According to CEO Philip O’Neill of Kyoto-based Parkdale Group, when you factor in pharma, medical devices and other healthcare technology, the Japanese healthcare market is probably the world’s second or third largest. 

“Japan’s spend on prescription and nonprescription pharma is something like US$110 billion,” he notes, “and medical devices are probably around US$30 billion. This is growing naturally at a rate of about 4.5 percent annually as the population ages since most of your healthcare spending will be in the last few years or months of life.”

O’Neill launched the Parkdale Group about three years ago at the suggestion of a friend who saw the gap between Canadian companies offering healthcare technology solutions relevant to Japan and what the Japanese market needed. 

“There was a lack of commercial activity and market presence in this area between Canada and Japan, so there was a spot for someone to step into this,” O’Neill notes. “I’m fortunate to have built an extensive network in the pharmaceutical industry and medical device industry during my previous work and through CCCJ activities. I also work with Medical Lab Partners in Tokyo, which is a top high-end regulatory company.” 

The Parkdale Group primarily covers two technology streams—medical devices and healthcare informatics. According to O’Neill, Canada has a lot of interesting medical device companies, particularly around Mississauga and Montreal but in other centers as well. Most focus on the US market, but he’s helping them enter Japan. “It’s part education and marketing. We can also help companies working on research projects with Japanese partners.” 

O’Neill also notes that about half of the medical devices sold in Japan come from overseas companies, in a market where the statistics portal statista.com predicts revenues for such products will amount to more than US$37 billion dollars by 2027.

Enticing Market Potential

Japan’s digital healthcare technologies market is growing very quickly as well, and O’Neill estimates that it’s in the double-digit billions in US dollars and exhibiting double-digit growth. 

Healthcare informatics is focussed on electronic medical records (EMR). “Japan is somewhat behind in digitization in this field, whereas Canada is out in front,” O’Neill says. “The major Japanese EMR companies have primarily offered onsite, server-based systems, which do a good job of holding onto the data but aren’t well suited for analysis or data re-use for clinical studies, or for communication with patients.” 

Registries, which collect masses from hundreds or thousands of healthcare providers, are also rising in importance in Japan. The systems are still sometimes not integrated with EMR—meaning that a manual process may be involved—so opportunities to digitize all this are huge. 

The laws are changing in Japan, allowing for more software as a service (SaaS) and cloud-based services for handling medical data. The country is also working hard to develop personalized health records for individuals, which will make taking one’s own healthcare information to different providers much easier. “The rollout of the My Number card is part of this,” O’Neill adds.  

“Healthcare informatics and digital health should see very strong demand for the foreseeable future and a growth rate of around 15 percent or higher,” O’Neill reports. “In particular, offerings in data management, telehealth, post-operative follow-up, etc. should find an interested audience in Japan. Also, applications that fit into the category of SaMD—software as a medical device—will certainly grow, probably at double-digit rates. Systems for detection of dementia, diabetes management, etc., should also find a good market here.” 

O’Neill points to a success story that Parkdale had a hand in: Introducing Ortech Systems, a world leader in digital healthcare data capture and analysis, to Japan. This well-stablished London, Ontario-based company makes an SaaS-based medical data interface platform that promises to revolutionize the handling of data in the Japanese healthcare system. “We set up Ortech Japan GK in Kyoto, which has the potential to enormously enhance the collection, handling and analysis of medical data.” 

Reading Vital Signs

Other Canadian firms have already jumped into the market and made major connections. “It’s not widely known that our Toronto-based company, NuraLogix, has quite a large presence in Japan, and is working with Japan’s largest telecommunications provider, NTT Data,” says Lindsay Brennan, a senior digital marketing specialist at the firm. “NTT Data conducted a technology and customer reaction survey of numerous startup companies from around the world—all with services related to vital sign data—and rated our technology the best.”

Specifically, NTT Data integrated NuraLogix’s Anura™ technology into its wellness measurement app as a new function of its cloud-based health management solution, Health Data Bank. 

“Our technology uses any front-facing camera to analyze facial blood flow patterns of the user, providing more than 30 health and vital sign measurements in just 30 seconds,” Brennan explains. Brennan explains. “The Health Data Bank app from NTT Data is being offered as part of the healthcare service for residents of Mitsui Fudosan’s Kashiwa-no-ha Smart City. There are plans to develop various use cases such as improving workplace environments at companies, and business services that parse and apply health data.”

NuraLogix has more than a hundred customers worldwide in B2B industries as diverse as telemedicine, insurance, health and wellness, transportation and consumer brands. According to Brennan, most companies purchase the Anura software development kit and integrate the technology into their existing application or platform. 

“We also have customers in the corporate wellness industry, with employers purchasing our technology and integrating it into their employee app or benefits package,” Brennan adds. NuraLogix technology is also used in the insurance industry for dynamic underwriting—a new approach that uses real-time data and AI to assess risk and determine premiums. 

Regulators and Regulations

The Pharmaceuticals and Medical Devices Agency (PMDA) is Japan’s leading organization in regulatory science, according to O’Neill, and is in constant contact with regulators elsewhere to find ways to smooth access and streamline approval processes. 

“The recently updated Pharmaceutical and Medical Devices Law appears to be for harmonization with ISO standards,” he states. “Basically, the JIS standards for medical devices are harmonized almost completely with ISO. This means that a medical device approved in Canada or the EU, for example, should have a good chance for approval in Japan. Same goes for products the FDA in the US has approved.”  

Notes for Market Hopefuls

The Parkdale Group can assist new market hopefuls and struggling entrants in several ways.

“For digital health technologies, our primary offering is market information, access to key opinion leaders in Japan, company setup and management,” O’Neill explains. “For medical devices, we work with regulatory science professionals on all kinds of questions about dealing with the PMDA, and provide consults about device categorization as well as approval and registration projects and overall management. We also supply regulatory updates.”

The Parkdale Group is also developing expertise in software as a medical device (SaMD). “Canada is a leader in the SaMD and aging care areas, and is also the world leader in AI—all that stuff comes from Toronto and Montreal,” O’Neill states. “Applications in diagnostics, for example breast cancer diagnosis, should find a market in Japan.” 

According to O’Neill, the approval process for a high-risk medical device can take many months and a considerable investment of capital and professional expertise, so keeping these in motion is key to a successful entry to Japan. “My team is focussing on highly innovative, high-value devices, particularly implantable products new to the market. These can bring something special and potentially lifesaving, and also reward the long investment of time and effort into developing the product. 

“The PMDA is keen on safety and non-clinical demonstrations of product conformity but they’re actually very quick,” he continues. “Getting your own data organized can take a lot of time, though. So can getting your potential partners lined up, gaining market awareness and finding the first users. Once this is established, though, an overseas company can look forward to steady, long-term business in Japan.”