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


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

  1. 1. China’s Medical Device Market Jay Biggs U.S. Department of Commerce Office of Health and Consumer Goods
  2. 2. Objectives <ul><li>Market Size </li></ul><ul><li>Regulatory Issues </li></ul><ul><li>Reimbursement Issues </li></ul><ul><li>Department of Commerce Resources to Help Boston Companies </li></ul>
  3. 3. Overview Of China’s Medical Device Market <ul><li>China has the potential to be the largest single country export markets for the U.S. medical device exporters. </li></ul><ul><li>Currently China is the second largest medical device market in Asia. </li></ul><ul><li>China’s has one of the world’s fastest growing medical device markets (10-15%) per year. </li></ul>
  4. 4. U.S. Medical Device & IVD Exports to China (1998 – 2001) $Millions
  5. 5. Domestic Chinese Medical Industry <ul><li>Supplies 50 – 60% of Chinese medical device needs </li></ul><ul><li>Focus is low level of technology – but rising </li></ul><ul><li>Vast majority are small firms (SMEs) </li></ul><ul><li>Most producers do not meet GMP requirements </li></ul>
  6. 6. Medical Device Regulatory System in China <ul><li>China’s regulatory device system is complex, not yet transparent or consistent. </li></ul><ul><li>Recently (March 2003) China’s State Food and Drug Administration (SFDA) responsibilities expanded to include Food and cosmetics. </li></ul>
  7. 7. Medical Device Regulatory System in China ( cont.) <ul><li>All imported medical devices to be sold in China must be registered with the SFDA </li></ul><ul><li>Type-testing is required for class II and III medical devices before registration </li></ul>
  8. 8. Medical Device Regulatory System in China ( cont.) <ul><li>Clinical trials are required to be included in registration applications for certain class II and III products </li></ul>
  9. 9. Registration Requirements i.e. the nitty-gritty <ul><li>Qualification Certificate for the manufacturer </li></ul><ul><li>Qualification certificate of applicant (if not the same as manufacturer) </li></ul><ul><li>Certificate from Country of Origin indicating device can be used in that country </li></ul>
  10. 10. Registration Requirements ( cont.) <ul><li>Technical specifications and indication of how these specifications are tested </li></ul><ul><li>Instruction manual (in Chinese) </li></ul><ul><li>Type-test report </li></ul>
  11. 11. Registration Requirements ( cont.) <ul><li>Clinical trial reports (at least two clinical trials within past year) </li></ul><ul><ul><li>Local clinical trials may be required for implantable products </li></ul></ul><ul><li>Statement guaranteeing product quality </li></ul><ul><li>Letter authorizing after-sale service agency and a letter of commitment including the business license of agent </li></ul>
  12. 12. Registration Requirements ( cont.) <ul><ul><ul><li>Statement of authenticity of materials submitted </li></ul></ul></ul><ul><ul><ul><li>Other documents as may be required by SFDA </li></ul></ul></ul><ul><ul><ul><li>Application Timeline </li></ul></ul></ul>
  13. 13. New Registration Procedures <ul><li>August 2004 New SFDA Registration Regs </li></ul><ul><li>Submit technical specifications at same time as rest of product registration </li></ul><ul><li>May use own technical specifications, without first getting SFDA approval. </li></ul><ul><li>SFDA reviews entire application package and issues import license. </li></ul>
  14. 14. CCC Mark Application Process <ul><li>For electro-medical products a CCC mark is required </li></ul><ul><li>A quick summary of the CCC mark requirements can be found at: </li></ul>
  15. 15. Chinese Hospital System <ul><li>Virtually no private hospitals in China </li></ul><ul><li>Vast majority of hospitals administered by the Ministry of Health </li></ul><ul><li>Public hospitals have a high degree of operating autonomy </li></ul>
  16. 16. Chinese Hospital System ( cont.) <ul><li>Hospitals are generally expected to generate revenue to cover 70 – 90 percent of their operating expenses </li></ul><ul><li>Provincial Health Departments set staff salaries and patient charges for basic services, Larger “profit-oriented” hospitals frequently have funds to purchase advanced medical technologies </li></ul>
  17. 17. Medical Device Reimbursement <ul><li>China’s reimbursement system for medical devices is at an early stage of development </li></ul><ul><li>Policies and procedures are not uniform and may vary significantly from region to region </li></ul><ul><li>There are several Chinese agencies involved, but they do not necessarily work in harmony </li></ul>
  18. 18. Medical Device Reimbursement ( cont.) <ul><li>Price limits on low-level, routine services </li></ul><ul><li>Urban “profit-oriented” hospital have invested in advanced medical devices to to generate patient revenue </li></ul><ul><li>Ministry of Health is trying to contain costs </li></ul>
  19. 19. Agencies Involved in Reimbursement <ul><li>Ministry of Health </li></ul><ul><ul><li>Administers rural health insurance system </li></ul></ul><ul><ul><li>Administers public hospitals </li></ul></ul><ul><ul><li>Bidding/tendering system </li></ul></ul><ul><li>Ministry of Labor and Social Security </li></ul><ul><ul><li>Administers urban health insurance system </li></ul></ul>
  20. 20. Agencies Involved in Reimbursement ( cont.) <ul><li>Provincial Health and Pricing Bureaus </li></ul><ul><ul><li>Review regional purchases of large scale medical devices </li></ul></ul><ul><ul><li>Establish reimbursement rates for medical devices </li></ul></ul>
  21. 21. Centralized Tendering <ul><li>certain orthopedic and cardiac implants </li></ul><ul><li>8 geographic areas (Beijing, Shanghai, Tianjin, Chongqing, Guangdong, Hubei, Zhejiang, and Liaoning). </li></ul><ul><li>Class III Hospitals </li></ul><ul><li>Purchase and Payment Requirements </li></ul>
  22. 22. Rural Health Insurance <ul><li>80% of China’s 1.2 billion population live in rural areas and cannot afford health care </li></ul><ul><li>Coverage is not universal </li></ul><ul><li>Farmers pay a small fee, public funds pay the balance </li></ul>
  23. 23. Rural Health Insurance ( cont.) <ul><li>Only 25 percent of China’s rural population is covered by rural health insurance </li></ul><ul><li>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 </li></ul>
  24. 24. Urban Health Insurance <ul><li>Begin in 1999 </li></ul><ul><li>Main features </li></ul><ul><ul><li>Wide coverage </li></ul></ul><ul><ul><li>Cost sharing </li></ul></ul><ul><ul><li>Combination of funds – cost pooling and individual accounts </li></ul></ul>
  25. 25. Urban Health Insurance ( cont.) <ul><li>Wide Coverage – All urban enterprises are required to participate </li></ul><ul><li>Cost Sharing – Costs are shared by employers and individuals </li></ul><ul><li>Each worker pays 2% of wages and employers pay 6% into the insurance fund </li></ul>
  26. 26. U.S. Department of Commerce Activities In China <ul><li>U.S. – China JCCT Medical Devices and Pharmaceuticals Subgroup </li></ul><ul><li>Co-chaired by State Food and Drug Administration </li></ul>
  27. 27. Major JCCT Subgroup Issues <ul><li>Type-testing vs Quality Systems </li></ul><ul><li>Adverse Event Reporting System </li></ul><ul><li>IVD classification </li></ul><ul><li>Clinical Trial requirements </li></ul><ul><li>Re-registration of medical devices </li></ul>
  28. 28. Upcoming JCCT Subgroup Activities <ul><li>Medical Devices Good Manufacturing Practice Workshop (August 22 – 24) </li></ul><ul><li>U.S. - China Healthcare Forum , </li></ul><ul><li>JCCT Medical Devices and Pharmaceuticals Task Force Meetings (August 24-25) </li></ul><ul><li>Pharmaceuticals Good Clinical Practices Workshop (Spring 2006) </li></ul>
  29. 29. Regulatory Profiles Database <ul><li>The Department of Commerce on-line database of regulatory profiles </li></ul><ul><li>Aid U.S. exporters as they seek to sell their products abroad </li></ul><ul><li>Available on the ITA web page: </li></ul><ul><ul><li> </li></ul></ul>
  30. 30. Other Department of Commerce Resources <ul><li>Commercial Service Offices </li></ul><ul><li>China Business Center </li></ul><ul><li>Trade Compliance Center (TCC) </li></ul>
  31. 31. STOP: Strategy Targeting Organized Piracy <ul><li>Protecting intellectual property rights (IPR) is important to the U.S. Government </li></ul><ul><ul><li>Learn about the STOP! Initiative </li></ul></ul><ul><ul><li>File a complaint, request assistance, or speak to a IPR trade specialist at 1-866-999-HALT </li></ul></ul><ul><ul><li>Access more about protecting your IPR at </li></ul></ul>
  32. 32. Trade Compliance Center (TCC) <ul><li>The fastest way to report a trade barrier is on-line at </li></ul><ul><li>For further information, companies may also contact the TCC via email at [email_address] , phone (202) 482-1191, or fax (202) 482-6097 </li></ul>
  33. 33. TCC Free On-line Resources <ul><li>Read or download the searchable texts of 270 plus U.S. trade agreements </li></ul><ul><li>Use the TCC Hotline to complain about a trade problem </li></ul><ul><li>Sign up for Export Alert! An early warning for foreign technical regulations </li></ul><ul><li>Join the TCC mailing list to get updates on trade related news </li></ul><ul><li>Use “how to” guides for trade agreements </li></ul><ul><li>Get market access reports </li></ul>
  34. 34. Presented By: Jay Biggs Office of Health and Consumer Goods <ul><li>Phone: (202) 482-4431 </li></ul><ul><li>Fax: (202) 482-0975 </li></ul><ul><li>E-mail: [email_address] </li></ul><ul><li>Web site: </li></ul>