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Lessons Learned

From the Mistakes of Others

Keisuke Kaye Suzuki

March 30, 2007

Basic Market Entry Models
Direct Operation Investment Risk

Market Penetration
Operational Expenses

Joint Venture
Share and Board Balance
Transfer Price

Distributorship -
Distribution Strength
Purchasing Commitment
Additional 2 Cs
Cultural Commercial Compliance
Direct Operation Investment Risk Investment Risk Investment Risk

Joint Venture
= =

Distributorship + - +
Basic Model - Kayes View
Code of Conducts
Core Value
Direct Communications

Compliance Venture
Regulatory (PAL)
Pre-clinical (GLP)
Clinical (GCP & GPSP) Capability
Quality (GQP & QMS) Commitment
Vigilance (GVP)
Distributor Channels
Seizou-Hanbai Shonin (Market Release Approval)
1. YOUR distributor is the applicant - usual
Apply as the Market release Authorization license Holder
(MAH, Seizou-Hanbai Gyosha) for the product
Changing distributor is a potential challenge as Shonin is
granted to distributor, not YOU

2. YOU can be the applicant - alternative

Apply directly under the Foreign Special Exemption
Approval System (PAL article 19-2)
Appoint distributor as Designated MAH (Sennin MAH)
delegated on GVP compliance
Changing distributor is not prevented by regulatory issue
Can you have the distributor be your outsource?

Market Release = To originate Manufacturing, Importation, Distribution, Sale, Rent and/or Present
Lesson 1

1. What are important criteria that Ace should

evaluate and watch out for, during their
selection process to identify the right-fit
partner in Japan?

2. What can Ace do besides finding their

distributor in Japan to speed up the market
Japanese market (size, growth, therapy acceptance, competitors and price)
is very attractive

US still needs continuous resource focus

Distributor candidates are identified with background check completed

All distributor candidates hold Class 1 Device MAH

Model A ventilator is classified as Controlled Medical Device without

Approval Standard

Implantable breath assist device is first of its kind, classified as Highly

Controlled Medical Device with Clinical data necessary
Criteria - Commercial (1)
Value & Vision Monitoring Metrics
Key Decision Maker Alignment

Structure Strategies
Incentives Customer Handlings
Training Customer Segmentation

Launch Strategies English Capabilities
Processes Customer Preferences
Product Positioning Market Intelligence
Criteria - Commercial (2)
Workforce Diversity
Age Turnover
Gender Tenure

Supply Chain
Inventory Management Labeling Operation
Dealer Management After Service

Voice of Stakeholders
Customers Regulators
Competitors Present Manufacturers
Dealers Past Manufacturers
Criteria - Compliance & Cultural (1)
Demand and Observe
Alignment on Shonin strategy
Bilateral satisfaction of WHY before any action
Peer review on all documents PRIOR to submission
Participation on all meetings with MHLW/PMDA
Biweekly conference call to align on next step
Quarterly face to face meeting

Offer and Observe

Full dossier submitted to FDA and CE Notified Body
Training and Testing on products and dossiers
Drafting English respond to all inquiries as a base
Criteria - Compliance & Cultural (2)
Conduct an AUDIT on PAL & Ethics compliance
Just like FDA and/or CE notified body will to YOU
Audit the system, procedures, controls and records

Observe how the distributor,

handles the audit;
accepts the findings and observation;
develops CAPA plans;
reach for your advise; and
executes CAPA

Compare with YOURSELF

How you will handle this situation if you were on their shoes?
Lesson 2

1. What are important criteria that Ace should

evaluate and watch out for, during their
selection process to identify the right-fit
partner in Japan?

2. What can Ace do besides finding their

distributor in Japan to speed up the market
Basics for Quality
Seiri, Seiton, Seisou, Seiketsu, Shituke
Arrange, Order, Clean, Neat, Habit

5 MU
Muri, Muda, Mushi, Muchi, Mura
Overstressed, Waste, Ignorance, Untrained, Non-uniform

Genba, Genbutsu, Genjitsu, Genri, Gensoku
On Site, Actual Thing, Reality, Theory, Principal
Good Preparation (1)
Understand PAL, GLP, GCP, GQP, QMS, GVP and GPSP

Understand the Shonin application review process

Organize FDA and CE Review History and Records

Obtain Copies of Similar Device Shonins

Compose Compelling Explanations on Safety & Efficacy

Conduct GCP Documentation Quality Check

Develop Detailed CRF Spreadsheet

Good Preparation (2)
Develop Detailed Material/Component List

Compile into A Product Master File

Review Complaint Records and MDRs

Review Field Actions and Associated CAPA

Conduct R&D Documentation Quality Check

Prepare for Foreign Manufacturer Accreditation Application

Prepare for Detail Oriented Audit by PMDA

Draft YOUR Thesis (1)
Medical Device Market Release Shonin Application
Japan Medical Device Classification
Japan Medical Device Nomenclature
Applied Product Name
Intended Use, and Efficacy
Description of Shape, Dimensions, Structure and Mechanism
Detailed Raw Materials and/or Components
Instruction for Use and/or Operation
Basic Manufacturing Processes
Storage and Shelf Life
Designated Manufacturers
Designated Raw Material and/or Component Manufacturers
Notes and Remarks
Draft YOUR Thesis (2)
Highly Highly
Shonin Application Attachments Controlled
Controlled Controlled

Approval Standard No Yes No No

Clinical necessity No No No Yes
Development Background (Origin & History) Possibly No Yes Yes
Usage in Foreign Countries Possibly Possibly Yes Yes
Comparison with Similar Devices Yes Yes Yes Yes
Descriptions on Specifications and their justification Yes Yes Yes Yes
Justifications on Stability and Durability Possibly Possibly Possibly Possibly
Documentation on Basic Requirements Conformity Declaration Yes Yes Yes Yes
Justifications on Basic Requirements Conformity (MHLW PN122, 03/29/2005) Yes Yes Yes Yes
Supporting tests & results on Performance and Safety Yes Yes Yes Yes
Supporting tests & results on Efficacy Possibly Possibly Possibly Possibly
Supporting tests & results on Handling and Usage Possibly Possibly Possibly Possibly
Explanations on Risk Analysis Implementation System Yes Yes Yes Yes
Justifications on Potential Critical Hazards Yes Yes Yes Yes
Explanations on Manufacturing Process and Equipments/Facilities Yes Yes Yes Yes
Explanations on Sterilization Possibly Possibly Possibly Possibly
Explanations on Quality Control Yes Yes Yes Yes
Clinical Trial Reports Possibly No No Yes
Post Marketing Study Execution Plan (draft) Possibly No No Yes
YOUR distributor represents YOU; NOT ONLY your products to the
stakeholders - Become Dynamic Duos with your distributor!

YOU need to be PROACTIVE, NOT REACTIVE; define and take the


YOU have to shift your perception; Japan is not fundamentally different

from YOU - YOU need to take away your sunglasses

YOUR Compliance Risk is the same; Distributor, Joint or Direct

YOU need to invest time and money, do your homework to gain access
to attractive Japan market; nothing come for FREE

YOUR overall cost will be higher later, if you compromise now; deal with
it upfront
Your most unhappy customers are your
greatest source of learning. - Bill Gates

The Quality is mental; Overall Functionality

versus Sum of Individual Component

The difficult part is to understand the true

WHY? (min. 3 layers deep), then the rest if fairly