Economic and Legal Frameworks for Non-Prescription Medicines 2004 studied by AESGP 1. CLASSIFICATION While the Pharmaceutical Affairs Law (PAL) promulgated in 1960 regulated matters pertaining to (1) Drugs, (2) Quasi-drugs, (3) Cosmetics, and (4) Medical Devices, the most recent amendment has introduced a classification of drugs as "prescription" and "others". A comprehensive revision of the Pharmaceutical Affairs Law was approved by the Diet (Japan's Parliament) in July 2002 and came into effect in April 2005. The PAL's amended Article 49, Item 1, states that the prescription category covers "drugs which should not be sold by a proprietor of a pharmacy or a person with a licence for selling drugs to anyone other than those who have a prescription issued by a physician, dentist, or veterinarian". The category of the "other than prescription" drugs contains drugs for ethical use and OTC drugs. Drugs for ethical use are defined as "the medicinal products supplied for the purpose of being administered by physicians or dentists with reimbursement from the medical insurance systems". OTC drugs are not reimbursed by the medical insurance systems. "Kampo" (traditional herbal) medicines are wholly classified as medicines when they meet the terms described in the articles of PAL, even though some of the natural (crude) drugs contained therein are also combined into foodstuffs. The concept of homeopathic medicines is almost unknown in Japan. Most preparations of vitamins and minerals are classified as OTCs, Quasi-drugs or foodstuffs. The principal guidance on the classification of products as foodstuffs or pharmaceuticals was mentioned in the Director-General's Notice Yakuhatsu No.476, issued on 1 June 1971, which was amended on 27 March 2001. While the "Basic nature of ingredients" previously used to group products into six sub-categories, this was simplified in 2001 to form the following two categories:   Ingredients exclusively used as drugs Ingredients recognised as foods as long as no therapeutic claims are made.