Market Access and User Adoption vary widely between Japan, Germany and the US

It is widely accepted that new technologies are responsible for both rising healthcare (HC) costs as well as for improved clinical outcomes. Research shows that there are substantial differences in how new products and techniques gain access to different markets, such as those in the US, Germany and Japan.

Equally varied are the ways that medical technologies reach medical providers, and how certain countries and their end-users adopt innovations more quickly than others do.

The main reasons for different market access patterns are:

  • Obtaining reimbursement – Variations in the process to obtain reimbursement for product-use (e.g. the use of evidence regarding the therapeutic benefit and/or costs of a given technology, to determine or update payment tariffs through HTA agencies)
  • Diagnosis-Related Groups – DRG systems support or deter the adoption of technology, depending on the circumstances and conditions of the nation/market.
  • Patient re-classification – How often does a given healthcare system update patient classification in order to include the use of a new technology; or, how are short-term and supplementary financing solutions used and eventually updated, to handle new medtech?
  • Regulation – The complexity and length of the licensing application, approval and regulatory tracks, tend to be different in each nation.

The adoption of a new product or technique depends on:

  • Physician’s training
  • Clinical practices
  • Reimbursement tariffs
  • Hospital management

Research also reported that physicians and HC centers, that are themselves involved in product development and clinical testing, adopt innovative techniques and products faster than those that do not. They also act as a catalyst for adoption among the surrounding hospitals and facilities.



In light of the eminent restructuring of the healthcare system and the related uncertainties, it is difficult to anticipate how the HC financing will impact the entry and adoption of new techniques and products in the USA.

Nevertheless, we assume that the following cornerstones will remain valid. The key components for entering the US market with a new medical device/technique are:

  1. Regulatory – will the product be approved by the FDA?
  2. Coverage specifications – Will the technology be covered by public and private players?
  3. Classification and coding – How will the product/technique be billed?
  4. Payment – How much will be paid for the product or technique?


The FDA is responsible for the classification and clearance/approval of new and imported products.

The Center for Devices and Radiological Health (CDRH) within the FDA is the authority responsible for medical devices being imported into the USA.

The CDRH focusses on:

  • The review and clearance of new devices according to risk.
  • Device manufacturing and performance standards, to ensure timely access to safe and effective medical devices.
  • Tracking reports of device malfunctions.
  • Clinical evidence regarding the effectiveness/safety of higher-risk devices.

The Centers for Medicaid and Medicare Services – Investigational Device Exemption (CMS-IDE) uses investigational devices in clinical studies to collect safety/effectiveness data for:

  • New devices that are not yet cleared for marketing.
  • Specific modifications or new purposes for approved devices.

Products are divided into:

  • Class I devices
  • Class II, typically requires postmarket surveillance
  • Class III, needs postmarket approval

Typical duration of registration

Class I devices – Takes up to one month, to register and obtain listing with the FDA

Class II devices and those requiring the 510(K) – takes up to 6 months

Class III devices and those requiring PMA – takes up to 30 months

FDA clearance or premarket approval does not guarantee coverage from health systems and other payers.

Coverage and reimbursement

CMS National Coverage Determination (NCD) determines the extent of coverage and reimbursements for medical services and technologies. This refers to:

  • Evaluating whether there is sufficient evidence of improved clinical outcomes (this may differ from the evidence required by the FDA).
  • Performing technology assessments (internally and/or externally), in consultation with MEDCAC (Medicare Evidence Development & Coverage Advisory Committee).
  • That new technologies’ coverage may be linked to participation in clinical trials.
  • The NCD may decide to fully, partially or not at all, cover a new technology.
  • The decision process takes 9 to 12 months.

Products will be categorized as:

  • A – The absolute risk of the device has not yet been established/ not yet covered.
  • B – It is covered by Medicare. Payments will be based on the amount paid for a currently used FDA-approved device/technique that serves the same medical purpose.

The CMS has specific reimbursement guidelines for products/techniques used in inpatient cases (IPPS) and outpatient cases (OPPS).

Private Payers

Private payers determine payer-specific coverage and practice policies dependent upon evidence and value. They establish the coverages they provide (for medical services or technologies) based on its medical necessity, clinical effectiveness, improvement of clinical outcomes, economic value/resource implications, and patient preference. (Coverage by private payers is not based on experimental purposes.)

These and other factors affecting coverage and reimbursement levels are:

  • The management of the new technology, through clinical and coverage policies, resource utilization management, contracting, etc.
  • Value-assessment through the evaluation of evidence on clinical and economic outcomes, resource implications and patient preferences.
  • Reliance on existing technology assessments from external sources.



Several indicators in Japan are not favorable to facilitate new product access and adoption.

Since 2012, the Japanese government has cut reimbursement rates (which are adjusted every two years) for medical devices and overall payments, in an attempt to reduce healthcare costs.

This results in mounting pressure on the profit margins of the domestic medtech industry, affecting the innovation rate of medical devices and technologies.

Management also effects the diffusion of new technologies. We observed that adoption processes of innovative product and techniques are slower among hospitals belonging to a hospital group, as a measure within cost-containment programs.


Registration and obtaining market approval is considered lengthy and complicated in Japan. All documentation must be completed in Japanese, and a domestic representative is needed.

All devices must qualify with the Japanese Ministry of Health, Labour and Welfare’s Ordinance #169 for Quality Management Systems (which is a more stringent version of the ISO 13485).

The Pharmaceutical and Medical Device Law (PMDL, applied since 2014) regulates the market approval mechanism and governs the main medtech authority, the Pharmaceutical and Medical Devices Agency (PMDA).

All medtech and pharma entering the market must obtain a Japanese Medical Device Nomenclature (JMDN) and be included in the approved database. This database also serves as a point of reference for product classifications, where a new product can be compared to existing ones.

Foreign manufacturers must then appoint a Designated Marketing Authorization Holder (DMAH), who plays a critical role in the registration process. They must register with the Ministry of Health, Labor and Welfare, via the PMDA.

A pre-market application must be submitted and approved by the PMDA.

After certification is obtained, the manufacturer must submit an Import Notification, prior to entering the product into the market.

Duration of registration and licensing:

  • Class I – less than 1 month
  • Class II (Specified Controlled) – 3-5 months
  • Class II (Controlled) – 7-9 months
  • Class III – 9-11 months
  • Class IV – 13-16 months

In order to support the export ambitions of the Japanese medtech industry to emerging markets, there is a lot pressure to reform the regulatory standards.



The German DRG (Diagnosis-Related Groups) system provides OPS (Operations and Procedures, i.e. therapies and diagnosis) codes to classify reimbursed procedures.

  • A new medical device is reimbursed immediately if it is part of an established method that is already covered by the reimbursement system.
  • An innovative medical device/technique requires a different approval procedure. For this reason, new OPS codes can be requested at the DIMDI (German Institute of Medical Documentation and Information) for reimbursement purposes. The DIMDI’s decision will take about 1 year. If successful, the newly created OPS code will be assigned to a DRG.

Financing of new research and treatment methods

These new diagnosis or treatment procedures can be introduced into the DRG system via a NUB (neue Untersuchungs- und Behandlungsmethoden; i.e. new research and treatment methods) application. The NUB-procedure is a payment scheme for remunerating cost-intensive innovative services and technologies in addition to the existing DRG case-based flat rate process.

Such an application entails the following steps:

  1. An application should be submitted by an individual hospital to InEK (Institute for the Hospital Remuneration System) claiming the necessity for said innovative product.
  2. A German medical society will then have to endorse the request.
  3. After approval, they can start negotiations with a local HC payer.

At some point in the future, InEK aims to include this procedure into the standardized DRG system.

InEK centralizes the DRG-system management on behalf of Germany’s major health insurance associations and for the German Hospital Association.

Costs and frequencies of all diagnosis and therapies are accessible via the public InEK G-DRG database report browser. A sample of 244 individual hospitals, from over 2,000 German hospitals in total, provide individual data to InEK.

The graph illustrates the pathways to obtain reimbursement for inpatient hospital care.


German and EU directives, standards and safety regulations regulate the German market for medical devices; these requirements are complex.

  • The German Medical Devices Act (AMG) applies to all equipment and devices used on/in the human body, and must be followed when seeking approval to enter the German market.
  • The licensing of medical devices requires accreditation from the Federal Institute for Drugs and Medical Devices (BfArM), or in some cases, from the Paul-Ehrlich Institute.
    • The BfArM also authorizes and monitors clinical tests when these are deemed necessary.
  • Devices are registered at DIMDI.
  • Any medical device intended for the German market must bear a CE marking.
  • Although GS (geprüfte Sicherheit; tested safety) and the VDE (Verband der Electrotechnik; Association for Electrical, Electronic and Information Technology) markings are not required by law, they are highly recommended for marketing electro-medical goods in Germany.
  • Underwriters Laboratories (UL), the VDE-Testing and Certification Institute, and TUV (Technische Überwachungs-Verein; Association of Technological Surveillance) Product Service have formed a strategic alliance, which has resulted in the globally recognized EMC (ElectroMagnetic Compatibility) marking.
    • A single test, yielding positive results, carried out by one of these 3 partners, entitles the product to an international EMC marking. This marking replaces domestic test-markings throughout nations in Europe, the United States and Japan.

Overall, medtech companies experience more rapid market approval processes in Germany, than in the US and Japan. The cost for bringing a new medical device to the German market is approximately 7 times less than in the US, and 25% less costly than in Japan.

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About Bart Van den Mooter

Bart is the founder of TforG and works closely together with over 50 global companies such as Abbott, Baxter, GE, J&J, Medtronic, Philips, Stryker and Covidien. In this function, he spends a lot time with Key Opinion Leaders and Health Policy makers in Europe and in Emerging Markets. He graduated at the Polytechnic University of Leuven with a Master of Engineering and has an MBA (Flanders Business School).