Administration believes that structural problems underlying Japan's health care system prevent efficient care delivery, substantially increase costs, and impede the timely introduction of new, innovative, and life-saving medical devices and pharmaceutical products. Cutting costs and improving the health care system in Japan will require the elimination of these inefficiencies and Medical Technology The United States concluded the Medical Technology Procurement Arrangement in November 1994, with the goal of significantly increasing market access and sales of competitive foreign medical products and services in the Japanese public sector procurement market. U.S. firms are the world's largest producers of advanced medical technologies. In the Japanese public sector market, however, U.S. industry's share is relatively low. This agreement represents an important step forward in the ability of foreign firms to more effectively sell medical technology products and services in Japan's public sector. The agreement establishes fair and transparent procedures that must be used by governmental entities in procuring major medical equipment and services. The agreement also specifies a set of quantitative and qualitative criteria to annually assess its implementation, including: value and share of contracts awarded to foreign firms by each government entity; number and value of contracts awarded through single tendering; and foreign access to procurement information. A key element of the agreement is the requirement that procurement decisions for central government purchases above a specified threshold (lowered to 385,000 Special Drawing Rights on April 1, 1998) be made on the basis of the overall greatest value method (OGVM) of bid evaluation, instead of lowest-bid. U.S. equipment is generally more innovative and offers special features or extraordinary performance. OGVM permits procurement decisions based not just on initial price, but on a complete...
