Ten to twenty years ago, Japan medical device reimbursement normally equaled the reimbursement in the US, or in a few cases, even higher. During this time, some device companies had 10% of their sales in Japan, with more than 10% of their overall profits there. However, those days are now over. A major consideration for device companies to bring their products to Japan is reimbursement. Without a decent reimbursement, some device companies cannot make a profit. Today, Japan reimbursement closely follows the pricing in Europe and not the higher-priced markets of the US and Australia. Japan reimbursement is especially crucial because it is illegal for patients to supplement government reimbursement with out-of-pocket payments, which are allowed in most countries in the world.
If a device company has a unique product, it will normally try to get the Japanese reimbursement code of either C1 or C2. To be successful, it is imperative to show the clinical value of your device. How will the device improve Japanese patient outcomes versus competing products, and also reduce Japanese government expenditures? While Western clinical studies may often be used for Japan registration, foreign clinical trials may not get a device company the increased reimbursement it is seeking. Thus, oftentimes a Japanese clinical study will be needed. Japanese KOLS and appropriate academic society support are also crucial in the reimbursement process. Please keep in mind that getting increased reimbursement after the initial price is set is a long and difficult process.
Written by: Ames Gross – President and Founder, Pacific Bridge Medical (PBM)
Mr. Gross founded PBM in 1988 and has helped hundreds of medical companies with regulatory and business development issues in Asia. He is recognized nationally and internationally as a leader in the Asian medical markets. Mr. Gross has a BA degree, Phi Beta Kappa, from the University of Pennsylvania and an MBA from Columbia University.