The medical devices market in Japan is increasing at a steady pace and presents countless opportunities for Wisconsin exporters. One of WEDC’s trade representatives recently completed an analysis of the sector that can help companies develop a strategy for the market. Below is a summary of the report.
Japan ranks third in the global medical devices market after the U.S. and China, owing to the presence of a sophisticated health care infrastructure, a large aging population, and growing prevalence of several chronic diseases that require medical devices for diagnosis and treatment. The Japanese medical devices market totaled $36 billion in 2017 and is expected to reach $41.5 billion by 2022, growing at a compound annual growth rate (CAGR) of 2.91 percent during the forecast period.
Across many mature economies, socioeconomic trends have resulted in aging populations, with profound impact on health care systems, workforce and national budget. The health care system in Japan is increasingly focused on the elderly, since more than 25 percent of the Japanese population is older than 65, giving the country the highest percentage of senior citizens in the world. The Japanese health care system places increasing emphasis on improved treatment and health maintenance. One of the major agendas of the country’s health care reform policy is to reduce the length of hospital stays and shift treatment toward home care.
Japan is a very attractive market for foreign manufacturers, especially those marketing devices used in treating lifestyle and age-related conditions. Within the medical device market, there is strong demand for interventional cardiology equipment, pacemakers, orthopedic implants, home care, preventative care, and innovative technologies, further pushing investors towards Japanese medical device companies. This will generate further opportunity for the types of innovative solutions at which Wisconsin's industry excels.
Generally, Japanese consumers and doctors prefer products produced by Japanese companies. In terms of revenue, leading Japanese medical device companies include Terumo, NIPRO, Olympus Medical Systems, Toshiba Medical Systems, Hitachi Medico, Nihon Koden and Fukuda Denshi. Although these firms manufacture diagnostic imaging devices, therapeutic and surgical equipment, bio-phenomena measuring and monitoring systems, home therapeutics, dialyzers and endoscopes both for the Japanese market and the global market, they lack expertise in advanced technologies, and largely rely on imports for this. Not only are there opportunities from U.S. medical device manufacturers, but there are gaps that Japanese companies are not meeting in the areas of health IT (digital health) and regenerative medicine.
Western companies have been able to succeed in Japan by offering a larger product selection and maintaining a strong reputation for quality devices with Japan’s key opinion leaders. U.S. exporters hold a 23 percent market share according to the official figures.
Foreign manufacturers that seek to sell their medical devices in Japan must do so through the Japanese Pharmaceutical Affairs Law, which also applies to pharmaceuticals and cosmetics. Under the law, Japan’s Minister of Health, Labor and Welfare must grant marketing approval, a license for the marketing authorization holder, and a manufacturer license.
Wisconsin companies wishing to enter the Japanese market should strongly consider partnering with a reputable, well-connected agent or distributor and cultivating business contacts through frequent personal visits. Japanese business culture attaches a high degree of importance to personal relationships, and these take time to establish and nurture. The nature and pace of deal-making in Japan are quite different from those in the U.S.
Companies in the medical devices sector should take advantage of a special trade show package that is being offered for the 2019 Japan Medical Expo, Feb. 20-22, 2019, in Osaka, Japan. WEDC, in partnership with REED Expos and the U.S. Commercial Service, and with funding from the U.S. Small Business Administration’s STEP grant, is offering four exhibition packages including booth space, marketing and interpreters at the Japan Medical Expo.
To obtain more information about exhibition options, please contact Monica Wahlberg, WEDC's international grants manager, at 608.210.6734 or monica.wahlberg@wedc.org.
To discuss the Japanese market in general, contact Khay Khong, WEDC’s market development director for Asia, at 608.210.6868 or khay.khong@wedc.org.
