. . . a little better all the time. Historically hampered by a burdensome regulatory system, Japan’s medtech market is showing marked signs of improvement, thanks to efforts by the regulatory body to reduce product approval lag times and the government’s targeting of industry as a key growth sector.
It’s no secret that the Japanese medical device market was hit hard by the March 2011 earthquake and tsunami. Nevertheless, it remains a force to be reckoned with on the world stage: Japan accounts for 10% of the total global market, worth €28.24 billion at the end of 2010, according to the Ministry of Health, Labour and Welfare, and ranks as the third largest after the United States and the European Union. Moreover, the market will continue to expand, as the percentage of people over the age of 65 rises from the current 23% to 36% by 2050, as stated in a United Nations report.
An ageing population could benefit foreign companies, in particular, as Japan imports a significant number of medical products. All artificial cardiac valves (worth €141 million), 99.6% of artificial hearts (€256 million), 98.4% of artificial respirators (€376 million) and 81.4% of contact lenses (€1.6 billion) sold in Japan are manufactured abroad, according to statistics from the ministry. It’s fair to say that foreign-made therapeutic devices are conspicuous in this country (Figure 1).
|Figure 1: Countries exporting medical devices to Japan.|
While Japan remains competitive in endoscopes and other diagnostic devices, the nation imports twice as many medical goods as it exports, contributing to a trade deficit of €6.1 billion, also according to ministry records (Figure 2). High-end medical technology from the United States and Europe continues to be in great demand.
Improved approval process
One of Japan’s major barriers to entry is its rigid regulatory system and infamous “lag time,” which hinders access to medical technology. Of late, the government has been more receptive to streamlining the product approval process and encouraging innovation. The Ministry of Health, Labour and Welfare has more than doubled the number of reviewers at the Pharmaceuticals and Medical Devices Agency (PMDA) in the past three years, growing from 35 in 2009 to 90 as of August 2012. The agency further aims to increase personnel to 104 by 2013. After receiving some criticism that newly hired reviewers were too young and inexperienced, the ministry instituted a “buddy system,” whereby well-experienced senior reviewers are teamed up with newcomers.
“Adding headcount alone is not our goal,” said Kazunari Asanuma, head of the ministry’s office of device evaluation. He told medical device manufacturers attending a recent regulatory seminar sponsored by the Medical Device Strategy Institute that he has even “instructed reviewers to check only the revised [parts of a device] and to ignore the rest,” in the case of previously approved devices that have received upgrades and, therefore, must go through the approval process again.
|Figure 2: Japan’s medical device trade deficit from 1992 to 2010. Exports are indicated in red and imports are in blue.|
This is a bold and rare decision coming from the Japanese regulatory authority. It typically takes an overly protective stance, leaving no stone unturned when approving devices, because the ministry, and not the manufacturer, is blamed if something is found to be defective.
Other ministerial efforts to eliminate the lengthy approval process include:
There are two aspects to the device lag: the application period, which applies to the length of time between the development stage and completion of clinical trials and submission of application forms, and the approval period, which spans from submission of the application to the moment when approval has been obtained.
The approval process varies depending on the class or type of device. Processing and approval times for priority-review items are roughly similar to those registered by US FDA. The review process for devices that are not deemed a priority, however, generally takes 1.7 years longer in Japan than in the United States. The ministry is now working on closing that gap completely by 2015.
Proposals from industry
Junko Kodama, a director at Abbott Medical Optics Japan’s R&D division, who struggled with PMDA’s burdensome review process when submitting her company’s intraocular lenses for approval, has some suggestions for improvement. “In the United States, we were just asked to submit the names of monomers used for the lenses, but in Japan we had to present everything from the monomers’ structural formulas and degree of purity to composition percentages,” said Kodama, who is also a director at the American Medical Devices and Diagnostics Manufacturers’ Association (AMDD). Unlike drugs, where a thorough understanding of the materials is warranted, “medical equipment cannot be identified by looking at the amount of raw materials used,” said Kodama. “Reviewers should stop demanding pointless data, and instead look at device efficacy.”
PMDA’s drug-centric review process is a result of the law regulating Japan’s medical devices, which was originally designed to regulate drugs and medicines. After years of lobbying by the Japan Federation of Medical Devices Associations (JFMDA) demanding device-specific regulations, the government announced in June 2012 a renewed five-year strategy for medical innovation that included the goal of revising the Pharmaceutical Affairs Law (PAL) so that medical devices could be processed separately.
Getting there will require some patience, though, as the bill won’t be submitted to the country’s legislative body until 2013 at the earliest. It will take at least another couple of years for the revised law to come into force. Seeking faster ways to improve business prospects for industry, JFMDA, in concert with the AMDD and the European Chamber of Commerce in Japan, is currently negotiating with the health ministry to expand the range of medical device products that require no new approvals for upgrades or partial changes, and to loosen some rules for foreign medical device manufacturers, said Ryutaro Iida, who heads JFMDA’s committee for the regulatory system. “We can’t just sit and wait for the law to be revised,” he said.
Japan has announced various policies to promote the development of advanced medical devices in the past five years. In April 2007, the government unveiled the first five-year strategy for the creation of innovative drugs and medical devices, which called for speeding up and improving review quality and optimising the environment for clinical trials. The plan was renewed in June 2012 with more emphasis on reinforced collaboration of government, industry and academe to create innovative drugs and devices. This medical-focused growth strategy was endorsed by cabinet members in July 2012 as part of the country’s new “revitalisation strategy,” which positioned the life sciences, environment and agriculture as primary sectors for enhanced investment. The initiative is designed to boost the value of life sciences to more than €515 billion and create more than 2.84 million jobs by 2020. The plan does not clearly state how the specific goals will be financed. This strategy is an evolved version of Japan’s growth strategy announced in 2010, in which the government for the first time defined the medtech industry as a key growth sector.
Despite a spate of policy announcements, progress has been slow. To help achieve the stated goal of making Japan a world leader in the production of innovative drugs and medical devices, the government created within the cabinet secretariat an office to focus on encouraging medical innovation. The office, which is not subordinate to a particular ministry, can oversee the whole plan and push through implementation. It acts as a “control tower,” said Takeo Asano, an office director. “We will apply the plan-do-check-act cycle to make sure that the project is running smoothly. We won’t let the plan fail in the end,” he added.
The goal is to make the indigenous medtech industry a central pillar of Japan’s international ambitions. However, the establishment of prompt and effective assessment systems also will create a favourable environment for foreign companies that want to sell their cutting-edge devices and technologies in Japan.
Miki Anzai is Associate Editor of sister publication Japan Medical Design and Manufacturing Technology.