Further Deregulation in Japan: Devices, Pharmaceuticals Benefit

Despite U.S. companies’ relative success in the Japanese medical device and pharmaceuticals markets, over-regulation has continued to hamper U.S. cutting edge products’ access to Japan’s market. This hurts both U.S. manufacturers and Japanese citizens, who are denied access to innovative, cost-effective, life-saving U.S. medical technologies.

The U.S. and Japan have been working together on deregulation issues since 1989. In recent years, through the Enhanced Initiative on Deregulation and Policy (Enhanced Initiative), the U.S. and Japan have negotiated more expedient medical device approval processes and greater acceptance of foreign clinical data for both medical devices and pharmaceuticals, among other things. As a result of work under the Enhanced Initiative, in October 2000, the Ministry of Health, Labor, and Welfare (MHLW) revised the reimbursement pricing procedures to increase transparency and create more appropriate valuations of medical devices that recognize increased innovation. MHLW has also indicated that it will review the timing of granting reimbursement to encourage faster introduction and greater availability of innovative new products. Additional drug pricing reform is expected to be completed by April 1, 2002.

On June 30, 2001, the U.S. and Japan announced the establishment of the Japan-U.S. Economic Partnership for Growth, the fourth bilateral forum to focus on important bilateral issues such as regulatory reform. As part of this forum, a working group on medical devices and pharmaceuticals will focus on remaining issues related to medical devices, pharmaceuticals, and nutritional supplements. This new organization, which replaces the Enhanced Initiative framework, should help continue the regulatory reform work that has occurred so far, increasing market access for U.S. companies and allowing more choice for Japanese health care providers and consumers.