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Setting New Flowers to Bloom in Fukushima and Tohoku Efforts to Create a Medical Device Cluster and Future Prospects | Tsuyoshi Ishibashi Research Fellow Medical Device Strategy Institute Japan Association for the Advancement of Medical Equipment [Date of Issue: 31/July/2014 No.0233-0937]

Date of Issue: 31/July/2014

Setting New Flowers to Bloom in Fukushima and Tohoku
Efforts to Create a Medical Device Cluster and Future Prospects

Tsuyoshi Ishibashi
Research Fellow
Medical Device Strategy Institute
Japan Association for the Advancement of Medical Equipment

The Tohoku Region Industrial Competitiveness Council* has positioned the medical device industry alongside automobile manufacturing as a strategic industry, laying out an approach for the region as a whole. Can Tohoku achieve industrial revitalization in the medical device field? Here I discuss efforts to develop biomedical engineering collaboration and build medical device-centered industrial clusters in Tohoku and in Fukushima Prefecture in particular; the challenges in positioning medical devices as a Tohoku region growth industry; and future prospects.

* Comprising business leaders and governors of the seven Tohoku prefectures, with a Joint Secretariat operated by Akita Prefecture, the Tohoku Economic Federation and the Tohoku Bureau of Economy, Trade and Industry.

1. Characteristics of the Tohoku medical device industry

Looking at 2012 Tohoku medical device production by prefecture, Fukushima Prefecture ranked fourth in Japan, Aomori 12th and Akita 14th, with Iwate, Yamagata and Miyagi all around the middle of the rankings. The region as a whole accounted for 13.1 percent of domestic production. Fukushima was far out in terms of growth over the last decade at 200 percent, and also led Japan in the area of production on consignment for manufacturing and sales firms. Plants set up in Tohoku by well-known medical device manufacturers from Tokyo include Aomori Olympus (2002), Nipro Corporation's Ohdate Factory (1981), Tanita Akita (1993), Topcon Yamagata, Chest M.I.'s Miyagi Factory and Aizu Olympus (all 1969), Shirakawa Olympus (1978), Johnson & Johnson's Sukagawa Factory (1972), and the Nippon Becton, Dickinson Fukushima Factory (1971).

Trends in Medical Device Production in the Tohoku Region (Statistics of Production by Pharmaceutical Industry, Ministry of Health, Labour and Welfare) 2. Local government initiatives in Fukushima Prefecture and Tohoku

Promoting the development of local industrial clusters requires clear vision and carefully thought-out strategies. Efforts to create a medical device cluster in Fukushima Prefecture trace back to 2005. Fukushima was one of the first prefectures in the country to launch an initiative focused on medical devices. What distinguishes Fukushima is that, separate from the collaboration with industry pursued by the Nihon University College of Engineering in Koriyama City and Fukushima Medical University over the years, the prefecture elected to get strongly behind manufacturers from other industries entering the medical device field. This was in response to the 2005 revision of Japan's Pharmaceutical Affairs Law, which introduced two approval systems-one for manufacturing and sales, and one for manufacturing-enabling total outsourcing of medical device manufacturing. Recognizing this as an opportunity, Fukushima Prefecture took the lead in boldly encouraging new entry into the industry by introducing comprehensive support for companies from other industries prepared to take on the challenge of an unknown industry, including subsidies for market and needs analysis and prototype manufacturing and evaluation; support for gaining approval under the Pharmaceutical Affairs Law; and promotion of business talks with medical device manufacturers. As a result of that support, over the last eight years, the number of medical device manufacturers in Fukushima Prefecture has increased by 1.6 times (up from 35 in 2005 before support was provided to 56 in 2013).

Medical Creation Fukushima, held annually in Koriyama City, merits special note. When it comes to medical technology and parts supply fairs, many people will think of Tokyo's MEDTEC Japan and Medical Device Development and Manufacturing Expo, but Fukushima's fair was in fact the first. Medical device manufacturers once placed something of a taboo on their components and suppliers exhibiting their technological capacity on the grounds of protecting confidentiality, with manufacturers seeking to corral suppliers close to home. However, there were also industry calls to encourage a culture in Japan of placing outstanding technological capacity out in the open so as to keep innovative products coming to market. Fukushima Prefecture took note of those voices, and led Japan in holding a design and manufacturing fair. Medical Creation Fukushima will celebrate its 10th anniversary this year, and we look forward to a strong industry turnout.

At Medical Creation Fukushima

At Medical Creation Fukushima

Medical Creation Fukushima (small logo)?

Medical Creation Fukushima
(small logo)?

Looking across Tohoku as a whole, local governments have launched a number of their own initiatives, including the Aomori Prefecture Wellness Land concept, the Iwate Medical Equipment Commercialization Study Group, the Akita Medical Industry Network, Okitama Medical Technonet (Yamagata Prefecture), and the Sendai Finland Wellbeing Center Project. Further, the Tohoku Bureau of Economy, Trade and Industry set up the Tohoku Region Medical Device Industry Support Board, comprising relevant officials from the six Tohoku prefectures, to power up exchange and business talks between the Japan Association of Medical Devices Industries and other member manufacturers and local companies. As a result, the drive to encourage local companies seeking to enter the medical device field has achieved Tohoku-wide coverage.

3. Local government post-disaster initiatives

While Fukushima Prefecture has suffered reputational damage from the nuclear power plant accident, the local government has sustained its support, using central government recovery funds to subsidize the business costs of local companies engaged in medical device development in order to maintain the momentum of industrial cluster creation efforts to date. The scheme offers massive subsidies of up to 300 million yen per project. It is also extremely comprehensive, with funds able to be directed not just into prototype development but also the intellectual property and pharmaceutical strategies necessary for commercialization. So far, 46 projects have been cleared for funding, and local companies are working with medical device manufacturers to develop products.

Offshore expansion (exhibiting at the MEDICA Trade Fair in Germany)

Offshore expansion
(exhibiting at the MEDICA Trade Fair in Germany)

Some companies have also begun planning offshore expansion, aiming to export superior processing technologies with potential medical applications. The high international profile has gained as a result of the nuclear power plant accident has merits as well as demerits. The Fukushima Prefecture booth at MEDICA, the world's biggest medical device trade fair, attracts huge interest every year, and technical exchange with the German state of Nordrhein-Westfalen is also gathering steam. The prefecture's major focus is the country's first medical device development and safety evaluation center, scheduled to open in 2018. This facility is intended to help build market share in the area of treatment-related medical devices, said to be the Japanese medical device manufacturing industry's weak spot. It is also hoped that the center will serve as a powerful magnet encouraging the development of a medical device cluster in Fukushima Prefecture.

Looking over Tohoku as a whole, the Miyagi Knowledge-Based Medical Device Cluster, spearheaded by the Tohoku University Graduate School of Biomedical Engineering, is a local innovation strategy support program launched as a recovery project. Tohoku University Hospital's Clinical Research, Innovation and Education Center has set up a biodesign division to identify unmet needs, setting in place the conditions for coming up with brilliant and highly-marketable ideas, as well as a framework for commercialization support. A little further away in Aomori Prefecture, technological exchange is underway to boost business between local companies and Tokyo medical device manufacturers, while GE Healthcare Japan, the local subsidiary of US major GE Healthcare, is working with Aomori Prefecture to build a new model of medical care for remote areas, which also involves exploring the possibilities for using products and technologies developed by local companies. This is a pioneering effort for a local government in Japan, and it will be interesting to see how local companies' technologies can be fed back into remote area medical care.

4. Challenges and prospects

Due in part to recovery funds, Fukushima Prefecture has been enjoying a steady influx of new medical device manufacturers, as well as major capital investment, and prospects are becoming bright. Olympus has announced that it will invest around 18 billion yen in both its Aizu and Shirakawa plants to boost its endoscope production capacity by 30 percent (December 2012), while Fuji Systems will build a second medical catheter plant in Shirakawa City (2012). Cyberdyne (Tsukuba City), known for its welfare-use robotic HAL suits, and Niti-on Co. (Funabashi City) plan to build new factories in Koriyama City (July 2014).

While this seems very promising, once the recovery budget runs dry, the risk is that the momentum of disaster recovery too will stall. It is not that easy for local governments to attract companies. I believe that long-term industrial stimulation and industrial cluster development-over 10 or 20 years-requires true industry-university-government partnership, whereby industry takes the lead and government and university understand that and extend their cooperation. The industry needs to be developed in close consultation with the local factories and works on the frontlines of medical device development and production, as well as industrial association members.

Building industrial clusters is more than simply increasing company numbers. Industry has to develop the relevant human resources-development staff for factories and works, engineers, quality assurance officers and the like-while local governments have their own personnel development needs, including human resources for commercialization support, coordination and pharmaceutical affairs. In other words, industrial clusters are clusters of human resources. The necessary foundations are steadily forming in Fukushima and Tohoku as a whole. New seeds have been planted for a medical device industry, and Tohoku can now look forward to them coming to bloom.

(original article : Japanese)
(For the Japanese version of this article)

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