So, your startup wants to play in Japan’s Regulatory Sandbox?

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.

Show Notes

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

Everything you ever wanted to know about Susmed Connect with Taro on LinkedIn

Transcript 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.

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? Taro: Yes. 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? Taro: Right. 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? Taro: No. 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. Taro: Yes. 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.