Risk of Failing to Respond to Changes in Healthcare Systems and Regulations in Each Country

「On 24 June 2025 (local time), the FDA published an import alert covering certain medical devices manufactured by 会津オリンパス株式会社. As a result of this action, the specified medical devices may not be imported into the United States until further notice.」

「・The corrective actions currently being implemented in response to matters identified in the Warning Letters received from the FDA in the fiscal year ended March 2023 must be fully implemented to ensure regulatory compliance. Depending on future developments, the FDA may take further regulatory action.」

「To comply with each country's quality regulations for medical devices and strengthen quality assurance functions, the company recorded ¥10,998 million under Other expenses for improvement activities including complaint handling, medical device reporting (MDR), and process and design validation.」

「In connection with follow-up activities relating to the Warning Letters received from the FDA in the fiscal year ended March 2023, a very substantial amount of resources from manufacturing, quality, supply chain management and research and development has been used to advance a large-scale quality improvement program and related improvement activities. The Group must maintain a balance between these resources and its regular operations, and depending on the outcome, this could affect the Group's ability to conduct its business.」

「To comply with quality and regulatory requirements for medical devices imposed by authorities in various countries and to strengthen quality assurance functions, we recorded ¥16,989 million in expenses for improvement activities, including complaint handling, medical device reporting (MDR), and process and design verification, under “Other expenses.”」

「Regarding other expenses, the previous fiscal year included approximately ¥1,700 million in costs related to promoting “Transform Olympus,” whereas the current fiscal year included a loss of approximately ¥49,600 million related to the discontinuation of manufacturing and sales of the electromagnetic navigation system and other products of Veran Medical Technologies, Inc., as well as approximately ¥11,900 million in FDA-related response costs, an increase of ¥59,202 million year on year.」

「Regarding other expenses, the previous fiscal year included approximately ¥1,000 million in costs related to promoting “Transform Olympus,” whereas the current fiscal year included approximately ¥5,000 million in FDA-related response costs, an increase of ¥3,369 million year on year.」

「From November 2022 through March 2023, the Group received 3 Warning Letters from the FDA concerning its facilities in Japan in connection with complaint handling, medical device reporting (MDR), corrective and preventive action, risk assessment, and process and design verification.」

「In November 2022, 会津オリンパス株式会社, and in December 2022, オリンパスメディカルシステムズ株式会社, received Warning Letters from the FDA citing, among other matters, document control, design verification and the timely submission of medical device reports (MDRs). Depending on future developments, the FDA may take further regulatory action.」

「Regulatory requirements for medical-device applications, registrations and other matters in each country, including the EU-MDR (European Medical Device Regulation), are becoming more stringent each year. In addition, requirements for reprocessing (cleaning, disinfection and sterilization) are becoming more demanding.」

「In the Medical Business, if the Company is unable to provide new products and services in a timely manner due to healthcare-related laws and regulations in each country or changes in related government policies, or if it must take market action in response to products sold, this could affect its ability to secure revenue.」

「The Group operates various businesses worldwide, including the regulated Medical Business, and is subject not only to Japanese laws and the healthcare and antitrust laws of each country and region, but also to laws prohibiting bribery in each country and region, including the U.S. Foreign Corrupt Practices Act (the “FCPA”) and the U.K. Bribery Act.」

「In the Medical Business, unpredictable, large-scale changes in healthcare administration policies resulting from healthcare system reforms and other changes affecting the healthcare industry may occur. If the Group is unable to respond to these changes in the operating environment or obtain the permits and approvals required for its business activities in each country in a timely manner, this could affect its ability to secure revenue.」