As global medical device companies look to expand in Asia, Japan and China remain critical and high-potential markets. These countries present complicated and emerging regulatory frameworks that can pose significant barriers to international device manufacturers, although they promise substantial revenue prospects too. China and Japan have implemented public health and innovation-focused reforms over the past few years, aiming to address the system’s oversight, innovation, and public health challenges. Global medical device companies must grasp these shifts and prepare for their pragmatic implications to achieve success.
While both countries work toward alignment with global regulatory frameworks, they still retain diverging governing local device requirements and expectations, which differ from the US and EU. Additionally, there are shifts toward local cost-effectiveness in supply chains which are being incentivized by shifts in pricing and reimbursement. More than just technical compliance, these challenges entail local involvement, in-depth understanding of the motivations in each system and strategic foresight.
China: Regulatory Tightening and Pricing Reforms
China’s regulatory environment has become increasingly more stringent over the last several years. The National Medical Products Administration (NMPA) is much more careful and engaged, and now requires extensive documentation and clinical evidence for even low-risk devices. When registering Class II or III devices, the NMPA is now often asking for a local clinical trial or a bridging study.
The technical reviews also involve numerous questions, ensuring compliance with China-specific GB standards and local testing at NMPA laboratories. Overall, Chinese regulators are sending a clear message: companies cannot take market access for granted, and manufacturers must provide and use localized, higher-quality evidence to demonstrate how their products meet the needs and expectations of patients, physicians, healthcare systems, and the public regarding safety and efficacy.
In late March 2025, the Center for Medical Device Evaluation (CMDE) under the NMPA announced new steps to guide the review of innovative devices. The stated goal is to accelerate the approval of medical technologies that address urgent, unmet needs, while increasing scrutiny on non-innovative or me-too products. Devices that incorporate novel technologies and demonstrate enhanced clinical value may be designated as “innovative,” a status that grants faster review timelines and greater regulatory support.
However, acceptance rates for foreign-made innovative devices remain low, and companies must submit strong clinical data to qualify. The CMDE’s Innovative Review Office aims to issue designation decisions within 60 days of application, but success depends heavily on the quality and relevance of the supporting data.
Even after obtaining regulatory approval, doing business in China has become significantly more challenging due to price reforms. National Volume-based Procurement (VBP) lowered some device prices by up to 80%, particularly for devices used in procedures carried out in high-volume hospitals. Concurrently, the rollout of Diagnosis-Related Groups (DRG) and Diagnosis Intervention Packet (DIP) reimbursement schemes further limited hospital purchasing autonomy. Such technological advances challenge providers to choose the lowest-cost devices capable of producing baseline clinical levels, posing significant challenges to foreign enterprises that export premium or high-priced unique technology.
To remain competitive, multinational manufacturers will need to develop robust value propositions that extend beyond regulatory approval. That means producing China-specific health economic data, making local partner or joint venture investments, and finding cost-down options that don’t compromise product quality but hit price caps. It’s essential to engage the services of a seasoned local regulatory and market access consultant to prevent pitfalls and leverage a strong positioning in this highly competitive environment.
Japan: Stringent Scrutiny and Focus on KOL Endorsement
Japan offers a more formalized and transparent system of regulation, but it also poses substantial challenges to foreign device companies seeking to obtain medical device registration in Japan. The Pharmaceuticals and Medical Devices Agency (PMDA) has developed a reputation for stringent scrutiny. Therefore, applicants should take advantage of the agency’s consultation programs. Risk-based classification systems, transparent documentation requirements, and additional fast-track mechanisms, such as those for regenerative medicine and digital health products, have minimized uncertainty in the approval process.
The latest amendment of the Pharmaceutical and Medical Device Act (PMD Act), unveiled in May 2025, supports compliance and accountability. According to the revised law, the Ministry of Health, Labour and Welfare (MHLW) can force a company to replace its Market Authorization Holder (MAH) if there is any quality issue. The new law also establishes new requirements for monitoring adverse events and mandates that MAHs appoint a Supply System Manager, who will notify the Japanese government of any supply disruptions.
Japan also aims to enlarge its early approval program for new drugs, devices, and diagnostics. The program enables certain products that meet important medical needs and for which no alternatives are available in the market to receive early approval based on good clinical data. The aim is to provide additional patient access to new medicines without compromising the compilation of real-world evidence. The new program would establish new channels for foreign firms with breakthrough technology if they can prove high clinical value.
Yet, the most significant hurdle for foreign device manufacturers in Japan is not always regulatory approval but reimbursement. In contrast to China, where reimbursement decision-making is controlled at the provincial level, in Japan, reimbursement decision-making is controlled by academic societies and Key Opinion Leaders (KOLs). The MHLW, as the entity that sets reimbursement prices, tends to seek expert opinions from Japanese physician organizations to assess the value and utility of new devices. For organizations unfamiliar with Japan’s consensus-oriented medical culture, this may result in unexpected delays or disappointing pricing outcomes.
Supporting local clinical value, cost-effectiveness, and national health goals is crucial to secure favorable reimbursement in Japan. For new devices, post-launch data and real-world evidence are critical. Similar to China, a local market entry and regulation consultant can assist companies in these efforts, build relations with opinion leaders, and optimize launch.
Convergence and Localization: Walking a Fine Line
Although both China and Japan have officially endorsed international regulatory alignment through platforms such as the International Medical Device Regulators Forum (IMDRF), they continue to use their own standards, forms, and regulatory approaches. For firms that have grown accustomed to harmonized submissions in both the EU and the U.S., this is still a significant issue in Asia.
This article was written for WHN by Ames Gross, President and Founder, Pacific Bridge Medical (PBM). Mr. Gross founded PBM in 1988 and has helped hundreds of medical companies with regulatory and business development issues in Asia. He is recognized nationally and internationally as a leader in the Asian medical markets. Mr. Gross has a BA degree, Phi Beta Kappa, from the University of Pennsylvania and an MBA from Columbia University.
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