Reimbursement for Medical Devices in Asia

There is currently some medical device reimbursement in China. Most devices are reimbursed as part of a medical procedure, while a few medical devices are reimbursed on a standalone basis. The reimbursement system is somewhat complicated, especially with its tendering system for certain types of medical devices. In addition, reimbursement prices vary depending on the specific China province. Generally, reimbursement for devices in China is adequate for locally made products but not sufficient to cover the full price for imported products.

Reimbursement and medical device pricing is regulated by the National Development and Reform Commission (NDRC), the National Health & Family Planning Commission (NHFPC), and the Ministry of Health (MOH). Being listed in the reimbursement catalog is essential to ensuring the sales of your medical device in China.

Normally, for a new medical device reimbursement, a provincial hospital will request a device that they currently do not have to the local FDA or NMPA office. In the local office, there will normally be representatives from 3 groups including – 1. the health department, 2. the pricing department, and 3. the insurance department. Generally, the pricing and insurance executives will review new reimbursement requests. A new medical service item which is not listed in the “fee catalogue” needs to be applied by a medical institution to the relevant provincial or municipal department.  If approved, the new device will need to be on the China market for one year without reimbursement before it is reimbursed.

Almost all medical devices sold in Japan are ultimately paid for by Japan’s National Health Insurance (NHI) system. The MHLW determines the coverage policies. The Chuikyo, a separate body under the MHLW, determines most prices. In fact, it is illegal in almost all cases for the Japanese to purchase medical devices that their government has not set up reimbursement for.

Reimbursement prices for medical devices are revised about every two years based on one of two factors: 1. the Functional Categories and 2. Foreign Reference Pricing (FRP).

There are four main functional reimbursement categories for medical devices in Japan: A, B, C, and F. A and B are for already categorized medical devices while C and F are relatively new medical device reimbursement categories. Some medical devices are reimbursed through procedure fees, while others are reimbursed based on product category.

FRP is the average price of the prices in the US, England, Germany, France, and Australia. Foreign Average Pricing (FAP) reductions will occur when the reimbursement rate is 1.5 times higher than the average price of the product in the major foreign reference countries. If one or two foreign reference prices are too high, they may be kicked out, and the average will be taken using only 3-4 countries.

Reimbursement in Japan normally takes 6-9 months after product approval. However, if you are trying to increase reimbursement and categorize your product into a higher reimbursement category, the process can take more than one year.

Obtaining favorable reimbursement for novel Western products can be difficult due to the government’s desire to constrain rising healthcare costs. Strong clinical and economic data is normally required.

Many medical devices bought in Korea are reimbursed by Korea’s National Health Insurance (NHI) system. Receiving government reimbursement is important for successful sales. However, some medical products do sell in Korea even without reimbursement.

Generally, only implantable or disposable medical devices are reimbursed separately; examples include pacemakers, spinal fixation products, drug-eluting stents, orthopedic trauma products, and sutures. All eligible devices must apply to Korea’s Health Insurance Review Agency (HIRA) for reimbursement within 30 days of product approval, and the reimbursement approval usually takes about 6 months. All non-reimbursed devices are traded at free market prices.

Under Korea’s regulations, medical devices are supposed to be grouped with predicate devices and given the lowest price among existing predicates. This is only avoidable if HIRA decides the product has significant advantages, in which case it may receive the highest price among existing predicates. If the product is completely new, HIRA may decide a new reimbursement price for it, but this will almost always be less than the reimbursement price in advanced Western countries. This situation generally does not favor novel medical products, and has recently been a source of contention in US-Korea trade talks.

The universal healthcare system of Taiwan, known as the National Healthcare Insurance Program (NHI), has existed since 1995. The NHI regulator, the Bureau of National Health Insurance (BNHI), usually runs deficits, making them especially interested in cost-cutting measures with respect to medical products.

The BNHI has two reimbursement approval systems in place for medical devices: a fee for service schedule and a case payment system. When assigning a reimbursement price for a new medical device, the BNHI will compare the new product with similar products on the Taiwan market. Generally, the BNHI will request a new applicant to provide a list of published reimbursement prices from other countries, and will typically grant a reimbursement price that is in the low to middle range of those prices.

The self-paid market for higher quality products is becoming more popular in Taiwan’s hospitals. As the BNHI continues to face increasing financial pressure, achieving medical device reimbursement in Taiwan can be very challenging.

Hong Kong, Indonesia, India, Malaysia, the Philippines, Singapore, Thailand, and Vietnam

The medical device reimbursement schemes in India, Singapore, Hong Kong, Thailand, Malaysia, Vietnam, the Philippines, and Indonesia will vary depending on the medical equipment used, the procedure being done, and the specific reimbursement regulations of each country. Generally, reimbursement in these countries is significantly less than in Japan, Korea, and Taiwan. In most of the less developed countries, medical device reimbursement is very low or non-existent.