International News In Brief
This article was originally published in The Gray Sheet
Executive Summary
Japan cuts: Japan has officially announced reimbursement cuts for devices that are sold in the country, according to the Japan-based American Medical Devices and Diagnostics Manufacturers Association. The cuts take effect for two years beginning April 1. On average, the pricing reductions are less than in previous years, but some companies were apparently hit with more drastic cuts, above 20% in some cases, according to Huimin Wang, chair of AMDD and corporate VP-Japan and Intercontinental for Edwards Lifesciences. The government calculates the cuts using two different formulas: foreign average pricing, which bases payments for certain products on how those products are priced in the U.S., U.K., France and Germany, and the R-zone process, which reduces reimbursement for products if payments are more than 4% above the average selling prices reported from surveys of Japan's hospitals. Most devices were subject to the R-zone approach. Wang says that Edwards was prepared for the cuts, which happen every two years (1"The Gray Sheet" Jan. 4, 2010). "We know the pricing revision will be coming, and so we plan for it, and it was within what we expected," he said