention (such as health checkups or vaccinations) and purchase eligible switch OTC drugs (expanded in 2022 to include some cold and back pain medicines) exceeding 12,000 yen per year, to receive an income deduction for the amount exceeding that threshold (up to 88,000 yen).

Reference List 

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