6.4 Medical Devices

In Japan, medical devices are defined as approved medical products with clearly defined structure, method of use, effect and performance to be used with objective of either “diagnosing, treating or preventing disease” or “impacting the structure or function of the human body.”[1]

Medical devices, in Japan, are classified into the following four categories based on their intended use and safety risk.  Approval requirements for medical devices vary by category

In particular, category III and IV medical devices with the largest risks require PMDA approval.

Under Japan’s insurance scheme, the manner in which medical devices are reimbursed and priced depends on its reimbursement assessment category[2]

• Medical devices within the A1, A2, and A3 categories covered within the technical fee for specific proceedures and cannot be reimbursed separately
• Medical devices within the B1, B2 and B3 categories are refered to as Specialty Treatment Materials that are directly reimbursed separately from technical fees based on reimbursement prices set by technical category
• Medical devices within the C1 and C2 categories are, similar to B category devices, directly reimbursed separate from any technical fees. However, as they do not fit existing technical categories upon approval, the creation of a new technical category is required.  Furthermore, C2 medical devices also require the creation of a new technical category as well
• B3, C1 and C2 medical devices require approval by the Chuikyo

Unlike pharmaceutical products which are reimbursed by produc, medical devices are reimbursed based on the technical category.

New medical devices  are priced either via the ”comparable technical category method” if there is an existing technical category exists for similar products, or via the ”cost based method” when there is no exsiting technical category.  Medical device reimbursement prices are revised concurrently with the periodic reimbursement revisions.[3]  Similar to pharmacutical products, medical device price revisions are decided primarily on the variance between the reimbursement price and actual market prices based on an acceptable margin including consumption tax of 4%.

In addition, the MHLW has also implemented medical device reimbursement pricing policies to promote innovation.

• Challenge Filing: Mechanism to subsequently file for a new technical category post approval based on real world data
• Fixed Period Enhacement Premium: Additional price premium awarded for 2 reimbursement periods to products able to replace an existing technical category
• Technical Category Exception: Mechanism applied to highly innovative or Sakigake productsin which prices are maintained at a higher level for 2 reimbursement periods separately from other follow on products within same technical category

Going forward, similar to pharmaceutical products, to control reimbursement prices, it is expected that health economics outcome considerations may also be considered when deciding medical device pricing.[4]

[1]The Japan Federation of Medical Devices Association “On Medical Equipment” http://www.jfmda.gr.jp/device/about/ (Accessed 2018, Apr. 30)

[2] Ministry of Health, Labour and Welfare “Outline of the 2018 Revision of the Medical Products and Equipment Insurance System” https://www.jdta.org/pdf/20180404-3.pdf (Accessed 2018, May. 1)

[3] Ministry of Health, Labour and Welfare “2016 Revision of the Medical Products and Equipment Insurance System” http://www.mhlw.go.jp/file/06-Seisakujouhou-12400000-Hokenkyoku/0000114377.pdf (Accessed 2018, Apr. 30)

[4] Ministry of Health, Labour and Welfare “Outline of the 2018 Revision of the Medical Products and Equipment Insurance System” https://www.jdta.org/pdf/20180404-3.pdf (Accessed 2018, May. 1)