Publication Number: 3909

Report Title: Medical Devices and Equipment: Competitive Conditions Affecting U.S. Trade in Japan and Other Principal Foreign Markets

Investigation Number: 332-474

Author's name(s): William Deese, Queena Fan, Teresa Finn, Eric Forden, Alexander Hammer, Cathy Jabara, Christopher Johnson, Kate Linton, Elizabeth Nesbitt, Heather Sykes

Date Published: March 2007

Report Description/Introductory Text: This study examines competitive conditions, including regulatory conditions, affecting U.S. sales and trade of medical devices in Japan and other principal foreign markets during 2001–05. An examination of regulatory cost and approval data by the U.S. International Trade Commission suggests that average total approval times for new medical devices were higher in Japan during the period than in other principal global markets, including the United States and the European Union (EU). Despite Japan's limited success in reducing these times in 2005 after reforms to Japan's Pharmaceutical Affairs Law took effect, significant challenges remain. Innovative, advanced technology medical devices are the most adversely affected by the Japanese regulatory process. U.S. medical device firms are the leading developers and exporters of such products and may be disproportionately affected. Medical device firms generally prefer the EU medical device approval system over the U.S. and Japanese approval systems, due to its shorter approval times. Although medical device regulation in the United States remains tightly controlled, it has become more predictable in recent years, and review times have steadily declined.

The United States, the EU, and Japan together account for about 90 percent of global production and consumption of medical devices. The study finds that the U.S. medical device industry is the most competitive in the world, recognized for its ability to continually design, develop, and place innovative medical devices in U.S. and foreign markets. This can be attributed in part to a higher level of research and development investment and greater availability of venture capital, compared with the EU and Japanese industries. While both U.S. and EU firms produce a broad variety of medical devices, ranging from general hospital supplies to more advanced technology products, including advanced cardiovascular devices, Japanese firms are more narrowly focused on medical imaging devices and commodity hospital supplies. Government healthcare and regulatory policies appear to have inhibited the growth of the Japanese medical device industry, and Japan's global share of related manufacturing has declined throughout the past decade.



Topics Covered: medical devices and equipment, medical device, competitive conditions, healthcare, regulatory, regulatory costs, regulation, Pharmaceutical Affairs Law, competition, innovation, research and development, venture capital, hospital supplies, cardiovascular, medical imaging, manufacturing, trade, U.S. trade, trade agreements

Countries: Japan, United States, China

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