Do You Know How to Manage Japan ’s Revised Reimbursement Approach?

One significant change in Japan’s revised reimbursement process for new medical devices involves pricing. Applicants have been required for some time to provide pricing for their medical devices in other primary markets such as the United States, the United Kingdom, Germany, France, and Australia. Pricing has been based on list price, not market price, and the intention was to cap the reimbursement of medical devices. Given the typical differences between U.S. pricing and European pricing, the high U.S. price tended to pull the average up. (Please see the example below in Table 1; each price is converted into Japanese yen using the average exchange rate published by the Bank of Japan.) Screen Shot 2018-07-27 at 10.02.13 AM.png Until this past April, the FAP (Foreign AveragePrice) was calculated as follows in this example: The highest price (30,710 yen) is 4 times of the lowest price (7,745 yen). As only up to 3 times the lowest price was allowed, the U.S. price would have been omitted when calculating the FAP. With more than 3 countries left, the average omitting the second highest price (21,242 yen) is 8,350 yen, which is 2.5 times higher. As only up to 2 times would have been allowed, Australia’s price would have be recognized as 16,700 yen (8,350 x 2), lowering the FAP to 10,437 yen. Since this April, the FAP (Foreign Average Price) is now calculated as follows: As only up to 2.5 times is allowed as a difference between highest...
Source: MDDI - Category: Medical Devices Authors: Tags: Regulatory and Compliance Source Type: news