WIN-Partners Co., Ltd.

The medical fee schedule system is generally revised once every two years, and each time the reimbursement prices for specified medical materials covered by insurance are revised, medical device sales prices also tend to decline. Core products such as stents, PTCA balloon catheters, and pacemakers are designated as specified medical materials covered by insurance, so price revisions directly affect business performance. The Group has a policy of striving to avoid such risks and to respond when they occur, but it is difficult to completely avoid the impact of institutional reform.

The sale of controlled medical devices requires a permit from the prefectural governor, and there is a risk that permits could be revoked at each business location of consolidated subsidiaries if permit requirements or related laws and regulations are violated. At present, no grounds for permit revocation, etc. have occurred, but since many of the handled products are controlled medical devices (stents, PTCA balloon catheters, pacemakers, etc.), revocation of a permit could have a material impact on business continuity. In addition, the Group is obligated to provide sales information on biologically derived products, and maintaining a compliance system is essential.

If the fair competition code established by the Fair Trade Council of the Medical Device Industry is violated, penalties such as fines may be imposed as a violation of the Act against Unjustifiable Premiums and Misleading Representations. In addition, regulations concerning "attendance" (tachiai) services at medical institutions also carry penalties such as fines in the event of violation. The Group thoroughly disseminates these regulations to employees, but if a violation occurs, it could affect business performance and social credibility.

Some of the handled products are designated as deleterious substances, and the relevant business locations have obtained registration as general sellers of poisonous and deleterious substances under the Poisonous and Deleterious Substances Control Act. If registration is revoked or a fine is imposed due to a violation of related laws and regulations at any business location of a consolidated subsidiary, this could affect business performance, etc. At present, no grounds for penalties have occurred, but continued thorough compliance with laws and regulations is required.

For the purpose of receiving orders for construction work related to medical facilities such as operating rooms, the company has obtained a specific construction business permit from the Governor of Tokyo under the Construction Business Act. If the permit is revoked or a fine is imposed due to a violation of related laws and regulations at any business location of a consolidated subsidiary, this could affect the Group's business performance, etc. At present, no grounds for penalties have occurred, but maintaining the permit is a prerequisite for continuing construction-related business.

In addition to information on employees and business partner customers, the Group may acquire personal information from medical institutions as its range of handled products expands. The Group works to ensure appropriate management, including compliance with the Individual Number (My Number) system, but if personal information is leaked due to an unforeseen event, the Group could be affected by damages compensation and a decline in social credibility, among other effects. Given the nature of medical-related information, the impact of a leak could be particularly severe.

Against the backdrop of intensifying competition among medical institutions and work-style reform, purchasing strategies are being reviewed and pressure on suppliers to lower prices is increasing. Many companies have entered the wholesale market, intensifying competition within the industry, and if the Group loses business partners or experiences a significant decline in sales prices, this could affect the Group's business performance, etc. Appropriately responding to environmental changes is key to maintaining performance.

The Group has implemented and continually reviews measures for business continuity and early recovery in preparation for natural disasters and infectious disease outbreaks, but events on a scale exceeding the Group's assumptions are also conceivable. Given the nature of the business, which requires stable supply of medical devices, business interruption could have serious consequences, including effects on medical institutions. Continuous strengthening of the risk management system remains a challenge.

The Group may use methods such as M&A and alliances for future business expansion, but there is a risk that the intended integration effects may not be realized as planned due to additional costs or delays related to post-integration operational efficiency measures. Failure to achieve integration effects carries the risk of delayed investment recovery and adverse effects on business performance. The Group has a policy of striving to avoid such risks and to respond appropriately.

Many of the Group's handled products are medical devices used for minimally invasive treatment of heart disease, and if the use of these medical devices decreases due to future innovations in medical technology, this could affect business performance, etc. In addition, if medical device manufacturers and marketers change their sales policies and transactions no longer proceed smoothly, there is a risk of disruption to the procurement and supply system. Monitoring both technology trends and the maintenance of relationships with suppliers is important.