Healthcare & Medical Sector in Japan

An Expert's View about Healthcare in Japan

Posted on: 4 Oct 2010

Japan has the second largest healthcare market in the world after the United States. As the ageing population increases, so too does the demand for healthcare.

Healthcare and Medical - Japan Sector Report HEALTHCARE AND MEDICAL JAPAN Produced by: Hitomi Nakai, Senior Commercial Officer, British Consulate-General, Osaka Last revised October 2009 Whereas every effort has been made to ensure that the information given in this document is accurate, neither UK Trade & Investment nor its parent Departments (the Department for Business, Innovation and Skills and the Foreign & Commonwealth Office), accept liability for any errors, omissions or misleading statements, and no warranty is given or responsibility accepted as to the standing of any individual, firm, company or other organisation mentioned. Published September 2009 by UK Trade & Investment. Crown Copyright © Healthcare and Medical ? Japan Table of Contents OVERVIEW 3 OPPORTUNITIES CHARACTERISTICS OF MARKET 4 KEY METHODS OF DOING BUSINESS 7 WHAT WE CAN DO FOR YOU USEFUL WEBSITES 8 EVENTS 10 CONTACT LISTS 11 ANNEX 12 Page 2 of 13 Healthcare and Medical ? Japan OVERVIEW The Japanese population is one of the world?s fastest-ageing. As of 1 September 2009, 22.7% of its 128 million populations is estimated to be over 65 and this figure is anticipated to increase to 31.8% by 2030 and to 40.5% by 2055. As the ageing population increases, so too does the demand for healthcare. Japan is the second largest economy in the world and also has the second largest healthcare market in the world after the United States. National medical expenditure in fiscal 2008 reached 34.1 billion yen (9.11% of GNI, £227.3 million at £1=150yen). Elderly people of 70 years old or over accounted for 43.5% of the total expenditure and this ratio is expected to grow further as the population ageing progresses. A reduction of healthcare expenditures, especially those on the elderly, is one of the Japanese Government?s pressing problems and two health insurance systems focusing on the elderly market were introduced in the past 9 years, ie the Long Term Care Insurance system in April 2000 and the Latter Stage Elderly Health Insurance system for those over 75 years old in April 2008. The Japanese medical devices market is the largest in the world after the United States and EU. Although domestic manufacturers of diagnostics equipment such as CT, MRI and electrocardiograph (ECG) have been doing comparatively well, nearly 50% of the market is supplied by overseas manufacturers, predominantly those of the United States. The Ministry of Health, Labour and Welfare (MHLW) is responsible for health insurance and regulating medical devices under the Pharmaceutical Affairs Law (PAL). MHLW set up a regulatory agency named Pharmaceutical and Medical Devices Agency (PMDA) in 2004 and revised PAL in 2005 with the aim of solving the problem of the device and drug lags by shortening the comparatively long waiting periods for regulatory approval. OPPORTUNITIES First-tier opportunities for British suppliers of medical devices exist with advanced and innovative products especially in the following areas: ` Medtech devices ` Infection control ` Preventative healthcare ` Diagnostics ` Novel medical treatments ` Diseases of an ageing population ` Oncology, Cardiology, Cerebrovascular, Orthopaedics ` Pain control MHLW published the Medical Device and Healthcare Technology Industry Vision in September 2008, which defined the following as the focus areas for the Japanese medical devices industry. In view of the current regulatory environment, most of these areas could be challenging but are regarded as second-tier opportunities for British suppliers: Page 3 of 13 Healthcare and Medical ? Japan ` Surgical navigation (eg surgical robotics) ` Implantable medical devices (eg artificial hearts, artificial heart valves, intraocular lens) ` Regenerative medicine (eg cell sheet and iPS cell) ` Diagnostic devices for personalised medication (eg DNA chips and protein chips) ` Optical molecular imaging ` Non-invasive therapeutic products ` Intelligent diagnostic systems and equipment ` Neuromodulation devices In view of medical devices regulatory clearance, introduction of innovative products categorised as Class I will also have comparatively higher potential to attract Japanese importer's interest. For the home care market, there is little opportunity for ?me-too? products from Europe including UK in view of the long distance, long delivery time and high expectations in respect of quality, price and function by end-users. Niche products with unique features at competitive prices could target the long term care insurance market, whilst products with superior design and functions should target the top end of the market that is willing to pay more to get precisely what they want. UKTI publishes international business opportunities gathered by our network of British Embassies, High Commissions and Consulates worldwide. These opportunities appear in the Opportunities portlet on the relevant sector and country pages on the UKTI website. By setting up a profile you can be alerted by email when relevant new opportunities are published. New or updated alert profiles can be set in My Account on the website. CHARACTERISTICS OF MARKET (1) HEALTHCARE INSURANCE SYSTEM All Japanese citizens are covered by one of the following public medical insurance systems, which cover a large range of medical services. They are (a) Co-operative insurance (employees of large firms), (b) Government run employment-based health insurance (employees of small-medium firms), (c) Seafarer?s Insurance (seafarers), (d) Mutual Association Insurance (national / local government employees, private school employees), (e) National Health Insurance (self- employed / agricultural workers, elderly), and (f) Others. In addition, many people have private medical insurance. Systems (a)-(d) involve direct payment of the insurance contribution from people?s salary, similar to National Insurance in the UK. The insurance premium rate in 2009 is 8.2% of annual income which is shared by the insured person and the employer. This allows 70% of medical expenses to be paid by the insurance and 30% by the patient at the point of delivery. The services are provided in a free access system, in which citizens are free to choose medical institutions. Thus, patients, even though suffering a mild illness, tend to visit a large hospital equipped with various high-tech instruments / devices so that we see a concentration of patients in large hospitals. This is in marked contrast to the UK, where the first point of call is likely to be one?s GP. Page 4 of 13 Healthcare and Medical ? Japan (2) MEDICAL EQUIPMENT MARKET Japan?s medical devices market is calculated as (production)+(imports)?(exports) and amounted to 2.1 trillion yen (£14.2 billion) in 2007. In 2007, local production value was 1.7 trillion yen for medical equipment and devices, which was 0.2% down from 2006. Within the medical equipment sector, the five major categories were diagnostic imaging equipment (23.5%), general surgical/orthopaedic supplies and related products (15.6%), artificial internal organ apparatus and assist devices (11.9%), physiological measuring and monitoring systems (11.9%) and radiography equipment and related tools (6.5%). Imports accounted for 47.9% of the total medical devices market (ie 1.0 trillion yen; £6.8 billion) in 2007 and there has been a steady increase in imports in recent years. The top four categories for imports were: artificial internal organ apparatus and assist devices (28.5%), general surgical/orthopaedic supplies and related products (25.0%), ophthalmic devices and products (mostly contact lenses; 15.7%) and diagnostic imaging apparatus (9.2%). The United States is the top exporter for all 10 categories except for ophthalmic products (Ireland is the top supplier) and home use medical devices (China). The United States accounted for 55.7% of all imports in 2007, followed by Ireland (10.8%) and Germany (6.3%). UK was ranked 8th by achieving 23.0 billion yen sales (ie £153 million) and occupied 2.2% of the imports, which was 0.2% up from 2006. Imported cardiac pacemakers, artificial joints, coronary stents, PTCA balloon catheters dominate their sectors of the Japanese market. Successful foreign suppliers set up an office, employ their own sales staff and provide prompt after sales services. Among UK companies, Smith and Nephew and Smith Medical stand out as being active in the Japanese market. (3) HOMECARE & REHABILITATION MARKET & THE LONG TERM CARE INSURANCE SYSTEM The Japanese government introduced a public insurance system for the care of the elderly at home and in nursing institutions in 2000. Anyone wishing to use the system should be assessed and categorised as having a specific need. Users pay 10% of the cost of the insured services. There are (1) domiciliary services and (2) facility services. Domiciliary services are further broken down into products and services. Products are either on leasing or purchase terms. Leased items include special beds, mattresses, wheelchairs, pressure sore prevention equipment, posture moving equipment, hand rails, slopes, walkers/walking sticks, prowling detecting systems and lifts/hoists. Those for purchase and home improvements include toilet seats, special bed pans/urinals, bathing seats, hand rails/hurdle for bathtubs, board/stool/portable baths and attachment to transfer lift (ie holding net). Facility services include care services at special nursing homes for the elderly; facilities of health care services for the elderly and long term care medical treatment facilities (hospitals or hospital wards). According to the Japan Assistive Products Association (JASPA), the market of assistive products was valued 1.3 billion yen in fiscal 2007 (£8.4 million and 0.7% up from 2006). JASPA also reported that the demand for personal care products such as hygiene goods and prosthetic limbs and fittings has been increasing. Page 5 of 13 Healthcare and Medical ? Japan Generally speaking, the majority of the assistive and homecare products tend to be standardised and inexpensive. Competition from local and other Asian suppliers is fierce. However, there is also a market for more sophisticated, fashionable, customised and/or highly technical products for those willing to pay more to get a quality product. The market segment is not as large as the elderly care market, but many EU and US suppliers enjoy sales in this sub-sector. (4) REVISED PHARMACEUTICALS AFFAIRS LAW A new Pharmaceutical Affairs Law (PAL) has been fully enacted since April 2005 and has created a shift from a system focusing on manufacturing to one similar to those operating in Europe and the US, centred on marketing with an emphasis on post- marketing safety measures. Under PAL, there are two kinds of licence - ?manufacturing/market business licence? and ?manufacturing business licence?. Importers should have the former licence. A marketing company is required to appoint a ?Marketing Supervisor-General? who needs to be a pharmacist, and staff responsible for GVP (Good Vigilance Practice) and GQP (Good Quality Practice). Medical devices are classified into three classes: (1) general medical products (Class I), (2) controlled medical devices (Class II), and (3) highly controlled medical devices (Classes III & IV). Notification is required for (1), but technical documentation review is not required to bring a new product to market. Testing or auditing is not required either. Certification is required for (2) and a registered third party will review documentation before issuing certification. Products falling under (3) require Ministry approval. It is difficult to know in advance to which category of the three the Japanese Ministry of Health (MHLW) will assign a particular product, but broad guidelines are: 1) General medical products (corresponds to Class I) (Class I products are medical devices whose risk to human bodies in case of a defect/fault is seen very low. Examples are x-ray films, dental gypsum, medical in- vitro testing apparatus, steel products for medical/dental use, first aid bandages etc) Notification is required but technical documentation review is not required. Testing or auditing are not required either. 2) Controlled medical devices (Class II) (Class II products are medical devices whose risk to human bodies in case of a defect/fault is considered relatively low. Examples are ultrasonic diagnostic imaging apparatus, audiometers, endoscopes, electric therapy apparatus for home use, condom, dental materials etc) Certification is required. A registered third party reviews documentation (Good Vigilance Practice, Good Quality Practice, GMP, product summary technical documentation (STED)) and provide certification. 3) Highly controlled medical devices (Classes III & IV). (Classes III and IV products are medical devices whose defect/fault is considered to cause high or life threatening risks. Examples are artificial joints/bones, dialysers, hyperthermia equipment, intraocular lenses, cardiac valve prostheses, vascular grafts, stent, implantable cardiac pacemakers, artificial pancreas etc) Products require Ministry approval. The manufacturer must submit an application to the prefecture government where they are based. The application will be forwarded to Pharmaceuticals and Medical Devices Agency (PMDA) for approval. Devices that are equivalent to products that are already on the market are also evaluated for equivalence by PMDA. Page 6 of 13 Healthcare and Medical ? Japan Marketing companies need to be accredited and comply with ISO 13485, a quality management system standard for the medical device and diagnostic industry. Eucomed (European Association of the Medical Technology Industry) has three areas of complaint about the PAL in Japan: (a) transparency, (b) consistency with Global Harmonization Task Force (GHTF) recommendations and (c) pricing. The new PAL implemented both price cuts and increased costs for foreign suppliers. Increased costs were both fixed (cost of redoing clinical approvals was typically 3- 4% of total sales) and variable (additional moving, tracing and cleaning of products typically cost a further 1% of sales). Further government-to-government or industry-to-industry discussions are needed with Japan to realise shorter approval times, recognition of CE marks and inclusion of medical devices in the EU/Japan Mutual Recognition Agreements. KEY METHODS OF DOING BUSINESS Despite what some books say about the uniqueness of Japan, there is nothing mystical about doing business in this country. Business is business here as elsewhere, and increasingly cosmopolitan. So you need not worry unduly about the niceties of Japanese etiquette. But a few general points are worth remembering: Above all, be patient. Do not expect quick returns. They may come. But for many Japanese companies, the emphasis is more on developing the sort of trust and mutual confidence that will lead to a strong, enduring relationship than on getting down to business instantly. This is why Japan is a market requiring a strategic approach rather than an opportunistic one. It is also why the potential for long- term achievement is so great. Compared to other Japanese industries, people in the healthcare / medical sector speak English relatively well. However, take things slowly. Many Japanese are too polite to let you know when they do not fully understand. Keep what you say simple and straightforward. The same is true if an interpreter is used. Other background information on doing business in Japan can be found on UKTI?s website. Simply go to the Japan country page where you will find information on: ? Economic background and geography ? Customs & regulations ? Selling & communications ? Contacts & setting up ? Visiting and social hints and tips WHAT WE CAN DO FOR YOU As the Japan-based arm of UK Trade & Investment?s (UKTI) trade promotion operation, our role is to work with UK companies to deliver a measurable improvement in their business performance and increase their competitiveness through the development of trade in Japan. There are three main types of service that we provide for UK companies. Page 7 of 13 Healthcare and Medical ? Japan a) Advice and support Tailored, experienced, impartial advice and support to maximise the chances of success in Japan. b) Information and opportunities Essential, unique, trusted information so that you can pick the right opportunities. c) Making it happen Practical help to achieve your international trade potential Within these three types of service, the main products that we deliver to customers are: OVERSEAS MARKET INTRODUCTION SERVICE (OMIS) Research is critical when considering new markets. UKTI provides market research services which can help UK companies doing business overseas. This is a chargeable service to help companies explore the potential for doing business in Japan at a cost-effective rate. There are ten levels of services (£245 to £9,800) built around the typical requirements of businesses making your first steps into a new overseas market. All provide a flexible choice of market/sector information, counselling, mentoring and introduction to potential clients or business contacts. HEALTHCARE TRADE MISSION TO JAPAN UKTI run one Healthcare and Medical focused trade mission to Japan per year covering sectors where there are good opportunities for UK companies to win business. Using our experience in this market we are able to organise seminars and networking receptions for missioners to be introduced to key decision-makers from the Japanese Healthcare and Medical world. These missions have proven extremely successful in introducing UK companies to the Japanese market. UKTI also offers British companies the Export Marketing Research Scheme (EMRS), a subsidised market research programme administered by the British Chambers of Commerce. Contact your local International Trade Advisor if you are interested in accessing these services, or for general advice in developing your export strategy. USEFUL WEBSITES (1) Useful URLs related to Healthcare and Medical Ministry of Health, Labour and Welfare (MHLW) Some statistics are available. Several links to relevant organisations. Japanese Pharmaceuticals and Medical Devices Agency (PMDA) Japanese regulatory agency, working together with MHLW. Japan Federation of Medical Devices Associations (JFMDA) Links to member companies and relevant information. Page 8 of 13 Healthcare and Medical ? Japan (2) General information Japan External Trade Organisation (JETRO) Information on investing Japan, business opportunities, market information, statistics & surveys. The following useful market reports on the healthcare and medical sector can be downloaded from: - ?Create New Stream of Revenue from Your Medical Device in Japan? by JETRO (Jan 2008) - ?Attractive Sectors for Investing in Japan: Medical Care? by JETRO (Jan 2007) UK IN JAPAN British Embassy site in Japan Keidanren Japan Federation of Economic Organisations (CBI equivalent) Toyo Keizai Inc Japan Company Handbook ? detailed data on Japanese companies EU-Japan Centre EU-Japan industrial co-operation Nikkei Leading Japanese economic data Japan Tariff Association Some free services, but membership fee for details Ministry of Economy, Trade and Industry Some statistics are available. Several links to relevant organisations. Industrial Bank of Japan Several links to other directories of Japanese companies Page 9 of 13 Healthcare and Medical ? Japan EVENTS UKTI Healthcare Trade Mission to Japan Dates: 1-5 March 2010 Organisers: UK Trade & Investment, British Embassy & British Consulate General, Japan Note: UK Trade & Investment organises a trade mission to Japan every year to provide UK healthcare and medical companies with marketing opportunities. Mission programme includes seminars and networking receptions both in Tokyo and Osaka. Home Care & Rehabilitation Exhibition Dates: 29 September-1 October 2010 Organisers: Health & Welfare Information Association Japan National Council of Social Welfare Venue: Tokyo Big Sight Note: Leading show focusing on a full range of care of the handicapped and the elderly at home and institutions. In 2008, 530 companies (479 domestic and 51 foreign) exhibited and 121,000 people including general public visited. International Modern Hospital Show Dates: 14-16 July 2010 Organisers: Japan Hospital Association Nippon Omni-Management Association Venue: Tokyo Big Sight Note: Annually held trade shows focusing on equipment and products that are used at hospitals and clinics. In 2009, 347 companies exhibited and 76,500 people visited. Hospex Dates: 11-13 November 2009 Organisers: Healthcare Engineering Association of Japan Japan Management Association Venue: Tokyo Big Sight Note: An annual event held concurrently with the Conference of Healthcare Engineering Association of Japan and exhibits include hospital-based facilities, healthcare and medical products and services. In 2008, 195 companies exhibited and 34,530 people visited. UK Trade & Investment?s Tradeshow Access Programme (TAP) can help eligible UK businesses take part in overseas exhibitions. Attendance at TAP events offers significant benefits: ? possibilities for business opportunities both at the show and in the future ? a chance to assess new markets and develop useful contacts ? grants are available if you meet the criteria ? UKTI staff overseas will be available to assist delegates Find out if you are eligible to apply to attend this event, and more about the support UKTI can offer, on the UKTI Market Entry web page. Other Market Visit Support may be available via your local International Trade Advisor. Page 10 of 13 Healthcare and Medical ? Japan CONTACT LISTS The British Embassy, Tokyo Address: 1, Ichibancho, Chiyoda-ku, Tokyo 102-8381, Japan Tel: +81 (0)3 5211 1100 Fax: +81 (0)3 3265 5580 Contact: Naoko Takei, Senior Commercial Officer E-mail: The British Consulate-General, Osaka Address: Epson Osaka Building 19F 3-5-1 Bakuro-machi, Chuo-ku, Osaka 541-0059, Japan Tel: +81 (0)6 6120 5656 Fax: +81 (0)6 6281 1731 Contact: Hitomi Nakai, Senior Commercial Officer E-mail: Healthcare & Medical Team/International Sector Group, UK Trade & Investment Address: Kingsgate House, 66-74 Victoria Street, London SW1E 6SW Tel: 020 7215 4805 Fax: 020 7828 4259 Contacts: Robert E Kipps, Senior Sector Manager (International Healthcare) Anil Vaidya, Healthcare & Biotechnology Specialist E-mail: Canada and Japan Unit, UK Trade & Investment Address: Kingsgate House, 66-74 Victoria Street, London SW1V6SW Tel: 020 7215 8623 Contact: Wendy Hurst E-mail: UKTI?s International Trade Advisers can provide you with essential and impartial advice on all aspects of international trade. Every UK region also has dedicated sector specialists who can provide advice tailored to your industry. You can trace your nearest advisor by entering your postcode into the Local Office Database on the homepage of our website. For new and inexperienced exporters, our Passport to Export process will take you through the mechanics of exporting. An International Trade Adviser will provide professional advice on a range of services, including financial subsidies, export documentation, contacts in overseas markets, overseas visits, translating marketing material, e-commerce, subsidised export training and market research. Page 11 of 13 Healthcare and Medical ? Japan ANNEX a) Sources of Help & Advice UKTI gives you access to the comprehensive range of government support in the UK and throughout our commercial and diplomatic teams overseas. We work in partnership with chambers of commerce, trade associations and many others that contribute overseas trade support to British business. British Chamber of Commerce Japan The BCCJ promotes and supports British business in Japan through seminars and networking events; and through its connection with the British Industry Centre (BIC) office facility in Yokohama which provides low-cost office accommodation and support services for UK companies newly establishing themselves in Japan. Tel: BCCJ - +81 (0)3 3267 1901 Fax: BCCJ - +81 (0)3 3267 1903 Website: Japan External Trade Organisation (JETRO) JETRO is Japan's semi-governmental trade promotion organisation, which provides help for exporters to Japan. It produces a number of publications and videos on the Japanese market, including sector-specific market reports. These are available from JETRO's London office, which has a well-stocked reference library. JETRO operates Business Support Centres in Tokyo, Osaka and other Japanese cities which provide free short-term office accommodation and support services to visiting foreign business executives. JETRO also runs an Export to Japan Study Programme inviting selected foreign company representatives to Japan to take part in group visits to give them a first-hand understanding of the market and make business contacts. Tel: 020 7470 4700 Fax: 020 7491 7570 Website: British Chambers of Commerce (BCC) The BCC run an export marketing research service, on behalf of UKTI, for companies with fewer than 500 employees. Professional researchers advise on how to carry out marketing research for Japan (and other export markets) and to help draw up specifications for work to be carried out by your in-house staff or by a professional consultant. Grants for up to 50% of the cost are available. Tel: 024 76694484 Fax: 024 7669 5844 Website: research-scheme Japan Industry Insight Training Programme The EU-Japan Centre for Industrial Co-operation runs short training programmes in Japan for senior managers. Grants are available to help SMEs to take part. Tel: +32 (0)2 282 0040 Fax: +32 (0)2 282 0045 Email: Website: Page 12 of 13 Healthcare and Medical ? Japan Executive Training Programme in Japan (ETP) This EU-funded programme offers managers of European companies the opportunity to spend 12 months in Japan learning the Japanese language and culture, followed by six months' placement with a Japanese company. Tel: 020 8335 8000 Website: b) Map of Japan Remarks: ? Quoted from ? A journey from Tokyo to Osaka is approximately 2.5 hours by bullet-train with fare of 15,000 Yen (Approx. £100) one way. Page 13 of 13
Posted: 04 October 2010