# Presentation: 075704

## General Medical Indicators (1)

## General Medical Indicators (2)

## Japan’s Healthcare System (1)

_**Major Characteristics**_
**Universal Healthcare Coverage (achieved in 1961)**** - *****health insurance covering the entire population***
**Free Access**** - *****patients can freely choose doctors, clinics, hospitals***
**Low Co-payment Rate**** - *****patient can receive necessary medical care for a small fee (patient are required to pay anywhere 10 and 30% of treatment fee)***
**Fee-For-Service**** - *****reimbursed based on point system***

## Japan’s Healthcare System (2)

## Rate of Projected Population - over 65

## National Healthcare Expenditure

- Source: Ministry of Health, Labor and Welfare (MHLW)

## Healthcare Reform?

- Past efforts included:- cut reimbursement rates (biannually since 1965)- established a separate insurance system for elderly (1984)- raised co-payment for the elderly (1997)- raised co-payment for ordinary salaried workers (1997)- established a new long-term care insurance system (2000)
- Recent efforts (2002) included- cut reimbursement rates   * first time cut on doctor’s technical fee  * introduction of foreign reference price on medical devices- raised co-payment for the elderly- raised co-payment for ordinary salaried workers

## Japan Medical Device Market

## Medical Device Trade BalancesBetween U.S. and Japan

**$US Million**

- Source: Ministry of Health, Labor and Welfare (MHLW)

## Japan Medical Device Imports

- Source: Ministry of Health, Labor and Welfare (MHLW)

## Competitive Products (Japan vs U.S.)

- Imaging Diagnostic equipment
- Therapeutic and Surgical Equipment
- Biophenomena Measuring and Monitoring Systems
- Home Therapeutic Equipment
- Others (Dialyzers, Endoscopes, Hemodialysis Apparatus, etc.)

- Pacemakers
- Advanced Interventional Cardiology Products such as stents
- Orthopedic Implants
- Laser Surgical Equipment
- Cardiac Valve Prothesis
- Others (MRI, CT, etc.)

**Japan**

**U.S.**

## U.S. Medical Device Firms in Japan

- 3M Healthcare
- Allergan
- Bausch & Lomb
- Baxter
- Boston Scientific
- Edwards Lifesciences

- General Electric (GE)
- Guidant
- Johnson & Johnson
- Kodak
- Medtronic
- St. Jude Medical

- American Chamber of Commerce in Japan (ACCJ), Medial Device Subcommittee has 46 member firms

## Medical Device Regulation System 

_**Japanese Law**_
- Pharmaceutical Affairs Law (PAL) ----- enforced by the Ministry of Health, Labor and Welfare (MHLW).
_**Necessary Governmental Authorizations**_
-  Manufacturing (or import) approval ("*Shonin*") which guarantees the safety and efficacy of the device. (approx. 2,500-3,000 submissions per year)
-  Manufacturing ( or import) license ("*Kyoka*") of a device, which the Japanese manufacturer and importer hold. (in 2002: manufacturing license - 2,709 / import license - 1,282)
-  Reimbursement listing approval

## How to Register Your Products

**Pros**
**Simple**
**Less expensive**
**No direct involvement with the Japanese authorities**
**Cons**
**The manufacturer often is limited to one importer**
**Change of importer forces the manufacturer to reapply for shonin from the beginning**
**Dependency on the importer increases**

**Pros**
**Option to work with multiple importers who may have different strenghts**
**No reapplication for shonin upon change of importer**** **
**The ability to focus fully on marketing your product**** **
**Cons**
**Expensive**

- Ask Your Importer to Apply

- Use In-country Care Taker

## Application Categories

- (1) Devices which do not require approval
- (2) “Me-too Devices” which are equivalent to already-approved devices in Japan   (Time Clock: 4 months)
- (3) “Improved Devices” which do not have new characteristics as much as the devices to be reexamined but are not substantially equivalent to already-approved devices in Japan   (Time Clock: 12 months)
- (4) “New Devices” which are different in use, function or technology from already-approved devices in Japan   (Time Clock: 12 months)

## Risk Categories of Medical Devices

## New Device

- Submission to Prefecural Government

- Evaluation and Licensing Div., MHLW

- Pharmaceuticals and Medical Devices Evaluation Center (PMDEC)

- Me-too Device

- Improved Device

- Evaluation by PMDEC

- Evaluation by JAAME

- Presentation

- Presentation

- Expert Discussion

- Expert Discussion

- Pharmaceuticals and Medical Devices Evaluation Center (PMDEC)

- Equivalency Investigation

- Evaluation and Licensing Div., MHLW

- PAFCS

- Evaluation and Licensing Div., MHLW

- Prefecural Government

- Approval

## Pharmaceutical Affairs Law Revision - Key Points

**(1) review of the approval system and enhancement of past marketing safety measures**
- * Introduction of a classification system corresponding to the risk of medical devices
- - three categories by risk to the human body (extremely low, low and high)
- * A third party certification system for low risk medical devices
**(2) review of the safety measures regarding medical devices; and**
**(3) enhancement of safety measures for biological products**

## Pharmaceutical Affairs Law Revision - Revision Schedule

## Review of Categories and Safety Measures Concerning Medical Devices

## New Independent Administrative Agency  

**Drug **
**Manufacturers**

**Medical Device **
**Manufacturers**

**JAAME**
- Medical devices’ equivalency investigation

**PMDEC**
- Review of drugs and medical devices

**OPSR**
- Drug’s equivalency investigation.  Clinical trial consultation.  Reliability inspections.  GCP,  GLP and GPMSP inspections

- MHLW

- Council

- Report of review results

- Consultation

- Recommendation

- Inquiry, instruction
- and answer

- Inquiry, instruction
- and answer

- Application

**Approval**

**Current System**

**Proposed New System**

**Drug and Medical Device**
**Manufacturers**

**New Independent **
**Administrative Institution**
- Review of drugs and medical devices (including clinical trial consultation and inspections)

- MHLW

- Council

- Consultation

- Recommendation

- Report of review results

- Application

- Inquiry, instruction
- and answer

**Approval**

**Certification by a third party for low-risk medical devices**

## Medical Device Reimbursement

## Seriously, Japan is a tough market

- Cost contamination pressure
- Over-regulation
- High-costs of doing business
- Protectionism
- Unique and complex market culture
- Competitive Japanese firms

## Approaching the Market

- Trade Shows- Modern Hospital Show- Hospex- Japan Dental Show- and more
- Academic Conference and Exhibition
- Healthcare Consultants
- The U.S. Commercial Service Programs

## Market Information in English

- Our market research reports http://www.usatrade.gov
- Japan External Trade Organization's (JETRO)http://www.jetro.go.jp
- Japan Pharmaceutical Manufacturers Association (JPMA)http://www.jpma.or.jp
- Ministry of Health, Labor and Welfare (MHLW)http://www.mhlw.go.jp/english/index.html
- Japan Association for the Advancement of Medical Equipment (JAAME) http://www.jaame.or.jp/english/index.html