Changes in Japan’s Medical Device Reimbursement

Japan’s government is planning to reevaluate its current reimbursement system and make appropriate cuts to reduce national medical spending. The main regulatory body responsible for deliberating reimbursement prices is the Central Social Insurance Medical Council (Chuikyo) . In the current system, every two years, Chuikyo compares the weighted average of medical devices’ reimbursement price to their foreign average price (the price in countries as in the US, UK, Germany, and France). If the current reimbursements are more than twice the foreign average price, Chuikyo then reduces their reimbursement level.

Chuikoyo’s areas of reevaluation include examining the appropriateness of the chosen foreign reference countries as well as improving reimbursement for innovative products. At present, innovative products can receive reimbursement bonuses. However, the system defines “innovation” vaguely, and Chuikyo is considering clearer definitions. For example, products could be classified as innovative for having less invasive mechanisms, reduced infection risks, or improved operability.

Budgetary constraints are constantly pushing Chuikyo and the Ministry of Health, Labor, and Welfare (MHLW) to reconsider national reimbursement prices. Since the budget for the upcoming fiscal year must be submitted to the Diet for approval, Chuikyo and MHLW’s reimbursement cuts will depend on budget levels.