PATIENT DISCLOSURE AND CLINICAL TRIALS IN JAPAN
In Japan, it is still common for medical doctors to limit the amount of information they give to their patients. Doctors in Japan are seen as “kings,” similar to the situation in the U.S. in the 1950s and 1960s prior to managed care. Japanese patients often do not question their physicians with regards to their diagnoses or treatments. A survey conducted by the Ministry of Health, Labor and Welfare (MHLW) revealed that 40% of 1,600 physicians deemed it appropriate to decide how much medical information should be given to patients while only 26% felt that patients should be given as much information as they wanted. Due to this type of doctor-patient relationship, patients are often unaware of their medical condition or the treatments they are receiving.

In terms of patients’ eligibility for clinical trials, many who qualify for studies are often unaware that they can participate. Therefore, it is not surprising that clinical trials and participation in these types of studies have been limited in Japan. Besides the lack of information and knowledge, clinical trials were also considered taboo. The public often viewed physicians who participated in clinical trials negatively.

This type of mentality has created a large barrier for clinical test recruiting in Japan. Due to these long established attitudes, not many are willing to participate in clinical trials. Public leadership has also been slow to provide funding and resource allocation to institutions engaged in clinical research.

However, there are currently growing initiatives to better educate the Japanese public in the merits of clinical trials. The Japan Pharmaceuticals Manufacturers Association (JPMA) Public Affair Committee produced a television documentary on clinical trials entitled “Creating and Developing New Drugs: Supporting tomorrow’s healthcare through clinical trials.” Informational websites have also been created to provide general information about clinical trials, different diseases, and specific clinical trials that are available to eligible patients.

THE GROWING CHINA OTC MARKET
China’s over-the-counter (OTC) market is growing fast and is expected to be the largest OTC market in the world within the next decade. In 2000, revenues from OTC sales in China reached RMB 12 billion (US$1.5 billion) and by 2005 this figure is expected to reach RMB 60 billion (US$7.3 billion). Experts project an annual expansion of the OTC market in China by 30% per year over the next five years.

Vice Chairman of the China OTC Association, Hu Shengyu, believes that the Chinese government’s policies with regards to OTC drug sales have contributed greatly to the growth of the country’s OTC market. The State Drug Administration (SDA) created a classification system in 1999 to differentiate between prescription and OTC drugs.

Vice Chairman Hu also states that the OTC market will continue to grow due to the following factors: 1) China’s immense population as well as growing aging population requiring more OTC drugs, 2) increased disposable income leading to more people able to afford OTC medication, and 3) changes in the healthcare system encouraging patients to buy more OTC drugs rather then utilizing hospital services (patients are now responsible for a percentage of healthcare costs, previously, employers shouldered the full burden of medical costs).

According to China’s WTO entry agreements, starting from January 1, 2003, foreign investment in wholesaling and retailing of drugs will be allowed. Until that time, foreign companies that do not manufacture in China must form joint ventures with local companies in order to distribute into these markets.

KOREA’S PROPOSED “MEDICAL DEVICES ACT”
The main regulatory body in charge of overseeing medical devices in South Korea is the Korea Food & Drug Administration (KFDA) established in 1996. Through the Medical Devices & Radiation Health Department, the KFDA performs inspections and quality assurance as well as conducts research on medical devices. Since the KFDA’s establishment, however, the agency has maintained much of its medical device regulations to general terms. While there are some specific requirements outlined for product registration in Korea (documentation, technical review, and type tests among others), there is a lack of details required for approvals specific to products, this has led to much confusion among many foreign medical device manufacturers.

To address these above problems, the Korean National Assembly is expected to write a draft legislation called the “Medical Devices Act” to be introduced into legislation in late 2002 or early 2003. This legislation aims to better codify more specific regulatory procedures and requirements. The Act would be distinct from the current Pharmaceutical Affairs Law under which much of Korea’s medical devices regulations have developed. Some of the proposed changes of the Medical Devices Act include the following:

- Adjustment and clarification of the definitions of products subject to medical devices regulation
- Inclusion of medical software under KFDA regulation
- Addition of specific provisions regarding used or reprocessed and leased devices
- Transforming from a three tier classification scheme to a four tier scheme
- Implementing new post-market surveillance regulations

PROPOSED LIFTING OF GOODS AND SERVICES TAX FOR HEALTHCARE IN SINGAPORE
Singapore’s Economic Review Committee recently released a report outlining its recommendations to lift the 3% goods and services tax that is currently levied on healthcare services within the country. Should the proposed tax lifting be implemented, both foreign and local users of Singapore’s healthcare system stand to gain. The report stated that the potential increase in healthcare revenue as a result of the tax lifting could raise the country’s share of the Asian healthcare market from less than 1% in 2000 to 3% by 2012.

Currently, approximately 150,000 foreigners utilize Singapore’s healthcare services. Most of these foreigners are from Malaysia or Indonesia. However, patients are beginning to turn to Bangkok, Thailand and Kuala Lumpur, Malaysia for healthcare due to lower costs and more aggressive marketing by these cities.

Besides the lifting of the goods and services tax for healthcare, the committee also suggested the relaxation of immigration laws for entering Singapore for foreign patients as well as medical practitioners. The report will be submitted to the Singaporean government in January 2003, at which time a decision will be made regarding the proposed changes.

MERGERS OF JAPANESE PHARMACEUTICAL COMPANIES WITH FOREIGN MULTINATIONALS
On October 1, 2002, F. Hoffman-La Roche Ltd., a Swiss pharmaceutical company, merged with Chugai Pharmaceutical Co. Ltd. The merger will make Chugai a subsidiary of Nippon Roche K.K., Roche’s division in Japan. The name Chugai Pharmaceutical will be retained, however, Nippon Roche will hold 50.1% of Chugai’s shares.

This merger follows several recent mergers between Japanese pharmaceutical companies and foreign pharmaceutical companies. Already, Boehringer Ingelheim, a German pharmaceutical company, acquired 50% of SSP Co. Ltd., a Japanese self-medication company in late 2001. Abbott Laboratories also sought full ownership of Kokuriku Seiyaku in April of 2002.

Mergers and acquisitions in the Japanese healthcare industry are on the rise. This is largely due to government deregulation, the strong dollar, as well as greater recognition of the size and potential for opportunities in the Japanese market. Industry experts predict that many Japanese drug companies, which have long resisted global consolidation, will have to merge to survive and become more competitive in the global market.