Medical Device sourcing continues to be a robust global market. Various countries are continue to adopt initiatives designed to assist companies and other suppliers in competing across their borders. In all cases, eyes are always on the prize that is the U.S. market, by far the world’s largest and most dynamic. For medical device suppliers – regardless of where they are based and notwithstanding the types of services they provide (e.g., contract manufacturing, repackager/relabeler, specification developer, etc.), participating commercially in the US medical device sourcing market requires registering with the U.S. FDA.
Owners or operators of places of business (also called establishments or facilities) that are involved in the production and distribution of medical devices intended for use in the United States are required to register annually with the FDA. This process is known as establishment registration. Registration and listing provides FDA with the location of medical device establishments and the devices manufactured at those establishments. Knowing where devices are made increases the Agency’s ability to prepare for and respond to public health emergencies.
There are over 41,000 company entries listed by the FDA in the Establishment Registration database for 2020. Of this total, the USA is the location for 27,000 (65.8%) listed companies. 5,009, representing 12.2%, are located in China. Japan is eighth in terms of listed companies (514, 1.2%).
Japan’s medical device classification system is based on the Japanese Medical Device Nomenclature (JMDN) codes which are different from U.S. and European classifications. Review processes for medical devices differ depending on the classification. Medical devices are classified by risk level into four classes (Class 1, Class 2, Class 3 and Class 4). Class 1 (lowest risk) is defined as general medical devices; Class 2 (relatively low risk) is defined as controlled medical devices; Class 3 (relatively high risk) and Class 4 (highest risk) are defined as specifically controlled devices. General medical devices can be marketed by submitting a notification to the Pharmaceutical and Medical Device Agency (PMDA). Controlled medical devices, with established certification standards, can be reviewed by third-party certification bodies. Controlled medical devices without certification standards and specifically controlled devices must be reviewed by PMDA and approved by MHLW.
The global spatial dispersion of medical device suppliers and service providers is concentrated in three areas: North America, Western Europe and Eastern Asia. Within these regions there are some notable and dramatic differences in the concentration of device market participants. In Asia, China has the largest concentration of device establishments, five times greater than the second and third most active countries in the region (Korea and Taiwan). India, in spite of its size, is sixth in the region behind Japan and Hong Kong, with one-half of one percent of the market based upon its level of activity.
Western Europe is led by Germany (1009 listed entities, equating to 2.4%). Germany is followed by Great Britain, Italy and France. Somewhat surprisingly, for all of its innovation in the field of medical technology, the Scandanavian sub-region has a small presence in the database, with a total of 384 listed entities for the four countries (slightly less than 1%).
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The major product categories comprising Japan’s domestic medical device production include: diagnostic imaging equipment, therapeutic and surgical equipment, bio phenomena measuring and monitoring systems, home therapeutic equipment, dialyzers, and endoscopes. Japanese medical device companies maintain high market share in these product segments. Top Japanese medical device companies, in terms of sales, include Terumo, NIPRO, Olympus Medical Systems, Hitachi Medico, Nihon Koden, and Fukuda Denshi. U.S. medical device companies produce a wide variety of medical devices, but they are especially strong in sophisticated segments of the medical market such as pacemakers, advanced interventional cardiology products, orthopedic implants, laser surgical equipment, and advanced diagnostic imaging equipment. Most major U.S. and foreign medical device firms have either a Japan office or a Japanese partner.