The Japanese Healthcare Market

Historically, Japan had practiced a closed-door policy preventing entry of foreign interests.  But recently, it has become easier for foreign companies to infiltrate the Japanese medical market since the Japanese government eliminated all tariffs and quotas in medical products when it entered the harmonized system in 1988.  Imported medical products, like all imported products, however, are still subject to 3% consumption tax charged on cost, insurance and freight value.  Registration procedures and approval process to import medical products remain to be complicated although drastic changes have been adapted to improve the process. 

Importation of medical products to Japan is qualified upon a firm’s completion of registration requirements and acquisition of the approval (Shonin) and licensing (Kyoka).  The Shonin and Kyoka systems are based on the Pharmaceutical Affairs Law, thus, strict government inspection of medical equipment can be expected, ensuring that the medical equipment is safe.  Upon a product’s registration and acquisition of MHLW approval, the Health Insurance Bureau of the MHLW settles reimbursement and the medical product is classified as to one of three categories:  technical fee; Special Treatment Materials (STMs) and Highly Advanced Medical Technology Systems (HAMTS).  A foreign manufacturer who does not wish to set up a company in Japan may choose to (1) allow the distributor to register the company’s product indirectly under the distributor’s name or (2) directly register the company’s product under its own name with the help of an In-Country Caretaker (ICC) which has recently been replaced by a Market Authorization Holder (MAH) system.