China’s fast growing medical devices market opens door to international OEMs
An emerging middle class, increased wealth and rapidly rising health care expenditure combine to make China the world’s fourth largest market for medical equipment.
Demand for medical devices is strong across China, especially in the wealthier cities and urban areas of Beijing and Shanghai. In 2013, the estimated market value for medical devices was more than USD$17-billion, making it the world’s fourth largest medical equipment market. In an economy currently enjoying year on year growth of some 10%, the Chinese health market has consistently been growing by around 20% per year, a trend that shows no sign of abating.
Chinese health care spending accounts for just 4.7% of gross domestic product (GDP), compared to 9% in Organization for Economic Cooperation and Development (OECD) countries. With a population of 1,360 million, almost 10% of whom are over 65, China represents an unrivalled opportunity for medical device manufacturers.
In an unusual twist, many multinational companies already manufacture medical devices and equipment in China, for export, while the country’s domestic market is largely supplied by imports. With domestic businesses unable to meet existing demand, China is an attractive market for foreign medical device manufacturers.
Healthcare investment, expansion
Socio-economic drivers in the medical device market are boosted by health reforms, which have been coming online since 2009 and the country’s 5-year plan, which was launched in 2011. These ambitious plans aim to improve the general quality of healthcare across the country, as well as to address and correct structural flaws in the existing healthcare system. Planned expansion of hospital facilities means that there will be increased investment in health care equipment in the near future.
At the same time, China has embarked on an ambitious review of its medical device regulations, the first and most extensive review since 2004. Almost all the applicable regulations have been updated, including those relating to:
* Clinical evaluation
* Documentation requirements
* Agent requirements
As a result, on 1 June 2014, the newly revised Regulations for the Supervision and Administration of Medical Devices (Council Statute Order No. 650) came in to force.
Medical devices regulations framework
In order to distribute, sell or market medical devices in the Chinese market, approval must first be acquired from the China Food and Drug Administration (CFDA). In addition to the primary Regulations for the Supervision and Administration of Medical Devices (Council Statute Order No. 650), the most important laws and regulations for medical devices are:
* CFDA Orders (second level regulation)
* CFDA Order No. 4: Administrative Measures for Medical Device Registration (will come into effect on 1 October 2014)
* CFDA Order No. 5: Administrative Measures for the Registration of In Vitro Diagnostic Reagents (will come into effect on 1 October 2014)
* CFDA Order No. 6: Administrative Rules for the Instructions and Labels of Medical Devices (will come into effect on 1 October 2014)
* CFDA Order No. 7: Administrative Measures for the Supervision of Medical Device Manufacturing (will come into effect on 1 October 2014)
* CFDA Order No. 8: Administrative Measures for the Supervision of Distribution of Medical Devices (will come into effect on 1 October 2014)
* Harmonized GB National Standards and YY&YY/T standard
Medical device classification, testing
Complimentary to the enactment of the updated Regulations for the Supervision and Administration of Medical Devices in June, the classification and testing provisions for medical devices have also been updated, albeit in draft format for now. China’s medical device classifications are broadly similar to the US FDA.
The CFDA stipulates that Class I devices are carried through routine administration, but Classes II and III have stricter controls. The provisions for device classification are given in CFDA’s Order 151.
For Class II and III equipment testing, the manufacturer should draft the technical requirements. These requirements are similar to the Essential Requirements Checklist and should:
* Be in compliance with adopted standards (GB National standards and YY &YY/T industrial standards)
* Include performance specification and testing method
For active Class II and Class III devices, certification body (CB) test reports do not exempt them from testing, but they can be helpful. Devices will be tested according to the technical requirements in a Chinese testing laboratory that is supervised by the CFDA.
The applicable national standards are:
* For general safety part, GB 9706.1:2007 (identical to IEC 60601-1:1988+A1:1991+A2:1995) is mandatory
* For Class III devices, EMC testing (YY0505:2012 identical to IEC 60601-1-2:2004) is mandatory from 2014
* For Class II devices, EMC testing (YY0505:2012 (YY0505:2012 identical to IEC 60601-1-2:2004)) will be mandatory from 2015
For Class I devices, the clinical evaluation report will be accepted.
For Class II and Class III devices:
* If the device falls under “clinical trial exemption database”, the supplied clinical evaluation report will be accepted
* If the device does not fall under “clinical trial exemption database”, a clinical trial in China is mandatory
The ‘clinical trial exemption database’ is still in draft.
CFDA application and registration
Applications for medical device approval must be made to the CFDA in Chinese and English, including all supporting documentation. In order to submit an application the manufacturer requires a local Chinese Registration Agency. The manufacturer will sign the English version of the documents and the registration agency will sign the Chinese versions, confirming that they are the same.
In addition to the application, several other documents are required:
* Qualification for Manufacture: a certificate issued by the authorities (or Notified Body) of the Country of Origin (CoO) to authorize the manufacturer to manufacture and distribute the medical devices, for example, in the EU this is an EN/ISO 13485 certificate
* The Approval for the Device in the CoO: for example, in the EU this is the CE certificate and Declaration of Conformity
* Qualification of Registration Agency: comprises the License of the Agency and an Authorization Letter from the manufacturer
* Technical requirements: typically drafted together with the manufacturer and the registration agency, and based on the user manuals, test reports and technical specifications
* Test report for Class II and Class III devices: issued by the testing laboratory that is authorized by CFDA, based on the Technical Requirements
* User Manual and Labeling in Chinese
* Clinical evaluation report: (see the clinical requirements section above)
* Product Quality Guarantee Letter: with this letter the manufacturer guarantees that the quality of the product that is to be registered for sale in China is exactly the same as in the CoO, and that the quality management system is continuously supervised
of Authorization and Letter of Promise for the Responsible Agency in China: the agency will need a business license, will undertake the relevant legal responsibility of product quality, report possible incidents to the CFDA, take care of product recalls, and contact the CFDA and manufacturer when necessary
* Letter of Authorization and Letter of Promise for the After-sales Agency: the agency will need a business license and will have responsibility for all necessary technical documents, training, spare parts, consumables, and after-sales of the device
* Self-declaration for Documents Submitted: provided by the manufacturer and includes a promise from the manufacturer to undertake legal responsibility
To support the new Regulations for the Supervision and Administration of Medical Devices, this document list will be updated. At present there is no official version of the above list.
Time to market
Finding the most efficient route to market for products means planning ahead and knowing what to expect. In principle, the CFDA technical review and Admin review need only 90 working days, if there are no on-hold comments. In practice however, the lead-time for a Class II device is typically 9-16 months, including documents preparation, device testing and CFDA reviews.