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Health Care Services
American firms have developed a strong presence in Japan's healthcare sector, supplying almost one-quarter of the medical device market and about 15% of Japan's pharmaceutical consumption. Together these two sectors account for roughly one-third of Japan's annual $300 billion in spending on healthcare. In another key element of Japan's medical sector -- healthcare services -- the U.S. role in much more limited, constrained by legal prohibitions against certain private sector activities in the medical field and by an insurance reimbursement system that offers few incentives for Japanese medical institutions to adopt U.S.-style management techniques and cost-containment programs. However, as Japan seeks to address the challenge of responding to increased demand for healthcare in an era of growing financial strains, new commercial opportunities for U.S. firms should begin to emerge in the healthcare services sector.
Japan is the most important export destination for American medical devices, representing the second largest market in the world for these products behind the United States. The Japanese market for medical equipment is also one of the few sectors where the United States has consistently enjoyed a sizeable trade surplus with Japan. Each year approximately $5 billion worth of U.S. made medical devices and supplies are sold in this market, which has a total annual value of approximately $20 billion.
Japan represents a challenging, but significant market for U.S. dietary supplements companies. American firms have captured roughly a $500 million share of Japan's $7.5 billion annual market for these products. Reflecting a trend in recent years of modest market openings achieved through eased regulatory restrictions on dietary supplements, U.S. sales in Japan have been increasing and were up about 5% in 2000.
Recent economic trends, including a burgeoning national budget deficit, combined with a rapidly expanding elderly population, are coalescing to create market conditions favorable to increased sales of generic drugs in Japan. One focus of Japanese Government healthcare reform has been to seek to reduce insurance coverage for long-listed pharmaceuticals, those that would be off-patent in the U.S. but are often still reimbursed by health insurance in Japan. This is expected to lead to policies that will stimulate consumption of cheaper, generic alternatives.
To obtain Market Research Reports in full text, please contact following staff:
Unit Chief: Stephen Anderson
Medical Devices, Pharmaceuticals, Health Care Services: Hiroyuki Hanawa
Home Health Care, Dietary Supplements, Biotechnology: Chris Ono/Tamami Honda
Health IT: Yasue Morimoto