[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.
____________________