MDREX Newsletter

2024.7.24.

MDREX, Introducing Improvements in Japanese Insurance Regulations for SaMD Products.

With emergence of various forms of medical software incorporating artificial intelligence (AI) technologies in the Japanese market, such as Software as a Medical Device (SaMD) and Software in a Medical Device (SiMD), the Ministry of Health, Labour and Welfare (MHLW) of Japan made an announcement concerning improvements made to its insurance coverage policies for medical software. As these improvements have taken effect since June 1, 2024, it is advised that domestic medical device companies considering entry into the Japanese market should take these developments into account when formulating their market entry strategies.

1) Clarification of Evaluation Criteria for Medical Software (Insurance Coverage Standards).

a)      For medical software that assists in diagnosis, treatment planning, or surgery:

•       If clinical trials indicate that the software significantly enhances clinical efficacy compared to existing technologies, "additional reimbursement" will be applied.

•       If it can be proven that the software allows for a reduction in medical facility resources or personnel, medical institutions adopting the software will be subjected to a relieved requirements to qualify for "facility reimbursement".

b)      For medical software that is essential for performing the intended examination:

•       The entire technology incorporating the software will be evaluated in its entirety. If the overall technology is classified as a new function/new technology, it will be categorized as C2 and "reference reimbursement" will be applied.

c)      For software that controls therapeutic medical devices:

•       If the software usage leads to increased clinical efficacy, the technical fee for specific procedures using the software will be "increased."

d)      For programs used by patients themselves outside medical institutions, such as digital therapeutics:

•       If it is proven that the treatment method using the software shows improved clinical efficacy compared to existing methods, it will be covered as a specific medical insurance material (C1).

2) Improvement in Cost Calculation Methods for Medical Software

a) Previously, sales and distribution costs were not considered in the cost calculation for medical software classified as C1. Under the revised system, these costs will now be considered in the cost calculation process.

3) Re-evaluation Based on Performance Improvement of Medical Software

a)      Formerly, re-evaluation for insurance coverage was only conducted if there was a change in the "intended use or efficacy" of the software. The revised system allows for the submission of an application for re-evaluation if there are “functional” enhancements to the software.

4) Other Evaluation and Selection System Improvements

In addition to the improvements mentioned above, the conditions for submitting challenge applications, etc. have been relieved. These changes should be considered when planning entry into the Japanese market. If you have any questions about the revised Japanese insurance system, please contact MDREX at pro@mdrex.co.kr. MDREX is committed to supporting your product's entry into the Korean or international markets at a reasonable cost.

Thank you