Masterix

Summary -With Japan’s aging population and rising public awareness about advanced dental treatment, dental aesthetics and preventive dental care, the dental device and material market in Japan is expected to show steady positive growth in the next few years. U.S. is the leading exporter of dental devices, the second leading exporter of dental materials, and is estimated to hold around a 30 percent share of the import market. As is the case for medical devices, Japan’s imports of dental devices and materials exceed its exports, and this trend is expected to continue. Thus, Japan continues to be an important profit center for U.S. dental device and material manufacturers. Advanced digital imaging equipment such as panoramic dental imaging systems, dental implant materials, advanced dental laboratory technologies such as CAD/CAM systems, preventive technologies, etc., have good sales potential. That being said, the Japanese market is not easy to enter due to cumbersome regulatory requirements and local competition.

Market Demand- The dental device and material market has been growing steadily over the past five years. While the market is not growing rapidly it is expected to show steady positive growth in the next few years due to Japan’s aging population and rising public awareness about advanced dental treatment, dental aesthetics and preventive dental care. As Japan’s population is aging, there has been increasing emphasis on good oral health. In December 2000, the Japan Dental Association proposed the establishment of the “8020 Promotion Foundation” which encourages Japanese people to keep 20 or more of their own teeth until the age of 80. The foundation has been very active in promoting better oral health among the Japanese population over the past ten years. Multiple studies have shown that people with periodontal diseases were more likely to develop some other physical diseases when compared to people without periodontal diseases. A special Foundation study on oral health and aspiration pneumonia showed that better oral health care could prevent aspiration pneumonia among elderly bedridden people. Also, with Japan’s aging population, the number of people aged 35 or above (especially between the ages of 55 and 74) are expected to have increasing high dental consultation needs since people in that age group have the most need for dental care according to the Ministry of Health, Labour and Welfare (MHLW).

In addition to the market demand from an aging society, there has been an increased perceived need to straighten teeth, correct overbites or prevent bad breath. In 2007, the Japanese Association for Dental Science and the Japan Dental Trade Association issued the “Dental Device Industry Vision”. The Dental Industry Vision showed a changing consciousness among Japanese people regarding their oral health. The Vision stated that the ratio of people who are satisfied with their oral health is limited to about 45 percent, whereas the ration of people who are satisfied with their general health is closer to 70 percent. Teeth color, teeth alignment, bad breath, etc., have been reported as major sources of discontent regarding oral health. The report further stated that almost 80 percent of Japanese think it necessary to have regular checkups at dental clinics, although the number of people who actually have regular checkups is as low as 25 percent. Also according to the report, more than 55 percent of Japanese are willing to consider dental treatments that are not covered by the National Health Insurance (NHI). In other words, people are willing to consider paying more for advanced dental work such as dental implants, orthodontics, etc. In addition, “home dentistry”, where the dentist visits invalids at home to provide dental care, will also increase due to Japan’s aging population.

Summary – Japan continues to be the second largest pharmaceuticals market in the world after the U.S. However, Japan’s market for generic drugs still lags far behind the United States, and other developed countries, with generics holding only an 18.7 percent share of the prescription drug market, in volume terms, in 2007. As a result of a rapidly expanding elderly population, burgeoning national healthcare expenditures are creating market conditions favorable for increased sales of generic drugs in Japan. The Japanese Government regards the promotion of generics as a key political solution to reduce soaring healthcare costs. In June 2007, Japan decided to increase the use of generics to at least 30 percent of all prescription drugs, on a volume basis, by FY 2012. A number of pharmaceutical manufacturers, including some foreign pharmaceutical companies, have already entered Japan’s generic drugs market in anticipation of potential increases in demand for generic drugs resulting from healthcare reform. In 2006, the size of the generic drugs market in Japan was $3.35 billion (Yen 390 billion). In the near term, the market is expected to increase in a measured, rather than a dramatic, fashion since it may take time for both physicians and pharmacists to become confident about the quality of generic drugs and for the general public to become comfortable with the idea of using generic, as opposed to branded, drugs. The Yano Research Institute, a Japanese research company, estimated that the Japanese market for generics would increase to $6.8 billion (Yen 790 billion) by 2012.

Market Demand – Japan’s healthcare system receives high marks for providing both basic care and a free choice of doctors to all citizens, at an affordable cost, under the National Health Insurance (NHI) system established in 1961. The country enjoys both the world’s highest life expectancy along with the lowest rate of infant mortality. However, the country has been confronting serious financial and social difficulties caused by its aging population. This situation has created market conditions favorable for increased sales of generic drugs in Japan. According to the Ministry of Health, Labour and Welfare (MHLW), in 2006 Japan’s healthcare expenditures reached $285 billion (Yen 33.1 trillion at US$1=JPYen 116.31), the highest level in the past four years. Due to the rapidly aging Japanese population, expenditures for the elderly (over 70 years old) were growing faster than overall national health expenditures. Elderly care represented 41.1 percent and those aged 65 and over represented 51.7 percent of total national health expenditures in 2006. In the absence of cost reduction measures, MHLW estimates that Japan’s healthcare expenditures will increase to $594 billion (Yen 69 trillion) by 2025 due to the country’s aging population. According to the National Institute of Population and Social Security Research, the elderly will increasingly make up a significant percentage of the total Japanese population. The number of elderly persons is projected to reach 28.7 percent in 2025 and 35.7 percent in 2050.

Japan has been taking measures to curb the growth of the nation’s healthcare expenditures. The measures were mainly focused on addressing the immediate budget shortfall in Japan’s healthcare system, including cutting prices of branded drugs. However, over time this approach has become less effective in containing skyrocketing healthcare expenditures. As a result, the promotion of generics became one of Japan’s main policies to contain soaring healthcare costs. In June 2007, the Japanese Cabinet approved the 2007 Basic Policies for Economic and Fiscal Management and Structural Reform, known as “honebuto no hoshin” or “thick-boned policies”, drafted by the Japanese Cabinet Office’s Council on Economic and Fiscal Policy (CEFP). The policies called for an increase in the share of generic drugs by at least 30 percent, on a volume basis, by Japan fiscal year (JFY – from April to March) 2012 as one of the major goals. MHLW estimated that this action would save $3.4 billion (Yen 400 billion) in healthcare expenditures by 2012. The importance ofpromoting generic drugs was also emphasized in the “New Pharmaceutical Industry Vision”, a major medical policy paper issued by the MHLW in August 2007 (http://www.mhlw.go.jp/bunya/iryou/shinkou/dl/01.pdf), which aimed to develop an internationally competitive drug industry and make Japan an attractive investment destination. The Vision also stated that the expansion of generic drug use was a key political solution to curb the rise in healthcare expenditures. Further promotion of generic drugs would bring down the overall cost of prescription drugs and thus free up financial resources which could be redirected to supporting expenditures for innovative products. Subsequently, in October 2007, MHLW created the “Action Program to Promote Reassured Use of Generics” to increase the use of generic drugs. The program included the creation of a council in each prefecture, measures to ensure good quality, guidance to manufacturers to ensure regular supply, and revision of the prescription form.

Most Japanese doctors prefer prescribing branded drugs. As a specific action to promote generic drug use, in the JFY 2006 revision of medical fees, MHLW introduced a prescription form which required physicians to check a designated box on the form if generic drugs were to be substituted for branded drugs. However, this measure produced very few results as doctors had little motivation to switch to generic drugs. As a result, in the JFY 2008 revision of medical fees, MHLW implemented a revised the prescription form which now requires physicians to check a designated box on the form if they do not wish to substitute generic drugs in place of branded drugs. With the revised 2008 form, pharmacists were allowed to replace branded drugs, prescribed by doctors, with generic drugs if the patient agreed. As part of the JFY 2008 revision, in order to encourage pharmacies to dispense more generic drugs, MHLW also introduced a premium system whereby pharmacies could receive a four-point ($3.5 or Yen 40) premium if they dispensed generic drugs for 30 percent or more of total prescriptions. At the same time, MHLW, decreased the basic dispensing fees by two points ($1.7 or Yen 20).

Another key factor that promoted the use of generic drugs was an expansion of the flat sum reimbursement system, the “Diagnostic Procedure Combination” (DPC), in 2003. Similar to the Diagnostic Related Group (DRG) system in the United States, the use of generic drugs was more economic under the DPC system. In fact, the use of generic drugs at DPC hospitals has increased steadily since 2003. In the beginning, the DPC system was primarily used in 82 private and public university hospitals. As of October 2008, there were 718 DPC hospitals. Currently, there are 710 hospitals which are preparing to become DPC hospitals.

Approximately 30 percent of the total number of beds for general patients belong to the 718 existing DPC hospitals and more than 50 percent of the total number of beds will belong to DPC hospitals when the additional 710 hospitals have become DPC establishments.

http://www.globaltrade.net/international-trade-import-exports/f/market-research/text/Japan/Hygiene-Cosmetics-Health-Medical-Equipment-Generic-Drugs-In-Japan.html

Advanced Medical Technology Association (AdvaMed) chairman James Mazzo, president of Abbott Medical Optics, and AdvaMed president and CEO Stephen Ubl, have urged the Japanese government to adopt policies to improve patient access to medical devices and diagnostics.

Published: 12-Nov-2010

The meetings focused on ways Japan could improve its regulatory and reimbursement systems, which delay by several years Japanese patient access to medical technology available in the EU and US.Mazzo and Ubl highlighted that Japan’s policies are inconsistent with the government’s ‘New Vision for the Medical Device and Medical Technology Industry’ of encouraging a vibrant domestic medical technology industry.

Ubl said that despite some recent improvements, Japan’s medical device approval process is still considered the most burdensome in the world.  “When you combine a difficult regulatory system with uncertain reimbursement rules – that are based not on the high costs of doing business in Japan but on comparisons with prices in completely unrelated foreign markets it is easy to see why our members are increasingly passing Japan by,” Ubl said.Mazzo said that their meetings this week were very productive and look forward to working with officials in Japan to ensure that regulatory and reimbursement policies are in place that facilitate Japanese patient access to the most safe and effective medical devices and diagnostics available.

Source: Medical Device Business Review