Japan’s medical technology business is in its own universe – market entry is difficult, regulatory pathways can take time, and distribution channels are challenging to understand. However, pricing is positive for medical devices and, once established in the market, recurring revenue stability is relatively assured for years to come.
So, is it an opportunity worth exploring or a risk worth ignoring?
Japan remains the world’s 3rd largest medical device market – a $27 billion market, according to the World Health Organization (WHO) Organization for Economic Co-operation and Development (OECD) data. Approximately half of Japan’s medical device market consists of imports, creating an opportunity for exporters from the U.S. or Europe.
How did this happen for a country that has a reputation for difficult to penetrate and has its own rules? At the end-user channel, Japan is primarily a domestic market for medical products. However, Japanese medical OEMs are actively seeking new products to import into Japan. With global players such as Omron, Hitachi, Olympus, Terumo, Hoya, Nihon Kohden, Shimadzu, and Toray Medical, Japan OEMs are actively seeking new products to complement their portfolios and meet healthcare initiatives outlined by the government.
How do I enter and thrive in the Japanese medical market segment?
Some key observations from our collaboration partners living and working in Japan:
Lock up your regulatory pathway in the U.S. (FDA) and/or Europe (CE). Even better is if you already have FDA clearance and/or a CE mark, as Japanese partners view these regulatory milestones as credibility.Understand your market segmentation
and do some basic research on the Japanese market. You are likely to succeed in Japan if your product has a healthcare value proposition in the U.S. or Europe.
Identify Japanese OEM medical companies that have complementary products that can act as distributors. Many companies are looking to expand and will move into adjacent spaces if you provide them the value proposition and opportunity to do so.
Create a market-entry plan with your Japanese partner. Japanese companies can be aggressive and slow at the same time. It can be confusing, so be patient and continue to communicate as you collaborate.
Let each party do their thing. Build your product with the highest quality (critical to a Japanese OEM), and let your Japanese partner drive market development.
If you do your homework and find the right partner, Japan can be a highly rewarding “planet” worth exploring.