Nichi-Iko: Japan's biggest generic drugmaker suspended as 75 drugs recalled for GMP fraud

In late February 2020, Japan's PMDA and Toyama Prefecture made their first-ever unannounced inspection of Nichi-Iko's Toyama First Plant, the main site of the country's largest generic drugmaker. They found suspected GMP violations. The company's own follow-up and an investigation by an outside law firm confirmed two systemic breaches: lots that failed release tests were shipped instead of discarded (a practice dating back to at least 2011), and stability tests had been skipped or deprioritized since around 2009.

The third-party report traced a clean chain of command. The managing executive officer for production told the plant manager to avoid discarding failed lots; the order passed down to the deviation-control manager, who ran 'deviation meetings' that overrode written procedures. The skipped stability tests were no secret: a plant quality committee had shared the problem since June 2013, and internal audit flagged it in FY2019. The manager who gave the improper instructions was later promoted to executive in charge of quality.

The consequences landed hard. From April 2020 to January 2021 Nichi-Iko recalled 75 products made at the plant, which also does contract manufacturing for other drugmakers. On March 3, 2021, Toyama Prefecture ordered a 32-day halt to manufacturing at the plant and a 24-day suspension of the company's manufacturing-and-marketing business — a penalty the prefecture called heavy even by past standards. No health harm had been reported at the time, but the finding gutted confidence in Japan's generic drug supply.

75 products recalled; plant shut 32 days and company 24 days; restructuring ADR by December 2022 after the quality crisis wrecked earnings

Profit came before patients: only shipping tests mattered, so stability tests were ranked below them and quietly dropped from plans.

The order came from the top: the production executive told the plant to avoid discarding failed lots, and deviation meetings complied.

Everyone knew: the quality committee discussed the skipped tests from 2013 and internal audit flagged them, yet no one with power acted.

The committee's root cause: company-wide low compliance awareness — GMP treated as paperwork rather than the condition of holding a licence.

Quality rots when one hierarchy owns production, testing and deviation review. Internal audit flagged the skipped tests a year before regulators — nothing changed until an unannounced inspection.

President Shingo Iwamoto took a pay cut over the suspension. In October 2021, wholesaler Medipal Holdings entered a capital and business alliance with Nichi-Iko to shore up its quality management. Earnings never recovered: on December 28, 2022, the company's business-restructuring ADR — an out-of-court debt workout — was formally completed. The scandal also stained Toyama's ambition of a ¥1 trillion pharmaceutical cluster, coming as legacy maker Kokando drew its own administrative penalty and a 36-day production halt.