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AMCHAM Healthcare Innovation Seminar 2013
“Creating a Sustainable Healthcare System
Through Innovation”
Chiaki Sato, Ph. D., LL.M.
Graduate School of Public Policy, University of Tokyo
Guest Scholar, Engelberg Center for Healthcare Reform,
Brookings Institution
୔The views expressed in this presentation are the views of the author and do not necessarily reflect the views or policies of the University
of Tokyo and Brookings Institution.
Rebuilding Japan Strategy in 2013
Japan is really back?
‹ Market on health promotion, disease prevention, and living
support=$100billion in 2020
‹ Market on pharmaceuticals, medical devices, products related with
regenerative medicine=$160billion
‡ Centralized funding and trans-relational researches by J-NIH
‡ “Advanced Therapy Highway Plan” for broadening and hasting dual use
of covered services and uncovered new therapies (cancer therapy as a
pilot)
‡ Permitting to sell OTC drugs via internet and mail
‡ ICT use for healthcare, social care and prevention area with initiatives
from payers or insurers
‡ Reforming PMDA for no drug and device lag based on reviewing time
‡ Clarification of present regulatory affairs for new emerging businesses
Source: Cabinet Decision, Rebuilding Japan Strategy, June 14, 2013, at 12-13, available at
http://www.kantei.go.jp/jp/singi/keizaisaisei/pdf/saikou_jpn.pdf
Life and Healthcare Strategy
Under the Rebuilding Japan Strategy in 2013
‹ Very small parts have been assigned for additional incentive
via national healthcare insurance
‹ Is promoting “advanced therapy program” a promising
solution for innovation?
‡Centralized funding and trans-relational researches by JNIH
‡Reforms in regulatory affairs (notified bodies, QMS
‡Global health (finding new markets for solving unmet
medical needs)
‡Promoting services in healthy life support
‡ICT use for healthcare, social care and prevention area
Source: Ministries’ Mutual Understanding, Life and Healthcare Strategy, June 14, 2013, available at
http://www.kantei.go.jp/jp/singi/kenkouiryou/pdf/senryaku.pdf
Present State of Biomedical Innovation in Japan
Brief Overview
Biomedical Innovation in Japan has been slowly developed.
‡ Investment cases in bio, pharmaceuticals, and healthcare: 180
(2006), 175 (2007), 75 (2008), 93 (2009), 83 (2010)
‡ IPO cases in bio: 5/36 (2011), 1/23 (2010), 3/19 (2009), 3/34 (2008),
3/96 (2007), 0/188 (2008)
¾ Lack of $10million’s investments by venture capitals
¾ Lack of bio ventures’ exit
‡ There is no Japanese healthcare company in R&D spending top
ranking, according to Bloomberg data, Booz & Company
‡ In ES/iPS cell, Japan is following U.S., EU and Asia
¾
¾
¾
¾
Articles: 172(U.S.)/29 (Japan)
Patents: 98(U.S.)/9(Japan)
Start-ups: 5 (U.S.)/1(Japan)
Clinical trials: 11(U.S.)/0(Japan)
Source, PARI, University of Tokyo, 3rd Biomedical Innovation Workshop, Nov. 27, 2012, available at
http://pari.u-tokyo.ac.jp/eng/event/smp121127_rep.html (Panelists’ presentations)
Incentives for Next Innovation
Main Three Components
Incentives must meet business models for medical devices,
which have shorter product cycles than pharmaceuticals
‡ Regulatory Affairs
¾ Timely reviews by PMDA and assessments by notified body
‡ Data collection period for new coverage
¾ Advanced Therapy Highway Plan
‡ Coverage and reimbursement under the national healthcare
insurance
¾ More value based payments with transparency and predictability
Incentives for Next Innovation (1)
Regulatory Affairs
‹ Regulatory Affairs works assuring safety and efficacy, but the trend is
the number of applications seems decreasing on generic and few
changing in improved devices (without clinical data)
‹ Timely reviews must be a core for regulatory affairs in medical devices
‡ FY 2010 Second Half Year, Approved Cases/Median Review Time (month)
¾ New MD (priority) 2/18.8m
¾ New MD (normal) 4/12.3m
¾ Improved (with clinical data) 26/12.0m
¾ Improved (without clinical data) 94/15.9m
¾ Generic 657/8.7m
‡ “Device Lag” could not come from review time but application lag ୔
‡ Dropped Applications
¾ New MD 17%, Improved (with CD) 4%, Improved (without CD) 8%, Generic 7%
Source: AMDD, Report, Apr. 2013, available at http://amdd.jp/pdf/activities/recommen/final20130408.pdf; MHLW, Report on action
program, July 12, 2011, available at http://www.mhlw.go.jp/stf/shingi/2r9852000001jq61-att/2r9852000001jq9l.pdf; Kodama J., An
Industry Standpoint about Medical Device Regulatory Models, MDSI Symposium, Tokyo, Aug. 31, 2012
Incentives for Next Innovation (2-1)
Data collection period for new coverage
‡ Advanced therapy program works as a financial support for transition periods from
regulatory clearance to coverage by specially permitting dual use of covered services and
those of uncovered
‡ Advanced therapy specially allows registered physicians for national healthcare insurance
services to provide uncovered services with covered services on specific conditions by getting
out of pocket payment from patients for uncovered services. Without such permission, they
cannot provide uncovered services basically under Health Insurance Act and its regulations.
‡ Cost for covered services patients must pay can be different among hospitals.
‡ Neither stringent cap nor cost adjustment exists for advanced therapies
‡ Purposes: Assuring people's safety, more options to medical cares, and more accessibility
with preventing heavy cost burden of patients
‡ Kinds of advanced therapies: (a-n.64) new procedures with present drugs/devices or new
diagnostic drugs/devices (b-n.42) New procedures with new drugs/devices or new
procedures with present drugs/devices (concerns in safety and effectiveness)
‡ Shared uncertain risk and benefit by patients’ payment to uncovered services
‡ Pathways after advanced therapy program: stopping, continuing, or new coverage
Source: MHLW, The summary of advanced therapy, available
athttp://www.mhlw.go.jp/seisakunitsuite/bunya/kenkou_iryou/iryouhoken/sensiniryo/index.html
Incentives for Next Innovation (2-2)
Data collection period for new coverage
୔1: The whole processes will be 6 or 7months from submission. It is
relatively same time with the fastest getting new coverage as C1 or C2
Submission from
hospitals (not
manufactures)
Advisory
Committee’s
meeting on
advanced therapy
-applicable therapies
-competent
institutions
Advisory
Committee’s
meeting on
advanced
therapy
Reviewing
specific
applicable
procedures
Reviewing
institutions for
providing such
procedures
Reviewing
providing plans
(including cost)
Submission from
hospitals (not
manufactures)
Reviews by
special institutes
Reviewing
providing plans
(including cost)
Permission for
dual use of an
uncovered
procedure with
covered services
Permission for
dual use of an
uncovered
procedure with
covered services
୔2 New highway plan will set review time as 3 months from submission with pre-settings
on target therapies and competent institutions
Source: Central Social Insurance Medical Council, Advanced therapies highway plan, available at
http://www.mhlw.go.jp/stf/shingi/2r98520000033s56-att/2r98520000033scf.pdf
Incentives for Next Innovation (2-3)
Data collection period for new coverage
‡ Advanced Therapy A=n. 65 at 749
institutions (as of June 1, 2013)
‡ Advanced Therapy B=n. 42 at 452
institutions (as of June 1, 2013)
‡ Other related data(From July 1, 2010 to
June 30, 2011) :
‡ Qualified institutions=n.522
‡ All patients applied for advanced
therapies=n. 14,505
‡ Cost for advanced therapies:$173.5million
¾
¾
(covered: $75.4million)
(uncovered: $98million)
‡ Qualified advanced therapies
¾ See the Appendix
Ratio of average cost and number of qualified
advanced therapies:
1.
2.
3.
4.
5.
6.
7.
Less than $2000 (60%, n.33, 2,330 cases)
$2000~$4000 (14.5%, n.8, 527 cases)
$4000~$6000 (5.5%, n.3, 3217 cases)
$6000~$8000 (3.6%, n.2, 119 cases)
$8000~$10000 (3.6%, n. 2, 70 cases)
More than $10000 (3.6%, n.2, 2381 cases)
No applied cases (9.1%, n. 5, N/A)
୔What are Pathways from advanced therapies to new
coverage? Without them, business models cannot be
created under the advanced therapy program. NUB in
Germany and Add on payment in the U.S. are not same with
advanced therapies in Japan. Similar with STIC in France?
Source: MHLW, Qualified Institutions for qualified advanced therapies, available at
http://www.mhlw.go.jp/topics/bukyoku/isei/sensiniryo/kikan02.html; MetLife Alico Japan, About Advanced Therapies,
available at http://direct.metlifealico.co.jp/medical/education/amt.html
Incentives for Next Innovation (3-1)
Coverage and reimbursement under the NHI
䞉Purpose (indication)
䞉Features
䞉Foreign List Prices or at
Original Cost Price
䞉Effectiveness with relative
devices and technologies (no
compulsory about clinical data)
Submission
Sub Advisory
Committee’s review
meeting
Preliminary opinion
based on 1st review
If any objection, 2nd
review meeting
happens
Approval to the
opinion by Central
Social Insurance
Medical Council
(CSIMC)
Coverage with
specific
reimbursement rate
by MHLW
୔A1, A2, and B will be covered by application and its report to CSIMC.
୔20 days is needed for A1 from an application filed. For A2 & B is also 20 days as minimum.
୔For C1 at least 6 months and for C2 at least 7 months are needed.
୔The Number of applications for C is increasing. 17 in 2010 (until Dec. 15), 16 in 2009, 8 in
2008, 8 in 2007, and 5 in 2006.
Source: See MHLW, The Summary of Reimbersement Reforms in Insured Medical Materials, Nov. 11, 2012, available at
http://www.mhlw.go.jp/stf/shingi/2r9852000002o0is-att/2r9852000002o0ml.pdf; Nakano, S., Coverage for Innovative Medical Devices and
Development Incentives, MDSI Symposium, Mar. 25, 2013.
Incentives for Next Innovation (3-2)
Coverage and reimbursement under the NHI
‡ Advanced therapy program cannot completely compensate for some problems
in coverage and reimbursement under the NHI
‡ What are requirements for a new coverage after qualified to advanced
therapy?
‡ There are mainly three hurdles against transitions from advanced therapies to
new covered services under the NHI (is there a predictable market after going
into the covered services from advanced therapies?)
¾ Strong capping in reimbursement prices based on foreign average price
(FAP) in every two years
¾ Updating reimbursement prices based on declined selling average prices
(R zone) in same functional categories in every two years (Is it equitable to
deal device A and B indifferently without considering comparative
effectiveness or some additional evidences if any? How should we set a
currency exchange rate?)
¾ More time for development means decreased reimbursement levels
‡ Data collection via advanced therapies and PMS could be used only for
decreasing prices, without quality based or value based evaluation to medical
devices. Incentives for delivery efficiency like ACO in the U.S. are not
emerging.
Source: See MHLW, The Summary of Reimbersement Reforms in Insured Medical Materials, Nov. 11, 2012, available at
http://www.mhlw.go.jp/stf/shingi/2r9852000002o0is-att/2r9852000002o0ml.pdf; Nakano, S., Coverage for Innovative Medical Devices and
Development Incentives, MDSI Symposium, Mar. 25, 2013.
Analysis as Conclusion about Innovation Policy
in Healthcare for Japan
‡ Rebuilding Japan strategy and Life and Healthcare strategy
could powerfully promote innovation in medical devices
‡ Pathways from regulatory affairs to advanced therapies and
then new coverage are still unclear and unpredictable
‡ For making use of advanced therapy program, more
smooth transition to new coverage and reimbursement
must be needed. At present, it is too difficult to find
impactful incentives to apply for new coverage after
qualification of advanced therapies
‡ Sustainable systems could be accomplished by not only
medical device itself but delivery efficiency via new type of
incentives like shared saving approach or others
Appendix
Most recent examples of qualified advanced therapies called as “B”:
1.
The autologous bone marrow cells administered therapy for liver cirrhosis due to
hepatitis C virus, Cirrhosis due to hepatitis C virus
2. Biodegradable stent placement for benign esophageal strictures refractory after
radical treatment of esophageal cancer has been made
3. Immunotherapy with NKT cells, head and neck squamous cell carcinoma
4. Transplantation of cultured epithelial cell sheet using a self oral mucosa, corneal
epithelial stem cell exhaustion disease
5. The immunoadsorption therapy for severe heart failure, severe heart failure
6. Waon therapy, chronic heart failure for chronic heart failure
7. Blood purification therapy for cholesterol embolism, cholesterol embolism
8. Stanford type B dissecting aortic aneurysm stent graft Grafting for dissecting
aortic aneurysm, save difficult-to-treat
9. Immune therapy with zoledronic acid-induced γδT cell, non-small cell lung
cancer
10. Immunotherapy with NKT cells, lung cancer
Source: MHLW, Qualified Institutions for qualified advanced therapies, available at
http://www.mhlw.go.jp/topics/bukyoku/isei/sensiniryo/kikan02.html
Thank you!