Chairman's Message for 2010

At the beginning of 2010, I would like to express my opinions and take advantage of this turning point to take a look back at the activities of JIRA.

JIRA has concentrated much energy into helping the Revised PAL, enacted in 2005, become firmly established. We have cooperated with the government in formulating guidelines and rules and spared no pains in the development and education of member companies. As a result, I believe our industry safely operates under the provisions of the Revised PAL.

With the introduction by the government in 2007 of the "5-year Strategy for the Creation of Innovative Pharmaceuticals and Medical Devices," and in 2008 of the "New Medical Device/Medical Technology Industry Vision," JIRA created a "JIRA 5-year Strategy Promotion WG" and has worked together with related organizations to actively make recommendations to the government. With this, we have come to understand that since medical devices differ from pharmaceuticals and are of great variety, by improving existing products or fusing together different technologies, we are able to create new devices. With the enactment of the Revised Medical Care Law in 2007, we have also promoted the importance of maintenance inspections for medical devices in coordination with the Law.

In addition, we have promoted efforts on behalf of the suitable economic valuation of radiological systems, international coordination regarding standards and regulations in response to market globalization, and overseas exhibition activities. We have also continued the core activities of JIRA of promoting standardization, conducting educational and training activities regarding "security and safety," collecting market data and running surveys, and managing exhibitions. In this way, we have contributed in various ways to the development of the radiological systems industry.

On the other hand, society has recently been exposed to large waves of change. Because of the global economic crisis, it is now important that we create not simply short-term economic policies, but new mid-and-long term growth strategies. Japan has had a change of government, and in order to enact bold reforms the new administration is seeking out a new political style. Furthermore, with the development and diffusion of IT (Information Technologies) such as computers and the Internet, society is undergoing rapid changes. Indeed, no matter the area – economics, politics, or technology – all are undergoing great transformations, and these effects are also clearly sweeping over the field of radiological systems.

In recent years, technical innovations in radiological systems have proceeded at a rapid rate leading to dramatic improvements in diagnostic accuracy for cancer, brain and heart disease patients; our field has contributed greatly to the modernization of medicine and to its quality enhancement. At the same time, with constraints on medical treatment fees, there is concern that people do not correctly recognize the value of their treatment nor correctly estimate its economic value. Especially, in the radiological systems field where innovations in software and IT can be dramatic, ensuring that technology is recognized as a kind of medicine and fairly assessed is important.

Also, though it is true that medical devices themselves are now recognized as ranging widely, we must take into consideration the specific characteristics of radiological systems and ensure that they are promoted by being included in national policies.

Furthermore, market globalization has escalated international competition as well as calls for global harmonization and thus affected the structure of the radiological systems industry. JIRA market data show that whereas the medical device markets in Germany, Great Britain, India, and Russia are expected to grow, the Japanese market reached its peak in 2006 and is now declining. Both this downturn in the domestic market and decline in exports and imports are disturbing problems for our industry association.

To respond to these changes, I believed it was necessary to quickly and proactively stimulate the radiological systems industry and so launched the "JIRA Future Vision Project" and also complied the "Action Plan Aimed at Developing a New Dynamism in the Radiological Systems Industry." The gist of this was to implement a speedy decision-making process which can respond to our rapidly changing times, to make policy recommendations and strengthen collaboration with the government in order to ensure industry development and fair evaluations, to promote the growth of the radiological IT industry and, to reexamine and optimize JIRA's organization to ensure that we move forward. I combine these reform ideas into the seven points below to make up the "JIRA 2010 Core Activity Plan" and ask all member companies to work together to promote their achievement.

JIRA believes that "being in compliance" is absolutely necessary in company activities and so have been thorough in encouraging this by creating a Compliance Committee and Trade Modernization Committee. We have also strictly maintained a Code of Ethics, a Compliance Declaration, and Medical Device Industry Promotion Codes. In spite of these efforts, however, there has been repeated misconduct by member companies, and so we regret our efforts have not been sufficient. Going forward we will raise the level of self-auditing in compliance matters and, as a corporation, strictly promote compliance within JIRA by having each division and committee voluntarily take responsibility for auditing. Also, by improving our guidelines and educational pamphlets, and our study seminars and consultation services, we will urge our member companies to be thorough about having a compliance mind-set.

1. Making policy recommendations to government and strengthening collaboration

While astutely taking into consideration changes in the various fields of economics, politics, and technology, we will clarify the JIRA vision and proactively propose solutions to the government. The areas in which we will make recommendations are wide-ranging: 1) the realization of a medical service remuneration system that is predictable and thus promotes a willingness to invest in research development, 2) the application of Japan's high level of technical craftsmanship, nanotechnology, software and image processing technology in the medical device industry, 3) a structure for cooperation between government agencies and industrial associations that allows us to exercise international leadership, 4) the realization of medical device regulations that are internationally consistent, and 5) the cultivation of specialists who understand the characteristics of medical devices. Also, regarding operational difficulties under the Revised PAL, though we have responded to the problems while consulting with the government, now that five years have passed since the Law went into effect, I believe the time has come for broad reforms. To summarize, the areas where JIRA now needs to improve are: 1) To put into writing standards for setting remuneration fees, 2) The medical devicification of medical-use application software, 3) Streamlining of the screening process for generic devices, 4) The global harmonization of QMS (Quality Management Systems), 5) Consideration of the creation of a "Medical Device Law" (provisional name). As the principal organization that will move ahead on these matters, we will create a "JIRA Industrial Strategy Office" to begin taking action.

2. Promoting the growth of the radiological systems IT industry

In recent years, information technology (IT) has made impressive progress as part of our social infrastructure. The needs for Medical IT have changed and grown; new technological fields and device categories have come into being. Some representative examples would be CAD(Computer Aided Diagnosis), the Database Application Systems of EHR/PHR (Electronic Health Records/Personal Health Records), and remote diagnosis systems that help to eliminate regional disparities. Also, the evolution in modalities such as CT/MRI (Computed Tomography/Magnetic Resonance Imaging) has been dramatic. This has been supported by software technology and also led to the development of new information technologies that take advantage of image data.

The number of companies joining JIRA that are involved in information technology industries has been increasing such that as of December 2009, they make up 80 of our 172 member companies. If we look at segment sales in the first half of 2009, we find that diagnostic image processors and other IT-related devices had breakthrough sales, with the devices coming in second position after X-ray apparatus. Taking this situation into consideration, we will work to grow and expand the Medical IT industry in the following ways:

• We will further strengthen the activities of the "JIRA-IT Zone" which was started last year to focus on IT related member companies. Through seminars, round-table discussions, and information exchange sessions, we will not only share information about government and overseas matters, we will work toward putting into effect policies that enhance the growth of the Medical IT industry.
• In March of 2010, results for the Ministry of Health, Labour and Welfare Scientific Research Team's "Survey on Regulations in Foreign Countries Regarding Software; Basic Survey of Software Used in Medical Devices" is expected to be finalized. Based on these results, JIRA will encourage the government to work towards a quick realization of the"medical devisification"" of clinical application software.
• In order to nurture the Medical IT industry and respond to its sophisticated nature, we will work on creating standards and guidelines that take into consideration safety and security needs.
• With the "JIRA Industrial Strategy Office" playing the central role, we will carry forward infrastructure building in order to establish the vision of the Medical IT industry.

3. Activities and recommendations seeking fair reimbursement of medical fees

JIRA has worked on behalf of the fair assessment of reimbursement fees for radiological system treatment. In this regard, along with sifting out problems related to the warrant for the decision process and reimbursement amount and the fee-sharing structure, we also argued for the establishment of rating systems for CAD and other new technology.
We will continue to coordinate on the following with related associations and proactively approach the government.

• We will continue to call for the establishment of the new concept of "digital radiography" so that digital radiography, which requires advanced image processing, accuracy control, and security will be fairly assessed.
• Without regular maintenance it is impossible to maintain most diagnostic imaging devices in a safe condition. We will continue to recommend that maintenance costs be clearly articulated and put in writing. Also, regarding devices that require urgent attention, we will urge discussions toward expanding the application of the "medical device safety management fee."
• Regarding innovation in medical devices, we will continue to recommend that technology such as CAD be evaluated and that accompanying legislation be introduced.

Also, since evaluation in the medical fee remuneration system is the most important factor influencing the predictability of development in the medical device industry, we will coordinate with related associations on the reevaluation of existing technology and, once the premises are clarified, make appropriate recommendations.

4. Promoting efforts to ensure medical devices are "safe" and "secure"

According to results from JIRA's "Survey Concerning the State of Adoption of Radiological Systems and Safety Ensurance," though the replacement cycle for diagnostic imaging devices is becoming longer year by year and the rate of maintenance and inspection is increasing, the survey also shows that there are large variations depending on the kind of device, kind of hospital, and kind of facility function. To that the post-sale safety measures outlined in the Pharmaceutical Affairs Law concerning the quality, effectiveness, and safety of medical devices are strengthened, we will coordinate with related associations on the following measures:

• When a medical device is introduced into a healthcare facility, the manufacturer must provide model information to the facility. In this regard, we have already created "Guidelines for Device Delivery" for six kinds of main units. We will create a new guideline for "Work Stations and Networks" as well as revise our existing materials.
• We will revise the content of our "Continuing Education Seminars" and classes to educate "Medical Device Information Contact Persons." We will continue to operate these seminars which have gained the support of the three related associations and been held each year since 2006.
• Since many medical devices have a high concentration of technologies, it is impossible to completely deny that unforeseen defects made during the development or manufacturing stages might be revealed post-sale. In order for the manufacturer to quickly and accurately learn of these problems, we will consider creating guidelines for the appropriate implementation of GPSP (Good Post Marketing Study Practice).

5. Strengthening International Activities

Along with deepening relations with related government agencies in Japan, we will communicate JIRA opinions overseas. In addition, we will proactively express our desires and requests regarding overseas regulations.

Along with actively promoting the work discussed below, this year JIRA will lead DITTA (International Congress of the Diagnostic Imaging and Therapy Systems Trade Associations) in our role as Chairman. Also, as Japan is the APEC (Asia-Pacific Economic Cooperation) Conference Chair, we will deepen discussions in the LSIF (Life Sciences Innovation Forum) concerning the harmonization of regulations within APEC.

• As Japan is one of the founding members of the GHTF (Global Harmonization Task Force), we will continue to dispatch members to the SC (Steering Committee) and SG (Study Group) and proactively communicate opinions from the Japanese industry's point of view.
• We will exchange information with overseas related industrial associations such as NEMA-MITA （Medical Imaging & Technology Alliance, a Division of the National Electrical Manufacturers Association）, COCIR (European Coordination Committee of the Radiological, Electromedical and Healthcare IT Industry) and MEDEC (Canada's Medical Technology Companies) concerning areas such as market trends in the radiological systems industry, trade negotiations, global harmonization in regulations and standards, and reimbursement of medical services.
• In Asia, we will deepen our interactions with the governments and industry associations of China and South Korea and promote information exchange. We will also cooperate with COCIR and NEMA-MITA to energize industry activities in China.
• In the AHWP (Asian Harmonization Working Party), as Japan is a founding member of GHTF we will conduct support activities. We will also proactively seek to collect information in Asian regions where the regulation of medical devices is under way.
• Concerning medical information technology, we will seek access to information from individual countries on their promotion measures and government regulations.

6. Strengthening standardization activities based on global harmonization

With the effect in 1995 of the WTO/TBT (World Trade Organization Agreements on Technical Barriers to Trade), the importance of international standards in the global market increased dramatically. As JIRA has "standardization based on global harmonization" as one of its basic policies, we have responded promptly to standards deliberations on drafting IEC Specifications and proactively participated in IEC international meetings in order to express Japan's opinion on matters. We have particularly contributed in recent years to the formulation of appropriate standards by participating in individual international meetings concerning alignment with the third edition of the General Standard IEC 60601-1 regarding the safety of electromedical equipment. Also, with regard to approval and licensing of medical devices per the Revised PAL, since JIS Standards are being more actively used, the importance of alignment with international standards will now become more significant. So, along with ensuring that IEC standards become, without delay JIS-sized, in order to strengthen the international competitiveness of the radiological systems IT industry, we will actively work on the international standardization of image processing technology and software.

7. Strengthening JIRA's infrastructure

The following four points are measures aimed at strengthening JIRA's foundations and were drafted by the previously mentioned "JIRA Future Vision Project." This year we will work to translate these into reality.

1. Implement swift decision-making
   In order to be able to act more quickly in response to the needs and information identified in the course of the activities of each division and committee, we will accelerate our decision-making by splitting up the existing "Policy Planning and Administration Council" into an "Administration Council" responsible for management functions, and a "Policy Planning Council" responsible for JIRA decision-making.
2. Strengthen collaboration with government
   There is a concern that amidst the great variety of medical devices the value of radiological systems is not fully appreciated. We will thus proactively express to the government appropriate points of view and countermeasures. (See Section 1 above.)
3. Promote the growth of the Radiological IT Industry
   In addition to promoting the growth of software "medical devicification," global harmonization, and standardization, we will promote the growth of the radiological IT industry. (See Section 2 above.)
4. The optimization of the JIRA Organization
   Since better information sharing between divisions and committees improves synergy, we will move to reform the organization's structure into a crisscrossing matrix where divisions focusing on specialized activities (vertical axis) cross with committees that focus in a cross-sectoral manner on issues resulting from changes in the external environment (horizontal axis).

This concludes my look back on JIRA activities from 2005 and a discussion of the core activities planned for this year. To ensure these activities produce results, it will be absolutely necessary that in addition to our own activities, we work together with those in government, related associations and industry groups. Your continued understanding and support is greatly appreciated.

In order to strengthen our core activities, we will continue to promote the following:

This year JIRA will manage The International Technical Exhibition of Medical Imaging 2010 （ITEM 2010）, the 38th Japanese Society of Magnetic Resonance in Medicine (JSMRM) and Medical Device Exhibition, and the Annual Meeting and Exhibition of the Japanese Society of Nuclear Medicine. The International Technical Exhibition of Medical Imaging 2010 （ITEM 2010） will be held at Pacifico Yokohama from April 9-11.

Going forward, we will continue to deliver information through our website, internationally the electoronic version of "Radiology Japan", and for members, continue to publish JIRA News. By also regularly publishing JIRA Bulletin, Diagnostic Imaging Device Industry 2010, and the JIRA Technical Report, we will promote the delivery of information both inside and outside of Japan.