The Journal The Authority on Global Business in Japan

HEALTHCARE | AGING–PART TWO

December 2013

Healthcare.12.13A 21ST CENTURY JAPANESE MIRACLE?
Companies are using knowledge from Japan’s aging society to find success in markets worldwide

By William R. Bishop Jr.

Having celebrated the 50th anniversary of its national healthcare system in 2011, the Japanese government, together with the Ministry of Foreign Affairs, trained their sights on making Japan’s medical knowhow a central pillar of its soft power in the region and around the world.

Japan’s universal healthcare system recently scored high marks from the World Health Organization and the Organisation for Economic Cooperation and Development. Thus bolstered, Japan has set out to highlight its expertise not only in cosmetic and elective surgeries—which are common in the medical tourism market elsewhere in Asia—but in the treatment of acute and chronic conditions for the well-to-do elderly of the region.

With the launch in 2011 of Medical Excellence JAPAN—an effort to provide a one-stop website for medical tourists—Japan is aiming to become the top Asian destination for medical care by 2020.

In addition to attracting more patients to Japan, the government has implemented programs overseas designed to increase the presence of Japan-style medical care. The goal is to create sales opportunities for the nation’s drugmakers and medical device manufacturers.

Japanese-style medical treatment was adopted in eight overseas projects in 2011, and 18 in 2012. As a result, the government of Prime Minister Shinzo Abe has moved quickly to earmark additional funding to cover feasibility studies in FY2013.

Japan is known for its cancer specialists and its work in heavy particle radiotherapy and regenerative medicine. The government has recently made regenerative medicine the focus of its efforts to commercialize innovative basic research through targeted government investments.

The endeavor has been propelled largely by the awarding of the 2012 Nobel Prize for Physiology or Medicine to Dr. Shinya Yamanaka, whose work has revolutionized the understanding of how cells and organisms develop.

The effort to rapidly commercialize new induced pluripotent stem cell innovations has been further boosted by generous government funding that is part of the growth strategy being pursued by the Abe administration.

The critical centerpiece that will allow the full implementation of the growth strategy is the establishment of the Headquarters for Healthcare and Medical Strategy Promotion. Currently, the plan is to create a Japanese version of the National Institutes of Health (NIH) that, as part of the US Department of Health and Human Services, is that nation’s medical research agency.

Key to the success of the Japanese version of the NIH would be the centralization of budgets related to the development of healthcare technologies. The responsibility for the financial allocations at present is distributed among various ministries and agencies, including the Ministry of Health, Labour and Welfare; the Ministry of Education, Culture, Sports, Science and Technology; as well as the Ministry of Economy, Trade and Industry.

Consolidating ministry budgets for R&D—in the areas of medicine, medical devices, and experimental medicine—under a single administrative body is a long-held dream.

The most recent attempt to achieve it is the Democratic Party of Japan’s (DPJ’s) effort to form an office for the promotion of medical innovation with the goal of coordinating a national effort to promote medical and life science-related R&D. However, since it had no budget or authority over ministry budgets, the DPJ Cabinet-level office had no viable means to implement the growth strategy.

If the Liberal Democratic Party’s Headquarters for Healthcare and Medical Strategy Promotion works as planned, it could lead to the establishment of a Japan-style NIH. However, getting the ministries to relinquish control over often jealously guarded budgets and long-held turf will not be an easy task.

The plan calls for Abe to serve as director of the new headquarters, Chief Cabinet Secretary Yoshihide Suga to be its deputy director, and all Cabinet members to attend meetings.

Then, beginning in 2014, Japan’s NIH would formulate comprehensive strategies, as well as determine research priorities and objectives in the fields of medicine and healthcare.

The Abe administration’s growth strategy priorities have given a boost to both the migration of high-tech industries from consumer electronics to medical devices, and the ongoing globalization efforts of established domestic healthcare industry players.

As it seeks a competitive edge for this century, the government is targeting a broad swath of medical technology, from regenerative medicine, biotechnology, vaccines, and drug development through medical devices and diagnostics.

Japan, a longtime leader in industrial robots, would now like to lead the world in robots that love you and lift you up. New exoskeletons will soon be widely used to help caregivers lift and move the increasing number of frail bedridden elderly. This new equipment will reshape what has long been a backbreaking chore.

Japan now has more pets than children, but elderly pet owners find it difficult to look after the animals. Here the therapeutic robot, Paro, comes into its own. Paro is a furry white baby seal that, in its eighth generation, has the ability to learn from its interactions with people, and to show the emotions of surprise, happiness, and anger. It is widely used in nursing homes around the world and reportedly helps stimulate dementia patients.

Paro is an excellent example of how companies are leveraging what they have learned from the frontlines of aging in Japan to find success in markets worldwide.

Building on Japan’s strength in consumer electronics, Japanese makers have come out with a multitude of health-monitoring and mobile health devices, from home blood pressure devices and high-tech toilets to pocket health monitors and smartphones linked for health data collection.

Considering developed countries’ urgent need for remote health monitoring in rural regions—of which Japan has plenty—and the rising need in the developing world for mobile solutions, mobile health is an area in which we can expect significant growth.

With nearly a third of its population already aged 60 or over, Japan leads the world in aging. Only time will tell whether the steps Japan’s government and industry are taking today will provide the sustainable economy needed to support an increasingly elderly and frail population.

The post-World War II Japanese economic miracle is today but a faded memory for most people. However, leveraging lessons learned in addressing the needs of a rapidly aging population at home, and turning them into commercial successes around the world may result in a 21st century Japanese miracle. Perhaps Japan can turn the needs of its super-aged society from a potential economic liability into a winning economic asset.

In turn, US industries, from retail to healthcare, could learn a great deal about where to compete and invest in a rapidly aging Asia—and in an aging world, for that matter—by studying the coming global economic metamorphosis already well underway in Japan.

 

BishopDividerWilliam R. Bishop Jr. is chair of the ACCJ Healthcare Committee and director of corporate affairs at Nippon Becton Dickinson Company, Ltd.

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