C1 (new function) is a decision category considered when the technology using the medical device is already evaluated under the existing medical fee schedule and deliberation is required to establish a new material functional category.
This article explains how to organize the selection of a similar functional category, clinical usefulness, and the basis for the proposed price as application documentation for a product being considered for C1.
Before preparing pricing documentation on the assumption that C1 applies, review the existing technical fees and functional categories.
The starting point is being able to explain that the technology used is already evaluated under the existing medical fee schedule and that a new material functional category is necessary. A product does not fall under C1 simply because it is new or has a higher selling price than conventional products.
Also review whether evaluation under an existing functional category or treatment under B3 may apply. If evaluation under a new technical fee is necessary, organize the issue including the possibility of C2. For remanufactured single-use medical devices, also review the relationship with category R.
The similar functional category used as the basis for price calculation and the comparator used to explain clinical value are not necessarily the same. Organize the rationale for selecting each.
Review intended use, structure and principle, method of use, function, unit of calculation, and other relevant factors. Compare similarities and differences for each candidate and do not select a comparator simply because its price is high.
Review the treatment currently provided to the target patients and the medical material that would actually be replaced. Explain what changes when the new product is used, following the clinical workflow and relevant evaluation endpoints.
Compare the definitions of existing functional categories with the product characteristics and clearly identify what cannot be adequately explained under the existing categories. Do not confuse structural differences with clinical differences.
For each claimed value, align the comparator, evaluation endpoint, data, and remaining uncertainty.
What differs from existing materials in structure, principle, method of use, or other characteristics
What differences exist in effectiveness, safety, patient burden, operability, or other clinical aspects
Which test results, literature, or clinical data support those differences
What limitations exist in the target patients, comparison method, observation period, or other factors
The type of documentation and comparison needed depends on the evaluation being requested. The same study design is not necessarily required for every application, but it is important to clearly connect each claim with its supporting evidence.
As a general rule, when a similar functional category exists, the similar functional category comparison method is considered; when none exists, the cost calculation method is considered. Because exceptions and special rules also exist, explain the applicable method and rationale in accordance with the pricing standards.
Under the similar functional category comparison method, organize the rationale for selecting the comparator. Under the cost calculation method, organize the necessary cost data and the basis for each expense. Do not choose a convenient method merely to match the desired price; confirm the relationship between the product and the pricing standards.
When requesting a premium, align the applicable requirements with the submitted evidence. The existence of a new function alone does not necessarily qualify the product for a premium, so clarify which requirement is being addressed by which objective data.
Confirm the countries, products, basis of the prices, sales units, product configurations, and other conditions so that the prices can be compared. Also confirm whether an adjustment based on the foreign average price applies.
If prices or packaging units differ among countries, explain those differences and make the source data and calculation process traceable.
Review not only the unit price of the product but also differences in the number of units used and concomitant materials. When explaining an impact on hospitalization, retreatment, or other costs, state the supporting data and assumptions and do not confuse actual costs with amounts under the medical fee schedule.
When preparing a C1 application, cross-check the following documentation.
Confirm that the product name, applicable models, comparator, and evaluation conclusions are consistent across the documentation. Do not treat an effect beyond the regulatory scope as if it had already been accepted solely for the reimbursement application.
Review existing technical fees, functional categories, target patients, and current treatment, and summarize why C1 is being considered and which comparators should be used.
For the new function, clinical usefulness, and any requested premium, separate the points that can be supported from those for which data are still insufficient.
Review the calculation method, comparator, foreign prices, and other factors and align the calculation basis with the explanation across the application documentation.
Organize likely questions concerning the category, comparators, usefulness, and price. If additional explanations are required, be prepared to show how they relate to the original claims and supporting evidence.
A separate assessment is required. Establishing a new functional category and meeting the requirements for an adjustment premium are not the same thing.
No. The rationale should be based on similarity in intended use, structure and principle, method of use, function, and the applicable pricing standards.
They may be usable. Confirm the relationship to the intended use in Japan, target patients, comparator, and product specifications, and clarify what the data can support and their limitations.
The proposed price is reviewed for the appropriateness of the category, calculation method, premiums, and other factors. Merely submitting a proposed price does not mean that price has been determined.
This explanation is based on the relevant FY2026 notifications. For an actual application, confirm the latest forms, pricing standards, and related notifications.
We review the product's intended use, comparators, clinical documentation, and pricing documentation and organize the preparations needed to explain the new function and proposed price.
Contact us about a C1 new functional category application