MEDICAL DEVICE SALES IN JAPAN: ROLE OF PHYSICIANS, UNIVERSITIES EXPLAINED
Physicians often run (and sometimes own) local hospitals in Japan. Because of this, they are the key decision makers for most major hospital purchases. Thus, it is imperative that a manufacturer’s medical device appeals to Japanese doctors during both the pre-approval and marketing phases.

How do Japan’s all-powerful doctors decide what products to purchase? The influence of universities plays a large role. Japanese doctors also tend to maintain loyalty to their former professors and medical schools throughout their careers. Hence, purchasing decisions often follow the recommendations of universities and professors, rather than individual doctors’ judgment. This type of influence can work either for or against a medical device company. For example, acceptance of a medical device by a leading doctor or professor basically guarantees that former students will choose it when purchasing decisions arise. On the other hand, rejection can be complete and across the board. In addition, interschool rivalry can play a role. If one school accepts a medical device, a competing school may reject it, for no reason but the rivalry between them.

Therefore, choosing an inappropriate school/physician to approve a medical device can greatly reduce its chances for registration, reimbursement, and widespread adoption in Japan.

PHARMACEUTICAL SALES IN CHINA: FOREIGN FIRMS’ MARKET SHARE SOARS
The popularity of foreign-made pharmaceuticals in China continues to rise, with imports and joint-venture products accounting for one-third of the Chinese pharmaceutical markets. In some areas of China, especially Guangdong province (which neighbors Hong Kong), foreign-made pharmaceuticals can account for as much as two-thirds of the local market. Among the 50 best selling pharmaceutical products in China, 80% are foreign made.

Why are foreign-made pharmaceuticals gaining so much in China? First, with increased affluence, more and more urban Chinese can afford the more expensive products offered by foreign producers. Second, foreign products are perceived as higher quality than locally made products. Third, hospital sales are important. As over two-thirds of hospital profits in China stem from pharmaceutical sales, hospitals often purchase foreign pharmaceuticals, which can be marked up with higher profit margins than locally made drugs. Finally, foreign firms are more advanced in their marketing and advertising strategies, making their products more attractive to consumers.

Other market factors have also influenced the Chinese pharmaceutical market. For example, over 2,000 registration certificates have been issued for pharmaceutical imports through 2000. In addition, twenty of the world’s 25 largest pharmaceutical firms have established Chinese operations, and many smaller companies have also entered the market. In total, there are almost 1,800 foreign-funded pharmaceutical firms in China today, including joint ventures, wholly owned operations, and holding companies. Finally, illegal channels account for a large portion of pharmaceutical imports, despite government efforts to crack down.

MEDICAL DEVICES IN TAIWAN: REGULATORY REQUIREMENTS
The Bureau of Pharmaceutical Affairs, Under the Department of Health (DOH), regulates medical devices in Taiwan. Devices are classified into three classes. Class I consists of devices that are not life supporting or life sustaining and which do not present unreasonable risk of illness or injury. Class II devices are those for use in supporting or sustaining human life. Class III devices are those that are life supporting or life sustaining or those for a use that is of substantial importance in preventing impairment of human health. Class III also includes devices that may present the potential for unreasonable risk of illness or injury. Taiwan’s classification system follows the USFDA’s framework, so that understanding the classification system “should” be straightforward for U.S. manufacturers. However, there are some issues that can make entering the Taiwanese market difficult for some medical device companies.

First, Taiwan has a maximum 24-per-year quota on medical device registrations for new devices and new usage indications. The backlog created by this quota can lead to serious delays and may cause some foreign manufacturers to bypass Taiwan’s market. Second, there are rumors that the DOH is considering mandating local clinical trials to assist in physician training. This would make Taiwan too difficult and costly a market for many firms to enter. However, U.S. Department of Commerce officials recently pressed the DOH on this issue and were told that the U.S. position would be seriously considered. Third, the DOH requires “Quality System Documentation Approval (QSD)”, or “paper audits” of device manufacturers’ facilities. Without QSD, your registration will not be approved. Finally, Taiwan’s Bureau of National Health Insurance has very low reimbursement rates for devices, leading to depressed market share and sub-optimal medical device usage in that country.

Despite these difficulties, Taiwan is an important market. Taiwanese are wealthy and will pay for their medical needs.

SINGAPORE’S HEALTHCARE INDUSTRY: AN OVERVIEW
Singapore, a tiny city-state with a population of only 4 million, has one of the world’s strongest economies, with GDP per capita of US$28,000, similar to that of the United States. Singapore spends approximately US$2.5 billion per year on healthcare, for an average per person of US$790. Singapore’s expenditures dwarf most other Asian countries. On the other hand, Japan spends over US$2,000 per person per year on healthcare, and the U.S. spends over US$4,000 per person per year.

Singapore’s most pressing healthcare concerns are similar to those of many rich, industrialized countries: those stemming from an aging population. The number of Singaporeans over 60 is expected to reach 800,000 by 2020, the world’s fifth highest percentage increase. To prepare, Singapore is increasing healthcare budgets and restructuring government insurance plans. Healthcare financing is driven by individual responsibility and government plans, which include “Medisave,” a compulsory savings plan to help individuals pay for healthcare expenses, “Medifund,” a safety net for the poor and needy, and other smaller programs.

In addition, on April 1, 2001 The Health Promotion Board (HPB) was established to provide greater nation focus on major Singaporean health problems. Among the HPB’s first projects is a three-year national screening program for Singapore citizens 55 and above. Citizens will be screened for high blood pressure, high cholesterol, and diabetes. It is estimated that 60% of those screened will be diagnosed with at least one of the above conditions, meaning increased market opportunities for companies with products that treat these conditions.