2025.2.28

Reimbursement of New Medical Devices Through Procedure Fees in Japan

In Japan, generally speaking, only devices that are used for a single patient receive a separate reimbursement. Those are often referred to as special treatment materials (STM). Matsumoto et al. (2022) provide a detailed overview the reimbursement process for STMs in Japan and LoPresti et al. (2024) provide an overview of reimbursement outcomes for STMs between fiscal year (FY) 2015 and FY 2023. But, many medical devices, including recent devices that incorporate artificial intelligence for diagnostics, for example, can be used across multiple patients. Those devices typically do not receive a separate reimbursement in Japan, but rather the cost for using them must be covered through procedure (or technical) fees which are set at the national level.

Some devices may also be broken out so that the disposable (consumable) part of the device receives a separate reimbursement, but the non-disposable part of the device, which can be used for multiple patients, is reimbursed through a procedure fee. This can advantageous because procedure fees tend to be less susceptible to biennial reimbursement revisions (reductions). If the procedure fee is sufficient enough to cover the purchase of the device in the long-run, then a clinic or hospital may have an incentive to purchase and use of the device for their patients. On the other hand, if the procedure fee is insufficient to allow a clinic or hospital to achieve an adequate return on their investment, then they may have less incentive to purchase and use it.

There are basically two approaches to establishing a procedure fee in Japan: (1) a request submitted by (through) a medical society or (2) submission through the STM reimbursement process. The Central Social Insurance Medical Council, or Chuikyo, which is Japan's advisory group on healthcare reimbursement, reviews about 700-750 new or revised procedure (technical) fee requests from medical societies every 2 years in Japan and about 15-20% of those requests are approved. A more direct approach to establish a new procedure fee is to submit for reimbursement of the device as an STM in order to trigger the establishment of a new procedure fee for the device. While new or revised procedure fees are only introduced every 2 years, submission through the STM reimbursement process can allow for the use of the device based on a preliminary procedure fee by referencing an existing procedure fee to be used before a new procedure fee can be established. This allows clinics and hospitals (and ultimately patients) to receive a procedure fee when the device is used in the interim until a new procedure fee is formally established.

Among the roughly 215 unique new devices assessed for reimbursement in Japan between FY 2015 and FY 2024, about 70 devices were not reimbursed based on a separate reimbursement, but rather they were evaluated for a new procedure fee. The table below shows some example of those products, the reimbursement they requested, and the preliminary procedure fee they were allowed at launch. As shown in the table, for many devices submitted through the STM reimbursement process that were reimbursed based on a procedure fee, the manufacturer had requested that a specific procedure fee be used as the preliminary procedure fee before a new procedure fee is established. In most cases, however, the preliminary procedure fee received was lower than the fee requested.

On the other hand, many devices had requested a separate reimbursement, but did not receive it. Instead, they received a reimbursement based on a procedure fee, so if the procedure is not conducted then there is no reimbursement for the use of the device. It is not clear in those cases whether the manufacturer knew they had a strong chance of being denied a separate reimbursement, but still took a chance on getting a separate reimbursement - or if they actually thought they might be able to get a separate reimbursement for the product.

Closing thoughts:

Working with medical societies to establish a new (or revised) procedure fee can be time consuming and the probability of success is not particularly high. As such, submission for reimbursement as an STM is an important option for establishing a procedure fee for a new device that is not a single-use device. This is particularly important if the new device includes both components that are single-use and those that are not. As such, it is important to understand how the STM reimbursement process works in Japan and to plan ahead. GinePro can support with strategy development and planning and can help facilitate the reimbursement of novel medical devices in Japan. Please contact us for more information.

Examples of Medical Devices Reimbursed Through Procedure (Technical) Fees (FY2015 - FY2024)

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