Public-Private Dialogue for the Creation ofInnovative Medical Devices and In-Vitro
Diagnostics
November 28, 2022

Japan Association of Clinical Reagents Industries
American Medical Devices and Diagnostics
Manufacturers' Association
IVD Committee
European Business Council EBC MedicalDevices and IVD Committee
1Issues of the dayA) Evaluation of innovation for clinical laboratory
testingB) Measures against the following infectious
disease crisesC) Measures for stable supply in the event of priceincreasesA) Evaluation of innovation for clinical laboratory testing
As stated in the Proposal* on the Proper Implementation System of Clinical Laboratory Tests, "Definition of innovation for clinical laboratory tests, and based on this definition, Introduction ofValid and Transparent Evaluation Standards " are very important for the creation of innovative invitro diagnostics.
* Quotation : Excerpt from Recommendation 2 on page 14 to the Minister of Health, Labour and Welfare from 3 organizations (JACRI, EBC andAMDD) of the Recommendation on the proper implementation system of clinical laboratory tests on December 15, 2021
Reference :Policy proposals regarding on Evaluation and Ideal state of Clinical Testing Based on Medical Value - Promotion of Evaluation of Clinical Tests thatform the basis of Medical Care - Social Insurance Sunpo No. 2867, 2022 9 11

Current status•

Even if innovative products are developed for in-vitro diagnostics, the system for evaluating suchproducts is not clarified. (For medical devices : Premiums for innovativeness, improvement,marketability, etc.)* * Refer to reference material : Case examples on pages 8-12

•The motivation for developing next-generation products cannot be maintained due to the difficulty insecuring development costs and predictability of incentives for development to continue developing
innovative in-vitro diagnostics that can contribute to patients and medical facilities in line with recent
advances in science and technology.

•In the supplementary opinion to the report at the general meeting of Chuikyo on May 18, 2022 (seenext page ***), the Expert Committee on Insurance-Covered Medical Materials is to consider theevaluation of innovation in clinical labolatory tests.

Proposal•

It is requested that the Expert Committee on Insurance-Covered Medical Materials consider in-vitro
diagnostics evaluating innovation and reflecting it in medical fee points.
Step1 : Agree on the definition of innovation
Step 2 : Institutionalize additions to items that meet the definition of innovation3

***Excerpt from Chuikyo material

Chuikyo So-9
4.5.18How to proceed with consideration of matters related to supplementary comments on the written report (Draft)〇 2022 Report on Revision of Medical Service Fees Incidental opinions need to be investigated, verified anddiscussed conducted. As shown in the attachment, it may be appropriate to examine the impact of the fiscalyear 2022 medical fee revision and to start investigations and necessary deliberations toward the next medical
fee revision to at each of the discussion places.

Attachment

Supplementary Comments on Reported Damages

Main Places forConsideration(Evaluation of Medical Technology)
11 From the viewpoint of perspective of promoting high-quality medical care based on
Subcommittee on
clinical practice guidelines, etc., we will continue to consider the revision of clinicalpractice guidelines, the analysis results of world data with registries, etc., including the Evaluation of MedicalTechnology,
appropriate medical technology evaluation process based on them. matter. In addition,
regarding advanced medical technology including innovative medical devices (including
Expert Subcommittee
programmed medical devices) and innovations such as testing, from the viewpoint ofperspective of prompt and stable supply and provision to patients, we should continue on Insurance-Covered
to consider appropriate evaluation methods based on evidence related to efficacy andMedical Materials
safety.
4B) Measures against the Next Infectious Disease Crisis (Lessons from the COVID-19) It isextremely important to continue developing and strengthening the examination system, including themaintenance of measuring instruments and human resources that have been developed and secured in medical
institutions, etc., as a measure against the next infectious disease crisis.

Current situation
In preparation for the next infectious disease crisis, the COVID-19 Response Headquarters has raised thefollowing issues with the aim of " Strengthening the Testing System " *.

•Prefectures, etc. shall develop a necessary system to ensure that inspections are conducted smoothly
from the initial stage of infection. In addition, the inspection system will be drastically strengthened bypromoting the utilization of private inspection organizations.

•Testing reagents, test kits, and other materials necessary for examination are also produced andimported in emergencies. For these purpose, develop a framework for taking appropriate measures.
* " Direction of Responses to Prepare for the Next Infectious Disease Crisis Based on Efforts to Date Concerning
the Next Coronavirus " (Decision of the Response HQ on June 17, 6, Reiwa 4 ) P5 From " 3 Strengthening theExamination System " / P6 From " 6 Strengthening the Securing of Medical Supplies " (partially modified)

Proposal•

When considering the establishment of a system, we are in charge of the development and supply of
test reagents and the diagnostics industry would like to participate in the discussion at an early stage.
-•

It is expected that more companies’ contribution and the response will be speeded up by
unifying the contact points for administrative and industry sides and developing a system totransmit and collect necessary information in a timely and efficient manner.
Providing opportunities for the development of systems on the part of the diagnostics industry
at an early stage will enable a more prompt and flexible response.

As a risk management measures implementation of " maintenance of measuring instruments, etc. "and " recruitment and training of clinical laboratory specialists and clinical laboratory technicians " inmedical institutions in peacetime (including maintenance of equipment and human resources thathave been improved recently) is recommended.
5C) Measures for Stable Supply in the times of Price Increases
Recent environmental changes such as rapid exchange rate fluctuations

Potential difficulties in supplying test kit
necessary for medical care test kits

Stable supplyIssues Facing Manufacturers andDistributors(Safety of Patients)

Issues in the IVD industry

Issues related to logistics
and exchange rate fluctuations• Decrease in insurance points• Rising product costs• Difficulties in obtaining raw materials and components andsoaring prices• Limitation of Cost Reduction through Corporate Efforts• Difficult to change price under public medical insurance

Issues Facing Logistics and Exchange Rate
Fluctuations

WeakerYen•••••

Driver shortage/aging population
2024 Problem (Working Hours Regulations)
Soaring gas prices, shortage of trucks
Soaring prices for air transportation, etc.
Rising sea freight costs due to container shortages, etc.

6C) Measures for Stable Supply in the times of Price Increases
Recent environmental changes such as rapid exchange rate fluctuations
Background

Recent changes in the environment•

Increased costs for imported goods and raw
materials procurement due to the sharp
depreciation of the yen•

Even for member companies of the Japan
Association of Clinical Laboratories, the impactof fluctuations in foreign exchange rates andconsumer prices will increase costs by about
10-30%.

•Under public medical insurance withreimbursement prices, it is difficult to pass onthese cost increases to medical institutions byraising selling prices.

••

Effects of COVID-19
High commodity prices due to disruption ofdistribution networks(Cost increases of 2-4 times for airfreightand 2-5 times for sea freight)

Request for Immediate Measures• Development of an environment that facilitates the use of Temporary Subsidies forReginal Development by medical institutions• This is within the framework of public medical insurance, but we would like to pass on
increased costs to sales prices.
6**

Reference materialsA) Evaluation of innovation for clinicallaboratory testing8Reference A) Evaluation of innovation for clinical laboratory testing

Innovativeness : " Cancer gene panel examination " using nextgeneration sequencer
Advanced technology (next-generation sequence technology) is introduced into clinical examinations, anditems that have been examined individually can be examined collectively.
➢ Contribution to early decision on treatment plan
➢ Contributing to the reduction of the burden on both patients and medical personnel

Individual examination

Batch examination

EGFR genetic testing () qPCR method

・EGFR gene mutation
ALK fusion gene test () IHC method
ROS1 Fusion gene test RT-PCR method
BRAF genetic testing () NGS method
RET fusion gene test () NGS method✓ Repetition of individual checks⇒ It is necessary to take a long time to decisionon treatment plan

✓ Larger sample volume is needed because
each gene mutation is tested individually⇒ Re-biopsy due to specimen shortage

test
・ALK fusion gene test
・ROS1 fusion gene assay

・BRAF genetic testing・RET fusion gene test

Next-generation sequencer✓ Shortening of the waiting period until the test result isobtained by the batch examination⇒ It is possible to decide on an early treatment policyand start treatment✓ Multiple items can be tested with a smaller sample volume⇒ Reduce the burden on patients and medical personnel
involved in re-biopsy due to specimen shortage
9Reference A) Evaluation of innovation for clinical laboratory testing

Improvement : Cases in which there was a change in medicalcare due to improvement in test performance- High-sensitivity troponin test " Changes in the guidelines for troponin testing "2007 : United States and Europe (ESC/ACCF/AHA/WHF) Task
force : The diagnostic criteria for MI (myocardial infarction)
were completely revised and " Universal Definition of MI " wasissued.
➢ The biomarker with specificity for myocardium is troponin, andthe recommended diagnostic criterion is less than 10% CV below
99% tile of a healthy person.
2013 : Guidelines for the management of ST-segment
elevation acute myocardial infarction➢ Cardiac troponin is highly myocardial specific and is not elevatedin healthy individuals.

➢ With the conventional troponin test, it was not possible to make a
judgment until 6 hours or more had passed, but the highsensitivity cardiac troponin measurement system has highmeasurement accuracy and has been shown to be useful for
diagnosis in the hyperacute phase (within 2 hours after onset).
2018 : Acute coronary syndrome guidelines➢ High-sensitivity cardiac troponin measurement systems havebeen shown to be more accurate than conventional troponinsystems and it is also useful for diagnosing the hyperacute phasewithin 2 hours after onset.
➢ Higher values at admission are associated with higher mortalityrisk.

High sensitivity enables early
diagnosis

Diagnosis become possible within 2 hours
from 6 hours

Improvement of diagnosis
accuracy and improvement ofpatient outcomes by early
diagnosis

Reflected in Guidelines

10

Reference A Introduction of evaluation cases of clinical laboratory innovation

Improvement : Cases in which there was a change in medicalcare due to improvement in test performance- High-sensitivity troponin test Method:

Costs (95%CI),$In patients with suspected ACS (acutecoronary syndrome), we compared thediagnostic method by the followingtroponin tests 1, 2, 3,
1. Conventional test : 6 hours after visit,
2. High-sensitivity troponin test : 2hours
after visit +LoD and
3. ADP (accelerated diagnostic protocol =early diagnostic protocol )Diagnostic Accuracy(95%Cl), %Results :High-sensitivity troponin and ADP compared with conventional troponin testing (#1).
When ADP was introduced (#5), the diagnostic accuracy improved from 90% to94%, and medical costs decreased by about $500.
Moreover, an early diagnostic protocol for high-sensitivity troponin LOD and 2 hours
after visit was associated with a 7.5% reduction in short term hospital admission
and a 25% reduction in cardiac ward admissions.
Juilicher P, et al. BMJ 2017;7:e013653.

11Reference A Introduction of evaluation cases of clinical laboratory innovation

Marketable (rare) : RAS Gene mutation (plasma)" Outline of the examination "Anti EGFR antibody reagents are used 1st line in patients with advanced / recurrent colorectal cancer, but it
is recommended to test for RAS mutation before making a decision on administration because RAS there isno therapeutic effect if there is a mutation.
Example : Efficacy of cetuximab ( RAS wild-type unresectable advanced or recurrent colorectal cancer
that is not candidates for curative resection )" Clinical usefulness evaluated at the time of application for insurance coverage "It is a highly sensitive plasma RAS gene mutation test combining digital PCR and flow cytometry for patientsfor whom obtaining a tissue specimen is difficult or who are at high risk of complications due to re-biopsy, it
is possible to make a decision to administer a therapeutic drug quickly and with low invasion.

In the conventional development of moleculartargeted drugs, patients are selected based on theresults of tissue examination
Therefore, even though technical improvements have led to thedevelopment of blood-based tests handling for insurance is " when theexamination using tissue is difficult " and evaluation is limited (Although the manufacturer can show the analytical equivalence oftissue and blood, long-term prognostic outcomes of interventions are
difficult to explan )Physicians are aware of the advantages of rapid and minimally invasive
procedures and have begun to accumulate positive evidence regarding
treatment options based on blood tests.
National Cancer Center (ncc. go. jp) : Proving Validity of Genome Analysis by Liquid Biopsy

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