Medical device makers say trade barriers are a nettlesome issue for doing business in Japan.
An investigation into the barriers by the U.S. House of Representatives got a boost last month when Michael Mussallem, chief executive of Edwards Lifesciences Corp., and other medical device executives shared some stories.
“Japan’s system for approving use of new medical technologies is the slowest and most costly in the developed world,” Mussallem told members of the House Ways and Means Committee.
The hearing was covered by the FDAnews Device Daily Bulletin.
Mussallem is chairman of the international board of AdvaMed, a trade association for device companies.
“Although Japan is one of the wealthiest countries in the world,the second-largest economy in the world,its spending on healthcare is among the lowest of major developed countries,” Mussallem told the lawmakers.
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Edwards heart valve: Chief Executive Michael Mussallem testified in big hearing to ease trade barriers with Japan |
He said that Japan compounds the issue by imposing what he called “more burdensome and costlier” regulations.
Mussallem said lengthy approvals equal higher costs for American medical device makers.
He said companies must maintain out-of-date product lines if they want to continue doing business in Japan.
Last year Edwards decided to discontinue making some perfusion, or breathing and blood flow assisters, and pacemaker devices for Japan.
Even after an agency was created in 2004 to process medical device applications, Japan still had a backlog of more than 490 applications as of last February, according to AdvaMed.
The office is hamstrung because it has just 40 staff members to review device applications.
The U.S. has more than 700 people doing the equivalent job.
U.S. Rep. William Thomas, R-Bakersfield, recently asked the International Trade Commission to launch an investigation into why Japanese regulations are burdensome for American medical device makers.
Thomas, in the letter, said the investigation should “closely examine the regulatory conditions affecting domestic sales and trade of medical devices and equipment in Japan and other major foreign markets during the past five years.”
Thomas also said the probe would focus on the primary U.S. device exports and compare Japan’s regulatory conditions to other foreign markets for domestic devices.
Separately, Edwards said its first-quarter profit was up 47% to $46 million, driven by stronger sales across all its units, including its dominant heart valve business. Edwards also benefited from a $24 million pre-tax benefit from a patent settlement and a gain on a sale.
The company’s sales rose 3.1% to $257 million.
Apria: ‘We’re No Rotech’
Lake Forest-based Apria Healthcare Group Inc. took the unusual step late last month of responding to a press release from Orlando, Fla.-based competitor Rotech Healthcare Inc. on Medicare reimbursement rates.
Investors hammered Rotech after the company said it would be hit by a proposed cut in federal reimbursement rates for Budesonide, a breathing drug. Shares of Rotech fell 55% on the day when the news came out.
Apria and Rotech provide drugs, breathing equipment and other healthcare services to people at home. Many of their customers are Medicare recipients.
In a release, Apria said it wouldn’t be “materially impacted” by the new reimbursement rate for Budesonide. The step worked: Apria shares fell less than 1%.
Apria expects sales to be cut by just $3 million if the Budesonide rate change takes place. Its sales for the year are expected to be about $1.5 billion.
Rotech said its 2006 revenue would drop $30 million and its profits by $17.3 million if regulators upheld the new Budesonide rates.
The home healthcare company also said it believed the final rate wasn’t merited and was working with regulators to reverse the change.
Philip Carter, former chief executive of Apria, is now Rotech’s chief executive. Carter and current Apria Chief Executive Lawrence Higby worked together to turn Apria around in the late 1990s.
Meanwhile, Apria said its first-quarter sales fell 1% to $368 million, versus a year earlier. Net income slumped 36% to $16.1 million in the period.
Bits and Pieces:
Carl Zeiss SMT Inc. and the California Institute for Telecommunications and Information Technology at the University of California, Irvine, said they’re launching a center for nanotechnology and biotechnology research, and advanced materials characterization. The center is at the Calit2 Building at the corner of East Peltason and Los Trancos drives Stephanie Alexander, senior vice president, general manager of Premier Inc.’s Healthcare Informatics unit, discusses “Pay for Performance in a Hospital Setting” at the May 11 meeting of the Orange County Employee Benefit Council. The meeting starts at 7:30 p.m. at the Beckman Center on UCI’s campus. Seating is limited, with members getting priority.
