Japan’s In Country Caretaker (ICC) System: An Overview

A foreign medical manufacturer has two choices when entering the Japanese market: 1) establish an office in Japan; or 2) export its products to Japan and arrange for a Japanese distributor or importer to sell them there. In the past, if a foreign medical manufacturer chose strategy 2 (above) and did not maintain an office in Japan, it was forced to register its products “indirectly” in the distributor’s name. Since 1983, however, the In Country Caretaker (ICC) option has been available to such firms. An ICC is a company that acts as a “proxy agent” for foreign medical companies exporting to Japan. It is responsible for preparing documentation, ensures the safety and efficacy of the imported products, provides importers and distributors with the necessary information, and acts as a negotiator on the foreign manufacturer’s behalf with Japan’s Ministry of Health and Welfare (MHW).

Under the ICC system, foreign medical manufacturers are able to “directly” register their products in Japan in their own name. While the upfront costs of using an ICC are significantly higher than indirect registration through a distributor, there are significant advantages as well. The major advantage of direct registration via an ICC is the increased control that a foreign medical manufacturer has over its marketing strategy in Japan. If a firm wants to change distributors, it is much easier to do so with direct registration. In addition, direct registration makes it possible to appoint multiple distributors from day one.

Though today only 5 to 10 percent of foreign medical companies exporting to Japan use an ICC, with increased knowledge of the ICC law and the benefits of using an ICC, PBI expects that by 2010, 30 to 40 percent of foreign medical companies will utilize an ICC as some part of their overall Japan strategy.