Direct physician imports: a tool for accelerating market entry into Japan

July 2012

Many companies are aware that life-saving medical devices can be imported into Japan without regulatory approval under the country's so-called compassionate use program. However, what many companies do not realize is that direct physician imports may also be used to accelerate the launch of other devices even when they do not treat life-threatening illnesses.

Japan's unofficial compassionate use system will allow the direct import of any medical device provided the physician is 1) able to name the specific patient that will use the device and 2) is willing to personally accept the risks associated with importing the product. Although products imported directly by physicians under the compassionate use program do not qualify for reimbursement, the compassionate use program does enable manufacturers to import products into Japan without receiving formal regulatory approval.

Which products are suitable for import via direct physician import?

The compassionate use system allows physicians to directly import unapproved products that treat life-threatening illnesses for which no alternative treatment is available or effective. The rationale for allowing importation is that the risk of the device (even if great) is viewed as less of a risk than non-treatment. Hence, physicians are usually willing to sponsor the importation because not importing the device would lead to death or a significant reduction in the quality of life for the patient. Artificial organs are an excellent example of a product class that fits into this category.

In practice, many physicians are also willing to sponsor the importation of low-risk products even if they do not treat life-threatening illnesses. Direct physician imports are also commonly used for unapproved products viewed as so safe that the physician does not feel uncomfortable taking on the risk associated with importation. Orthodontic wires are an example of a product class that fits into this category. Wires are often unapproved due to the hassles associated with formal approval but are so safe that physicians see no reason not to import new products from overseas even if they are not formally approved for sale in Japan.

Because unapproved products do not qualify for reimbursement, even if physicians are willing to import a device, manufacturers must ensure that patients are willing to pay. Historically, devices used for private pay treatments (e.g., dermatology, cosmetic surgery, orthodontics, etc.) have found the greatest success via the compassionate use program.

How should direct physician imports be incorporated into my business strategy?

Importation via direct physician imports is inappropriate as a means of generating long-term sales. The administrative burden associated with direct physician imports is high and the compassionate use program is not intended as a long-term means of circumventing registration. However, direct physician imports for are a useful short-term bridge to the market if patient need is high and/or the risks and costs associated with a product are relatively low.

Companies that do not have the near-term financial resources to conduct a clinical trial or that are unsure of the market opportunity for their products may find that importation via direct physician imports is an attractive way to establish relationships with key opinion leaders and generate initial sales. The relationships and track record established via direct importation can then be used to garner physician support for clinical trials and to begin brand building prior to a full-scale product lunch.

Align Technologies is an example of a company that successfully used direct physician imports to establish its Japan business. The company initially conducted a limited release of InvisAlign via direct physician imports. As a result, the company was able to generate sales and a track record in Japan while simultaneously pursuing a formal product approval. By using this strategy, Align accelerated revenue generation and was able to get a jump-start on a successful full scale launch which was initiated after receiving regulatory approval.

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