Japan Medical Device Market Overview

1
Japan Medical Device Market Overview

• Ian Clements
• Office of Japan
• U.S. Department of Commerce
• April 10, 2008

2
Main Points of this Presentation

• Japan remains the worlds No. 2 medical device
  market.
• Japans market is highly regulated Product
  approvals are slow and expensive.
• The Commerce Department helps U.S. companies
  overcome Japans regulatory problems.

3
Presentation Outline

• Importance of Japans Market
• Impact of Its Aging Society
• Introduction to Japans Regulatory System
• The Regulatory Agencies and Pharmaceutical
  Affairs Law
• Regulatory Problems and Their Impact
• Japans Plans to Resolve the Problems
• The Commerce Departments Work on Medical Devices
  in Japan
• Regulatory Reform Initiative

4
Warm-up Question

• Who is the Prime Minister of Japan?
• Junichiro Koizumi
• Shinzo Abe
• Kosuke Fukudome
• Yasuo Fukuda

5
Japan Remains the Worlds Number 2 Economy
Source CIA World Factbook
6
Japan Imports 5 Billion of U.S. Medical Devices
Unit Millions of U.S. Dollars Figures for 2006
and 2007 are estimates. Source Doing Business
in Japan, 2008 Country Commercial Guide for U.S.
Companies, U.S. Foreign Commercial Service and
State Department.
7
Japans Population is Shrinking and Aging

• Japans population is projected to fall from 127
  million in 2007 to 97 million in 2047.
• 1 in 5 Japanese is 65 or older today.
• 1 in 4 Japanese will be 65 or older by 2015.
• Population trends are straining Japans
  healthcare budget
• Sources U.S. Census Bureau, The Economist, OECD

8
Two Agencies Regulate Medical Devices in Japan

• Pharmaceuticals and Medical Devices Agency
  (PMDA), or Kiko
• Reviews product applications
• Isnt a government agency
• Needs more device specialists as reviewers
• Ministry of Health, Labor and Welfare (MHLW)
• Approves product applications
• Is a government agency

9
Pharmaceutical Affairs Law (PAL) Governs
Regulation of Medical Devices -- Risk-Based
Regulatory System

• PMDA reviews devices in highest risk categories.
• Third parties can review some lower-risk devices.

10
Things You Probably Need to Sell Medical Devices
in Japan

• Marketing approval (hanbai shonin)
• Marketing Authorization Holder, or MAH (optional)
• Four licenses
• Marketing
• Manufacturing
• Retail
• Repair

11
Regulatory Approval Delays are a Problem

• Average Medical Device Approval Times
• European Union 6 Months.
• United States 3 to 10 Months.
• Japan 12 to 36 Months.

Source Medical Devices and Equipment
Competitive Conditions Affecting U.S. Trade in
Japan and Other Principal Foreign Markets, March
2007, U.S. International Trade Commission
12
Japans Strategy for Innovative Medical Devices

• Japans April 2007 Five-Year Strategy for
  Creation of Innovative Drugs and Medical Devices
  includes plans to
• Increase RD spending.
• Promote start-ups.
• Improve clinical trials.
• Expedite reviews.
• Review the reimbursement pricing system.

13
Warm-up Question on the U.S. Commerce Department
Which of the following 3 agencies are units of
the Commerce Department?
14
Commerce Department Helps Companies do Business
in Japan

• International Trade Administration
• U.S. Foreign and Commercial Service
• Offices in Boston and 106 other U.S. cities
• Offices in more than 80 countries
• In Japan, offices in Tokyo, Osaka, Nagoya,
  Sapporo
• Manufacturing and Services (MAS)
• Industry specialists
• Office of Health Consumer Goods
• Market Access and Compliance
• Regional and compliance specialists
• Office of Japan (my office)
• Leads U.S. Government work on medical devices in
  Japan

15
U.S. Government Encourages Japan to Streamline
Regulations

• U.S.-Japan Regulatory Reform Initiative (since
  2001)
• 1986 U.S.-Japan MOSS (Market-Oriented,
  Sector-Selective) Agreement
• U.S. Governments October 2007 Recommendations
• Regulatory
• Speed approvals of minor changes.
• Reimbursement Pricing
• Abolish the Foreign Average Price rule.
• U.S.-Japan Report to the Leaders
• Annual summary of progress on regulatory and
  reimbursement issues.

16
Concluding Summary

• Japan, the worlds No. 2 medical device market,
  will be affected by demographic changes.
• Japan acknowledges its cumbersome regulatory
  process contributes to a device lag.
• The Commerce Department uses the Regulatory
  Reform Initiative and other means to help U.S.
  companies overcome Japans regulatory problems.

17
Websites of the International Trade Administration

• International Trade Administration of the U.S.
  Department of Commerce http//trade.gov/index.as
  p
• Market Access Compliance http//trade.gov/mac/
  index.asp
• Office of Japan http//www.mac.doc.gov/japan/
• U.S. Commercial Service http//trade.gov/cs/inde
  x.asp
• Japan 2008 Country Commercial Guide
  http//www.buyusa.gov/japan/en/ccg.html
• Manufacturing Services http//trade.gov/mas/in
  dex.asp

18
Other Useful Websites

• U.S. International Trade Commission Report
  Medical Devices and Equipment Competitive
  Conditions Affecting U.S. Trade in Japan and
  Other Principal Foreign Markets (March 2007)
  http//hotdocs.usitc.gov/docs/pubs/332/pub3909.pdf
  
• U.S.-Japan Report to the Leaders (June 2007)
  http//www.ustr.gov/assets/World_Regions/North_Asi
  a/Japan/Regulatory_Reform_Initiative/asset_upload_
  file751_12837.pdf
• Annual Reform Recommendations from the U.S.
  Government to the Japanese Government under the
  Regulatory Reform Initiative (October 2007)
  http//www.ustr.gov/assets/Document_Library/Report
  s_Publications/2007/asset_upload_file751_13383.pdf
  
• Japans Pharmaceuticals and Medical Devices
  Agency http//www.pmda.go.jp/english/index.html
• Japans Ministry of Health, Labor and Welfare
  http//www.mhlw.go.jp/english/

19
My contact information

• Ian Clements
• International Trade Specialist
• Office of Japan
• U.S. Department of Commerce
• 1401 Constitution Avenue, NW
• Washington, DC 20230
• 202-482-1821
• Ian_clements_at_ita.doc.gov