Becoming a Global Player: Japan Moves to Boost Its Medical Technology Infrastructure
Earlier this year, Japan’s Ministry of Health, Labor and Welfare (MHLW), the Ministry of Education, Sports, Science and Technology; and the Ministry of Economy, Trade and Industry held a joint meeting with members of academia and industry to explore ways to develop and increase cutting-edge medical devices developed in Japan.
Extensive debate among the groups yielded the drafting of a five-year strategy for the creation of innovative medical technology in Japan and participation in multinational development efforts. The ministries reached a consensus to make every possible administrative and procedural effort to achieve their goal, including improving the infrastructure for medical technology research and development, as well as positioning the medtech industry as a growth driver for the Japanese economy in coming years.
To achieve this, the groups recommended that larger budgets and more resources be dedicated to Japan’s domestic medical products industry. They also advised enhanced cooperation between the public and private sectors, in addition to encouraging more venture capital and support for entrepreneurial efforts, sharing research facilities, tapping the knowledge of retired experts, improving the system for consultation, and an improved user-fee system to support product evaluation and approval (much like the one employed by the FDA in the Untied States). The recommendations currently are under investigation and should draw to a close by the end of fiscal 2008.
Based on this five-year strategy, MHLW drafted its “New Innovative Medical Device and Technology Industry Vision,” which outlines a future where Japan can be a center of medical technology development and introduce competitive medical devices in the global market by leveraging the country’s product development strengths in electronics, information technology and chemical technology. According to MHLW, the industry has supported the agency’s “vision,” and has highly appreciated the idea of government not simply regarding medical devices as just products but as a technology industry to be fostered. In the past, Japan has placed most of its resources into diagnostics rather than therapeutic devices. In the future, however, Japan will dedicate increased resources to the development of therapeutic medical devices by collaborating with other industries such as electronics, textiles and chemicals. Regenerative medicine and tissue technology (using stem cells and new organ development, for example) are other areas where Japan will concentrate its efforts.
Keeping Regulatory Pace
As a practical matter, part of the action plan includes the improvement of regulatory evaluation of medical devices—such as hiring more reviewers and improving their quality. Japan has long been criticized for its slow approval process of new medical devices and the resulting generation gap in technology, also called “device lag.” The goal for Japan is to create a system based on that of the FDA’s Center for Devices and Radiological Health (CDRH) in the United States—an investigational evaluation system, a fast-track program and a more comprehensive consultation system are suggested to make the approval process faster. Currently, the number of reviewers for medical devices at the Pharmaceuticals and Medical Devices Agency (PMDA) is about one tenth of FDA’s CDRH. A study group empanelled by Japan’s current ruling party, the Liberal Democratic Party, recommended increasing the number of reviewers from the current level of 36 to 105, and their cost should be covered by increasing the user fee paid by device firms. Both Japanese and non-Japanese companies currently pay user fees to Japan’s PMDA, but the amount varies depending on the type of product and other factors. An increase in user fees to speed review has been proposed by PMDA and now is under negotiation with industry (including input from the medical device industry’s US lobbying arm, the Washington, DC-based Advanced Medical Technology Association). In addition to regulatory considerations, changes to device reimbursement also are under consideration. At the moment, the perception is that the device industries in the United States and Europe demand a more comprehensive system to quickly evaluate the adequate value of technology. Industry awaits a practical action plan to be outlined by the end of the year.
A Checkup for Patients and Healthcare Payments
Japan is known as a country where citizens enjoy one of the longest life expectancies in the world—for both men and women. The advancement of medical technology, improvement of the healthcare infrastructure and devoted efforts by Japanese medical professionals have contributed to this outstanding outcome. Although the medical expenditure as a percentage of GDP has not been as high as other countries (Japan currently spends roughly 8% of its GDP on healthcare, compared with approximately 15% spent by the United States, according to 2005 statistics from the Organization for Economic Cooperation and Development, based in Paris, France), the MHLW is concerned about the potential increase of medical spending in the next decade as a result of a rapid rise in the elderly population.
To prepare, the MHLW came up with a new healthcare policy called the “Metabo Health Checkup,” which is a mandatory evaluation for all middle age and elderly people in Japan. This special checkup and health consultation system has been introduced to prevent the onset of metabolic-related disorders that can result in atherosclerosis, coronary heart disease, stroke and diabetes. The objective is to reduce long-term medical expenditures by identifying lifestyle changes earlier in a patient’s life. The target group is beneficiaries of the National Health Insurance from the ages of 40 to 74. Beneficiaries are required to monitor their weight compared to height, keep track of their waist size and have blood testing conducted periodically. Beneficiaries would then be categorized into three groups—high-risk, middle risk and regular support. Insurance premiums would differ based on risk group. The current basic monthly premium is covered 50% by the beneficiary and another 50% by the employer. The government hopes this will force employers to take a more active role in better healthcare for employees and result in a significant long-term reduction in healthcare expenditures.
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Over the course of the next few years, it seems that Japan will take serious steps toward ensuring the health of its people as well as its medical device industry.