In late June 2014, the Japanese Cabinet approved Prime Minister Shinzo Abe’s new economic growth strategy. One of the proposed reforms is to deregulate some of Japan’s highly protected industries — including healthcare. A key pillar of Abe’s economic strategy is expanding coverage of “mixed medical treatments”. Reform of the Japanese mixed medical treatment system should lead to increased opportunities for Western medical companies in Asia’s largest healthcare market. An example of a mixed medical treatment would be combining anti-cancer drugs that have not been approved in Japan with approved anti-cancer drugs for patients with late stage cancers. Western companies may soon be able to provide advanced medical products to Japanese patients in many more situations — without medical device or pharmaceutical product approval in Japan.
Mixed medical treatments
Mixed medical treatment (kongo shinryo) is a combination of treatments: one treatment involves devices or drugs approved in Japan and covered by the national health insurance schemes, while the other treatment (device or drug) is not registered in Japan and is excluded from the Japanese reimbursement system.
Under the current system, a patient must pay out of pocket for both treatments including the one that is reimbursed and the one that is not reimbursed. Mixed medical treatments are generally limited in Japan out of concern for efficacy and safety. Today, Japan’s Ministry of Health, Labor and Welfare (MHLW) only allows 17 procedures for mixed medical treatments. There are also limitations in both the type of Japanese medical institutions able to provide mixed medical treatments and the range of patients eligible for such care. To date, Japan has only allowed 94 mixed medical treatments, primarily for medical research purposes. Critics of the current system say it allows for not enough mixed medical treatments.
Expanding coverage of mixed medical treatments
Abe’s government has pledged to overhaul this system, and expand the possibilities for more mixed medical treatments. First, patients in Japan will be able to directly apply for mixed medical treatments which they cannot do on their own now. In fact, the Abe administration has said that patients’ requests for mixed combination treatments will be given (in more cases) approval priority. This will expand the range of patients eligible for these treatments, as long as the patients can afford the new drugs and new devices.
The time required to receive approval of mixed medical treatments in Japan will also be reduced. Currently, the waiting period is approximately six to seven months. However, it is expected that this timeline will be reduced to less than two months.
Applications for mixed medical treatments will be sent to one or more of the 15 core Japanese hospitals that have been designated as the primary institutions for clinical trials in Japan. If a patient requests a mixed medical treatment that has a precedent, the request will be sent to the hospital(s) that has provided the treatment in the past. The hospital(s) will decide whether to approve the mixed medical treatment request within two weeks. If approved, the patient can receive the mixed medical treatment at a core hospital that has experience with the treatment or at a local hospital.
If patients request potentially risky mixed treatments without precedents in Japan, the requests will be sent to the core Japanese clinical trial hospitals. These applications will be reviewed by a governmental panel of experts, and a decision will be made within six weeks. If the request is approved, the patient will be given the mixed treatment at one of the 15 core hospitals.
It is expected that Japanese patients will request pharmaceuticals and medical devices that are approved and used in other countries, but have not yet been approved in Japan or authorized for coverage under the Japanese health insurance system. It is likely that more Western medical companies’ products that are currently marketed in the U.S., Europe and other advanced countries will be sold for use in mixed medical treatments. Hence, Western medical companies should see expanded market opportunity in Japan once these reforms come into effect.
Furthermore, with the new reforms, Japanese patients will no longer have to pay out of pocket for the medical product (or portion of the treatment) that has already been approved in Japan. Instead, this portion will now be covered by a patient’s national health insurance for mixed medical treatments. However, Japanese patients will still have to pay in full for the medical technologies and drugs not registered and not covered by the insurance system. Therefore, these mixed medical treatments — and Western medical companies’ products — will be more accessible to a much larger segment of the Japanese population.
Future medical environment
In addition to expanding medical options for Japanese patients, this reform is aimed at promoting advanced medical technology in Japan. The Abe administration hopes that Japanese businesses will increase their investment in developing more advanced medical care products. Abe’s proposed economic growth strategy, including the mixed medical treatment reforms, is scheduled for approval by the Japanese Diet next year. The new policies will likely go into force in the 2016 fiscal year.
About the Author:
Ames Gross is president and founder of Pacific Bridge Medical, a Bethesda, Md.-based consulting firm that helps medical companies doing business in the Asia market. A recognized national and international leader in the Asian medical markets, he founded Pacific Bridge Medical in 1988, which has helped hundreds of medical companies with business development and regulatory issues in Asia. For more information, visit www.pacificbridgemedical.com.