Since 1985, Japan’s In Country Caretaker (ICC) system has allowed foreign medical manufacturers without a local office in Japan to register products “directly” in their own name (Japan law does not allow medical companies without a local presence to register their products in their own name, unless an ICC is used). While generally more costly than indirect registration through a distributor, registration through an ICC offers foreign manufacturers distinct advantages, most notably increased control over marketing strategies and the ability to change distributors at will. Over the years, more and more foreign companies entering the Japanese market have recognized the value of the ICC system and have retained ICC companies to assist them in their efforts to enter the market.
Despite the benefits of the ICC system, the Ministry of Health, Labor, and Welfare (MHLW) recently announced major changes that will significantly change and dismantle the system as it exists today. Effective April 2003, foreign sales approval will be subject to the following new requirements. First, a foreign manufacturer must appoint a representative in Japan. The representative must hold a license to sell medical devices. Next, the foreign manufacturer and its representative will be jointly responsible for regulatory compliance with regard to import procedures, Good Manufacturing Practice GMP), and Post-Marketing Surveillance (PMS). Finally, the representative must be able to adequately perform both the regulatory functions traditionally performed by an ICC, as well as the testing, warehousing, and tracking duties traditionally performed by the importer. These new requirements place a heavy burden on existing ICCs, many of which are small firms without the capacity to take on this greater role.
There will be a three-year grace period for the implementation of these new rules.