EXHIBITS

              1.           White Paper
2.           Sample Letter to JMEA Members
3.           Sample Letter to Legislators
4.           Sample Op-Ed Article
5.           Schedule
6.           Budget

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Exhibit 1. White Paper

                                  

Deregulation of the Pharmaceutical Affairs Law

White Paper

 

1. Issue

 

JMEA urges the Ministry of Health and Welfare (MHW) to deregulate the Pharmaceutical Affairs Law. This law was established in 1943 in order to protect and improve public health by regulating medical equipment quality, effectiveness, and safety. In response to recent wide-ranging innovations in medical technology and the shortening of medical equipment life-cycles, the law was amended in June 1994 with the goal of speeding the procedures for obtaining approval for new medical products.  However, it is still difficult for the medical equipment industry to introduce new products because Japan’s approval process for new medical equipment is the longest of any major developed country. Shortening product approval times will help Japanese medical manufacturers compete by speeding the introduction of new cost-effective medical equipment. Speeding the acceptance of new medical technology will also reduce health care costs and improve patient treatment options.

 

2. Background

Regulatory System

Because medical equipment directly impacts human lives, the Pharmaceuticals Law regulates all aspects of the medical equipment industry, from manufacturing and importing to post-marketing activities.

The standard processing period for obtaining approval for a product is 12 months for new medical equipment—products that are significantly different from previously approved products or those new in indications, effects or uses.  It takes up to four months to gain approval for "me-too" medical equipment—equipment that is essentially the same as equipment already on the market. The Pharmaceutical and Medical Devices Evaluation Center (PMDEC) of the Ministry of Health and Welfare is the authority that makes equipment approvals.  

Approval Procedures for New Products. PMDEC reviews applications for new product approvals in consultation with the Central Pharmaceutical Affairs Council. PMDEC then makes a final approval decision.  

Approval Procedures for “Me-Too” Products. For “me-too” equipment, PMDEC forwards applications to the Japan Association for the Advanced Medical Equipment (JAAME), the independent organization designated by the Japanese government for investigating the equivalence of structures, usage, indications, performance, etc. of “me-too” medical products.   After JAAME’s equivalency examination, PMDEC performs all other necessary evaluations and then makes a final approval decision based on its findings.  

Non-approval Products. MHW allows some new products to be sold without MHW approval.  Under the Pharmaceuticals Law, MHW is required to maintain a list of products that do not need to obtain approval.

 

3. Analysis

Unnecessary bureaucratic procedures for approving new medical equipment

The Japanese regulatory system blocks medical equipment manufacturers from obtaining product approvals in a timely manner. Currently it takes one year to obtain approval for new products in Japan.  Approval procedures in the United States and most European countries are significantly faster than in Japan.  

One reason why Japan’s approval process is long is that MHW lacks adequate personnel to handle all approval applications quickly. Additionally, in the case of "me-too" products, the review process is redundant. JAAME reviews “me-too” applications to determine whether a product is equivalent to other, already approved products. It then reports its results to PMDEC. However, PMDEC sometimes rejects JAAME’s results and conducts its own review.  

      
MHW’s Policy  

Another problem with Japan’s regulatory system is MHW’s reluctance to approve new medical products, especially high-risk products used inside the human body. MHW didn’t approve the Implantable Cardioverter Defibrillator (ICD) until it had been in use in other countries for ten years, although the device was known to save $46,500 per patient and to provide a better treatment option for many patients. 

4. Proposed Actions

On behalf of its member companies, JMEA strongly encourages MHW to take action to reduce the obstacles to introducing innovative, cost-effective new medical equipment into the Japanese market. Specifically, JMEA urges MHW to take the following actions without delay:

Ø      change the Pharmaceutical Affairs Law to:

• shorten the approval process for new products from one year to six months;
• prohibit the redundant examination of “me-too” products conducted by both JAAME and PMDEC;
• increase the number of items that do not require MHW approval before being marketed;

Ø      increase the number of personnel that review applications in JAAME and PMDEC; and

Ø      recognize the benefits of advanced medical equipment.

 

Japan’s population is aging rapidly.  The introduction of cost-effective and innovative medical equipment will be crucial to containing health care expenditures and to provide for an increasingly aged population.

Exhibit 2. Sample Letter to JMEA Members

 

Dear JMEA Members:

 I am writing to ask for your support for changing the Pharmaceutical Affairs Law. Under the current law, it is difficult to introduce new medical equipment into the market. Indeed, Japan’s approval process for medical equipment is longer than that of any other major developed country. In today’s world of increasingly short product life-cycles, quick approval for new products directly affects a product’s profitability. 

Japan’s market for medical equipment is the second largest in the world.  The domestic demand for medical equipment was 2,028 billion yen in 1998.  The value of the market is expected to be 8,319 billion yen in 2025.  If the regulatory system were deregulated, the market would become even larger. 

JMEA is requesting that the Ministry of Health and Welfare:

1. change the Pharmaceutical Law in order to:
   • shorten the approval period from one year to six months for new products and four months to two month for “me-too” products;
   • prohibit the redundant examination of “me-too” products conducted by both the Japan Association for the Advanced Medical Equipment (JAAME) and the Pharmaceutical and Medical Devices Evaluation Center (PMDEC);
   • increase the number of medical products that do not require MHW approval; and

2. increase the number of JAAME and PMDEC personnel that review product applications.

 

I hope all JMEA members will support this proposal. Additionally, I ask that you respond to the questionnaire that will be sent to you in ten days.  The objective of this questionnaire is to collect accurate information on how current regulations negatively impact the medical equipment industry.  Your honest answers will help to identify problems prevailing in the regulatory system. 

 

If you have questions, please contact me.

Sincerely,
President of the Japan Medical Equipment Association

Exhibit 3.  Sample Letter to Legislators

   
Dear Members of the Advisory Council on Social Security:
  

On behalf of Japan Medical Equipment Association (JMEA) members, I am writing to request your support for changing the Pharmaceutical Affairs Law.  Under the current law, it is difficult to introduce new medical equipment into the market. Yet new, cost-effective medical technology can help reduce health care costs and improve patient care—goals which are becoming increasingly important as Japan’s population ages. The timely introduction of new medical equipment will significantly reduce health care expenditures in the long run. Currently, it takes longer to obtain approval for new medical equipment in Japan than in any other major developed country. 

As you know, the Ministry of Health and Welfare (MHW) estimates that over 25 percent of Japan’s population will be over the age of 65 by the year 2025. Japan’s health care expenditure and the ratio of this expenditure to national income is already steadily increasing.  In 1999 the total medical expenditure was 30 trillion yen.  Estimates are that the total will reach 141 trillion yen in 2025.  

The containment of the health care costs is a crucial issue for building a sustainable and stable social welfare system for the future.  I understand that it is for this reason that the Prime Minister established the Advisory Council on Social Security to explore avenues for increasing efficiency within the country’s health care system.  

The containment of health care costs is JMEA’s goal, as well as the Council’s. We hope that you will support our efforts to persuade MHW to:

1. change the Pharmaceutical Law in order to:
   li>shorten the product approval process from one year to six months for new products and from four months to two month for “me-too” products;
   • prohibit the redundant examination of “me-too” products conducted by both the Japan Association for the Advanced Medical Equipment (JAAME) and the Pharmaceutical and Medical Devices Evaluation Center (PMDEC);
   • increase the number of items on the list of medical products that do not require MHW approval before being put on the market; and

2. increase the number of JAAME and PMDEC personnel who review product applications.
   

I am enclosing a report (see Appendix 9) that shows how the rapid introduction of new medical equipment can reduce health care expenditures and improve patient care. If you have questions, please contact me. 

 

Sincerely,
President of the Japan Medical Equipment Association