Executive Summary
Market Entry
Current Market Trends
Best Prospects
Market Size
Main Competitors
Current Demand
Registration Process
Reimbursement
Barriers
Procurement & Tenders
Trade Events
Local Associations
Government Links
Frequently Asked Questions
U.S. Commercial Service Contact Information
Tab Options
Executive Summary
Market Entry
Current Market Trends
Best Prospects
Market Size
Main Competitors
Current Demand
Registration Process
Reimbursement
Barriers
Procurement & Tenders
Trade Events
Local Associations
Government Links
Frequently Asked Questions
U.S. Commercial Service Contact Information
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Executive Summary
Japan’s market for medical devices and materials continues to be among the largest in the world. According to the latest official figures from the Ministry of Health, Labour and Welfare (MHLW) Annual Pharmaceutical Production Statistics, the Japanese market for medical devices and materials in 2020 was approximately $26 billion USD(USD 1 = Yen 106.8), down 4.8% from 2019 in yen terms. The market remains heavily dependent on imports, especially sophisticated medical devices. The demand for advanced medical technologies is expected to increase since Japan has a fast-aging demographic profile, with relatively prosperous seniors holding increasing expectations for improved quality of life in their later years. Fitch Solutions has estimated that Japan’s medical device market will exhibit a compound annual growth rate of 5.9% in yen terms from 2021 to 2026.
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Market Entry
A Japanese company that intends to market a U.S. medical device needs to receive a “license for manufacturing/marketing business” (seizo hanbai gyo kyoka). The company holding this license is called a “Marketing Authorization Holder” (MAH). An MAH must be physically located in Japan. The MAH must obtain marketing approval (hanbai shonin) for each product. A U.S. manufacturer intending to manufacture medical devices in the United States and export them to Japan is required to be registered by the Pharmaceutical and Medical Device Agency (PMDA) as a “Registered Foreign Manufacturer” in the same way that a Japanese manufacturer is registered. Typically, an MAH can make a registration application on behalf of a U.S. manufacturer. A U.S. manufacturer that lacks a Japanese subsidiary can receive and maintain the marketing approval under its own name. However, the U.S. firm will need to designate an MAH when applying for product approval. This Designated MAH (D-MAH) will have to assume the same responsibilities as an MAH. A D-MAH can be a regulatory consulting company or an importer/distributor that holds an MAH license. When a regulatory consultant is designated as an MAH, a U.S. company will need to have a Japanese distribution partner since a regulatory consulting company will not act as a distributor. If a U.S. firm has a subsidiary in Japan, that subsidiary can become an MAH and then obtain the marketing approval for each product. If a U.S. firm does not have a subsidiary in Japan, the company has three options to consider in order to conduct business in Japan:
1. The U.S. firm can ask their importer/distributor to obtain the marketing approval under the name of the importer/distributor. In this case, the importer/distributor will have complete control of the U.S. firm’s products when the products are marketed in Japan.
2. The U.S. firm can obtain the marketing approval under their own name by designating their importer/distributor as a D-MAH.
3. The U.S. firm can obtain the marketing approval under their own name via a neutral third party such as regulatory consulting firms that have a “license for manufacturing/marketing business” by designating them as a D-MAH.
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Current Market Trends
The Japanese market for medical devices is large and established at $26 billion USD in 2020. The market remains heavily dependent on imports, especially sophisticated medical devices such as pacemakers, PTCA catheters and orthopedic implants. Recently, MHLW has taken several steps to promote early product commercialization of stand-alone medical software, or Software as a Medical Device (SaMD) as Japan lags other countries in the digital health sector. For example, the U.S. approves five times more SaMD products, such as those that utilize AI (artificial intelligence) and machine learning, than does Japan. In November 2020, MHLW launched a strategy called DASH for SaMD, or Digital Transformation Action Strategies in Healthcare for SaMD. Then, in April 2021, it established an office dedicated to SaMD development, as did the Pharmaceutical and Medical Device Agency (PMDA), which is akin to the FDA in the U.S. In addition, MHLW established a SaMD study group under one of its advisory councils, and – in collaboration with PMDA – set up an integrated contact desk to take inquiries on application criteria, regulatory affairs, and reimbursement.
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Best Prospects
Innovative new medical technologies and therapies that alleviate pain, complement lost functions, and improve quality of life, including minimally invasive medical devices.
Medical technologies and diagnostics utilizing Artificial Intelligence (AI)/Internet of things (IoT).
Other area includes in-home care, self-care and preventive care medical devices and products.
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Market Size
Healthcare spending
Yen 44,394 billion (2019)
… as percent of GDP
7.93% (2019)
… of which spent on inpatient services
38.1% (2019)
… of which spent on pharmaceuticals
17.7% (2019)
… of which spent on outpatient services
33.9% (2019)
Hospitals, Procedures, Healthcare Professionals UN
Number of hospitals
8,300 (2019)
…Public
1,522 (2019)
…Private and others
6,778 (2019)
Number of hospital beds
1,620,097 (2019)
… available beds per 100,000
1,212.1 (2019)
…of which in general hospitals
1,529,2155 (2019)
…of which in general clinics
90,882 (2019)
Physicians
323,700 (2020)
…of which general surgeons
13,211 (2020)
…of which general internists
61,514 (2020)
…of which pediatricians
17,997 (2020)
Dentists
107,443 (2020)
Demographics
Population
124,214,766 (2022 est.)
Life expectancy men/women
81.92/87.9 (2022 est.)
Infant mortality
1.9 deaths/1,000 live births (2022 est.)
Percent of population older than 65
29.18% (2022 est.)
…projection, 2036
33.3%
Annual deaths
11.59 deaths/1,000 population (2022 est.)
…caused by [highest disease burden]
Malignant neoplasms
…caused by [second highest]
Heart diseases
Prevalence of [fastest growing disease burden]
Malignant neoplasms
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Main Competitors
The major product categories comprising Japan’s domestic medical device production include diagnostic imaging equipment, therapeutic and surgical equipment, bio phenomena measuring and monitoring systems, home therapeutic equipment, dialyzers, and endoscopes. Japanese medical device companies maintain high market share in these product segments. Top Japanese medical device companies, in terms of sales, include Terumo, NIPRO, Olympus Medical Systems, Hitachi Medico, Nihon Koden, and Fukuda Denshi. U.S. medical device companies produce a wide variety of medical devices, but they are especially strong in sophisticated segments of the medical market such as pacemakers, advanced interventional cardiology products, orthopedic implants, laser surgical equipment, and advanced diagnostic imaging equipment. Most major U.S. and foreign medical device firms have either a Japan office or a Japanese partner. As such, new-to-market U.S. companies will face strong competition not only from Japanese companies but also from American and multinational firms already in the market.
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Current Demand
In March 2021, Japan’s Office of Healthcare Policy of the Cabinet Secretariat issued a survey on Japan’s competitiveness in the medical devices and healthcare industry. The survey identified diseases with high medical needs in Japan based on factors like top causes of death and top diseases that require support and long-term care. The survey listed (1) malignant neoplasm; (2) diabetes; (3) cardiovascular disease; (4) Alzheimer’s and other dementia; (5) pneumonia; (6) kidney disease; and (7) frailty and sarcopenia, including weakness, fractures, and falls due to old age. It also described characteristics of devices and functions needed in the future. Those include devices (including apps) that promote behavioral changes, visualize risks, and monitor the progress of prognosis; devices and diagnostics that are minimally invasive, advanced, and automated utilizing AI; genetic testing devices; and robot assisted devices among others.
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Registration Process
Japan’s medical device classification system is based on the Japanese Medical Device Nomenclature (JMDN) codes which are different from U.S. and European classifications. Review processes for medical devices differ depending on the classification. Medical devices are classified by risk level into four classes (Class 1, Class 2, Class 3 and Class 4). Class 1 (lowest risk) is defined as general medical devices; Class 2 (relatively low risk) is defined as controlled medical devices; Class 3 (relatively high risk) and Class 4 (highest risk) are defined as specifically controlled devices. General medical devices can be marketed by submitting a notification to the Pharmaceutical and Medical Device Agency (PMDA). Controlled medical devices, with established certification standards, can be reviewed by third-party certification bodies. Controlled medical devices without certification standards and specifically controlled devices must be reviewed by PMDA and approved by MHLW.
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Reimbursement
In order to effectively market most medical devices in Japan, the products must be listed in Japan’s reimbursement system. The reimbursement rate, or price, granted to a given medical device by the MHLW is effective under all insurance schemes, whether public, private or employer based. There are eight product reimbursement classifications. For further details regarding the medical device reimbursement system in Japan, please see an article titled “Reimbursement pricing for new medical devices in Japan: Is the evaluation of innovation appropriate?” written by M. Tamura, S. Nakano and T. Sugahara for the International Journal of Health Planning and Management at https://onlinelibrary.wiley.com/doi/full/10.1002/hpm.2719 .
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Barriers
While the market for U.S. medical equipment in Japan remains strong, U.S. firms face challenges with pricing and reimbursement due to the Government of Japan’s (GOJ) efforts to contain overall healthcare costs because of Japan’s aging population.
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Procurement & Tenders
In order to participate in Government procurements, the seller must usually be qualified based on their history of operations, financial status, etc. For further information about the GOJ’s procurement, please see the Ministry of Foreign Affair’s website at http://www.mofa.go.jp/policy/economy/procurement/index.html .
Also, the Japan External Trade Organization (JETRO) provides the Japanese Government Procurement Database System on their website at https://www.jetro.go.jp/en/database/procurement/ .
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Local Associations
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Government Links
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Frequently Asked Questions
1. Can we file a product approval application to PMDA in a language other than Japanese?
2. Can we submit foreign clinical data for a product approval in Japan?
3. Can we own a product approval status under our own name?
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U.S. Commercial Service Contact Information
Name: Hiroyuki Hanawa Hiroyuki.Hanawa@trade.gov
