Slow approval process for overseas-made medical equipment puts off foreign companies
The Japanese healthcare budget is under increasing strain, burdened by a rapidly ageing population of which one in four people will top the age of 65 in 2013, and more than one in three by 2035, according to figures from the National Institute of Population and Social Security Research. But while the implications for the nation’s coffers are ominous, there are robust business opportunities for domestic and foreign medical equipment makers as more Japanese look to stay healthy longer.
With a global share of 11%, the Japanese medical equipment market ranks third behind the United States (45%) and the European Union (nearly 33%), according to a presentation entitled Medical Technology in Europe given on 6 March, 2009 by John Wilkinson, Chief Executive of the European Medical Technology Industry Association (EUCOMED).
Almost 50% of Japan’s medical equipment is imported, with the United States accounting for 55.7% of that figure and Europe for 27.9%, according to data from Japan’s Ministry of Health, Labour and Welfare. United States and European makers of medical equipment have helped pioneer non-invasive therapies via the use of MRI (magnetic resonance imaging) scans, CT (computed tomography) scans and PETs (positron emission tomography).
But despite these opportunities, the Japanese medical equipment market can be a daunting place to operate, and some medical equipment makers pass over Japan for more amenable, or profitable, markets including China. Makers cite high regulatory barriers, costly test requirements and inadequate returns on investment.
“Only 50% of the medical devices marketed and sold in the EU and the United States are available in Japan,” says Seiji Kamijo, chair of the Medical Equipment Committee at the European Business Council, and president and CEO of Philips Electronics Japan.
The list of products available in Europe and the United States for over five years but not imported into Japan includes phakic intraocular lenses, which help sight function recovery in nearsighted patients not treatable with LASIK, and cardiovascular port-access technology, which facilitates minimally invasive valve replacement.
The Japanese approval process averages between 12 and 36 months compared to just six months in the EU. Matters are complicated by the fact that documentation screening and application approval are handled by different organizations. Screening is the responsibility of the Pharmaceuticals and Medical Devices Agency (PMDA), while final approval of applications depends on the Ministry of Health, Labour and Welfare (MHLW).
Screening may take approximately 12 months, and the approval process about a further seven months. Japan recognizes that this process contributes to a delay in introducing new medical technology, and in December 2008, the MHLW came up with a five year Action Program designed to reduce the 19-month period.
It is worth noting the 19-month period roughly tallies with the 18-month to 24-month product cycles in place for most medical machinery, and suggests equipment approved in Japan [may be] at least one generation obsolete compared to equivalent United States and European models.
Chronic delays have also been aggravated by a lack of PMDA inspectors, who are outnumbered by their United States counterparts by a ratio of almost ten to one.
There were 35 inspectors in 2008, and the MHLW program aims to boost that number to 104 over five years from April 2009, according to Hidehito Sekino, director of the Office of Medical Device Evaluation in the Pharmaceutical and Food Safety Bureau at the MHLW. The number of inspectors rose by 12 to 47 in 2009, and Japan is broadly on schedule to achieve its goal, but will still fall short of United States levels.
PMDA inspectors tend to be drawn from medical, pharmaceutical, engineering and physical science backgrounds, and are more academically focused than their counterparts in private industry. Those with private sector experience are restricted from making a direct switch to the agency – with the result that communications problems exist.
“The consultation structure remains complicated,” says Takeshi Fujiwara, chairman of the EBC’s Regulatory Subcommittee of the Medical Equipment Committee, and president of the medical technology company Gambro. “It would be difficult for first timers to figure out what they need to do.”
Mutual recognition of medical equipment standards could make negotiating this process easier, cut costs and lead to better treatment for patients.
Japan and the United States maintain a cooperative framework to develop global clinical trials, known as Harmonization By Doing (HBD). But, the EU is not part of this framework. This is partly because the EU operates a system of self-certification known as CE marking, in contrast with the official approval-based systems in place in the United States and Japan.
At present, the MHLW has difficulties accommodating the European model. “We do not have enough intelligence about CE marking, or its structure,” says Sekino. “We are attempting to learn about the system, but there is just not enough information.”
He draws a diagram of railway tracks. “It’s a question of the gauge,” he says. “The FDA and MHLW gauge have gotten closer, but we would have to say we don’t know what kind of gauge Europe operates on at present.”
That suggests room for further discussion, and Sekino calls on EU medical equipment representatives saying, “if they wish to talk to us we would tell them to make their point, and find out how we both feel about the issues.”
The EBC, however, takes a more robust stance. “We have been talking to the Ministry of Health, Labour and Welfare for more than 10 years about the need for standards harmonisation and mutual recognition of market authorisation processes. Such change would eliminate the delays caused by the long approval process,” says EBC Policy Director, Bjorn Kongstad. “There has been plenty of talk. Now it is time to act.”