1. The Registration Process with China’s NMPA
Because of the rapid market growth and tight competition with western medical device business, China’s medical device registration has become more laborious over the past years. It has been continuously creating regulatory reforms to empower its management of product registration, requiring applicants to provide more detailed documentations, such as a complete product life cycle report, and adhere to more comprehensive standards such as longer local type testing and post-market compliance requirements and the associated penalties.
While there are great opportunities for foreign companies in the said market, these new policies have become deciding factors for such investors in pursuing success in medical device sales in the country.
Recently, the China National Medical Product Administration (NMPA) finally declared the Order 739, namely the so-called “Regulation on the Supervision and Administration of Medical Devices”, which compared to its preceding policy, formalizes the responsibilities and accountabilities of Market Authorization Holders (MAHs). Furthermore, the State Administration for Market Regulation published and implemented the following policies, guidelines, and administrative measures to support the Order 739:
● Administrative Measures for the Registration and Filing of Medical Devices and In Vitro Diagnostic Reagents has been issued.
● Self-test reports are acceptable if it follows NMPA’s “Regulations on Self-test of Medical Device Registration”
● Special Policies from Hainan and Greater Bay Area (GBA).
● Unique Device Identification (UDI) implementation and guidelines for all Class III devices manufactured after June 1, 2022.
● Reclassification of Medical Devices and classification rules for IVDs and Artificial Intelligence Medical Software.
● Fast-track channel for innovative and specific devices addressing healthcare unmet needs.
While these newly implemented policies in the past appear to increase and tighten the regulations, there are some changes in the same that foreign companies might consider as beneficial. First, is the self—test report which allows medical companies to maximize their own equipment and run an in-house test. However, besides this opportunity being in existence, it is important to point out that it often represents a challenge to foreign manufacturers because a) their self-test work needs to be incorporated into the QMS documentation, and b) their own laboratory must meet the qualifications according to NMPA’s requirements. Hence, when an applicant is not capable of administering certain special testing, it is recommended and necessary to avail to external qualified testing labs in China. Second, an accelerated pathway was implemented for the localization of imported medical devices and IVD products in China. This announcement applies to any foreign enterprise which already holds a registration certificate with NMPA and decided to set-up a subsidiary local manufacturer, in which they are viable to have an expedite and easier registration procedure.
China’s reimbursement system has become quite complex compared to the past. Currently, the majority of devices are being reimbursed as part of a medical procedure or treatment, and only limited numbers of standalone devices are reimbursable. Moreover, reimbursement prices vary per province, and newly approved medical devices will need to be in the Chinese Market for one (1) year to be qualified for reimbursement.
The request approval is more advantageous for locally made products compared to the imported ones, as the producers have easier communication and access to the authorities. In general, foreign manufacturers must note the following key details to obtain a medical device reimbursement in China:
● Patient-Price Application Approval - submit and receive approval for the highest allowable patient-price
● Provincial Bidding & Approval - must pass through the bidding process province by province
● Hospital Listing -pursue hospital listing with each targeted hospital individually
● The Tendering and Bidding Process - well-acquainted with bidding procedures
3. Market Competition
Foreign companies are expanding their exports and often either establish or enter joint ventures in manufacturing and producing medical commodities locally in China.
However, these companies must acknowledge that local manufacturers are getting more notable and advanced in terms of technology and operation. A decade ago, China has become the top choice for procuring low-risk medical devices among MedTech companies, especially those products exported to the West. In the present, China can now produce sophisticated medical devices with all kinds of classification and wide range of application. Particularly developing countries have recognized China-made medical devices in such categories, because of the price difference and comparable quality with their western counterparts.
The close gap between Chinese and Western medical devices in terms of quality gives the Chinese government a reason to fully support and promote local companies over foreign manufacturers. Additionally, China implemented a major market approach called Volume-Based Procurement (VBP) that aims to integrate larger purchasing volume with a lower price to subdue the increasing prices of sophisticated medical devices.
In addition, incentives are given to hospitals, clinics, and medical institutions for buying domestically made devices, as well as subsidies for the VBP winners. For instance, disposable devices such as catheter are called for registration via procurement system. And the increasing demand from hospitals to purchase these devices through procurement mostly benefit domestic manufacturers.
Despite of the potential complication of entering the Chinese medical device market, rewarding investment is still feasible with correct market strategy. The following are some key points to be considered before entering the Chinese medical device market.
1. Market Research - ensure that there is a demand for your product on the Chinese market. Consumers and hospitals need change regularly. Hence, you need to be alert on the current healthcare events and trends.
2. Key Player - not only direct competitors, but government agencies responsible for medical device registration and certification must be taken into account.
3. Registration Process – be familiar with the important certificates needed, regulatory procedures, latest updates, and submission timeline.
4. Trustworthy Partners - collaborate with reliable and qualified representation agents and distributors.
Thus, shall you need any assistance with your preparation and planning to enter the Chinese market, please feel free to contact our Qualtech business team for a free consultation at any time.