Shimadzu : Notice about Business Improvement Order for a Shimadzu Subsidiary

A subsidiary of Shimadzu Corporation, Shimadzu Medical Systems Corporation (President & CEO: Yoshiaki Miura; Head Office: Osaka City; and hereinafter referred to as "Shimadzu Medical" or collectively as "Shimadzu" to indicate both Shimadzu Corporation and Shimadzu Medical) received a "Medical Device Repair Service Business Improvement Order" (hereinafter "Improvement Order") based on the "Act on Securing Quality, Efficacy and Safety of Products Including Pharmaceuticals and Medical Devices" (Act No. 145, 1960) on August 18, 2023 from Kumamoto Prefecture for its Kumamoto Sales Office of the Kyushu Branch. Shimadzu Medical is involved in the sales and service of medical products.
Shimadzu again deeply apologizes to all the healthcare institutions, patients, and others who have been caused inconvenience and worry due to the situation. Moreover, Shimadzu considers the Improvement Order a very serious matter and is committed to diligently regaining the trust of healthcare providers, patients, and others by ensuring thorough compliance with all applicable laws and regulations, and by creating and implementing an improvement plan.

Details

1. Description of the Improvement Order

(1) Scope

Name: Kumamoto Sales Office, Kyushu Branch, Shimadzu Medical Systems Corporation

(2) Description of Government Action

Order to make improvements to repair operations that involve approval of medical device repair services

(3) Description of the Business Improvement Order

①		In addition to identifying violation causes and implementing corrective measures, ensure compliance with all relevant laws and regulations.
②		To ensure violations do not occur again, officers with operational responsibilities related to Act on Pharmaceuticals and Medical Devices (hereinafter "Responsible Officer") should be made sufficiently aware of the responsibilities they should fulfill, urgently indicate policies for fundamentally reforming capabilities for compliance with laws/regulations, including the following, and build organizational capabilities for achieving those policies. Establish organizational capabilities that enable reliable implementation of the business processes and fulfill the obligations of engineers responsible for repairing medical devices. Continuously educate and train all officers in charge of relevant business processes, including Responsible Officers, to instill conscientiousness about complying with relevant laws/regulations and to ensure compliance with such relevant laws/regulations. Establish policies for fostering a corporate culture that prioritizes compliance with laws/regulations, capabilities for ensuring business processes are conducted appropriately, including the establishment of effective whistle-blowing systems, capabilities for creating, managing, and preserving appropriate procedures and records based on the requirements specified in laws/regulations, and any other necessary capabilities for ensuring compliance with laws/regulations.
③		Based on ① and ②, create and submit an improvement plan involving corrective actions and recurrence prevention measures.

(4) Reasons for Government Action

①		The organization exceeded its business scope of repairing medical devices to function as a medical device manufacturer without becoming registered as a medical device manufacturer.
②		Engineers responsible for repairing medical devices failed to fulfill their obligation of practicing adequate caution necessary for preventing health and hygiene problems.
③		The organization did not notify the holders of marketing authorization for applicable medical devices in advance before they repaired specially-designated medical devices requiring maintenance.

For more details about the violations that were the basis for the government action, refer to the article published by Shimadzu Corporation on September 30, 2022, entitled "Fraudulent X-Ray System Maintenance/Inspection Practices at Shimadzu Subsidiary" and on February 10, 2023, entitled "Receipt of the Investigation Report from the External Investigation Committee and Our Company's Response."

2. Ongoing Response

As reported in the article published on February 10, 2023, entitled "Receipt of the Investigation Report from the External Investigation Committee and Our Company's Response," Shimadzu received recommendations from the External Investigation Committee and is now in the process of implementing measures to prevent recurrence based on those recommendations.
Shimadzu considers the business improvement order a serious matter and will continue to implement improvements in accordance with instructions from applicable authorities in order to prevent similar situations from occurring again in the future.

3. Voluntary Partial Return of Compensation by Shimadzu Corporation Officers

Due to the seriousness with which Shimadzu Corporation views the business improvement order for the Shimadzu subsidiary Shimadzu Medical and considering that such a serious case occurred at a Shimadzu subsidiary, the following officers will voluntarily return a portion of their compensation.

10 % of monthly compensation (1 month) for Teruhisa Ueda, Representative Director and Chairman of the Board, Shimadzu Corporation
10 % of monthly compensation (1 month) for Yasunori Yamamoto, President and CEO, Shimadzu Corporation
10 % of monthly compensation (1 month) for Koki Aoyama, Managing Executive Officer, Shimadzu Corporation

4. Effect on Financial Performance

The above case is expected to have a minimal effect on overall financial performance. Nevertheless, Shimadzu Corporation will promptly report any additional relevant information in the future that should be disclosed.