Fiscal 2022
Medical Devices and IVD Committee of European
Business Association
Meeting of Representatives
Medical Fee Subcommittee

December 8th 2022
Chairperson of the Medical Fee Committee
Ryōichi Tanaka
Page1

Agenda• Summary for the current year•

Administrative events and activities•

Public and Private Sector Dialogue (Minister of Health, Labour andWelfare)•Periodic meetings and liaison meeting of SaMD-relatedorganizations (METI)•

For the next fiscal year

Page2

Results in FY 2022 ;Decision to institutionalization of ' C2 Challenge '" Establishment of insurance application system based on usage records "Institutionalization of “C2 challenge”
1. Medical Technology and Innovation Assessment :Application for C2 Challenge(Industry opinion statement by Chuikyo* Expert Panel on Medical Materials, November 19, 2019)" C2 challenge is OK " (No. 1 side: payment side)
2. Medical Technology and Innovation Assessment :Application for C2 Challenge (Industry opinion statement by Chuikyo Expert Panel on Medical Materials,
November 29, 2021)
Agree (No. 1 and 2 side: payment side and treatment side)*Chuikyo: Government reimbursement advisory council

Page3

Activities in 2022 are being toward to FY2024.

Ongoing(1) Optimization and evaluation of innovation technologies
1) Evaluation of artificial intelligence technology2) On-line and remote robots
3) Integration of medical information to PHR (ICT infrastructure development)
4) Proper evaluation of radiation therapy, nuclear medicine and other treatment
5 Evaluation of the efficiency improvement of medical care and reduction of burden of medical professionals *Proposal of a new evaluation criteria * + Proposal of a new insurance system(* Addition for improvement with time limit)(2) Measures against foreign price adjustments(3) Continuous response to subdivision and rationalization of functional category(4) Elimination of category - Relaxation of rules for withdrawal of unprofitable products (confirmation required)(5) HTA : Continuous monitoring of the cost-effectiveness evaluation system (following up on the outline plan)(6) Response in line with the community medical program policy (maintenance management and formulation ofrequirements for exposure control)

Page4

Agenda•Summary for the current year

• Administrative events and activities•

Public and Private Sector Dialogue (Minister of Health, Labour andWelfare)•Periodic meetings and liaison meeting of SaMD-relatedorganizations (METI)•

For the next fiscal year

Page5

Participation in Medical Fee Subcommittee and related events
January 19 : Participation in Chuikyo (Review of special materials and HTA system) notification revision meeting
3 Exchange of opinions with Ayano KUNIMITSU LDP (member of parliament) on the selective treatment expense system
April 1st medical fee revision 2022
April 21 : Study meeting for medical fee revision (Economic Affairs Division)
May Study with Councilor Katsume LDP (member of parliament) –programmed medical devices
May 31 : Cabinet decision on the second phase of the Basic Plan for Medical Devices(Act on Research, Development and Promotion of Medical Devices to Improve the Quality of Medical Care Received by Citizens)
June 7 : Basic Policy (Economic and Fiscal Management and Reform 2022) Cabinet Decision
August 25 Summer Lecture : Professor Toshiki Mano, Katsunobu KATO Minister of MHLW
November 28 : Public and Private Sector Dialogue with the Minister of MHLW (MHLW / MEXT / METI / PMDA/AMED)
8/29, 10/06,10/25,27, 11/01,08,18,28 3-poles Conference on Diagnosis and Treatment (JFMDA, AMDD, EBC)
9/27, 10/24, 11/15,28,30, 12/02 Special Materials 3-organizations Meeting (MTJapan, AMDD, EBC)
8/29, 9/27. 10/6, 12/12 , Pharmaceutical Industry Promotion and Medical Information Planning Div. 3-poles Meeting (Diagnosis
and Treatment)
12/5, , Pharmaceutical Industry Promotion and Medical Information Planning Div. 3-poles Meeting (Special Materials)
10/05, 10/24, 10/30, 12/9 METI / MHLW / Council AI related on Pharmaceutical

Page6

Agenda•Summary for the current year•

Administrative events and activity history• Public and Private Sector Dialogue (Minister of
MHLW) - See related materials separately•

Periodic meetings and liaison meeting of SaMD-relatedorganizations (METI)•

For the next fiscal year

Page7

Agenda•Summary for the current year•

Administrative events and activity history•

Public and Private Sector Dialogue (Minister of Health, Labour andWelfare)• Periodic meetings and liaison meeting of SaMDrelated organizations (METI)

•
Page8

For the next fiscal yearSpecial Designated Treatment Materials

Page9

Main Topics of Material WG periodic Meeting
Periodic Meeting (MHLW) 2023/1/24
1. Measures to secure stable supply
New Request(1) Measures to rising prices of raw materials and components(2) Dealing with medical devices that require stable security and products with
unprofitable risks
Continuation / addition(3) Review of the Foreign Price Adjustment and Repricing System
Continuation / addition(4) Review of calculation rules when establishing new function categories(5) Rationalization of function category
Continuous request
2. Review of Innovation Evaluation(1) Challenge Application(2) Expansion of exceptions to function categories and continuation of rapid
additions(3) Appropriate evaluation of medical devices for orphan diseases and children
3. Other(1) Certain width(2) Optimization of coefficients in the cost calculation method(3) Holding of an expert organization for insurance-covered medical materials in therevised year
(4) Appropriate evaluation of innovation at the time of revision(5) Simplification of procedures for B2 and A3 (with changes)(6) Evaluation of improvement in the efficiency of medical care
(7) Calculation method of standard material prices for new functional category(draft) (AMDD)(8) Toward realization of value-based health care (AMDD)(9) Cost-effectiveness program (AMDD)
Page10January 24, 2023 : Proposal
for materials for the regularmeeting

1. Measures to secure stable supply

New Request(1) Responses to rising prices of raw materials and components◼
◼
◼
◼

The medical device industry has been greatly affected by the rise in raw material andcomponent prices and transportation costs.
Marketing authorization holders are making efforts to reduce costs in order to achieve
stable supply. However, self-help efforts have reached the limit and they have no
choice but to pass on the cost to the price.
Because special materials have official prices, it is difficult to pass on prices.
On the other hand, even if a stable supply is secured through price increases, etc.,
under the principle of standard material price revision *, prices may not exceed theprice before revision, and as a result, the pass-on to prices will not be sufficiently
reflected.
* : " Standards for Calculation of Reimbursement Prices for Special Designated Treatment Materials (PFSB 0209
No. 3, February 9, 2022) "➢ If the calculation result of the revised price confirmed by the market price survey exceeds the pricebefore revision, it should be accepted and revised to the price according to the actual price.
➢ Therefore, delete the phrase "However, it cannot exceed the standard material price before the standard
material price revision for the relevant functional category" in the principle of the standard material pricerevision.

Page11

January 24, 2023 : Proposal formaterials for the regular meeting

1. Measures to secure stable supply

Proposed Revision(3) Review of the foreign price adjustment and repricing system (1/2)•

In 2002, a repricing system using foreign average prices was introduced. Since then, thegap between domestic and overseas prices has steadily narrowed due to repricing andadjustments based on foreign prices at the time of listing.

•Reimbursement prices of new insurance products in the past few years often less than 1.0
times the foreign average price•

When the product is newly included in the NHI price list, it is compared with the productconcerned. When it is at the time of repricing, it is compared with the function category.
Therefore, it may not be an appropriate comparison.

➢In this situation, foreign price adjustment is deemed unnecessary. The foreign price adjustment systemshould be abolished.

➢

Since it is unreasonable to adjust foreign prices under the functional category system rather than by brand, if
the system is to be continued, revisions should be made at the time of listing as a general rule.

➢

Only when there is no foreign price that can be referred to at the time of listing, and therefore it is calculatedby the cost calculation method, foreign price repricing will be applied only once as an exception.

Page12

12

January 24, 2023 : Proposal formaterials for the regular meeting

1. Measures to secure stable supply

Request Continuation(4) Revision of calculation rules for standard material prices for
newly listed products (2/2)•

Standard material prices for newly listed products will be reduced if they exceed 1.25 times the foreign
price due to foreign price adjustments. On the other hand, even if the price falls below the foreign
average price, there will be no adjustment for the increase.
(For pharmaceuticals, both downward and upward adjustments are being made.)➢ The current downward price adjustment will be maintained , but the case of the price falls below 0.75
times the foreign average price, the price will be raised and adjusted in the same way as pharmaceuticals
to support stable supply.
Drug pricing system : In drug pricing, when the standard drug price is less than 0.75 times the foreign
average price, upward adjustment for price is performed.

0.75 times or more thanforeign priceIf low, request for increase!

1.25 times or more is
reducedMaterial
Price

Page13Foreign
priceMaterial
Price

Foreignprice13

1. Measures to secure stable supply(5) Rationalization of function category (2/2)

January 24, 2023 : Proposal formaterials for the regular meeting
RequestContinuation•

Rationalization not only distorts assessments based on prevailing market prices and impedes thesubstitution of new technologies, but may also impede stable supply.

•

As a result of the 2020 revision (Reiwa 2) , the number of rationalized categories was a few, but it isdifficult to say that the transparency and predictability of processes are still ensured.

➢This It does not deny the review of the functional category based on rational grounds. By sharing with theindustory the specific reasons that led to the consideration of rationalization, transparency andpredictability of functional category review can be ensured.

➢In addition, it is requested that sufficient time by presenting the schedule at an early stage is available sothat sufficient discussions can be held with related companies in the category and clinical experts.

➢

Functional categories newly established in C classification should not be reviewed for reasons other thanrequests from the industry until a certain period of time has passed.

Page1414

Material WG Agenda item (1)Procedures for Discontinued Products

EBC Proposal for 2022
Periodic Meeting◼

In many cases of when the company reports a supply outage, it is often difficult to procure substituteproducts. The current situation is that negotiations for adjustment of substitute products are left to thecompany.

◼

In reality, it is difficult for a company to make a decision to suspend supply before it becomes unprofitable,
and to respond to requests for continued supply from academics.
In particular, if there is strong opposition from academic societies and negotiations are prolonged, there isa possibility that the supply will be cut off before understanding is obtained.
Although process charts * 1 and forms * 2 were prepared in FY 2022, the situation has not improved.

◼

* 1 : March 4, 2022 " Examples of Entries in Application for Insurance Coverage for Medical Devices "* 2 : February 9, 2022 " Procedures for Submission of Application for Insurance Coverage for Medical Devices "➢ Regarding the procurement adjustment of substitute products, it is necessary for competitors todisclose their hidden supply capacity, which may lead to competitive disadvantages.
Therefore, we would like the government to take the initiative in coordinating, with companies only
providing information on substitute products.
➢ We would like to request the cooperation of the Ministry of Health, Labor and Welfare to understand thecircumstances of the company that must stop the supply and to obtain the understanding of theacademic society before the supply is cut off.
In cooperation with JFMDA ：⇒consultation with the Economic Affairs Division
Page15

Not submitted

Material WG Discussed agenda (2)It became a matter for continuous
consultation.
EBC Proposal for 2022
Periodic Meeting

Handling of cost calculation method◼ From the Chuikyo proposal * 1 in 1993 until the notification of the current standards for calculating insurance
reimbursement prices * 2
When there is a similar functional category, the similar function category comparison method shall be used inprinciple.
Although it is recognized that the costing method is an exceptional, the government's response to requests forthe similar functional category comparison method is changing.
* 1 : " [September 24, 1993] Proposal for Evaluation of Special Designated Treatment Materials "* 2 : " Standards for Calculation of Reimbursement Price of Special Designated Treatment Materials "(Example) Cost calculation was strongly recommended,
Cost was requested to be presented after the insurance application request was submitted.

◼ Since considerable preparation time is required for the estimation of costs, if it is difficult to respond to sudden
requests or there is a shortage of responses, the degree of disclosure may be affected.
➢ Is comparison of similar functional category no longer a principle?
➢ When the similar functional category comparison method is desired
If it is necessary to prepare cost calculation, isn't it necessary to prepare a notice?

Page16category of similarfunctions
Items for which
comparison method isdesiredcategory of similarfunctions
Determination ofcomparison method

Determination of
Cost Accounting
MethodDeterminedamount / desired
amountAverage rate ofchangeFiscal 20201212 (100%)

0 (0%)-5.9%

Fiscal 2021

55 (100%)0 (0%)+0.6%

Fiscal 2022

12

6 (50%)

6 (50%)-21.0%

Diagnosis and treatment

Page17

Response based on the evaluation by the Medical
Technology Assessment Subcommittee FY2022
採択率
31
%28
28
30% % 24 %
35%

25%
20%

%
16
%

19
%

15%
10%
5%
0%

2022
2020
2018
2016
2014
2012

Source : Summary of 2022 medical fee revision (briefing session held on March 4, 2020)
https://www.mhlw.go.jp/stf/seisakunitsuite/bunya/0000196352_00008.html

Regarding medical technologies proposed by academic societies, based on the results of examinations by
the Medical Technology Evaluation Subcommittee, we will conduct new evaluations of new technologies
that should be preferentially introduced into insurance, as well as re-evaluate existing technologies. .
Page18

New Section on Programmed Medical Devices

From the viewpoint of clarifying the evaluation of programmed medical devices, a new section on
evaluation when programmed medical devices are used will be added to the medical management
section of the medical fee point table.

Page19Fiscal 2022
Medical Fee Subcommittee

Materials for Periodic Meetings

08 / 2022
European Business Council (EBC) Medical
Devices and IVD Committee
Medical Fee Committee

Page20Proposal to the Pharmaceutical Industry Promotion andMedical Information Planning Division for the Periodic
Meeting
EBC Proposal for 2022
Periodic Meeting•••

Page21

Proper evaluation of medical technology•••

Risk Sharing - Programmed medical devices, etc. ; Establishment of the Japanese version of DiGA
and utilization of the selective treatment expense program in case of rejection
Flexible systems and utilization of selective treatment expenses - Flexibility of systems including 7T
MRI and AI programs and medical devices (OP ; ⇒ after Evidence ⇒ C2 challenge?)
Correction of the comprehensive technical fee for PET examination (Is it possible to separate
technical fee like CT and MR?)

Medical DX•

Framework for insurance premiums for the utilization of real-world data ; cloud premiums incollaboration with academia

Other

•
•

Follow-up of C2 Challenge Implementation System ⇒ Opinions on Insurance Guidebook
Regarding development packages such as MR and CT of innovative technologies * that benefit
work style reform, is there a framework for responding to epochal function premium like special
materials?

3. Evaluation of medical device (medical technology) innovation
SaMD,SiMD: provisional approval and provisional insurance sysytem[Current status]

Proposal for Public-Private
Sector Dialogue 2022

EBC Proposal for
Periodic Meeting 2022

• In the case of Programmed Medical Devices SaMD or SiMD (Software) in Medical Device etc., the development
rotation is fast and it takes time to obtain Evidence for insurance coverage, and there are cases where the value ofthe product is lost. Alternatively, there are cases where the development or putting on the market is abandoned
due to lack of predictability by caused many major changes. In order to revitalize development, it is necessary torecover development costs as soon as possible.
• In the revision of the act in Heisei 25, a chapter on regenerative medicine products was established and approvalsystem with conditions and deadline for regenerative medicine products was introduced.
In Heisei 27, regenerative products were approved under this conditional and time-limited approval system, and realexample pf approval system was implemented to confirm efficacy and further safety after putting on market.
• In the Heisei 29, a notice of rebalancing was issued, and early approval has begun to take place.
• In addition, in recent years, a system of having a provisional license system with insurance for programmed medical
device has started oversea, and a certain degree of predictability is secured in the development and sales of start-up
companies. (Germany ; DiGA System)

Issue ;In order to ensure early access to patients, the public and private sectors will consider a system in which
products whose safety is ensured by QMS standard, etc. are first put on market, and then re-evaluated andcovered by health insurance.

Page22Issue : Medical equipment that does not assume introduction of
insurance

EBC Proposal for 2022
Periodic Meeting- > Suggestion of the possibility of selective treatment (non-insurance combined treatment)(industry opinion statement in 2021)→ Supplementary opinions on programmed medical devices in the 2022 revisionhttps://www.mhlw.go.jp/content/12404000/000853875.pdf

123

https://www.mhlw.go.jp/stf/shingi2/0000212500_00139.html

Medical treatment that can be used in combination with health
Evaluative medical treatment ⇒ Assess for insurance
introduction
Medical treatment by patient ‘s request ⇒ Assess for insurance
introduction
Selective medical treatment ⇒ Not premised on the insurance
introduction

Supplementary opinion
18. With regard to the evaluation ofpharmaceuticals, medical devices and medical
technology, continue to consider the appropriate
evaluation while understanding the status of
discussions on the scope of insurance benefits,etc.
Selective treatment : Candidates for medical
expenses combined with treatment outside
insurance coverage ;Programs using AI technology Medical devices Items
Outside of the DiGA system

MR/CT
Short working hours
High image quality
Radiation exposure reduction AI software

Page23

Proper evaluation of medical technology- Proper evaluation of PET examination
Reference : 2022 revised medical technology evaluation proposal

JRS/JSNM/JRPA Collaborative Issues

EBC Proposal for 2022
Periodic Meeting

Current situation
PET examination is regarded as a comprehensive technical fee including synthesizing device, drug administration,
imaging, image processing, management of controlled areas, etc. This is Japan only.
PET Diagnostic reagents for PET have been approved, but supply is delayed due to comprehensive technical fee
revisions every two years. In addition, there are several PET examination technologies for which technical fees are
not charged.
A new reagent for PET diagnosis for brain tumors was approved in 2021, but there is an event that the technical fee
has not been approved.
Issue
The price adjustment between the technical fee and the cost of diagnostic reagents has not been successful, and thesetting of the technical fee has stalled, so the benefits to the patient are not being enjoyed.
Proposal
As with existing SPECT diagnostic reagents and MR/CT contrast media (pharmaceuticals), PET diagnostic reagentsshould be treated as technical fees that do not include synthesizers, etc.
As a result, even if new PET diagnostic reagents are developed, they can be used for PET examinations without
waiting for revisions, just like CT and MR.

Since JSNM withdrew once, it is withdrawn in line.
Page24

January 24, 2022 : Proposal formaterials for the periodic meeting

The 43rd periodic meeting between the Ministry of Health, Labour and Welfare and the
medical device industry
Draft" Diagnosis / Therapeutic devices / Home medical care "Proposals for medical devices (medical technology)

0 / 0 / 2023

25

Content of today's proposal

January 24, 202 : Proposal formaterials for the periodic meeting

1. Evaluation of the innovation for medical device (medical technology)

P. -P.

(1) Improvement of predictability of C2 applications (new functions and technologies)(2) Evaluation of the Needs Study Group for technical fee comprehensive medical devices(3) Regarding medical devices related to medical technology evaluation proposal

2. To promote safety assurance

P. -P.

(1) Review of long-term clinical use of specified maintenance management medical devices(2) Promotion of radiation exposure management in cooperation with medical institutions(3) Evaluation of quality control of medical monitors26

1. Evaluation of the innovation for medical device (medical technology)(3) Regarding medical devices related to medical technology evaluation proposal

January 24, 2022 : Proposal formaterials for the periodic meeting[Background and current status]① With regard to medical technology revisions, new technologies are being evaluated and existing technologies are being
reevaluated based on “Medical Technology Evaluation Proposals” submitted by academic societies.
② Regarding the " Medical devices used for the proposed medical technology " described in the “Medical Technology Evaluation
Proposals”, the information is shared between academic societies and related companies and describe them jointly.
③ On the other hand, when the technical fee is newly established or revised, various conditions related to medical device may be
attached in the notice of " Points to Consider in Calculation " etc. There have been cases where there is a discrepancy between thecontents of medical device proposed by academic society and the final medical devices that meet the conditions described innotice. Therefore, it is sometimes seen that it causes confusion in clinical practice.
④ In addition, although the " Guidelines for Preparation of Proposals for Medical Technology Evaluation " regarding drugs andmedical devices have been revised, there are still some proposals that are not subject to evaluation by the Subcommittee on
Medical Technology Evaluation because " approval of drugs and medical devices to be used cannot be confirmed ".

[Proposal]① If there is possibility of a discrepancy between the medical device described and proposed by the academic society in the “Medical
Technology Evaluation Proposals” and the medical device that meets the conditions (e.g. approval of the PMD act, device
specifications, etc.) indicated finally in the “Points to Consider in Calculation” notice, etc. and also confusion is expected in clinicalpractice, in such case, the introduction of a procedure that enables confirmation of the details of the PMD act approval, etc.
through related companies and organizations.
② Regarding "Medical Technology Evaluation Proposals" submitted by the industry together with academic societies, a system will beestablished that allows inquiries about the reasons for medical technology evaluation results via the Medical Device Policy Office.
③ Clarify the medical devices related to the technology in the "definition, etc. of medical devices for which specific medical fees arecalculated"
Page2727

2. To promote safety assurance

January 24, 2022 : Proposal formaterials for the periodic meeting(1) Review of long-term clinical use of specified maintenance management medical devices
Current Status and Background① There are many devices that have been used in medical practice for 10 years or more. (* More than 12 years according to JIRA
survey)② The company sets a maintenance management period after the discontinuation of manufacturing of Specified MaintenanceManagement Medical Devices. However, in actual medical practice, there is no choice but to use it beyond the period in which
medical safety can be ensured, which hinders maintenance and management work at medical institutions.
③ Therefore, even under the situation where the parts supply including the parts stock is severe, it is not easy to replace the parts.
Some companies have been forced to procure parts at a new expense hindrance to stable supply. * There are many people whowish to introduce a system like " automobile inspection system " in the term of car.
④ Cyber attacks on medical institutions are rapidly increasing and the threat of virus infection via medical devices is increasing.
Therefore, providing medical devices capable of cyber security measures and handling medical devices after service termination in
IMDRF guidance * are major issues. * To be applied from fiscal 2023

Proposal① Support the establishment of a system to review the continuation of clinical use only for medical devices whose safety is difficult
to ensure due to the end of supply of parts or expiration of maintenance period due to long-term use.
② Regarding medical devices that have been in clinical use for a long time and cannot be protected against cyber security, we willshow measures to encourage updating to devices that can support new technology.

Page2828

January 24, 2023 : Proposal formaterials for the periodic meeting

The 43rd periodic meeting between the Ministry of Health, Labour and Welfare and the
medical device industry

Draft" Diagnosis / Therapeutic devices / Home medical care

Proposals for Programmed Medical Devices

January 0, 2023

29

Main Points of EBC
2022 Periodic Meeting
EBC Appeal Plan•

Clarification of evaluation methods for medical treatment fees of programmed medical devices→ Regarding programmed medical devices, evaluation method for technology that does not have facility standards, etc. is notclear at present.

→ Further improvement of predictability in medical fee evaluation is essential•

Evaluation based on the characteristics of programmed medical devices→ Programmed Medical Devices, It was also shown that they can be evaluated as Special Designated Treatment Materials→ For programmed medical devices with relatively high update frequency, opportunities for medical fee evaluation are the same
as for conventional medical devices.

•

Evaluation of programmed medical device for Physician Work Style Reform→ It is clear that the majority of radiologists are in a state of overwork.
→ This time, in the revision of " Programmed medical devices shall be evaluated by taking into consideration the characteristics
of each product and reflecting them in facility standards, etc., while bearing in mind the perspective of work style reform forphysicians in the evaluation of medical devices". However, there is no clear indication of the evaluation in terms of additional
points or additions to the technical fee.

•

Promotion of Programmed medical devices in early introduction→ There is concern about the so-called SaMD / SiMD lag compared to Europe and the United States for programmed medical
devices using AI and machine learning→ For regenerative medicine products, there is a " conditional and time-limited early approval system " that enables early
approval and early insurance listing. However, there is no such system for programmed medical devices. Despite being a
programmed medical devices with relatively high update frequency, it is the same as a normal medical device.

Page301. Clarification of evaluation methods for medical treatment fees of programmed medical devices[Proposal](1) " If the ability to detect lesions is clearly better than existing technology, it can be evaluated as an addition. "January 24, 2023 : Proposal formaterials for the regular meeting

Exemplify specific calculation conditions to be " evaluated as an addition "⇒ evaluation criteria, evaluation coefficient , end points of test, technology to be compared, evidence level, etc.

(2) Evaluation of " cases where interpretation is equivalent to that of a specialist " and " cases where it leads to work-style reform of physicians "In light of the fact that there are technologies (e.g. endoscopic method, etc.) for which facility standards do not exist,
Please provide specific examples including technical fee or/and evaluation methods using DPC function evaluation factor II, etc.

(iii) Based on the evaluation methods for programmed medical devices presented by industry associations in the previous revision,
Set up study sessions and opportunitiesto exchange opinions to clarify differences in thinking between the government and the industry.

Page31

● Evaluation based on the characteristics of programmed medical devices
January 24, 2023 : Proposal formaterials for the regular meeting[Proposals and requests]①

Regarding special designated treatment materials that adopt the functional category method, the functional category is defined as“similar in terms of structure, purpose of use, medical efficacy and effect, etc.'' In the case of intangible programmable medical
devices, the expression "structure" is difficult to interpret, so how about reviewing the expression?

②

In the cost calculation method for special designated treatment materials, Chuikyo indicates coefficients that should be applied togeneral administrative sales expenses, operating income, distribution expenses, etc. against manufacturing costs. on the other hand,programmed medical devices, which are intangibles, do not have cost items corresponding to manufacturing costs, or the ratio of
manufacturing costs is remarkably low compared to medical devices, which are tangibles, and cannot be calculated appropriately.
Therefore, for the time being, specific examples will be accumulated in order to establish a method of setting coefficients suitable for
evaluation of programmed medical devices, taking into consideration the development and manufacturing processes of individual
products that are submitted for application without using coefficients. (Same treatment as individual consideration for regenerated
products)③

In light of the fact that performance will continue to be updated even after putting on market, it will be clarified that multiple challenge
applications can be submitted for programmed medical devices.

In the case of an intangible programmed medical device :The expression " structure " is difficult to interpret

How about " similar in terms of structure (in the case of
programmed medical devices, mechanism of action,

Programmed medical equipment, which is anintangible item, does not have an element
corresponding to the "raw material cost" inthe case of a tangible item. Alternatively,
since the cost composition ratio for tangible
items is significantly different, it is notsuitable for cumulative calculation based onconventional coefficients.

content of programs, algorithms, development

techniques, etc.), intended use, medical efficacy, etc.
"?

Page32● For the time being, accumulate cost calculations for individual
cases and establish appropriate coefficient setting methods

3. Evaluation of Program Medical Devices Contributing to Working Style Reform of Physicians
January 24, 2023 : Proposal formaterials for the regular meeting[Proposals and requests]① Based on the reality that doctors' overwork is a risk factor for patient safety, it is possible to evaluate the selection of
applicable techniques and the application of supplementary additions. In addition, we will clarify the evaluation criteria andevaluation coefficients to be eligible for premiums, etc., and institutionalize the spread and expansion of programmed
medical devices that contribute to the work style reform of doctors.
② In the case of evaluation based on technology fees, if the introduction of applied technology in question results in more
efficient medical resources compared to the overall cost of medical care using conventional similar technology, a certain
part of cost reduction is newly applied to the evaluation as a "partial addition“③ If it is evaluated as a special material, the cost reduction due to the applicable technology is reflected as a correction
addition to the material price.

Reference:
A case of a university hospital where the diagnostic imaging environment of the radiology department affected the delay in recognition ofabnormal findings。
" Excessive work of a radiologist "・ In a series of CT image diagnoses at a university hospital, two urological outpatient physicians, nine primary readers of the radiology
department, and two secondary readers, in total 13 persons involved, the overlooking of lung cancer occurred, and the patient died.
• There are important organizational factors behind the delay in recognition of abnormal findings, and the average rate per physician atnational university hospitals is lower than that at national universities.
There was a situation in which 1.5 times of reading was performed. The environment was not suitable for accurate diagnostic imaging.
Nagoya University, " following after Surgery for Renal Cancer, Materials for Press and Publication of Cases in which Delay in Detection of Progression of Primary Lung Cancer ", 2015,
https://www.med.nagoya-u.ac.jp/hospital/departments/file/author63aa4/2021/pdf/2755fd2e4b3e6171ef98fd927a6a161c072adea6.pdf

Page33

4. Promotion of programmed medical devices in early introduction

January 24, 2023 : Proposal formaterials for the regular meeting[Proposals and requests]① Applying the “conditional and time-limited early approval system” like regenerative medicine products toprogrammed medical devices, and enabling early approval and insurance coverage, it will be re-evaluated(utilizing the challenge application framework) by using of additional data collected within a certain period after
putting on market ( e.g. RWD, etc.)② If there is no evidence enough to be covered by health insurance, and if the company wishes, an evaluative
medical treatment (advanced medical care A for which the company is the main body of application) is applied toensure patient access. After introduction to clinical practice, RWD etc. will be used to evaluate insurance coverage.
③ For products that have obtained conditional and time-limited approval using ① and ②, even if approval is not
obtained in the main review after a certain period of time, safety, etc. is confirmed at the time of the provisional
review. so that it can be used continuously.

Framework for early introduction utilizing conditional and time-limited approval of regenerative medicine products (provisional)

R&D(clinicaltrial)

Approval
application
Estimation ofefficacy /Confirmation ofsafetyConditional andtime-limited
approval

Commercially available
Verification of efficacy andfurther safety after putting
on market

Application
forreapproval
Reevaluation ofefficacy andsafetyApproval

Covered by insurance

Insurance re-evaluation

Evaluative medical treatment because not enough evidence

Covered by insurance
Products determined to beunsuitable for insurance
coverage

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Continued
marketingSelective medical
treatment

Agenda•Summary for the current year•

Administrative events and activity history•

Public and Private Sector Dialogue (Minister of Health, Labour andWelfare)•Regular Meetings (Medical Division) Special materials, diagnosis
and treatment equipment (program medical equipment)• Liaison committee of SaMD related organizations (METI)• For the next fiscal year
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Activity Policy of the Medical Fee Committee in 2023

(1) Optimization and evaluation of innovation technologies
1) Evaluation of artificial intelligence technology2) On-line and remote robots
3) Integration of medical information to PHR (ICT infrastructure development)
4) Proper evaluation of radiation therapy, nuclear medicine and other treatment
5 Evaluation of the efficiency improvement of medical care and reduction of burden of medical professionals *Proposal of a new evaluation criteria * + Proposal of a new insurance system(Challenge / Temporary approval / Mixed medical treatment)(2) Measures against foreign price adjustments(3) Continuous response to subdivision and rationalization of functional category(4) Elimination of category - Relaxation of rules for withdrawal of unprofitable products (confirmation required)(5) HTA : Challenges and Responses to Stable Supply(6) Response in line with the community medical program policy (maintenance management and formulation ofrequirements for exposure control)

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Lineup of the Medical Fee Subcommittee in anticipation of the next
revision••

Respond to rapidly changing products and applicable systems, and broadly recruit participation
Encourage young members to participate in 3-poles conferences (EBC, JFMDA, AMDD), etc.

Support of government and otherorganization for chairman

Tadashi Idei Vice Chairman of committee in charge ofOrganized by the Administrative andGroup Response Subcommittee(Chairman in case of other organization)

Ryoichi Tanaka Chairman of the

Support for the Chairman(Deputy Chairmen in case of Other
Organizations)

17 members

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medical fees

Medical Fees SC

Tomohiko Matsukawa Vice
Chairman of SC (Diagnosis andTreatment)

Ritsuko Koba, Shigeyasu Mori
Takeya Tamura, Masanari Hosotani,
Hiroyuki Akimoto
Shizuko Suzuki, Mamiko Yamamoto

Mitsunori Nomura Vice
Chairman of SC (Specified Healthand Medical Materials)

Hisako Naito, Miyo Nishimuta
Madoka Makishima, Akiko Tsubota, Atsushi
TakedaYoshitaka Kishimoto, Tatsuhito Nakagawa,
Hidekazu Harayama
Hitoshi Iwasaki, Hajime Masaru Sato

Medical fees (covered by insurance) are the lifeline of companies.

••

Towards the 2040 problem, the medical fee system will inevitably change due to the redesign of primary careand medical categories and the promotion of medical DX.
Firmly secure our exit strategy (outcome) with practical benefits such as realization of earnings and insurance
coverage2025 ⇒ 2040 problem
Comprehensive Community Care

Medical DX

Preventive medical care

Medical fees
Evaluation and Income for Medical Care
Assessment of safety management and consistency with requirements

Medical Care Act
Basic compliance matters for providing Medical Care
Maintenance / Medical safety

Functional evaluation of technology
Guarantee of Quality
Evidence base
Work Style Reform

Systematization of medical devices
Facility requirements
Various guidelines

Pharmaceuticals and Medical Devices Act
Quality, Efficacy and Safety Assurance
Sales, Repair, Specified Maintenance Medical Devices andPackage Inserts (Tempu-bunsho)

Page38https://www.mhlw.go.jp/content/12401000/000517328.pdf

Research, Development, Sales

Participation in the Medical Fee Subcommittee
We ask for the cooperation of member companies.
Thank you for listening.

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