Japan is the world’s third-largest device market. Similar to the drug lag, Japan is now beginning to see a device lag. The reason for this is that although Japan wants and needs innovative devices for its citizens, especially innovative devices that will reduce the Japanese Government’s healthcare expenditures, device reimbursement is now a “sticky” issue. To get into the higher functional reimbursement categories of C1 and C2, strong clinical evidence and strong support from a medical society are needed. However, please note that over the last 10 years, only about 14 innovative devices each year were allocated to the functional C1 and C2 categories. At the same time, of the innovative devices approved based on the cost-based calculation, only about 10% of these devices received a reimbursement price equal to or higher than the manufacturer’s requested prices.
A recent discussion with a former device reimbursement official (ex-Chuikyo), included comments like device reimbursement in Japan is “like water.” Outcomes are changed dramatically depending on the situation. In some cases, the Japanese government price was more than expected (like 1.5x). In other cases, where the government knew that a better device with a more competitive price was coming soon, the innovative device seeking reimbursement first (now) received a reimbursement of 50% of what the manufacturer wanted. Other factors that affect reimbursement besides the ones above include the national budget and national policy – but in general, Japan device reimbursement is often a black box.
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.