Mark Kawai 12/24/21 Mark Kawai 12/24/21

Innovation Destination

As a super-aging society with a population of more than 100 million, Japan has the potential to become a destination for healthcare innovation. Its citizens have easy and equal access to quality healthcare services, with pharmaceuticals and medical devices playing important roles in improving quality of life. But there are technological obstacles to overcome. The US medical device industry is leading the effort to develop a data platform in Japan which will enable traceability in healthcare.

US-led platform to provide healthcare traceability and stability in Japan

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But there are technological obstacles to overcome. The US medical device industry is leading the effort to develop a data platform in Japan which will enable traceability in healthcare. The platform will allow the collection, storage, and sharing of information among stakeholders (e.g., manufactures, vendors, and hospitals). It will become a critical tool for improving the quality and efficiency of Japan’s healthcare system and will help ensure a stable supply of medical goods for healthcare providers.

Leveraging Tech

High-speed internet is nearly ubiquitous across Japan, but its benefit to healthcare is hampered by rules, systems, and business practices put in place before the internet era. Healthcare data is stored in a way that makes it difficult to share among stakeholders. This issue became obvious as the Covid-19 pandemic took hold and the country found it difficult to:

Track medical supplies
Monitor public health
Analyze collected data

Medical devices in Japan now carry a unique device identifier and all products are labeled with a GS1-128 bar code that contains a Global Trade Item Number. Some products, such as those related to orthopedics, are even tagged with radio frequency identification (RFID) information so that every item can be tracked, traced, and reported on.

Currently, RFID is only used to improve productivity within an organization. But as more companies introduce RFID technologies, to minimize confusion and inconvenience, the industry has agreed to:

Standardize the RFID format
Develop a platform to store and share data

The platform will enable manufactures to offer products that allow stakeholders to use all associated information to improve the quality and productivity of the healthcare system and to stabilize the supply of medical products. Expected to be available in mid-2022, the platform is being developed under the Smart Logistics Service portion of the Japanese government’s Cross-ministerial Strategic Innovation Promotion Program.

Government Support

The US medical device industry is part of a study group supported by Japan’s Ministry of Health, Labour and Welfare (MHLW), which provides grants to help enable traceability of drugs and medical devices to improve safety and efficiency in hospitals. The goal of this study group is to set the basic feature requirements for electronic health-record systems used in hospitals. Guiding documents help hospitals and vendors introduce and use bar codes and RFID technology. With these two systems, traceability in the Japanese healthcare system can be dramatically improved.

Traceability in healthcare enables us to see the movement of prescription drugs and medical devices through the supply chain. We can trace the history of the transfers and locations of a product, starting from the point of manufacture. We can also look ahead to see the intended route of the product to the point of care. It also helps provide greater oversight of medical device performance for effective post-market surveillance in the event of adverse event reports or product recall alerts.

With increased traceability and productivity along the whole supply chain, the quality and efficiency of healthcare services provided in Japan will improve, and a stable supply of medical goods will be guaranteed. Data can also be collected automatically, and shared among stakeholders for analysis that will lead to improvements in care.

C Bryan Jones 11/10/21 C Bryan Jones 11/10/21

Unsung Hero: Dr. Tatsuya Kondo

One year ago, we featured Dr. Tatsuya Kondo on the cover of The ACCJ Journal. The American Chamber of Commerce in Japan (ACCJ) had recognized him for his contributions to the healthcare industry with the 2020 ACCJ Outstanding Achievement Award. Dr. Kondo played a key role in Japan’s healthcare efforts as chief executive of the Pharmaceuticals and Medical Devices Agency (PMDA) from 2008 to 2019. Sadly, he passed away on September 26 after a battle with prostate cancer. ACCJ members shared thoughts and memories with The ACCJ Journal about what Dr. Kondo meant to them and the industry.

Remembering the former PMDA chief executive and how he changed medicine in Japan

One year ago, we featured Dr. Tatsuya Kondo on the cover of The ACCJ Journal. The American Chamber of Commerce in Japan (ACCJ) had recognized him for his contributions to the healthcare industry with the 2020 ACCJ Outstanding Achievement Award. Dr. Kondo played a key role in Japan’s healthcare efforts as chief executive of the Pharmaceuticals and Medical Devices Agency (PMDA) from 2008 to 2019. Sadly, he passed away on September 26 after a battle with prostate cancer. ACCJ members shared thoughts and memories with The ACCJ Journal about what Dr. Kondo meant to them and the industry.

Strong Supporter

“We are all deeply shocked and saddened to hear the news of Dr. Kondo’s passing and would like to extend our deepest condolences to his family,” said Zimmer Biomet G.K. Executive Officer and Chairman Kazuya Ogawa, who is also chairperson of the American Medical Devices and Diagnostics Manufacturers’ Association (AMDD), adding that the AMDD Executive Committee offered a silent prayer for his soul at its October meeting.

“Dr. Kondo was respected as a strong supporter of the need to resolve the medical device lag issues. His thoughtful, sharply focused actions, always led to a quick resolution of serious lag problems. I personally recall intense discussions with him about more than 300 files of outstanding orthopedic reviews on hand at the PMDA, just as some 100 new applications were coming in. He promptly organized a task force to tackle the issues and cleaned them up in a very short time frame. He demonstrated great leadership during his time at the PMDA, and we feel very honored to have had opportunities to work with him.”

Man of Results

ACCJ Governor James Feliciano, who serves as chair of the Japan-based Executive Committee of the Pharmaceutical Research and Manufacturers of America, highlighted some of the results.

“Dr. Kondo was nothing short of a Japanese hero. Through his untiring efforts over so many years, he transformed the PMDA into a premier regulatory review and approval body,” he said. “We can look at the results in terms of months of review, number of new products approved, or the elimination of the drug lag compared with Western countries. However, the real measurement should be the number of Japanese patients who received access to lifesaving and life-changing innovative pharmaceutical medicine. Kondo-san is the unsung hero for so many patients in Japan.”

Leader of Change

Simone Thomsen, president and general manager of Eli Lilly Japan K.K. and ACCJ governor–Kansai, praised his leadership.

“We would like to express our deepest sympathy on the passing of Dr. Tatsuya Kondo, chief executive emeritus of the PMDA. He was truly a great leader for Japan who advanced our efforts to eliminate the drug lag for Japanese patients,” she said.

“Under Dr. Kondo’s leadership, regulatory science was truly developed and incorporated into the PMDA’s review, which yielded greater transparency for the industry. We appreciate the opportunity to have had the chance to work with him.”

Warm and Supportive

ACCJ Vice President and former PhRMA Japan Representative Amy Jackson, who is APAC senior director of government affairs and policy at Janssen Pharmaceutical K.K., said: “Dr. Kondo had a powerful and long-term impact on the Japanese healthcare system. Countless Japanese patients got early access to needed, lifesaving medicines thanks to his vision and efforts to make the PMDA a truly world-class regulatory system. Not only was Dr. Kondo a great leader, he was also an excellent ambassador between the PMDA and international stakeholders. I so fondly remember the many times PhRMA had meetings with him and his team. Dr. Kondo would always walk into the PMDA conference room with a big smile on his face. He would greet his international visitors with great warmth and would earnestly urge them to share, without reservation, any comments or concerns they had about the Japanese regulatory system. He will be greatly missed.”

Thank You

ACCJ Healthcare Committee Co-chair John Carlson summed up Dr. Kondo’s support of the chamber. “He was no stranger at the ACCJ. During the course of his career at the PMDA, he visited the chamber on numerous occasions to share his thoughts on the future of the agency and exchange opinions with members of the Healthcare Committee," he recalled. “His commitment to public–private partnership was compelling. The ACCJ extends its deepest gratitude to Dr. Kondo and condolences to his family. He was a transformational healthcare leader.”

Mikiro Suga 11/10/21 Mikiro Suga 11/10/21

The Power to Innovate

The Japanese public is concerned that domestic pharmaceutical companies have yet to launch a single Covid-19 vaccine. Some may argue that this is due to a low rate of vaccine confidence, as is seen in the national tendency to avoid the human papillomavirus (HPV) vaccine, which has, in turn, caused a problem for vaccine development.

Covid-19, mRNA, and government and private sector roles in healthcare

Although there may, indeed, be such a factor, this would not be the primary reason—especially not for the delay in the domestic development of a messenger ribonucleic acid (mRNA) vaccine.

It should be noted that Moderna, Inc., the US pharmaceutical and biotechnology company that has produced an mRNA vaccine to combat Covid-19, had been advancing cancer therapeutic vaccine development since well before the pandemic.

In Japan, however, initiation of development was delayed compared with other advanced countries, and efforts to develop products based on mRNA technology have failed to make significant progress. This is not because the environment surrounding a prophylactic vaccine is unfavorable but, rather, it is due to the lack of an environment in which companies can take risks and consider new modalities.

The Role of Government

The coronavirus pandemic has made me reconsider what the government should do to promote the development of innovative healthcare products. Among the various ideas I have come up with, I would like to conclude—even though this may be obvious—that the primary responsibility of the government is to create an environment in which innovative products are highly valued and the private sector can invest in a broad range of research and development (R&D).

I see that Operation Warp Speed—the public–private partnership backed by the US government to support rapid development of a Covid-19 vaccine—has had a huge impact. This underlines the fact that the Japanese government needs to invest directly in companies that can provide clinical research and manufacturing facilities, especially during a public health emergency.

Yet, under normal circumstances, it is fair to say that the private sector in Japan can make more efficient investments than can the government. It is extremely challenging for the government to pinpoint and invest in a promising company and product. Further, a massive direct investment by the Japanese government is unlikely, given the current budgetary issues.

By evaluating the history of mRNA technology, we can see how difficult it is to identify rising stars. Thanks to its wide use around the world to prevent Covid-19 infections, mRNA technology is now well known. Before the pandemic, however, only a few of us predicted such a quick, practical application. A researcher from Hungary, according to media reports, even struggled to have the merits of her research results recognized, despite years of studies.

Private Sector Stands Ready

I believe that Japanese and US companies in the private sector are willing to take risks and engage in R&D if they recognize innovative product candidates and can appropriately evaluate them under the right conditions.

But how can Japan create such an environment? I will be committed to accomplishing this once I complete my current assignment in the United States, and policymaking becomes my direct responsibility in the government.

US corporations are involved in the two mRNA vaccines currently in use, a fact that highlights US power to pursue innovation. The collaboration between Pfizer Inc. and BioNTech SE in Germany brought us a Covid-19 vaccine, thanks to the US pharmaceutical company’s attitude of aggressively seeking cooperation among companies beyond the borders that might restrain activity under normal circumstances. It has made me realize, once again, the importance of open innovation.

During the rest of my stay in the United States, I look forward to gaining further insight into what drives the US power to innovate.

C Bryan Jones 9/15/21 C Bryan Jones 9/15/21

HxD 2021

Healthcare x Digital 2021 will carry forth the goal of forging new partnerships and creating new solutions to solve Japan’s most critical community healthcare and individual patient challenges by focusing on three key areas tied to the digital transformation of society and which can help Japan continue to take care of—and provide even better care for—all its citizens.

ACCJ drives innovation by bringing together startups and big pharma

Last August, the American Chamber of Commerce in Japan (ACCJ) announced Healthcare x Digital, an XPRIZE-style competition meant to spur industry-changing technologies and connect Japan-based startups with major pharmaceutical companies and public officials.

Driven by the ACCJ Healthcare Committee—with support from the chamber’s Kansai Chapter—the initiative is led by ACCJ Corporate Sustaining Members AstraZeneca K.K., Bayer Yakuhin, Ltd., Deloitte Touche Tohmatsu LLC, and President’s Circle Member Eli Lilly Japan K.K.

The inaugural event was a huge success, with 28 companies submitting proposals. Three finalists were selected from this pool, and each emerged from the December 1 Pitch Event with awards and prize money to help them continue development of their ideas. Honors went to:

Bisu, Inc.: Best Innovation; the Moonshot Prize
MediFrame, Inc.: Best Value Proposition
MICIN, Inc.: Best Product

Great Opportunity

In a follow-up interview, Bisu Chief Executive Officer Daniel Maggs told The ACCJ Journal that participation in the Healthcare x Digital competition was important to them because “it matters for us to have validation and recognition from the medical industry, because we care very deeply about quality.”

Ryoichi Kusama, co-founder and senior vice president of MICIN, said that his company wants to help the medical industry change from within and become a player that can be trusted. Therefore, “the biggest plus is that it has expanded the collaboration with major pharmaceutical companies.”

And Mediframe CEO Atsushi Wada said that it meant a lot to him to be recognized by AstraZeneca, Bayer, and Lilly. “For them to see the potential in my company made me feel very pleased and encouraged.”

This year’s competition will once again bring together global healthcare leaders with top and emerging tech companies, entrepreneurs, and innovators in the search for new ideas.

Three Challenges

Overcoming the urban vs. rural healthcare divide
Reimagining the hospital of the future
Empowering patients to own their healthcare

These areas tie into the digital transformation of society and can help Japan continue to take care of—and provide even better care for—all its citizens. Demographic and economic trends are creating a strong contrast between rural and urban regions, and these shifts will require Japan to adopt new healthcare approaches and solutions. One question being asked in this year’s competition is how digital technology can break down the boundaries of distance to provide great and uniform care for everyone, no matter where they live.

Of course, reform of the healthcare system puts great pressure on hospitals to transform themselves and make better use of tools and resources. Technology is certainly key to that makeover, but what are the most innovative digital levers that can open up those paths to greater efficiency?

Another important part of ensuring that the healthcare system remains sustainable is empowering individuals to monitor their own health. A great example of such a tool is Bisu’s home health lab, for which the startup won ¥1 million in funding at last year’s competition. The elegant and easy-to-use system supports a range of tests that anyone can perform at home, allowing early disease detection and providing a way for individuals to track their health and adjust their daily lifestyle habits and decisions.

Joining Forces

At the core of Healthcare x Digital is the goal of bringing together emerging players—who have healthcare ideas, but require partners—with established players looking for innovative ideas to solve healthcare challenges.

This is made possible through the Healthcare x Digital ecosystem, which comprises four groups:

Innovators and startups
Established companies
Government organizations
Academic and non-profit institutions

These public, private, and non-profit sector players join forces to deliver all the pieces required to envision and execute groundbreaking solutions.

In the private sector, startups often have innovative digital healthcare ideas, but they lack the partnerships to evolve them. Teaming up with established companies that have the resources to develop an idea and bring it to market can allow the startup not only to grow as a company, but to change the course of future healthcare.

In the public and non-profit sectors, government bodies are searching for solutions to long-term healthcare challenges, such as cost, quality, and access. They want to drive innovation, which can lead to economic growth, but how to drive that change is not always clear. Academics and research institutions have insights that can help effect change, and they need a way to translate this into real-impact non-profit organizations.

Pitch Your Idea

Healthcare x Digital 2021 began accepting submissions on July 1 and the deadline is October 1. Evaluation of submissions is set to start on October 5. Pitches will be evaluated according to the following criteria:

Focus on patient and community needs
Healthcare x Digital value proposition
Need for an ecosystem to flourish

Everyone who participates in Healthcare x Digital will benefit from having their ideas reviewed by top executives from leading international healthcare and technology companies.

Those selected to participate in the Pitch Day will be invited to the full-day virtual event on October 14. Finalists will then take part in the HxD Ideas Day on November 11, a hybrid in-person and virtual event at which they will present to a panel of leading healthcare and pharmaceutical executives—all empowered to initiate business deals and new relationships on behalf of their global brands.

Monetary prizes will also be awarded, and the finalists will meet with senior executives from the organizing sponsors. Winning companies will receive mentoring and support from healthcare professionals and executives from organizing sponsors.

Join us to discover Japan’s most innovative healthcare ideas and develop partnerships to make them a reality.

Impact of Engagement

Japan faces a very modern problem: its success in delivering universal health coverage and fostering longer life expectancy has led to demographic and social changes that are giving rise to a new set of interconnected healthcare challenges. As the Japanese government moves to reform its healthcare system to address these challenges, new policy approaches will be necessary. With the right approach and policies, Japan can continue to improve the health of its citizens and create a blueprint that aging societies around the world can follow.

Continuing our efforts to communicate the value of investing in health

As the Japanese government moves to reform its healthcare system to address these challenges, new policy approaches will be necessary. Promoting innovation in all areas of the system will allow for increased healthy life expectancy and improved productivity, helping Japan move to the next phase of economic growth. And all this can be achieved while maintaining Japanese patients’ access to the most cutting-edge medicines, technologies, and treatments, while ensuring the security and stability of health and social care.

With the right approach and policies, Japan can continue to improve the health of its citizens and create a blueprint that aging societies around the world can follow.

More Agile Advocacy

On the back of our successful health and retirement work, the American Chamber of Commerce in Japan Healthcare Committee is now moving forward with our biennial health policy white paper. The upcoming report will look different compared with earlier reports. Previous white papers published by the Healthcare Committee have included topics ranging from the use of advance modeling and simulation in pandemic-related planning to improving cervical cancer screening. However, the wide range of topics made it difficult to maintain an up-to-date and compelling narrative in a single document.

Starting with our next white paper, we plan to create more succinct recommendations that fit with the overall messages of our committee viewpoints. The individual viewpoints will become the tools with which to dig deeper into issues featured in the white paper, thus creating a hybrid set of materials that can be updated regularly and used with greater agility in our advocacy. We are excited about the new format, and appreciate the ongoing contributions of member companies.

In the forthcoming white paper, we plan to explore a range of issues, focusing our recommendations across four key themes:

Investing in prevention, early detection, and treatment of disease
Maximizing healthcare quality and efficiency through digital and data innovation
Developing innovation policy, exploring reimbursement models
Ensuring the financial sustainability of Japan’s healthcare system

We believe that each theme will help Japan chart a path to more sustainable healthcare, and we encourage you to join upcoming Healthcare Committee meetings to learn more about our ongoing efforts and to help us finalize our recommendations.

To help you consider what form those final recommendations should take, here is more information about each of the key themes.

1. Prevention, early detection, treatment

In recent years, the Japanese government has shifted its focus from simply caring for disease to applying the practices of prevention, early detection, and earlier aggressive treatment to reduce overall healthcare expenditure and to sustain the productivity of its citizens. While significant progress has been made, much more could be done.

2. Digital and data innovation to boost quality, efficiency

Recognizing the need for better healthcare data management, the Japanese government has begun to centralize data platforms, accelerate data-driven innovation programs, and strengthen cybersecurity infrastructures to safeguard against external threats.

Yet, despite these efforts, Japan trails other developed countries in the implementation of a comprehensive healthcare data platform. Much more could be done to incentivize better collection and utilization of healthcare-related data.

3. Innovation policy, reimbursement models

In response to calls for the acceleration of healthcare innovation in Japan, the government launched a healthcare innovation initiative in 2014. Since then, the government has pursued several broad initiatives for research and development support, as well as the registration, authorization, commercialization, and evaluation of new healthcare technologies.

Despite this, reforms made to the pricing of, and reimbursement for, innovative medical technologies threaten to undo the progress made over recent years. With the clear purpose of delivering innovative healthcare to people in need, as soon and safely as possible, more could be done to allocate physical, human, and financial resources to maximize the potential for innovation.

4. The healthcare system’s financial sustainability

Japan’s healthcare system is respected around the world for its quality of care and contribution to long life expectancy. However, the aging society and low birthrate are straining a system designed, starting in 1868, primarily to control infectious and acute diseases in a different population structure. Improving the overall financial health of the system will be critical as more of the population ages and the workforce shrinks further.

ACCJ Healthcare White Papers & Viewpoints

The ACCJ Healthcare Committee strives to stimulate multi-stakeholder partnerships and discussions that will drive healthcare transformation by identifying practical, tangible actions and providing innovative solutions that address patient needs and ensure the sustainability of Japan’s healthcare system. Read advocacy documents and get involved in the committee’s ongoing efforts at: www.accj.or.jp/healthcare-advocacy.

C Bryan Jones 9/15/21 C Bryan Jones 9/15/21

Do the Right Thing

As the coronavirus pandemic unfolded in early 2020, supply chain disruptions put extreme pressure on many companies. The healthcare industry, in particular, struggled with a shortage of personal protective equipment (PPE), and procuring resources became a difficult—and sometimes risky—business for those in need, as some unscrupulous vendors took advantage of the situation. For others, the crisis was a chance to show how strong ethics provide a solid foundation for long-term business success. One such company is Northfield, Illinois-based Medline Industries, LP.

Medline’s Tomo Hasegawa on the importance of ethics to business success

For others, the crisis was a chance to show how strong ethics provide a solid foundation for long-term business success. One such company is Northfield, Illinois-based Medline Industries, LP, whose Japan president, Tomo Hasegawa, is scheduled to speak at an upcoming American Chamber of Commerce in Japan (ACCJ) event hosted by the ACCJ Independent Business Committee on November 4.

Topics he will discuss include supply chains and ethical sourcing, and The ACCJ Journal spoke with Hasegawa ahead of the event to find out how Medline weathered the Covid-19 storm of 2020 and what advice he has for leaders trying to make tough choices and guide their companies in a sustainable way.

Sudden Impact

Many of us watched the early days of the pandemic unfold on TV, as initial reports from China painted a confusing and grave picture, but one that felt far away. For Hasegawa, however, the reality of what Covid-19 would bring to the world was much closer.

“We were at the 35th Annual Meeting of the Japanese Society for Infection Prevention and Control, which was being held in Yokohama in February 2020,” Hasegawa recalled. “That was just after the Diamond Princess made its way into the port there. Having the ship right in the backyard of this major medical conference, which was all about infection control, made it very real.”

As the seriousness and widespread nature of the pandemic became clear, Medline began to look at how the situation might affect their business in Japan. Hasegawa said that their initial assessments underestimated the impact.

“We thought it might drive the sales of some PPE and were not thinking about changing what we would do in terms of strategy,” Hasegawa said. “Then, all of a sudden, the next stage of the crisis occurred and there was a business continuity scenario playing out. I don’t think anybody anticipated the entire country of China literally shutting down for two months.”

Supplies Stopped

China manufactures almost half of the world’s supply of PPE. With the source of so many medical supplies cut off, Medline had to quickly work with its Chinese partners to assess the situation and look at alternative ways of obtaining products, including qualifying new substitute PPE offerings.

Recalling the scramble for toilet paper that occurred in spring 2020, and the empty shelves that greeted panicked buyers, he said that Medline faced the same situation with medical supplies, as masks, gowns, and gloves “were literally being hoarded.”

As it turned out, the China supply situation, while acute and unprecedented, was just a harbinger of even bigger issues. China was able to get Covid-19 under control and mobilize its entire infrastructure so that, by the middle of 2020, most of its PPE factories had increased capacity to meet the ever-increasing global demand.

The real crisis turned out to be a shortage of examination gloves. Malaysia supplies 75 percent of the world’s nitrile (synthetic rubber) gloves. Unlike factories that manufacture non-woven PPE products, such as masks and gowns, those that produce examination gloves require significant capital investment and cannot increase capacity in a matter of months. Figuring out how to manage the supply chain was critical, but doing so was not as simple as finding a factory that could churn out PPE. For example, the nitrile gloves supply had a hard constraint and, despite all factories running 24/7, demand outpaced supply by 37 percent, according to the 2020 Personal Protective Equipment Market Report, published by the Health Industry Distributors Association.

“Medline is very proud of how we do sourcing to begin with. We’re very strong advocates of what we call ethical sourcing—we have a supplier code of conduct, for example—and there were certain companies and factories with which, even prior to Covid-19, we chose not to work,” Hasegawa explained.

“This is because we did not agree with how they went about producing products, making money, etc. Coronavirus literally brought out the best and worst of many companies. A lot of suppliers went into a mode that was pure capitalism—supply and demand at its extreme—as the demand skyrocketed,” he said.

Ethical Sourcing

Human rights issues in supply chains is a growing concern and is something investors consider when assessing how a company is doing in the social aspect of its environmental, social, and corporate governance, or ESG, efforts.

In August, Japan’s Ministry of Economy, Trade and Industry began a large-scale investigation into about 2,600 companies listed on the first and second sections of the Tokyo Stock Exchange to better understand where they stand on these issues and what support they need from the government.

Medline is a great example of how a company should approach the matter. Their Ethical Sourcing Program comprises 11 pillars, through which the company carries out its commitment to promote human rights. That involves setting expectations and requirements for its suppliers, assessing and investigating alleged violations, and empowering employees and suppliers with information and training.

The company undertook a comprehensive assessment of its policies and procedures in 2020, and its approach is guided by widely accepted international standards, including the United Nations Guiding Principles on Business and Human Rights.

Medline’s suppliers are obligated to ensure:

No forced labor, human trafficking, and slavery
No child and underage labor
No discrimination and harassment
Promotion of health and safety
Minimal environmental impact

“These are standards that most companies would normally state, but I think the difference is that we put our money where our mouth is,” Hasegawa said. “We regularly conduct onsite social compliance audits, and we expand and update our supplier risk assessments on an ongoing basis.”

He added that there is a strong belief at the top of the family-managed business that the values which are important to the family should be important to the company. Medline’s stability and success show that the approach works. The company recorded $17.5 billion in worldwide sales in 2020 and has had 54 years of consecutive annual growth. In all but one, the growth was in the double digits.

Focus on Stable Supply

Hasegawa said that Medline’s strong buying power was a real asset during all of last year, as companies were scrambling to secure supply. Not only were they able to minimize price increases from various suppliers as the situation changed, but they were also able to secure much needed supply allocations for their customers.

“It certainly was challenging, not just for us but the entire industry,” he said. “The radical imbalance in supply and demand was unprecedented. Literally, on our supplier side, costs reached levels previously unimaginable. Masks went up by a factor of 16. Gowns and gloves went up by at least five times. That was our cost to procure the products. So, what do you do with that?”

As costs rose, Medline eventually did have to raise their own prices, but Hasegawa said that the way this was done makes him feel proud. “After making initial price adjustments to get the exam gloves business profitable again, we took a different approach where, if we got a cost increase of, say, ¥5 per glove, then we asked our customers to pay that same ¥5 increase. We did not take any incremental profit on top of that to our customer,” he said.

Covid-19 forced companies to make trade-offs. At Medline, the decision was to prioritize stable supply over growing the bottom line. “Our mission is to be a partner for healthcare providers so they can focus on providing care,” said Hasegawa. “We interpreted that as, ‘Don’t stop healthcare’ and focused all our energy on maintaining stable supply to our customers.

“In addition, multiple new customers were willing to pay a higher price to us for the much needed gloves. It was painful to turn away accounts who obviously needed help but we chose to prioritize protecting our existing customers over the opportunity to make more money,” he continued.

“Specifically for gloves, where the pricing truly went out of control all around the world, we saw some very unethical behavior; customers ended up getting something completely different than what they had ordered when they went outside the normal supply chain.” Customers purchased what they thought were medical-grade gloves from a new vendor and received substandard gloves. Even now, around the world, many hospitals are realizing they have stockpiles of inappropriate gloves and are having to replace them.

Medline, Hasegawa said, chose to protect their customers and make sure they did everything they could to ensure that customers received a steady flow of proper supplies. This meant minimizing, as much as possible, the financial impact of price gouging by unscrupulous vendors. This also meant educating customers on how to conserve usage of much needed PPE products such as examination gloves.

Making a Difference, Together

Japan is known for coming together in the face of adversity, and Hasegawa noted that there was very good cooperation among vendors and distributors. While most large companies moved to protect their own customer base, wholesalers worked together to ensure the supply was as stable as possible to hospitals.

“It was all about making sure we got life-saving equipment to the hospitals, to the doctors and nurses who depend on it,” he explained. “That singular focus on the mission to provide not just a service, but to protect the healthcare workers who were doing everything they could to save the lives of Japanese citizens, was very clear to us and, I believe, most of the industry followed suit.”

And that’s a big reason Hasegawa—who says he is fortunate that his personal values mesh with those of the company—believes so strongly in Medline and its role in healthcare. “That tone from the top makes it very, very clear that this is how we want to run the business. And waking up the next day, I always want to be proud of the decisions I made.”

C Bryan Jones 6/28/21 C Bryan Jones 6/28/21

Beyond the Pandemic

One reason that foreign companies choose to invest in Japan is the nation’s high-quality manufacturing and services sectors, as well as its technological prowess and innovative workforce. Maintaining the health of the population—beyond the immediate challenges of Covid-19—is, therefore, critical to the future prosperity of the country and the viability of its business environment.

Digital health can guide the way for Japan’s post-virus evolution

Listen to this story:

As the ACCJ is dedicated to ensuring a vibrant environment for global business in Japan, advocacy for improved health policy and initiatives is an important part of the chamber’s mission. One reason that foreign companies choose to invest in Japan is the nation’s high-quality manufacturing and services sectors, as well as its technological prowess and innovative workforce. Maintaining the health of the population—beyond the immediate challenges of Covid-19—is, therefore, critical to the future prosperity of the country and the viability of its business environment.

Recognizing this, the ACCJ has worked with the Institute for New Era Strategy (INES) to bring together key leaders in business, government, and academia to discuss the future shape of social security in Japan. The results can be found in the Healthcare Committee white paper Post Covid-19 Recommendations to Realize a Social Security System for All Generations.

Stronger Foundation

Our evolution as a data-based society has allowed us to grasp the impact of Covid-19 in real time, and digital tools have enabled the active cooperation of civil society as the government works to mitigate the threat and limit its damage. While this is an encouraging sign that bodes well for the future of Japanese society, the state of Japan’s infrastructure has been inadequate compared with other countries.

The ACCJ and INES provide ideas on how to build a stronger infrastructure through post-Covid-19 recommendations on how to realize a social security system for all generations, and to promote continued innovation and application of technology that can help Japan provide for the needs of its people in a way that is effective and fiscally sustainable.

The white paper discusses utilizing data technology, shifting financial resources to healthcare and retirement, and raising the health and financial literacy of society.

In terms of digital health and utilizing data technology, areas of focus include:

Information usage rights
Data collection
Database integration
Public–private collaboration
Telehealth and virtual care

In the case of the last item, the Covid-19 pandemic has thrust this need to the forefront. As most people have been forced to stay home for extended periods, quarantine, or limit visits to clinics and hospitals, healthcare services at a distance has been the only way for many patients and doctors to interact. Particularly those in high-risk categories due to preexisting conditions, and those living in rural areas, have relied on telehealth services to minimize the risk of infection during the pandemic.

Stay the Course

One concern is that, once the coronavirus vaccine rollout is complete and a majority of the population has been inoculated, some digital initiatives that have been embraced might fall by the wayside as Japan fully returns to normal routines.

One recommendation from the joint ACCJ–INES team states: “It is essential to couple the support for telehealth with support for digital prescriptions, and to enable pharmacies to offer home delivery of important medications, all while expanding the overall role of digital technologies in delivering care. These measures will help support the aging population long after Covid-19, and enable new approaches to triaging, screening, and following up, customizing the patient experience, and improving the ability of doctors to monitor and communicate with their patients.”

Doing this will require a change in mindset and policy. While many forms of digital data exist in Japan, the individual’s consent is often not obtained at the time of collection, making it impossible to utilize the information. Even if the data is in the government’s possession, it is still difficult for it to be leveraged due to privacy considerations.

But with Japan’s fiscal strains exacerbated by the coronavirus, now is the time for the government to tackle these challenges. Strong political will and leadership are required to face reality, make the right choices, and share with the public a vision for a better future. And today’s digital tools and the power of data are making this possible and opening a door to a healthier, sustainable tomorrow.