[Congressional Record Volume 151, Number 154 (Friday, November 18, 2005)]
[Senate]
[Pages S13401-S13403]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




SENATE CONCURRENT RESOLUTION 67--URGING JAPAN TO HONOR ITS COMMITMENTS 
  UNDER THE 1986 MARKET-ORIENTED SECTOR-SELECTIVE (MOSS) AGREEMENT ON 
     MEDICAL EQUIPMENT AND PHARMACEUTICALS, AND FOR OTHER PURPOSES

  Mr. COLEMAN submitted the following concurrent resolution; which was 
referred to the Committee on Foreign Relations:

                            S. Con. Res. 67

       Whereas the revolution in medical technology has improved 
     our ability to respond to emerging threats and prevent, 
     identify, treat, and cure a broad range of diseases and 
     disabilities, and has the proven potential to bring even more 
     valuable advances in the future;
       Whereas medical technology has driven dramatic productivity 
     gains for the benefit of patients, providers, employers, and 
     our economy;
       Whereas investment from the United States medical 
     technology industry produces the majority of the 
     $220,000,000,000 global business in development of medical 
     devices, diagnostic products, and medical information 
     systems, allowing patients to lead longer, healthier, and 
     more productive lives;
       Whereas the United States medical technology industry 
     supports almost 350,000 Americans in high-value jobs located 
     in every State, and was historically a key industry, as it 
     was a net contributor to the United States balance of trade 
     with Japan, which was a trade surplus of over $7,000,000,000 
     in 2001, and continued to be a surplus until 2005, when the 
     trade balance became a trade deficit of $1,300,000,000, due 
     in part to changes in the policies of Japan that impact 
     medical devices;
       Whereas Japan is one of the most important trading partners 
     of the United States;
       Whereas United States products account for roughly \1/2\ of 
     the global market, but garner only a \1/4\ share of Japan's 
     market;
       Whereas Japan has made little progress in implementing its 
     commitments to cut product review times and improve their 
     reimbursement system in bilateral consultations on policy 
     changes under the Market-Oriented Sector-Selective (MOSS) 
     Agreement on Medical Equipment and Pharmaceuticals, signed

[[Page S13402]]

     on January 9, 1986, between the United States and Japan;
       Whereas, although regulatory reviews in Japan remain among 
     the lengthiest in the world and Japan needs to accelerate 
     patient access to safe and beneficial medical technologies, 
     recently adopted measures actually increase regulatory 
     burdens on manufacturers and delay access without enhancing 
     patient safety;
       Whereas the general cost of doing business in Japan is the 
     highest in the world and is driven significantly higher by 
     certain factors in the medical technology sector, and 
     inefficiencies in Japanese distribution networks and hospital 
     payment systems and unique regulatory burdens drive up the 
     cost of bringing innovations to Japanese consumers and impede 
     patient access to life-saving and life-enhancing medical 
     technologies;
       Whereas artificial government price caps such as the 
     foreign average price policy adopted by the Government of 
     Japan in 2002 restrict patient access and fail to recognize 
     the value of innovation;
       Whereas less than \1/10\ of 1 percent of the tens of 
     thousands of medical technologies introduced in Japan in the 
     last 10 years received new product pricing;
       Whereas the Government of Japan has adopted artificial 
     price caps that are targeted toward technologies 
     predominately marketed by companies from the United States 
     and is considering further cuts to these products; and
       Whereas these discriminatory pricing policies will allow 
     the Japanese Government to take advantage of research and 
     development from the United States: Now, therefore, be it
       Resolved by the Senate (the House of Representatives 
     concurring), That Congress--
       (1) urges Japan to honor its commitments under the Market-
     Oriented Sector-Selective (MOSS) Agreement on Medical 
     Equipment and Pharmaceuticals, signed on January 9, 1986, 
     between the United States and Japan (in this resolution 
     referred to as the ``MOSS Agreement''), by--
       (A) reducing regulatory barriers to the approval and 
     adoption of new medical technologies; and
       (B) meeting or exceeding agency performance goals for 
     premarket approvals and adopting an appropriate, risk-based 
     postmarket system consistent with globally accepted 
     practices;
       (2) urges Japan to honor its commitments under the MOSS 
     Agreement to improve the reimbursement environment for 
     medical technologies by actively promoting pricing policies 
     that encourage innovation for the benefit of Japanese 
     patients and the Japanese economy and eliminating 
     reimbursement policies based on inappropriate comparisons to 
     markets outside Japan; and
       (3) urges Japan to honor its commitments under the MOSS 
     Agreement by--
       (A) implementing fair and open processes and rules that do 
     not disproportionately harm medical technology products from 
     the United States; and
       (B) providing opportunities for consultation with trading 
     partners.

  Mr. COLEMAN. Mr. President, we share a strategic and important 
relationship with Japan. A relationship that has proven to be vital for 
both countries, as we enhance our collaboration on everything from 
economic pursuits to our joint national security interests. On all of 
these fronts Japan has demonstrated that it is both a committed partner 
of the U.S. as well as a global leader in its own right. It is because 
Japan has demonstrated its leadership on the global stage that I 
support its bid to become a member of the U.N. Security Council.
  As with any partnership, the U.S. and Japan face the occasional 
challenges to this cooperation. One might argue this is an opportunity 
for the U.S. and Japan to strengthen their partnership and increase 
collaboration and trade. The time is now to push this cooperation. 
However, I am concerned about a threat to our trade relationship with 
Japan based on our medical technology industry's market access in 
Japan. It is crucial to my State of Minnesota that we have access to 
this market and to our country.
  Last Congress, I submitted a resolution in the Senate expressing my 
concern that discriminatory practices and systematic barriers have 
limited the ability of the U.S. medical device industry to introduce 
new technologies into the Japanese healthcare system. Today, I am 
resubmitting similar resolution. I am concerned that insufficient 
progress has been made by the Japanese to address policies that 
penalize American companies and ultimately prevent Japanese citizens 
from receiving the most advanced healthcare.
  This resolution recognizes that medical technology has driven 
dramatic productivity gains for the benefit of patients, providers, 
employers and our economy. It also states that Japan is one of the most 
important trading partners of the U.S., and urges Japan to honor its 
commitments under the Market-Oriented, Sector Specific, MOSS Agreement. 
This agreement calls on the Japanese to improve the reimbursement 
environment for medical technologies by actively promoting pricing 
policies that encourage innovation and eliminating policies based on 
inappropriate comparisons to markets outside Japan.
  Discriminatory practices targeting the medical device industry 
directly affect my state and many of my constituents. This is due to 
the fact that Minnesota is the proud home to a thriving medical 
technology industry. Minnesota's medical alley is a rich corridor of 
more than 8,000 medical-related companies--12 percent of our 
workforce--and is home to over 520 FDA-registered medical technology 
manufacturers. Employment in the industry increased 33 percent from 
1991 to 2001, adding over 23,000 jobs to the State of Minnesota. The 
jobs produced by the medical technology industry represent a lucrative 
opportunity for my constituents, as the aggregate figure for wages 
exceeds $1.3 billion an average of over $56,000 per employee.
  The benefits that Minnesota has derived from being home to a 
flourishing medical technology industry are well-deserved and a product 
of hard work. Minnesota ranks second only to California in device 
companies, and our State is home to many technology firsts: the first 
implantable cardiac pacemaker, artificial heart valve, implantable drug 
transfusion pump, wireless cardiac monitoring system, blood pump, 
anesthesia monitor and many more examples. The success we have had in 
Minnesota is also indicative of the positive trends that have been 
experienced by the entire industry throughout the U.S.
  The positive trends of American medical technology companies' 
performance in domestic and international markets are not reflected in 
their experience with the Japanese market. The fact of the matter is 
that U.S. medical technology companies are discriminated by Japanese 
policies. There are numerous examples of these policies, but I will 
only briefly mention a few.
  Japan has adopted a foreign reference pricing system to reduce 
reimbursement prices in Japan's health system, a tool long opposed by 
the U.S. Government and the medical technology industry. This system 
calls for the establishment and revision of reimbursement rates on the 
basis of prices paid for medical technology products in the U.S., 
France, Germany, and the U.K. This pricing policy therefore fails to 
account for the high costs of bringing advanced technologies to the 
Japanese market, and instead bases prices on arbitrary conditions that 
exist outside of Japan.
  In addition, Japan's system for approving the use of new medical 
technologies is the slowest and most costly in the developed world. The 
backlog in processing applications for medical technology products is 
staggering, and may be primarily related to the lack of staff dedicated 
towards the review of applications. Importantly, the end result has 
been that the medical technologies used to treat patients in Japan are 
often several generations behind the products utilized in the U.S.
  These and other regulatory hurdles embedded in the Japanese medical 
technology industry conflict with regulatory commitments made to the 
U.S. under the MOSS trade agreement. They also contradict the 
philosophy underpinning the Global Harmonization Task Force, to which 
the U.S., Europe and Japan are a party. Even our friends need to be 
held accountable to the agreements they sign, otherwise they become 
less valuable than the paper they are printed on.
  I urge our friends in the Japanese Government to take aggressive 
action to remedy this clearly unfavorable situation. Non-tariff 
regulatory and reimbursement policies discriminate U.S. manufacturers. 
While these policies hurt U.S. manufacturers' economically, ultimately 
the biggest losers of these policies are Japanese patients. Innovative 
medical technologies offer the possibility of key health solutions to 
all nations, including those that face severe health care budget 
constraints and the demands of aging populations. Past experience has 
demonstrated that the U.S. and Japan are able to overcome challenges 
that arise in our relationship, thus making it stronger. I think that 
both countries

[[Page S13403]]

stand to gain significantly if the principles of the resolution I am 
presenting today are upheld.
  I urge my fellow colleagues to join me in Japan to honor its 
commitments under the 1986 Market-Oriented Sector-Selective, MOSS, 
Agreement on Medical Equipment and Pharmaceuticals by supporting this 
resolution.

                            S. Con. Res. 67

       Whereas the revolution in medical technology has improved 
     our ability to respond to emerging threats and prevent, 
     identify, treat, and cure a broad range of diseases and 
     disabilities, and has the proven potential to bring even more 
     valuable advances in the future;
       Whereas medical technology has driven dramatic productivity 
     gains for the benefit of patients, providers, employers, and 
     our economy;
       Whereas investment from the United States medical 
     technology industry produces the majority of the 
     $220,000,000,000 global business in development of medical 
     devices, diagnostic products, and medical information 
     systems, allowing patients to lead longer, healthier, and 
     more productive lives;
       Whereas the United States medical technology industry 
     supports almost 350,000 Americans in high-value jobs located 
     in every State, and was historically a key industry, as it 
     was a net contributor to the United States balance of trade 
     with Japan, which was a trade surplus of over $7,000,000,000 
     in 2001, and continued to be a surplus until 2005, when the 
     trade balance became a trade deficit of $1,300,000,000, due 
     in part to changes in the policies of Japan that impact 
     medical devices;
       Whereas Japan is one of the most important trading partners 
     of the United States;
       Whereas United States products account for roughly \1/2\ of 
     the global market, but garner only a \1/4\ share of Japan's 
     market;
       Whereas Japan has made little progress in implementing its 
     commitments to cut product review times and improve their 
     reimbursement system in bilateral consultations on policy 
     changes under the Market-Oriented Sector-Selective (MOSS) 
     Agreement on Medical Equipment and Pharmaceuticals, signed on 
     January 9, 1986, between the United States and Japan;
       Whereas, although regulatory reviews in Japan remain among 
     the lengthiest in the world and Japan needs to accelerate 
     patient access to safe and beneficial medical technologies, 
     recently adopted measures actually increase regulatory 
     burdens on manufacturers and delay access without enhancing 
     patient safety;
       Whereas the general cost of doing business in Japan is the 
     highest in the world and is driven significantly higher by 
     certain factors in the medical technology sector, and 
     inefficiencies in Japanese distribution networks and hospital 
     payment systems and unique regulatory burdens drive up the 
     cost of bringing innovations to Japanese consumers and impede 
     patient access to life-saving and life-enhancing medical 
     technologies;
       Whereas artificial government price caps such as the 
     foreign average price policy adopted by the Government of 
     Japan in 2002 restrict patient access and fail to recognize 
     the value of innovation;
       Whereas less than \1/10\ of 1 percent of the tens of 
     thousands of medical technologies introduced in Japan in the 
     last 10 years received new product pricing;
       Whereas the Government of Japan has adopted artificial 
     price caps that are targeted toward technologies 
     predominately marketed by companies from the United States 
     and is considering further cuts to these products; and
       Whereas these discriminatory pricing policies will allow 
     the Japanese Government to take advantage of research and 
     development from the United States: Now, therefore, be it
       Resolved by the Senate (the House of Representatives 
     concurring), That Congress--
       (1) urges Japan to honor its commitments under the Market-
     Oriented Sector-Selective (MOSS) Agreement on Medical 
     Equipment and Pharmaceuticals, signed on January 9, 1986, 
     between the United States and Japan (in this resolution 
     referred to as the ``MOSS Agreement''), by--
       (A) reducing regulatory barriers to the approval and 
     adoption of new medical technologies; and
       (B) meeting or exceeding agency performance goals for 
     premarket approvals and adopting an appropriate, risk-based 
     postmarket system consistent with globally accepted 
     practices;
       (2) urges Japan to honor its commitments under the MOSS 
     Agreement to improve the reimbursement environment for 
     medical technologies by actively promoting pricing policies 
     that encourage innovation for the benefit of Japanese 
     patients and the Japanese economy and eliminating 
     reimbursement policies based on inappropriate comparisons to 
     markets outside Japan; and
       (3) urges Japan to honor its commitments under the MOSS 
     Agreement by--
       (A) implementing fair and open processes and rules that do 
     not disproportionately harm medical technology products from 
     the United States; and
       (B) providing opportunities for consultation with trading 
     partners.

                          ____________________