Chinas Medical Device Market

1
Chinas Medical Device Market
Jay Biggs U.S. Department of Commerce Office of
Health and Consumer Goods
2
Objectives

• Market Size
• Regulatory Issues
• Reimbursement Issues
• Department of Commerce Resources to Help Boston
  Companies

3
Overview Of Chinas Medical Device Market

• China has the potential to be the largest single
  country export markets for the U.S. medical
  device exporters.
• Currently China is the second largest medical
  device market in Asia.
• Chinas has one of the worlds fastest growing
  medical device markets (10-15) per year.

4
U.S. Medical Device IVD Exports to China (1998
2001) Millions
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Domestic Chinese Medical Industry

• Supplies 50 60 of Chinese medical device needs
• Focus is low level of technology but rising
• Vast majority are small firms (SMEs)
• Most producers do not meet GMP requirements

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Medical Device Regulatory System in China

• Chinas regulatory device system is complex, not
  yet transparent or consistent.
• Recently (March 2003) Chinas State Food and Drug
  Administration (SFDA) responsibilities expanded
  to include Food and cosmetics.

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Medical Device Regulatory System in China (cont.)

• All imported medical devices to be sold in China
  must be registered with the SFDA
• Type-testing is required for class II and III
  medical devices before registration

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Medical Device Regulatory System in China (cont.)

• Clinical trials are required to be included in
  registration applications for certain class II
  and III products

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Registration Requirementsi.e. the nitty-gritty

• Qualification Certificate for the manufacturer
• Qualification certificate of applicant (if not
  the same as manufacturer)
• Certificate from Country of Origin indicating
  device can be used in that country

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Registration Requirements (cont.)

• Technical specifications and indication of how
  these specifications are tested
• Instruction manual (in Chinese)
• Type-test report

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Registration Requirements (cont.)

• Clinical trial reports (at least two clinical
  trials within past year)
• Local clinical trials may be required for
  implantable products
• Statement guaranteeing product quality
• Letter authorizing after-sale service agency and
  a letter of commitment including the business
  license of agent

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Registration Requirements (cont.)

• Statement of authenticity of materials submitted
• Other documents as may be required by SFDA
• Application Timeline

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New Registration Procedures

• August 2004 New SFDA Registration Regs
• Submit technical specifications at same time as
  rest of product registration
• May use own technical specifications, without
  first getting SFDA approval.
• SFDA reviews entire application package and
  issues import license.

14
CCC Mark Application Process

• For electro-medical products a CCC mark is
  required
• A quick summary of the CCC mark requirements can
  be found at http//www.mac.doc.gov/China/Docs/Bus
  inessGuides/cccguide.htm

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Chinese Hospital System

• Virtually no private hospitals in China
• Vast majority of hospitals administered by the
  Ministry of Health
• Public hospitals have a high degree of operating
  autonomy

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Chinese Hospital System (cont.)

• Hospitals are generally expected to generate
  revenue to cover 70 90 percent of their
  operating expenses
• Provincial Health Departments set staff salaries
  and patient charges for basic services, Larger
  profit-oriented hospitals frequently have funds
  to purchase advanced medical technologies

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Medical Device Reimbursement

• Chinas reimbursement system for medical devices
  is at an early stage of development
• Policies and procedures are not uniform and may
  vary significantly from region to region
• There are several Chinese agencies involved, but
  they do not necessarily work in harmony

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Medical Device Reimbursement (cont.)

• Price limits on low-level, routine services
• Urban profit-oriented hospital have invested in
  advanced medical devices to to generate patient
  revenue
• Ministry of Health is trying to contain costs

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Agencies Involved in Reimbursement

• Ministry of Health
• Administers rural health insurance system
• Administers public hospitals
• Bidding/tendering system
• Ministry of Labor and Social Security
• Administers urban health insurance system

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Agencies Involved in Reimbursement (cont.)

• Provincial Health and Pricing Bureaus
• Review regional purchases of large scale medical
  devices
• Establish reimbursement rates for medical devices

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Centralized Tendering

• certain orthopedic and cardiac implants
• 8 geographic areas (Beijing, Shanghai, Tianjin,
  Chongqing, Guangdong, Hubei, Zhejiang, and
  Liaoning).
• Class III Hospitals
• Purchase and Payment Requirements

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Rural Health Insurance

• 80 of Chinas 1.2 billion population live in
  rural areas and cannot afford health care
• Coverage is not universal
• Farmers pay a small fee, public funds pay the
  balance

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Rural Health Insurance(cont.)

• Only 25 percent of Chinas rural population is
  covered by rural health insurance
• As a result, virtually all rural primary health
  services are provided on a fee for service basis,
  and non-covered patients must pay full fees

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Urban Health Insurance

• Begin in 1999
• Main features
• Wide coverage
• Cost sharing
• Combination of funds cost pooling and
  individual accounts

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Urban Health Insurance(cont.)

• Wide Coverage All urban enterprises are
  required to participate
• Cost Sharing Costs are shared by employers and
  individuals
• Each worker pays 2 of wages and employers pay 6
  into the insurance fund

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U.S. Department of Commerce Activities In China

• U.S. China JCCT Medical Devices and
  Pharmaceuticals Subgroup
• Co-chaired by State Food and Drug Administration

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Major JCCT Subgroup Issues

• Type-testing vs Quality Systems
• Adverse Event Reporting System
• IVD classification
• Clinical Trial requirements
• Re-registration of medical devices

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Upcoming JCCT Subgroup Activities

• Medical Devices Good Manufacturing Practice
  Workshop (August 22 24)
• U.S. - China Healthcare Forum,
• JCCT Medical Devices and Pharmaceuticals Task
  Force Meetings (August 24-25)
• Pharmaceuticals Good Clinical Practices Workshop
  (Spring 2006)

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Regulatory Profiles Database

• The Department of Commerce on-line database of
  regulatory profiles
• Aid U.S. exporters as they seek to sell their
  products abroad
• Available on the ITA web page
• www.ita.doc.gov/td/mdequip/regulations.html

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Other Department of Commerce Resources

• Commercial Service Offices
• China Business Center
• Trade Compliance Center (TCC)

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STOP Strategy Targeting Organized Piracy

• Protecting intellectual property rights (IPR) is
  important to the U.S. Government
• Learn about the STOP! Initiative
• File a complaint, request assistance, or speak
  to a IPR trade specialist at 1-866-999-HALT
• Access more about protecting your IPR at
  www.stopfakes.gov

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Trade Compliance Center (TCC)

• The fastest way to report a trade barrier is
  on-line at www.export.gov/tcc
• For further information, companies may also
  contact the TCC via email at tcc_at_ita.doc.gov,
  phone [phone], or fax [phone]

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TCC Free On-line Resourceswww.export.gov/tcc

• Read or download the searchable texts of 270 plus
  U.S. trade agreements
• Use the TCC Hotline to complain about a trade
  problem
• Sign up for Export Alert! An early warning for
  foreign technical regulations
• Join the TCC mailing list to get updates on trade
  related news
• Use how to guides for trade agreements
• Get market access reports

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Presented ByJay BiggsOffice of Health and
Consumer Goods

• Phone [phone]
• Fax [phone]
• E-mail jay_biggs_at_ita.doc.gov
• Web site www.ita.doc.gov/td/mdequip/