OPPORTUNITIES IN CHINA FOR FOREIGN MEDICAL COMPANIES AS A RESULT OF SARS
The Severe Acute Respiratory Syndrome (SARS) outbreak that occurred in the beginning of 2003 has caused many Asian countries to fortify their national health systems. Among them, China has announced 11 billion RMB (US$1.3 billion) in new funding for their troubled national health system as a response to the recent SARS situation. The epidemic has also resulted in increased business and profits for foreign medical companies in China. Roberta Lipson, CEO of Chindex, a US-owned medical equipment importer in China, said, “Our sales of high-heat and high-pressure sterilizers have more than doubled in the last two months [April and May 2003] over the same time last year.”

Another medical market that is expected to grow in China as a response to the recent SARS outbreak and the current focus on disease prevention is the vaccine market. Experts predict that the vaccine market in China will reach 2-3 billion RMB (US$240-360 million) in the next few years and will reach 10 billion RMB (US$1.21 billion) by 2006. It is forecasted that China’s vaccine market will grow approximately 15% per year compared to the global 10% annual growth due to the infancy of China’s market. Already, foreign drug manufacturers like Aventis Pasteur MSD, GlaxoSmithKline, and Merck & Co. have entered China’s vaccine market.

Aventis Pasteur MSD, a major multinational pharmaceutical company based in France, was the first foreign company that entered China’s vaccine market. It established Shenzhen Aventis Pasteur Biologicals Co., the first joint venture enterprise in China specializing in imported vaccines and marketing of vaccines for HIB, HAV, pneumonia, and influenza. GlaxoSmithKline is another multinational company entering China’s vaccine market. The company has invested over 30 million RMB (US$3.62 million) to establish a biological products company in Shanghai. The new company began production in June 2003.

REVISION IN JAPANESE PAL: MEASURES FOR SAFETY RELATED TO MEDICAL DEVICES
One of the main revisions of the Japanese Pharmaceutical Affairs Law (PAL) that was passed in 2002 will be the re-categorization of medical devices. The Japanese medical devices classification system will be revised in the PAL to take into account the risks associated with the use of medical equipment. The official new definitions for each class of medical device will be made available in the near future.

Although the proposed re-classification may appear to be a simple reduction of the current four-class structure into three classes, the effects of the revision will be substantial. Medical devices will be re-categorized based on the amount of control required by the government to ensure patient safety in medical product distribution and use. The three new categories of medical devices will be as follows:

• Kodo-kanri Iryo Kiki (medical equipment requiring advanced controls): This class is anticipated to correspond to Classes III and IV of the current national classification.
• Kanri Iryo Kiki (medical equipment requiring controls): This is anticipated to correspond to Class II of the national classification.
• Ippan Iryo Kiki (general medical equipment): This is anticipated to correspond to Class I of the national classification.

KOREAN GOVERNMENT TAKING STEPS TO STRENGTHEN PHARMACEUTICAL INDUSTRY
The Korean Ministry of Health and Welfare (MOHW) is currently implementing plans to strengthen the competitiveness of Korea’s pharmaceutical industry. The main goals of the MOHW include establishing a more comprehensive base for research and development for pharmaceutical products in Korea. Among the government’s initiatives include seven major projects that the MOHW hopes will enhance the country’s pharmaceutical industry. Medical technology development, cerebral medicine research, biotechnology studies, and new medicine development are among the projects currently being worked on by the MOHW. The Ministry is investing over 434 million won (US$366,244) for R&D investment in new medicines until 2010.

The Korean government’s goal is to produce 10 new medicines by 2010. They are also hoping to rank 7th among countries that contribute to the development of new medicines. Currently, pharmaceutical companies in Korea have managed to develop four drug products with 27 clinical trials for new medicines in progress.

In addition to these initiatives, the government has started construction on a Health and Medical Science Technopolis located in Oh-Song, North Choong-chung Province. The industrial complex is located on 840 square kilometers (324.34 square miles) of land and has standards comparable to other high-tech complexes around the world. The Health and Medical Science Technopolis will be completed by 2006.

FOOD SCARES IN JAPAN: GOVERNMENT STEPS UP REGULATIONS ON FOOD SAFETY
Japan’s recent food-related scares have prompted the Japanese government to take more serious measures in addressing the country’s food safety. Last year, Snow Brand Food Products Co., was involved in highly publicized scandals involving the distribution of foreign meats labeled as domestic meat during the mad cow disease scare, as well as contaminated milk products leading to the death of one person. The Acting Manager of the Japanese Consumers’ Cooperative Union (JCCU), Akiko Yamauchi, commented that government regulations related to food safety have failed to keep up with today’s technology and science. Since then, the government has been working on revising the system that deals with Japan’s food safety.

Recently, the Japanese government announced the establishment of the Food Safety Commission (FSC) with the Cabinet Office. The FSC will conduct food-safety risk assessment and communication. The government is also considering a crisis management system in order to respond to food safety emergencies and to expedite submission of legislation to the Diet. However, risk management will still be under the responsibility of the Ministry of Health, Labor and Welfare (MHLW).

There are fears, however, that the new safety measures will be used to discriminate against foreign food products. Yoshikuni Sugiyama, a business commentator with the Yomiuri Shimbun wrote, “Every time a new product is found problematic in terms of health considerations, a large majority of the Japanese public will certainly throw its support behind import restrictions.”