Disruption comes slowly to medicine. And that’s a good thing.
Since the ethos of the profession is “First, do no harm”, it makes sense that safety and efficacy are prioritized over rapid innovation.
But innovation does happen, and the Japanese government is working to make sure it happens faster. Today we sit down with Taro Ueno of Susmed and talk about the challenges and tradeoffs in innovative medicine.
We talk about why he left medical research for entrepreneurship, and how iPhone apps and blockchain are being used clinically in Japan. And in both cases, I assure you, it’s not what you think.
It’s a great conversation, and I think you’ll enjoy it.
- Why leave medical practice to start a startup
- Why Japan just can’t fall asleep
- Why Japan over-prescribes sleeping pills and other drugs
- Why it’s very hard to get apps approved as medical devices in Japan
- The reason so few medical apps have been approved in Japan
- The importance ofJapan’s regulatory sandbox
- How blockchain is actually helpful in clinical trials
- What kinds of medical apps are we most likely to see first on mobile phones?
- Why so few apps have been approved and why that might be changing
Links from the Founder
Welcome to Disrupting Japan, straight talk from Japan’s most successful entrepreneurs.
I’m Tim Romero and thanks for joining me.
Today, you’re going to learn about how to make money in blockchain. No, no, no, it’s not like that, it’s not what you think. Today, we’re going to sit down with Taro Ueno of Susmed, and we’ll talk about how Japan’s new regulatory sandbox has enabled his startup to get approval for their blockchain-based platform for clinical trials. The platform prevents trial results from being changed after they’ve been recorded, which as Taro will explain, has been a real problem in Japan.
Taro is also a medical doctor and a PhD, and he’s developed an insomnia app that he is in the process of getting approved as a medical device. We talk about the challenges of getting mobile apps approved for clinical use in Japan, why this technology is so frustratingly slowed to come to market, and why people in Japan just can’t seem to fall asleep.
But you know, Taro tells that story much better than I can, so let’s get right to the interview.
Tim: So, I’m sitting here with Taro Ueno of Susmed, and thanks for sitting down with me today.
Taro: Thank you.
Tim: Now, Susmed is an app-based solution for insomnia and you also make a platform to improve clinical trials, but you can probably explain Susmed much better than I can, so tell me a bit about the company.
Taro: Susmed stands for ‘Sustainable Medicine.’ This is our vision and we are developing digital therapeutics using smartphone apps, and we are now developing several apps for diseases like insomnia and cancer, and so on.
Tim: Tell me a bit about your customers, so are these apps designed for doctors to use in a clinical setting? Are they designed for consumers to use on their own?
Taro: Doctors prescribe this app for insomnia patients. This is alternative for treating patients
Tim: Before we dive into everything that’s going on with medical technology in Japan, I want to ask a little bit about you. You got your MD and then your PhD, what drove you to startup after that? I mean, you put a tremendous amount of work into becoming a doctor.
Taro: Yeah, I agree. Yes, as you mentioned, I have a background of medical doctor and especially in psychiatry. I got PhD in basic research over sleep medicine. I have seen so many patients with overprescription with sleeping pills. That’s why I try to develop DTx for insomnia patients.
Tim: I mean, I find that fascinating, the ability to develop software for an app gave you greater ability to help people than practicing medicine or research?
Taro: Our company is developing software as a medical device, and we are trying to get approval from a regulatory agency in Japan.
Tim: You’re still practicing medicine now, right?
Tim: You’re using this device in your own practice?
Taro: Now, we are running clinic trials, and so after getting approval, I hope I can use our app in clinical practice.
Tim: So, how big a problem is insomnia or lack of sleep in Japan?
Taro: The prevalence of insomnia is very high in Japan, about 18,000,000 people in Japan, and most of them are treated using sleeping pills, but no pharmacological treatment was recommended by guideline, but the treatment is labor-intensive.
Tim: Without the pills, what is the other insomnia treatment?
Taro: It’s called cognitive behavioral therapy.
Tim: Okay, and so that requires the doctor and the patient to work together and your app reproduces or reinforces that sort of interaction?
Tim: Japan, especially, but I guess everywhere really kind of has a bad attitude about sleep in general. It’s almost like people are ashamed of themselves if they get enough sleep, and everyone brags about how little sleep they have and how tired they are at work. Do you think there’s a cultural component?
Taro: Yes, some components, basically, biological but there’s a cultural component; the prevalence of insomnia is high in Japan or Korea. I think there’s a cultural component. I think Japanese are diligent and they tend to overwork. It can be cultural pressure.
Tim: You seem pretty busy. How much sleep do you get a night?
Taro: I usually have more than six hours.
Tim: So, you usually get enough sleep?
Taro: I think so.
Tim: Well, actually, getting back to the app itself, I think it’s great to treat insomnia without pills, but who would pay for this? Would this be something that the patient would pay for or is this something that eventually would be covered by the national health insurance?
Taro: In Japan, medical treatment is covered by national insurance, so DTx should also be covered by national insurance.
Tim: And, you’ve been running various clinical trials on this since 2016. Can you explain what’s involved in bringing that to market? It seems like something that’s well beyond what most startups can consider doing.
Taro: To check the effectiveness and also safety of our app, we are running clinical trials. Because this app is a medical device, it must get approval from the regulatory agency, so we have discussed with the regulatory agency several times about what kind of clinical trial we should run. Usually, it takes several years to get approval to run clinical trial.
Tim: So, the fact that these apps are running on iPhones or on Android phones, does that make it harder to get them approved as a medical device since you can’t really completely control the hardware?
Taro: Smartphone apps for medical devices are very new, so for regulatory agencies, it’s hard to explain because we must update for new type of OS or smartphone.
Tim: Does that mean that for example, when Apple or Google, or Samsung release a new OS or new hardware, do you have to get this approved again?
Tim: Well, that makes things easier, I guess. Are there apps being used now as medical devices? Are there apps that have already been approved in Japan?
Taro: Yes, there is one smartphone app approved by the regulator agency, it’s for smoking cessation.
Tim: Is that also cognitive behavioral therapy? It seems like it would be a good fit.
Taro: I don’t know exactly, but I think the device tries to change the behavior of the patient.
Tim: Susmed and several other medical startups are really benefiting from Japan’s regulatory sandbox. Can you tell me a little bit about what is the regulatory sandbox and who gets to play in the sandbox?
Taro: Regulatory sandbox is a system for trial using the new technology to challenge regulation. Cabinet of Japan approved regulatory sandbox for each company. We have submitted our trial to cabinet office and we got approval to run the clinical trial using blockchain system.
Tim: And what’s the advantage of using the regulatory sandbox framework?
Taro: Based on the result of regulatory sandbox, we can challenge regulation.
Tim: Does it give you an exemption for certain regulations or is this a way that the government can look at new technology and maybe change regulations?
Taro: For example, clinical trials have a regulation called GCP and pharmaceutical companies under medical device companies must run clinical trial based on this GCP rule. Based on the result of the regulatory sandbox, we can challenge the regulation, and the clinical trial was classically conducted by human resources. For example, data from clinical trial must be checked by human resources, but using blockchain technology, we can improve the quality of the data, so based on those results, the government approves the way of learning the clinical trial using new technology.
Tim: Okay, well, actually, let’s talk a little bit about this blockchain platform for clinical trials. So, as you mentioned, usually, all of the information is taken in, checked by people, documented by people, but your blockchain solution, you’re saying, can eliminate a lot of the human oversight?
Taro: Right. Based on our results, government has approved our way of learning clinical trial.
Tim: And, what is the main advantage of using a blockchain-based system in clinical trials?
Taro: Using blockchain technology, we can secure the consistency of the data without human resources.
Tim: So, blockchain, of course, it doesn’t mean that the data being put in is any more accurate than a regular database, but blockchain makes it very, very hard for anyone to change the data once it’s been put in the database.
Tim: Is this a problem in clinical research? Has data been changed in the past?
Taro: Yes, there can be a conflict of interest between pharmaceutical companies and the result of clinical trials. That’s why the regulation requires consistency of the data. To secure the data, human resources from a contract company checks the data by visiting hospitals.
Tim: And you’re saying in the past, there have been cases where the data has been changed?
Taro: Yes, there are several cases of data tampering over clinical trials. In Japan, one of the famous cases was a clinical trial for hypertension, people in pharmaceutical companies changed the data, and the result showed the drug is beneficial. The case made regulations more strict in Japan.
Tim: I personally tend to be very skeptical of most blockchain technologies but I’ve got to say, this actually is one of those very few uses where it makes a lot of sense.
Taro: I agree with you. Most of use cases of blockchain is not necessary, I think so. Database is enough for most cases.
Tim: Yeah, I think so too, a simple database is usually much cheaper, must faster, but in this case, it’s what blockchain was designed for, it’s making it hard, next to impossible to go back and change the records.
Taro: Right. I think an important point is conflict of interest. There must be an incentive for using blockchain.
Tim: I think so too. Clinical trials really are almost a perfect use case for it because there is that conflict of interest you mentioned, there’s also a tremendous amount of money involved, so the incentive to change the data is huge. So, when will clinical trials be run this way?
Taro: We could get approval from government last year, now, we are trying to run a clinical trial using this platform this year and we are talking with several pharmaceutical companies and also hospitals or universities. We want to decrease the cost of clinical trial and it can result in the decrease of medical cost.
Tim: And recently, you’ve announced tie-ups with Sumitomo and CMIC, and some other large companies, large investors as well. Is this mainly focused on the blockchain for clinical trials platform or is that also involved in the insomnia app?
Taro: It depends on each company. Several companies have interest in our blockchain technology. Other companies have interest in digital therapeutics.
Tim: Looking ahead five years from now, 10 years from now, is Susmed going to be focused mainly on the platform for clinical trials? Where do you see the company going? What’s most important?
Taro: We are trying to conduct digital transformation of medicine, like clinical practice, like digital therapeutics. We also conduct digital transformation of clinical trials. We want to focus on roadblocks in medicine.
Tim: That makes sense because let’s talk about Japan as a whole, for example, the problem with the clinical trials you mentioned, I think that can be used everywhere in the world. I think that same conflict of interest exists everywhere in pharmaceutical research, but Japan, I think, is especially feeling the need for med tech and the ability to use cellphones for things like rural hospitals for telemedicine. So far, the Japanese government has talked a lot about the importance of telemedicine but has been slow to actually use it.
Taro: I agree with you. Japan is now facing aging society. Japanese government is trying to change the way of medicine but Japan needs to catch up with other countries. The proportion of elderly people in Japan will continue to increase until 2050, so we must change the way of medical practice for sustainability of healthcare in Japan.
Tim: I think so, but it seems there’s like two kinds of med tech. There are consumer med tech like Fitbit and fitness trackers, and I guess those are very useful for general health, but it’s not medicine, and there’s the other extreme which is traditional medical devices like we talked before, you’ve got hardware and software, and it’s all approved together, it’s developed together, but I think it’s really interesting, the middle ground you’re exploring which is these mobile phones, these little super computers we’re all carrying around in our pockets now, that seems to be the obvious place for med tech, but as you mentioned, it’s hard to get approval for these types of apps. One that you mentioned, but very, very few have gotten approval in Japan, so what kind of things are most appropriate for using a mobile phone in medicine?
Taro: I think we must get evidence of the efficacy of each medical device or app, so that’s why we want to reduce the barrier of clinical trials. If we can run clinical trials more efficiently, we can get evidence of each product easily.
Tim: But on the clinical side, do you think we’ll be able to, I mean, even things like, do you think we’ll be able to see consultations over video chat? Do you think there will be other tools like cognitive behavioral therapy that require a constant reminder and interaction? Do you think we’ll be seeing more and more of these soon, even though there’s so few right now?
Taro: I think telemedicine can be used more often, but it needs human resource, even though we can see a doctor through internet, it requires the time of doctors, so I think medical device is more efficient.
Tim: Yeah, that makes sense, a device that actually is part of the therapy that can fill the role of the doctor in some limited way.
Taro: Yeah, because staff in medical institutions are too busy.
Tim: Well, let me ask you, I mean, why don’t we have this now? So, no, I mean, everyone agrees this is a good thing, all levels of the Japanese government are saying this is a good thing, we want to improve telemedicine, we want to get more diagnostic tools on the phones, there are countless new university graduates and people starting startups to attack these problems, there are physicians, doctors like yourself who think this is a great thing. Why don’t we have it? What’s the roadblock?
Taro: Because regulatory agencies are concerned about the negative effect of this technology. There can be a side effect. Japanese regulatory agencies focus on negative effect.
Tim: That is good, it is good to be conservative in that respect. It is new and medical devices are not like Fitbits or consumer devices. So, do you think it’s just a matter of time and maybe after the first three or four apps are approved, then we’ll see more and more come onto the market quickly after that? Is it just the first few that are hard because it’s so new?
Taro: Yeah, I think so. After getting approval of your product, the way of thinking on medicine will change.
Tim: Well, it sounds like we’re almost there with the first few getting approved now.
Tim: Okay, Taro, I want to thank you so much for sitting down with me, I really appreciate it.
Taro: Thank you so much.
And we’re back.
When I sat down to write this outro, there was a lot I was impressed with: the introduction of digital therapeutics to moving medical treatment away from drugs and towards behavioral changes, to the fact that Taro left a prestigious career in medical research to pursue entrepreneurship, but then I realized something.
My goal in running Disrupting Japan has always been to explore and to show you what it’s like to be an innovator in a culture that prizes conformity.
One thing that’s becoming increasingly clear, however, and not just from today’s interview but from the startup ecosystem all over Japan, is that the conformists have started valuing the innovators a lot more than they used to.
Over the past 10 years, the Japanese government’s view of startups has expanded from simply a possible source of economic growth to a source of overall positive change. We saw this in our conversation today with Taro in areas like the regulatory sandbox where the Ministry of Health is looking to startups for advice on how to modernize and streamline their regulations, and that ability to be listened to and to make an impact is drawing more and more people from all kinds of backgrounds into entrepreneurship in Japan.
In fact, talking with Japanese founders today reminds me a lot of talking with founders in Silicon Valley 20 years ago. I mean, the ecosystems are completely different, of course, but there’s a refreshing commitment to a larger mission. The money is important, of course, the money has always been important but there’s something else here too, something that existed well before “move fast and break things”, and “follow your passion” became the hollowed-out clichés that they are today.
It’s an understanding that’s startups are not simply a means of wealth creation but a tool to make lasting, positive change at scale and to have a real impact on the world. It’s the realization that if we succeed, we will not only be financially successful on our own terms, but that we can actually make the world a better place.
As an honest sentiment, it’s something that’s hard to find these days in Silicon Valley. but it’s alive and well in Japan.
If you want to talk more about med tech in Japan, Taro and I would love to hear from you, so come by DisruptingJapan.com/show177, and let’s talk about it. If you leave a comment, I guarantee Taro or I, or maybe both will respond, and hey, if you get the chance, please leave a review on iTunes or your podcast platform of choice, or you know, if you like the show, just tell a friend about it.
But most of all, thanks for listening, and thank you for letting people interested in Japanese startups know about the show.
I’m Tim Romero and thanks for listening to Disrupting Japan.