Medtech insider has recently covered the sense of betrayal among Japanese doctors about recent revelations of how Olympus Corp apparently managed to cover up huge investment losses for more than 20 years. The extracts from the article shown below sound like the wringing of hands from a culture which finds any whiff on impropriety abhorrent, yet believes it is seeing exactly that from what has become a Japanese Medical Device icon.
According to recent Reuters reports Japan’s Olympus Corp risks collapsing under the massive accounting scandal, but the company’s big and profitable medical business is likely to “emerge from any wreckage unharmed” as it is seemingly “too big to fail”.
That is the view of both Olympus’s investors and customers as they watch, horrified at events unfolding at the once-proud company, which has admitted to hiding losses for decades and using dubious Mergers and Acquisitions payments to help cover them up as widely reported, including on our own pages.
“It’s nothing but a humiliation to all medical workers that they had earned from a near-monopoly endoscope market and paid it to virtually unknown Cayman Islands–based financial advisors,” Yoshiro Kawahara, MD, a director at the Department of Endoscopy of Okayama University Hospital said in a Medical Research Information Center newsletter.
“I use Olympus’s endoscopes almost everyday. The quality of their products is really high, so I want to keep using them,”
A Proud History
Olympus’s innovative endoscopic devices helped turn the 92-year-old camera and medical equipment maker into the top player in the US$2.5 billion gastro-intestinal endoscopy market, capturing roughly 70% of the global market.
“I use Olympus’s endoscopes almost everyday. The quality of their products is really high, so I want to keep using them,” says a respiratory medicine doctor at a hospital in Tokyo.
“Unlike cameras and voice recorders, endoscopes are not something where we can instantly switch to cheaper versions,” says another doctor from the hospital’s gastro-enterological medicine department. “The Olympus-made device has become part of my own endoscopic practice. I can’t live without it.”
“Those involved in endoscopic treatment should have the right to urge the company to reveal the whole truth”Olympus’s dominance of the endoscopy market is a result of its comprehensive product coverage, ranging from diagnosis through treatment, and including endoscope sterilisers and cleaners, says Kawahara. “Olympus is also good at quickly catching up and creating improved devices whenever rivals release new products such as gastrostomy kits and capsule endoscopy,” Kawahara adds.
Olympus recorded an operating profit of 35.3 billion yen (US$442 million) for the fiscal year ending 31 March 2011. The company’s medical business earned 69.3 billion yen (US$866 million), far outweighing the 15 billion yen (US$188 million) in losses from its older camera division.
Source: Medtech Insider, Reuters