2024.10.28

Orphan Designation for Devices and Regenerative Medicine Products in Japan

New medical device and regenerative medicine products that are meant to treat conditions with only a small number of patients in Japan may be eligible for orphan device or orphan regenerative medicine designation. This designation allows for assistance with development of a study design, expedited regulatory review, lower regulatory fees, a longer period of market exclusivity, and, potentially, a reimbursement premium known as the Marketability I premium.

The key criteria for orphan device designation are as follows:

(1) the new treatment targets a condition with less than 50,000 patients in Japan*

(2) the new treatment addresses a high medical need – meaning there is no adequate alternative treatment for the condition in terms of efficacy and safety

(3) there is a high probability of success for its development in Japan

Since 2015, 8 devices and 27 regenerative medicine products received orphan designation in Japan. More recently, for devices, in December 2024 Sumitomo Heavy Industries’s boron neutron capture therapy (BNCT) NeuCure treatment and dose calculation system received orphan device designation for the treatment of unresectable locally advanced or locally recurrent head and neck cancer and recurrent malignant glioma. Moreover, in March 2024 Boston Scientific’s Visual-ICE Cryoablation System received orphan device designation for renal angiomyolipoma associated with tuberous sclerosis.

Among the 8 devices that received orphan device designation since 2015, 7 devices have since been approved and listed in Japan and 2 devices received a Marketability premium at listing based on having received orphan device designation. The Marketability premium based on orphan device designation typically allows for a +10% reimbursement premium. The 2 device products that received a Marketability premium based on orphan device designation are listed below together with the peak annual patient volume that their reimbursement submissions indicated

• Medtronic’s Harmony™ Transcatheter Pulmonary Valve system for patients with severe pulmonary regurgitation who have a history of surgical repair (patch repair) or transcatheter intervention (balloon valvuloplasty) to the right ventricular outflow tract and who have a clinical need for pulmonary artery valve replacement

  Peak annual patients (10 years): 85 patients

• Mallinckrodt’s Cellex extracorporeal photopheresis (ECP) system the treatment of steroid-resistant or intolerant chronic graft-versus-host disease

  Peak annual patients (10 years): 38 patients

Some other devices that had received orphan device designation and were listed prior to April 2020 did not receive a Marketability premium, but instead received an increase in their operating profit ratio.**

Having received orphan device designation appears to also be associated with the receipt of a utility reimbursement premium (i.e., the Usefulness or Improvement premiums). Since 2015, among the 7 newly reimbursed medical devices that had received orphan device designation, 5 products also received a utility premium. More information on the utility reimbursement premium and factors associated with it can be found in our publication here.

For regenerative medicine products, more recently, Ultragenyx’s pariglasgene brecaparvovec gene therapy received orphan regenerative medicine designation in Japan in November 2024 for the treatment of glycogen storage disease type Ia (GSDIa) and in August 2024 Biomarin’s valoctocogene roxaparvovec gene therapy received orphan regenerative medicine designation for the treatment of congenital hemophilia A. Moreover, in March 2024, CSL Behring’s etranacogene dezaparvovec gene therapy received orphan regenerative medicine designation in Japan for the treatment of hemophilia B. At present there are about 20 regenerative medicine and cellular therapy products that have been approved and listed in Japan and among them, several have received a Marketability premium of +10% based on having received orphan designation. Some examples include Novartis’s Kymriah (tisagenlecleucel) for CD19-positive B-cell acute lymphoblastic leukemia, diffuse large B-cell lymphoma (DLBCL), and follicular lymphoma, which was listed in May 2019, and Takeda’s Alofisel (darvadstrocel) for the treatment of complicated hemorrhoidal fistulas in patients with inactive or mildly active Crohn's disease, which was listed in November 2021. More recently, Aurion Biotech’s Vyznova, which was listed for the treatment of bullous keratopathy in September 2024, also received a Marketability I premium based on having received orphan regenerative medicine designation.

Similar rules apply for in-vitro diagnostic (IVD) products. However, for IVDs a higher reimbursement premium is allowed for products with fewer patients (usage frequency) per year as follows:

+20%: 600 to less than 800 patients (usage frequency) per year
+30%: 400 to less than 600 patients (usage frequency) per year
+40%: 200 to less than 400 patients (usage frequency) per year
+50%: Less than 200 patients (usage frequency) per year

Moreover, for IVDs that do not receive orphan device designation but are expected be used for fewer than 1000 patients (usage frequency) per year, a +10% premium may be possible with a higher premium for products with even fewer patients (usage frequency) per year, similar to the levels shown above. Two IVDs, Nihon Stery’s AmoyDx FGFR2 Break-apart FISH Probe kit and Kohjin Bio’s KBM Lifetech aPAP kit, recently received a +20% and +50% reimbursement premium, respectively, for targeting conditions with very few patients in Japan. You can find more information on those decisions here.

*In principle, calculating the number of patients for a specific condition as less than 50,000 patients by adding criteria such as “severe patients” without a clear medical reason, is not accepted. But some exceptions are allowed when the treatment targets a condition for which there is a high unmet need and the number of patients for the condition, as a whole, is not significantly higher than 50,000 patients.
**Prior to April 2020, the reimbursement premium system only applied to newly reimbursed devices that were reimbursed using a comparative approach, and did not apply for devices reimbursed using a cost-based approach. However, devices reimbursed using a cost-based approach could benefit from an increase in their operating profit ratio if they had received orphan device designation and/or they were for conditions with very few patients.

Closing thoughts:

While there is a detailed application process for orphan device and orphan regenerative medicine designation, obtaining orphan designation may be worthwhile for devices and regenerative medicine products that target a smaller number of patients in Japan as it can lead to a higher reimbursement price and/or the price maintenance premium. If no reliable evidence is available on the number of patients in Japan, then an epidemiology study using real-world data for Japan, for example, can be used to support the number of patients. But the evidence should be published in a peer-reviewed journal prior to finalization of the orphan designation submission. Moreover, the number patients reported to the authorities in Japan (e.g., the PMDA and MHLW) should be consistent throughout the development process to avoid misunderstandings and a reduction in the credibility of the evidence presented. GinePro can advise and support you with developing the evidence needed for this process, so please contact us if you need support.

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