OG Wellness, a leading Japanese manufacturer of advanced and user-friendly physiotherapy and rehabilitation equipment, has set its sight on the global market.
What is your analysis of Japan’s medical sector?
The Japanese market hasn’t gained a lot of traction. Economically we haven’t made large gains, but this is not because we haven’t produced innovative and important technology. Rather, it is due to the burden of the medical insurance system and due to the cost of the medical devices being kept very low. If Japan relaxes its insurance system, or removes some of its medical regulations, people are saying that the world of medical devices will increase five-fold. It is the insurance system that is keeping the market scale of medical devices low. Japanese companies that manufacture medical devices are quite well-known around the world. There are no good Japanese medical device companies that only focus on the domestic market. They are all looking overseas.
Medical device companies know that they are different from pharmaceutical companies. Pharmaceutical companies take care of all sorts of drugs for different illnesses. However, medical device companies only focus on one aspect, and try to increase their shares in that specific market. The cutting-edge medical device companies that I know in Japan are not trying to deal with the restrictions in Japan. Rather, they are looking at global markets, as they aim to increase their international sales. They also have some devices that they do not sell in Japan, as the cost to launch into the market may be too high. Japan is not attractive to medical devices companies because of its too-strict restrictions.
How is your company able to differentiate itself from your global competitors?
In the past, we developed our presence in Japan. We were able to make the company grow through our local domestic business. However, ten years ago, we started expanding overseas, as we saw the limitations of staying solely in Japan. We have two types of products. The first type of products are based on our originality, and are products that do not exist outside of Japan. We want to bring these unique Japanese products overseas.
The second type of products that we make are only made overseas. We cannot produce them in Japan. We first sell these products overseas, with the aim of bringing them back to Japan in the future. We know how to adhere to the regulations and get approval for these products, and we are working to bring them to the Japanese domestic market. That being said, there are some products that we sell overseas that we are unsure if they will be able to pass domestic regulations. These regulations can in some cases be very strict and hard to pass. We need to have ten years of profit in order to pass some Japanese device regulations.
Western media always talks about Japan’s aging society. While there are many negative sides such as accessibility of labor and recruitment, there are also positive sides such as the growing medical market both in Japan, and in other advanced countries such as the United States. What challenges and opportunities exist for your firm in catering to advanced societies or countries with growing medical markets?
There are many challenges when considering Japan’s aging society. One of the main challenges, as you have mentioned, is the decrease of manpower. The number of people in the labor force that enters into the medical and caregiving field is going to decrease. That being said, although manpower is decreasing in Japan, as our labor force gets older and retires, the number of people who need medical help is increasing. By making use of ICT and robot technology, we actually see the decrease in manpower as a good opportunity for us. ICT and robot technology can be used in the rehabilitation sector, as well as in nursing.
As for the decreasing amount of finance that goes into the medical department, what is important is to decrease the gap between the years when you pass away and the time when you are fit and healthy. Staying fit and healthy for as long as possible is definitely positive for one’s lifespan. The rehabilitation industry was originally developed in the United States to bring injured and ill soldiers back to society. This triggered the development of the rehabilitation sector.
Rehabilitation helps people to regain their power. They are more energetic. We can also decrease the burden of medical costs in Japan. This is a great opportunity for us, as we do not have many big competitors in our field. This is down to the fact that if you rehabilitate and get better, you no longer need rehabilitation equipment. That is the upper limit of this market. We are only needed when people are ill. A small amount of medical expenses for providing rehabilitation continuously keeps the system in motion to create healthy people..
We’ve increasingly heard of IoT and ICT as a means of conducting remote therapy for people living in hard-to reach-places, where there are not many available physicians or doctors, or for elderly people who have trouble leaving their homes. How is OG Wellness integrating ICT into its products, and how do you believe digital transformation is going to change physiotherapy?
This is what we marketed last year. It is called Be-Well. This is an OG Wellness digital link with a cloud-based system, which allows patients’ records of their training to be uploaded. Therapists are able to check these records in a timely manner, and give feedback. We want to produce more products that can be linked to our Be-Well OG data link. I believe that digital big data is going to change the world of rehabilitation. Thanks to big data, people will start verifying rehabilitation menus and protocols. Currently the menus and protocols that are used on site tend to be more individualistic with the therapists deciding on what kind of menu or protocol each person should use. This also can depend on who your therapist is. So far, there hasn’t been a lot of standardization which could advise you on what kind of protocols you should use for specific illnesses. There is also a lack of research as to what would be the optimal combination of therapies that could be used for specific illnesses. By making use of the data, I am hoping that we can establish links between the protocol menus and the disease states, so that treatment can be optimized.
We believe that by using reduced manpower, and through the use of our medical devices, we will be able to optimize the effects of rehabilitation. Currently we only have training medical devices, but we would like to combine them with more evaluation and analysis mechanisms, to measure the effects that they have on patients.
Our wish is to make a platform, and connect this platform to other devices from different manufacturers. I want to make this platform accessible to everyone. We are also considering M&As to acquire the devices that we need to fill in the gaps.
As you have mentioned, you are considering M&As. What type of companies are you looking for, to either acquire or to collaborate with to create your platform? Are you only looking for Japanese companies, or are you also open to collaboration with international companies?
We are considering both M&As and collaboration with other companies. It does not matter if the company is Japanese or international. The target that we are aiming for is to increase the line-up of our products. That is our goal.
Right now, we have overseas and domestic collaborations. We are currently collaborating with a Dutch company called “Enraf-Nonius B.V.“ to make this machine.
We also collaborate with domestic Japanese companies. For ICT to be possible, it is necessary to collaborate with software companies. So, we are collaborating with an industrial robot manufacturer to bring robot technology into rehabilitation equipment.
I would like to ask you about your PAS system, which is highly regarded in the industry for treating victims of stroke. Can you give us an overview of how you developed this system, and its effectiveness?
Our PAS system is now called IVES. We did collaborative research with Keio University, and we developed a product and started its sale around 15 years ago. The system is very effective. When a person has a stroke, their nerves are damaged. For example, they may not be able to move their arm or hand. However, even in that case, there are slight signals that come from the brain to the affected area. We replace those signals from the brain, by using IVES, with electrical stimuli and this helps people to use the muscles in the affected area. By repeating this process over and over, it is possible to revive the circuit. Once it is revived, the patient no longer needs us. This neurological rehabilitation product is one of our common products.
One of the disadvantages of IVES is that it can be quite difficult to manoeuvre. It is a support system (called “IVES Support club” in Japan) in which the physiotherapist or doctor participates, and shares how to use IVES with the patients. There are videos and journal articles online which explain everything you need to know about IVES.
Is the IVES support system ("IVES Support club") provided only in Japan? Or, is it possible for people overseas to receive the service?
Currently, it is provided only in Japan.
As you have mentioned, many medical device manufacturers are not just catering to, but often operating with overseas markets in mind. We understand that you already have a location in China, as well as a vast global distribution network which encompasses 28 countries around the world. Are there any markets that you consider key as part of your international development going forward?
First when it comes to international development, it can be divided into manufacturing and sales. For R&D, we are looking for collaboration with international companies to increase our line-up of products. We have recently been transferred the robot rehabilitation system business from Yaskawa, for which we signed the agreement in April and the transfer happened in June. We are planning to sell this in overseas markets, such as Europe or China. The rehabilitation robot will be launched into the market in the name of “OG Wellness Phyibo.” This is part of our strategy when it comes to our products.
In regards to our sales strategy, we divide our markets into two categories. There are countries where rehabilitation is already established, and there are other countries where rehabilitation has not been developed yet. For the first category of countries, we are only going to sell original products, like IVES or our ORTHOTRAC. For the countries that have not established rehabilitation, we are going to sell a full line-up of products. We are considering expanding our business to South America, a region which we have not targeted before. We also want to expand to the United States, and we are currently trying to get approval from the FDA for our second line-up of IVES products. There are also some products that we have already developed here in Japan, that we are waiting on parts for, before we can put them on the market.
Your company is this year celebrating its 73rd year anniversary. Imagine that we come back 7 years from now, for your company’s 80th year anniversary, and have this interview all over again. What would you like to tell us? What are your dreams for this company, and what goals would you have accomplished by then?
I want this company to be the world’s best rehabilitation company. My dream is that by making use of our products, we can help as many people around the world as possible, to return to the lifestyle that they were deprived of.