Firms want easier access to Japanese market

March 29, 2000

During deregulation talks in March, Clinton administration trade officials urged members of Japan’s Ministry of Health and Welfare in Tokyo to expedite the process by which American companies sell new and improved medical equipment.As part of last

During deregulation talks in March, Clinton administration trade officials urged members of Japan’s Ministry of Health and Welfare in Tokyo to expedite the process by which American companies sell new and improved medical equipment.

As part of last year’s U.S.-Japan deregulation agreement, Japan agreed to improve its approval and reimbursement system for new and existing medical technology.

Japan implemented some of the reforms, but not others, said Linda Ruckel, HIMA spokeswoman. In March’s round of deregulation talks, HIMA urged Japanese officials to finish the remaining reforms.

Manufacturers of diagnostic imaging platforms such as MR, CT, and ultrasound enjoy success in Japan because hospitals can put out bids for equipment through a procurement process set up in the 1980s, said Paul Barry, HIMA’s associate vice president of global strategy and analysis.

But if a U.S. company improves a heart catheter or any type of orthopedic or in vitro diagnostic equipment, the manufacturer must wait for Japan’s national health insurance system to create a new category for the equipment. The system is run by the Ministry of Health and Welfare.

Currently, new technology can be introduced in the Japanese market only on April 1 every two years—with rare exceptions. The Japanese government will not provide reimbursement coverage for improved versions of existing medical technology for months or even years.

“You might gain a safety approval, but no reimbursement,” Barry said.

Japan’s trade policy affects medical equipment companies such as Johnson & Johnson, Boston Scientific, Medtronic, St. Jude, and Smith & Nephew, Barry said.

U.S. companies supply approximately 25% of the $23.4 billion in medical technologies used by the Japanese. By comparison, U.S. medical technology companies hold a 40% to 50% market share in other foreign countries, according to HIMA.

“This ultimately hurts Japan’s patients and providers, who lack access to the latest medical innovations,” said Pamela Bailey, HIMA’s president.