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China's Medical Device Market (US Dept of Commerce)

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  • 1. China’s 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 China’s 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.
    • China’s has one of the world’s fastest growing medical device markets (10-15%) per year.
  • 4. U.S. Medical Device & IVD Exports to China (1998 – 2001) $Millions
  • 5. 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
  • 6. Medical Device Regulatory System in China
    • China’s regulatory device system is complex, not yet transparent or consistent.
    • Recently (March 2003) China’s State Food and Drug Administration (SFDA) responsibilities expanded to include Food and cosmetics.
  • 7. 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
  • 8. Medical Device Regulatory System in China ( cont.)
    • Clinical trials are required to be included in registration applications for certain class II and III products
  • 9. Registration Requirements i.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
  • 10. Registration Requirements ( cont.)
    • Technical specifications and indication of how these specifications are tested
    • Instruction manual (in Chinese)
    • Type-test report
  • 11. 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
  • 12. Registration Requirements ( cont.)
        • Statement of authenticity of materials submitted
        • Other documents as may be required by SFDA
        • Application Timeline
  • 13. 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/BusinessGuides/cccguide.htm
  • 15. 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
  • 16. 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
  • 17. Medical Device Reimbursement
    • China’s 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
  • 18. 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
  • 19. 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
  • 20. Agencies Involved in Reimbursement ( cont.)
    • Provincial Health and Pricing Bureaus
      • Review regional purchases of large scale medical devices
      • Establish reimbursement rates for medical devices
  • 21. 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
  • 22. Rural Health Insurance
    • 80% of China’s 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
  • 23. Rural Health Insurance ( cont.)
    • Only 25 percent of China’s 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
  • 24. Urban Health Insurance
    • Begin in 1999
    • Main features
      • Wide coverage
      • Cost sharing
      • Combination of funds – cost pooling and individual accounts
  • 25. 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
  • 26. 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
  • 27. Major JCCT Subgroup Issues
    • Type-testing vs Quality Systems
    • Adverse Event Reporting System
    • IVD classification
    • Clinical Trial requirements
    • Re-registration of medical devices
  • 28. 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)
  • 29. 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
  • 30. Other Department of Commerce Resources
    • Commercial Service Offices
    • China Business Center
    • Trade Compliance Center (TCC)
  • 31. 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
  • 32. 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 [email_address] , phone (202) 482-1191, or fax (202) 482-6097
  • 33. TCC Free On-line Resources www.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
  • 34. Presented By: Jay Biggs Office of Health and Consumer Goods
    • Phone: (202) 482-4431
    • Fax: (202) 482-0975
    • E-mail: [email_address]
    • Web site: www.ita.doc.gov/td/mdequip/