Strategies for Medtech and Biotech Businesses to Win Japan's Healthcare Market

In a recent webinar hosted by Ryan Shepard, Associate Director of Healthcare and Life Sciences at RGF Executive Search Japan, Rob Claar, Co-Founder and CEO of HekaBio K.K, shares expert insights on piloting Japan’s regulatory landscape, hastening market entry, and empowering Japan as powerful gateway to Asia Pacific region.

This article refines the core takeaways from Claar’s presentation, providing practical strategies for healthcare innovation and market access in Japan.

Why Japan?

The world’s third largest; Japan’s healthcare market offers unparalleled opportunities for biotech and medtech companies.

Valued for its reliability and scale, Japan’s healthcare market is a critical entry point for Asia pacific expansion. The ultra-aging society of Japan, with 30 percent of its population over 65, offers both opportunities and challenges. This populace drives huge demand for medical devices and innovative therapeutics, especially in cardiology, neurodegeneration, and oncology. Though, Japan struggles with drug lag, a major gap in the obtainability of innovative drugs and devices compared to the Europe and U.S.

The government of Japan is actively underscoring these challenges by facilitating regulatory hurdles. The recent amendments comprise excluding requirements for early-stage clinical trials with Japanese patients and permitting English-language submissions for new drug applications. These changes make Japan a lucrative and attractive destination for healthcare innovation, presenting a transparent and foreseeable regulatory process through the Pharmaceuticals and Medical Devices Agency – PMDA and Ministry of Health, Labour and Welfare – MHLW.

Also Read: Transforming Japan's Pharma Industry with Global Partnerships

Key Benefits of Entering Japan’s Healthcare Market

National Reimbursement System: Regardless the U.S., where businesses negotiate with private insurers, the national healthcare system of Japan allows immediate rollout post approval nationwide, restructuring market penetration.

Gateway to Asia: Across the countries in Asia Pacific like Australia, Taiwan, and Korea providing fast-track approvals for Japan-sanctioned innovations.

Market Stability and Size: Being a third-largest healthcare market, Japan accounts for a vital portion of global GDP, totaling 5-10 percent to value upon market approval of the company.

Tackling market entry barriers in Japan

Claar highlighted common barriers that deter companies from entering Japan, including perceived regulatory complexity, Japanese business culture, and a focus on the U.S. market. However, he debunked these myths, noting that the PMDA/MHLW process is well-scripted, transparent, and predictable. HekaBio assists companies in navigating these challenges by offering expertise in regulatory strategy, key opinion leader (KOL) relationships, and reimbursement negotiations.

Highlighting the common barriers, that daunts businesses from entering Japan, comprising perceived Japanese business culture, regulatory complexity, and an emphasis on the U.S market. Catering to this, HekaBio aids firms in overcoming these challenges by providing expertise in KOL (key opinion leader) relationships, regulatory strategy, and reimbursement negotiations.

By healthcare expenditure at 11.4 percent of GDP (OECD figures), the government is modifying hospitalization fees and co-pay structures to accomplish costs. For example, the usage of home-visit nursing is increasing, but bed occupancy and hospital visits are decreasing due to rised co-pays for those completed 65.

Strategy and Cultural Considerations

Knowing Japanese business culture and building long-term KOL relationships with stakeholders and doctors is vital for success. Notably, regardless the other markets, Japanese doctors desire direct engagement with leadership like chief medical officer or inventors, unlike the third-party representatives. Regular inspections by C-level executives can promote trust and speed up regulatory approval and reimbursement success.

For businesses which are hesitant to launch a local entity, Japan provides a competitive edge: the capability to appoint designated marketing authorization holder (MAH) and in-country caretaker without establishing a physical office. This level of flexibility and adaptability permits medtech and biotech firms to receive approvals in their own name while upholding a lean operation.

Responding to Healthcare Workforce Challenges

The healthcare workers of Japan face significant workloads, with nurses and doctors covering 4 times the number of hospital beds than their U.S. counterparts comparatively. The government is underscoring an anticipated shortage of more than 50,000 long-term care workers by 2040 through improved compensation and immigration. Though, the conservative approach of Japan regarding immigration bounds rapid workforce growth, demanding higher wages to attract talent.

Also Read: Japan: A Resilient, Low-Risk Haven for Real Estate Investment

Innovations in Digital Health and Remote Monitoring

Advanced digital health solutions including face reimbursement, remote monitoring challenges due to Japan’s slow implementation of health economic models. Meanwhile some digital therapeutics has gained regulatory approval where the reimbursement remains vague. The medtech and biotech companies can overcome this by focusing the patient-pay market or partnering with large employers to cover costs, harnessing Japan’s competitive labor market.

Japan: A Doorway to tap Asia Pacific opportunities

As a stringent regulatory authority, Japan’s reputation enhances its part as gateway to Asia Pacific. The regulatory approvals in Japan simplifies fast-tracking in nations like Australia, Taiwan, and Korea, while KOL relationships encompass influence across the region. As a key partner, Australia, where businesses can get a 43 percent reimbursement on clinical trial costs, allows cost-effective simultaneous development with Japan and U.S.

Strategic Insights for Global CEOs

Considering Japan for global CEOs, the topmost advice is to act early. The government of Japan is keen on eliminating drug lag, providing fast-track programs and subsidies for products approved overseas. Through synchronizing development with the U.S and harnessing Japan’s updated regulatory process, businesses can tap substantial value and establish a strong position in Asia Pacific.

Winning in Japan means winning in Asia

To summarize, “If you win Japan means you can win in Asia”. The healthcare market of Japan provides a steady and high-value opportunity for biotech and medtech companies. As Japan persists to minimize the regulatory hurdles and embrace healthcare innovation, now is the right time for the businesses to seize the right opportunity.