The Journal The Authority on Global Business in Japan



Let’s Roll!
Secretary Pritzker to lead October trade mission to Tokyo

By Andrew Wylegala

While US–Japan trade has been “steady-state” in recent years, the number of companies calling on Commercial Service Japan (CS-J) to test the waters of the Japanese market continues to surge.

Investment transactions in both directions have also grown, and new data from the Department of Commerce shows Japan reclaiming the No.1 ranking as an FDI source for the United States in 2013.

Mid-October promises yet more bilateral business, when Secretary of Commerce Penny Pritzker brings a business development mission to Tokyo and Seoul, the first such visit in years. Plans call for Secretary Pritzker to be joined by some two-dozen healthcare and energy executives.

The Japanese market for patented pharmaceuticals is the largest outside the United States and is projected to remain so, given Japan’s aging population and relatively prosperous seniors, who expect improved quality of life in their later years.

The market for innovative medical devices is also lucrative; US exporters and affiliates have an about 60 percent share of the market here. Prime Minister Shinzo Abe’s growth strategy targets the healthcare sector, looking to both deregulate and promote investment and Japanese exports.

Legislation passed in spring 2013, including the Regenerative Medicine Promotion Act and a revision of the Pharmaceutical Affairs Law, promises to speed up commercialization.

Measures introduced include accelerated regulatory approvals and the facilitation of clinical trials in and with Japan. There are premiums available for innovative and very low-volume drugs or medical devices, as well as generics, and an allowance for so-called mixed treatments not covered by Japan’s National Health Insurance (NHI).

Allowing documented health claims to appear on supplement and health food labels can also help build commerce while improving health outcomes.

In addition, health IT and telemedicine represent a convergence of US strengths and Japanese needs.

The plan to establish a “medical innovation” Strategic Special Zone in Western Japan has piqued interest. If realized as billed, these measures will benefit US exporters, US affiliates in Japan, and US communities that may host investments from Japan.

First, however, Japan must do no policy harm. Both domestic and foreign players are concerned about proposals to shift Japan’s NHI reimbursement price review system from a biennial to a more burdensome annual one. As Japan takes measures to cut healthcare spending, we have urged balancing cost reductions with the promotion of innovation.

More generally, the Department of Commerce, which has chaired discussions with the Ministry of Health, Labour and Welfare on reimbursement and regulatory issues for 30 years, supports US interests in the sector, working closely with organizations such as the ACCJ.

Our relationship with the ministry started in 1985, when then-President Ronald Reagan and former Prime Minister Yasuhiro Nakasone met for discussions that gave rise to the Market-Oriented, Sector-Selective talks.

That department-to-ministry tie continues under the 2010 U.S.–Japan Economic Harmonization Initiative bilateral framework, and on an ad-hoc basis, with discussions now under way to further boost our healthcare dialogue.

An example is the annual U.S.–Japan Vaccine Policy Exchange, now in its fifth year, which brings Commerce officials and experts from the Department of Health and Human Services—including the Centers for Disease Control and Prevention—to Japan.

The exchange has given Japanese stakeholders a clear picture of the U.S. National Vaccine Plan, which Japan is beginning to incorporate into its own plan.

With such a strong legacy of policy and promotion collaboration, science and R&D teamwork, as well as a shared imperative to improve human health and well-being as economically as possible, it is hard to see the bilateral commercial relationship around healthcare as anything but rosy.

Secretary Pritzker’s mission will include business-to-government and business-to-business meetings, market briefings, and networking events. To get rolling, contact Hiroyuki Hanawa or Stephen Anderson of CS-J with your ideas to plan and recruit a productive, mutually rewarding business platform. Next month: Energizing October. •



Andrew Wylegala is the Minister Counselor for Commercial Affairs at the Embassy of the United States Tokyo.