China's health authority, the National Medical Product Administration (NMPA), has recently released a draft of the Medical Device Administrative Law and is asking for comments from the public. This act signals that the Chinese government will further push forward the medical device supervision reform and establish its legal status.
By looking back at the medical device regulatory history and development in China, from the first device regulation State Council Order No. 276 in the year 2000, to No. 650 in 2014, and No. 680 amendment in 2017, and then No. 739 in 2021, legalization of the governance has become an inevitable outcome along with the medical technology advancement and industry growth.
The medical device law draft consists of 190 articles. By adding 83 new articles and revising some requirements in the current regulation No. 739, the key changes are summarized as follows:
- Innovation will be further promoted and facilitated by a comprehensive support system
The government is starting to emphasize the importance of basic academic education in the medical device-related field and is paying more attention to a solid foundation for breakthrough technology. Majors in life science, materials, and applied science will be greatly strengthened.
Hospitals are motivated to use their resources to support innovative device clinical studies, particularly those with great clinical value for treating rare or life-threatening diseases. Participation in international multi-center studies to accelerate global launch is also encouraged.
Imported devices of all classes will no longer be required to provide their home country market approval when applying for China market launch. This means that foreign companies may apply for regulatory approval in their own country at the same time as in China to accelerate market placement globally. Chinese patients do not have to wait for innovative or urgent-use devices to be approved in other countries before being used in China.
In addition, supportive tools are provided from finance, bidding processes, pricing structuring, medical insurance, and funding channels to allow private capital investment, etc., to solve the pain points from realizing device development in research centers, incubation hubs, and practical application.
- Services from the 3rd party are legally introduced and encouraged
The law establishes the legal basis to introduce 3rd-party services to provide professional advice and authorize qualified bodies to perform regulatory review and evaluation. The government or health authority may also purchase the service if needed. Qualified technical institutions like privately-operated test houses, CROs, CMOs, and CDMOs may provide dedicated services to better support products' research and development, clinical study, manufacturing, operation, and usage.
Professional service companies are also welcome to help domestic medical device companies explore international markets. Third-party organizations are encouraged to establish and improve service systems for medical device import and export legal consultation, testing, certification, and intellectual property protection to promote the internationalization of local industries. At the same time, legal manufacturers and contract manufacturers are suggested to use qualified third parties to evaluate the effective operation of their quality management systems.
- Product certificate is allowed to be transferred
The law allows device license holders to transfer their obtained product certificates upon approval by the drug regulatory department. The transferee must demonstrate the ability to ensure the safety, effectiveness, and quality control of the intended medical devices through their quality management and risk prevention schemes and fulfill the obligations of the medical device registrant. However, the draft does not specify what conditions or obligations the transferor must meet to ensure a smooth handover.
- The role of China agent has been redefined with more obligations
The bar for taking on the role of China agent has been raised. The draft mentions that a foreign company must designate a domestic person responsible for submitting the filing or registration application. The new term "domestic person responsible" replaces the current term "China agent" with added qualifications and responsibilities. To meet the criteria, a responsible domestic person must obtain either a manufacturing license or a distribution permit to represent imported class I, II, or III devices. All current China agent responsibilities remain, and more requirements have been added to a responsible person. These duties include 1) assisting the authority in conducting inspections and investigating illegal activities of the registrants/filers of imported medical devices and signing legal documents on their behalf, 2) being responsible for liaison between the authority and the registrants/filers of imported medical devices, and promptly informing them of relevant laws, regulations, and technical requirements, 3) being jointly liable with the registrants/filers, and 4) issuing a written authorization letter to assist with completing customs clearance procedures and confirming the imported products' name, model, quantity, and import port, etc. If the domestic person responsible fails to fulfill the required duties, the legal responsibilities of the registrants will apply.
- Legal penalties for violation will be heavier
One change to the penalties is that the law adds 5-15 days of detention for violations during the device manufacturing (including contract manufacturing), certification, operation, and distribution phases. It also imposes penalties for not reporting substantial changes to class II and III devices on time. Based on risk levels, the manufacturer and key responsible individuals will be punished if major product-related changes occur but the change application is not filed with the authority. The online sales platform, customized devices, and resume manufacturing after discontinuation will also be penalized if proper reporting procedures are not followed. Anti-corruption terms have also been included in the law.