Post on 24-May-2015
China’s Medical Device China’s Medical Device MarketMarket
Jay Biggs
U.S. Department of Commerce
Office of Health and Consumer Goods
ObjectivesObjectives
Market SizeRegulatory Issues Reimbursement IssuesDepartment of Commerce Resources
to Help Boston Companies
Overview Of China’s Medical Overview Of China’s Medical Device MarketDevice 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.
U.S. Medical Device & IVD U.S. Medical Device & IVD Exports to China (1998 – 2001)Exports to China (1998 – 2001)
$Millions$Millions
0
100
200
300
400
500
600
1998 1999 2000 2001 2002
Domestic Chinese Medical Domestic Chinese Medical IndustryIndustry
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
Medical Device Regulatory Medical Device Regulatory System in ChinaSystem 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.
Medical Device Regulatory Medical Device Regulatory System in ChinaSystem in China ((cont.)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
Medical Device Regulatory Medical Device Regulatory System in ChinaSystem in China ((cont.)cont.)
Clinical trials are required to be included in registration applications for certain class II and III products
Registration RequirementsRegistration Requirementsi.e. the nitty-grittyi.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
Registration RequirementsRegistration Requirements ((cont.)cont.)
Technical specifications and indication of how these specifications are tested
Instruction manual (in Chinese)
Type-test report
Registration RequirementsRegistration Requirements ((cont.)cont.)
Clinical trial reports (at least two clinical trials within past year)– Local clinical trials may be required for
implantable productsStatement guaranteeing product qualityLetter authorizing after-sale service
agency and a letter of commitment including the business license of agent
Registration RequirementsRegistration Requirements ((cont.)cont.)
Statement of authenticity of materials submitted
Other documents as may be required by SFDA
Application Timeline
New Registration ProceduresNew Registration Procedures
August 2004 New SFDA Registration RegsSubmit technical specifications at same
time as rest of product registrationMay use own technical specifications,
without first getting SFDA approval.SFDA reviews entire application package
and issues import license.
CCC Mark Application ProcessCCC 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
Chinese Hospital SystemChinese 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
Chinese Hospital SystemChinese Hospital System ((cont.)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
Medical Device ReimbursementMedical 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
Medical Device ReimbursementMedical Device Reimbursement ((cont.)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
Agencies Involved in Agencies Involved in Reimbursement 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
Agencies Involved in Agencies Involved in Reimbursement Reimbursement ((cont.)cont.)
Provincial Health and Pricing Bureaus– Review regional purchases of large
scale medical devices
– Establish reimbursement rates for medical devices
Centralized TenderingCentralized Tendering
certain orthopedic and cardiac implants8 geographic areas (Beijing, Shanghai,
Tianjin, Chongqing, Guangdong, Hubei, Zhejiang, and Liaoning).
Class III HospitalsPurchase and Payment Requirements
Rural Health InsuranceRural 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
Rural Health InsuranceRural Health Insurance((cont.)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
Urban Health InsuranceUrban Health Insurance Begin in 1999 Main features
1) Wide coverage
2) Cost sharing
3) Combination of funds – cost pooling and individual accounts
Urban Health InsuranceUrban Health Insurance((cont.)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
U.S. Department of Commerce U.S. Department of Commerce Activities In ChinaActivities In China
U.S. – China JCCT Medical Devices and Pharmaceuticals Subgroup
Co-chaired by State Food and Drug Administration
Major JCCT Subgroup IssuesMajor JCCT Subgroup Issues
Type-testing vs Quality SystemsAdverse Event Reporting SystemIVD classificationClinical Trial requirementsRe-registration of medical devices
Upcoming JCCT Subgroup Upcoming JCCT Subgroup ActivitiesActivities
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)
Regulatory ProfilesRegulatory Profiles Database 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
Other Department of Other Department of Commerce ResourcesCommerce Resources
Commercial Service OfficesChina Business CenterTrade Compliance Center (TCC)
STOP: STOP: Strategy Targeting Organized Strategy Targeting Organized
PiracyPiracyProtecting intellectual property rights (IPR) is Protecting intellectual property rights (IPR) is
important to the U.S. Government important to the U.S. Government Learn about the STOP! Initiative Learn about the STOP! Initiative File a complaint, request assistance, or speak File a complaint, request assistance, or speak
to a IPR trade specialist at 1-866-999-HALTto a IPR trade specialist at 1-866-999-HALTAccess more about protecting your IPR at Access more about protecting your IPR at
www.stopfakes.govwww.stopfakes.gov
Trade Compliance Center Trade Compliance Center (TCC)(TCC)
The fastest way to report a trade barrier is on-line The fastest way to report a trade barrier is on-line at at www.export.gov/tccwww.export.gov/tcc
For further information, companies may also For further information, companies may also contact the TCC via email atcontact the TCC via email at tcc@ita.doc.gov, , phone (202) 482-1191, or fax (202) 482-6097phone (202) 482-1191, or fax (202) 482-6097
TCC Free On-line ResourcesTCC Free On-line Resourceswww.export.gov/tccwww.export.gov/tcc
Read or download the searchable texts of Read or download the searchable texts of 270 plus U.S. trade agreements270 plus U.S. trade agreementsUse the TCC Hotline to complain about a Use the TCC Hotline to complain about a trade problemtrade problemSign up for Export Alert! An early warning Sign up for Export Alert! An early warning for foreign technical regulationsfor foreign technical regulationsJoin the TCC mailing list to get updates on Join the TCC mailing list to get updates on trade related newstrade related newsUse “how to” guides for trade agreementsUse “how to” guides for trade agreementsGet market access reportsGet market access reports
Presented By:Presented By:Jay BiggsJay Biggs
Office of Health and Consumer Office of Health and Consumer Goods Goods
Phone: (202) 482-4431Fax: (202) 482-0975E-mail: jay_biggs@ita.doc.govWeb site: www.ita.doc.gov/td/mdequip/