Over the past year, Japan has introduced a series of regulatory reforms aimed at modernizing and accelerating the approval and reimbursement pathways for medical devices, especially Software as a Medical Device (SaMD) products. These reforms are part of Japan’s broader effort to align its regulatory environment more closely with international norms while encouraging innovation and ensuring patient safety.
The updates span across expedited SaMD registration mechanisms, revised usability engineering requirements, changes to medical device reimbursement models, and enhanced support structures for novel and high-impact technologies. This article provides a comprehensive overview of these recent changes and their implications for industry stakeholders.
New Two-Stage Approval Process for SaMD
In an effort to streamline the regulatory review of Software as a Medical Device, the Pharmaceuticals and Medical Devices Agency (PMDA) in Japan introduced plans for a two-step approval model beginning in early 2024. This model reflects a pragmatic approach to SaMD oversight, particularly for digital tools that can demonstrate strong early evidence of clinical utility.
Under this framework, SaMD products with sufficient preliminary safety and performance data can receive an initial conditional regulatory green light. A follow-up assessment – based on either clinical experience or a formal post-market study – will then determine if full registration approval is warranted. This staged approach is designed to encourage faster initial access to digital tools while still ensuring long-term safety and effectiveness.
To support this initiative, the PMDA is scaling up its internal resources. A specialized SaMD review team is being expanded, and a new SaMD consultation model is being introduced. This subscription-based system will allow manufacturers to engage in multiple review discussions within a defined timeframe, improving regulatory clarity and responsiveness during the approval journey.
These enhancements fall under the PMDA’s “Dash for SaMD2” initiative, which aims to close the gap between Japan and leading digital health markets such as the United States and European Union.
Six-Month Review Target for SaMD and Faster Drug Approvals
On January 22, 2024, the PMDA outlined its 5-year plan covering 2024 to 2028. A central objective of this roadmap is to ensure that all SaMD submissions benefit from a fast-track registration channel, with a maximum review duration of six months. This strategic target aims to make Japan a more attractive market for digital health technologies, which up until now, often struggle with regulatory delays.
In parallel, the PMDA is extending similar support to pharmaceutical products, particularly those considered groundbreaking or urgently needed. The agency now offers early consultation opportunities even when applications are not yet complete, allowing sponsors to align drug development plans with regulatory expectations from an earlier stage.
This early engagement model enables developers to clarify requirements for clinical studies, accelerate the design of pivotal trials, and improve overall submission quality. Special attention is also being directed toward pediatric, rare disease, and emergency-use pharmaceuticals. These categories will receive added regulatory support in the form of tailored guidance and prioritized review.
Mandatory Usability Engineering for Medical Devices
In line with global best practices in human factors and usability, Japan has mandated adherence to a national standard for usability engineering as part of medical device submissions. This requirement, which became enforceable by March 31, 2024, is based on JIS T 62366-1:2022 – a localized version of the international IEC 62366-1 standard.
The standard provides a structured framework for identifying and mitigating risks related to device-user interaction. It requires manufacturers to document the usability engineering process through a formal file that includes hazard analyses, user interface specifications, and evaluation protocols. These practices are not limited to electronic devices but apply broadly across all types of medical technologies.
By requiring usability engineering documentation, Japan aims to reduce use-related errors and improve the overall safety of medical devices in real-world settings. The policy also strengthens the traceability of design decisions that impact user safety, aligning Japanese device regulation with the U.S. FDA’s expectations on human factors design.
Reimbursement Reform: Decline in Emphasis on Foreign Reference Pricing
In recent years, Japan’s medical device reimbursement landscape has been shaped by three key components: functional categorization, foreign reference pricing (FRP), and cost-based assessments. However, the importance of FRP in determining reimbursement levels is diminishing.
Previously, FRP was calculated using a weighted average of device prices in five major markets – the U.S., U.K., France, Germany, and Australia. High prices in markets such as the U.S. often skew reimbursement values to high levels in Japan. To counter this, the MHLW introduced new rules that exclude outlier prices when one country’s price exceeds 2.5 times that of the lowest-priced comparator. In this case, the FRP will be based on the 4 remaining countries. This formula now guides FRP calculations toward more moderate values, often aligned with European pricing benchmarks.
Again, Japan’s reimbursement authority, Chuikyo, has indicated that FRP will play a more limited role in pricing decisions going forward. In some cases, FRP may even be leveraged to justify downward adjustments in reimbursement rates.
Instead, greater emphasis is being placed on local clinical evidence and economic analysis. The two main pricing methodologies used to justify higher reimbursement rates for novel products are:
- Similar Functional Comparison Method: This compares the new device with an existing reimbursed product within the same functional category. Adjustments to the base rate may include correction surcharges for improved usability, superior clinical performance, or market differentiation.
- Cost Accounting Method: This model calculates reimbursement based on either:
- The full cost of producing the device, or
- The import price plus applicable markups for logistics, general expenses, operating profit, and taxes.
These frameworks require companies to provide robust documentation of clinical benefit, manufacturing costs, and operational expenses. Innovative devices must be clearly distinguished from existing technologies to justify enhanced reimbursement levels.
Key Takeaways
The Japanese regulatory and reimbursement environment is undergoing a meaningful evolution aimed at keeping pace with the increasing complexity and volume of medical innovations. Through a combination of regulatory agility and greater reliance on clinical value, the country is positioning itself as a more responsive and innovation-friendly market for both domestic and global developers. A summary of the changes:
- SaMD Fast-Track: Japan’s two-step SaMD registration and six-month review commitment offer a streamlined path for digital health tools, supported by expanded staff and structured consultations.
- Broader Access to Early Drug Consultations: By allowing preliminary interactions with developers even before data is finalized, the PMDA is enabling more efficient design and review of innovative drug programs.
- Usability Engineering Compliance: A formal usability engineering requirement aligns Japan’s medical device oversight with global safety practices, improving real-world usability.
- Reduced Role of FRP in Reimbursement: By shifting the focus away from international price averages, Japan is embracing more contextual and evidence-driven approaches to device pricing.
For companies eyeing the Japanese market, these regulatory adjustments signal a growing willingness on the part of authorities to accommodate cutting-edge technologies – provided there is clear evidence of their value and safety. As Japan continues to refine its approach to regulation, early and strategic engagement with the PMDA, and a well-justified reimbursement strategy will be key to navigating the evolving regulatory landscape.
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.