Reimbursement of Medical Devices and In Vitro Diagnostics- Summary Ver.

This document systematically organizes the practical procedures, timing, and key considerations related to insurance coverage (reimbursement listing) of medical devices and in vitro diagnostic products. Based on publicly available information from the Ministry of Health, Labour and Welfare (MHLW) and PMDA, it comprehensively covers the information needed by development companies when formulating reimbursement strategies.
  • Japan's Medical Insurance & Device Reimbursement
  • Two-Step Process for Market Launch
  • Step 1 vs. Step 2
    • STEP 1: Marketing Approval
      • Purpose: To review the "quality, efficacy, and safety" of a product and obtain permission for manufacturing and marketing.
      • Jurisdiction: Pharmaceuticals and Medical Devices Agency (PMDA)
    • STEP 2: Insurance Reimbursement
      • Purpose: To evaluate the "clinical usefulness and cost-effectiveness" of a product and determine the appropriateness of insurance coverage and its price.
      • Jurisdiction: Ministry of Health, Labour and Welfare (MHLW)
  • The Insurance Reimbursement Process
    • Obtain Marketing Approval (Prerequisite)
      • The "intended use" from the approval application directly impacts reimbursement.
      • Must be an integrated strategy.
    • Pre-consultation and Strategy Development
      • Arguably the most important stage; can be done before marketing approval.
      • Determine the likely category and differences from existing products.
      • Utilize MHLW's pre-consultation system (Industrial Affairs Division), ideally before clinical trials.
    • Submit Application for Insurance Coverage
      • After approval, submit the application to the MHLW (Medical Economics Division).
    • Deliberation by Expert Panels
      • Reviewed by the "Expert Panel on Medical Materials."
    • Final Decision & Notification (Chuikyo)
      • The Central Social Insurance Medical Council (Chuikyo) makes the final decision on coverage and price.
  • Device Insurance Categories
  • What is a "Functional Category"?
    • Definition: A "group" or "category" used to determine the price of a medical device.
    • Major Difference from Pharmaceuticals:
      • Pharma: Price set for each product (e.g., "Loxonin Tablets").
      • Devices: Price set for the functional category (e.g., "cardiac pacemaker"), not individual products.
    • Why?
      • Vast number of device types with frequent minor improvements.
      • Grouping similar products allows for fair and efficient pricing.
    • B vs. C:
      • Category B (Existing): Price is the standard price for that group.
      • Category C (New): If highly innovative, you can apply to create a new category, potentially achieving a new price commensurate with its value.
  • IVD Insurance Categories
    • Category E (Testing Fees)
      • The value of the testing procedure is evaluated as a testing fee.
      • (E1) Existing Item, (E2) Existing Item (New Method), (E3) New Item / Improved Item.
    • Category D (Interpretation Fees)
      • For complex tests requiring specialized medical judgment to interpret results.
      • (e.g., Gene-related tests, companion diagnostics).
  • Common Misconceptions
    • "Not all devices get an individual price."
      • Many are included in the "technical fee" (Category A).
      • This provides little incentive for hospitals to use a specific device if it's in Category A.
    • "Price is set for the 'functional category,' not the 'product.'"
      • Unlike pharma, products in the same functional category (Category B) have the same price.
      • Differentiation based on reimbursement points is not possible within the same category.
  • Aiming for C2 Category (New Innovative Device)
    • C2 offers the potential for high reimbursement for innovative devices with no corresponding existing procedure.
    • Key Tasks:
      • Information Gathering: Thoroughly research marketing and insurance info for your product vs. existing ones.
      • Clarify Differences: Crucial for C2. Objectively prove to authorities that your product/procedure is innovative and superior. Create comparison tables (product, technology, workflow, etc.).
      • MHLW Pre-consultation: Based on the comparison, consult the MHLW (Industrial Affairs Division) on the target category before starting clinical trials.
  • Points to Note
    • C2 is Difficult: Approval is very hard (avg. ~25 cases/year). Carefully weigh costs vs. benefits.
    • Data is Key: For Category C, you must systematically acquire data on clinical and cost-effectiveness starting from the clinical trial stage.
    • Integrated Strategy: Develop marketing approval and insurance reimbursement as one unified strategy from the early stages.
    • Regulatory Focus: Authorities (PMDA, MHLW) only evaluate:
      • Marketing: Quality, Efficacy, Safety
      • Insurance: Clinical and Cost-Effectiveness
    • Use Direct Consultations: PMDA (RS consultation) and MHLW (pre-consultation) systems are available.​
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