China's Regulatory Environment for Medical Devices: 2005

By Ames Gross, President, and Rachel Weintraub, Senior Associate, Pacific Bridge Medical

Introduction: Asia

The expanding Asian economies and growing medical markets offer considerable opportunities for US companies. While the medical markets in the US and Europe are well-established and mature, many US medical companies are experiencing their highest growth rates (in terms of sales) in the Asian markets. Moreover, most US medical companies are struggling to keep up with the high costs of R&D, clinical trials and manufacturing in the US. In order to stay afloat in such a competitive global market, US medical companies are now, more than ever, also exploring new outsourcing opportunities in Asia.

Many Asian nations are experiencing increased Gross Domestic Product (GDP), per capita income and overall wealth. People in Asia are living longer and demanding better healthcare products and services. A number of the Asian governments are implementing more stringent medical device regulations, as they are prepared to spend more money for higher healthcare standards. Moreover, many of these Asian countries are placing a greater importance on international regulatory standards in order to export their medical products globally.

Overview of China and Its Medical Device Market

One of the fastest growing economies in the world today is China, growing at a rate of around 9 percent per year. The country's medical device market is currently worth approximately $3.5 billion. Following China's entry into the World Trade Organization (WTO), the State Food and Drug Administration (SFDA) is making greater efforts to create a better medical device regulatory environment. In August 2004, the SFDA implemented new registration requirements, simplifying the device application and review process. Moreover, exporting to China is becoming easier for foreign companies, and tariffs on most medical devices have been reduced to less than four percent as of January 2005. The US is the leading exporter of medical devices to China, contributing nearly one-third of all China's foreign imports.

Medical Device Regulation

Overview
Medical devices are regulated in China by the State Food and Drug Administration (SFDA). The SFDA is the Chinese equivalent of the US Food and Drug Administration (FDA). The General Administration of Quality, Supervision, Inspection and Quarantine (AQSIQ) is another Chinese agency that regulates imported medical devices. AQSIQ conducts mandatory safety registration, certification and inspection for certain devices. Companies who want to import medical devices into China must register their device with the SFDA.

Medical Device Classification
As in the US, medical devices are categorized into three classes, each with specific regulatory requirements. The classes are as follows:

• Class I: Low risk devices, regulated by provincial governments
• Class II: Modest risk devices, regulated by provincial governments
• Class III: High risk devices, regulated by the SFDA

Product Registration Requirements
In order to register a medical device, a total of 12 documents must be collected and submitted to the SFDA in both Chinese and English, as announced by the SFDA on March 22, 2005. The required documents are summarized as follows:

1. SFDA registration form
2. Legal Production Qualification (e.g., US FDA registration)
3. Business license for the Chinese agent registering the product (The agent must be located in China, have a valid license, and have a letter of commission from the manufacturer)
4. Marketing approval from government of country of origin (Certificate to Foreign Government as well as 510(k), pre-market approval (PMA) application for US-made devices issued by FDA or Free Sale Certificate)
5. Product Standards (ISO, CE, AAMI, etc.); include an authorization letter to a Chinese agent to translate and reformat the product standard according to Chinese regulation
6. Operation Manual (Product instructions)
7. Test report issued by SFDA-certified test center (only required for Class II and III products that have not received ISO9000 certification)
8. Clinical trial report (only required for certain types of devices; manufacturer may submit clinical trial data that was submitted in the country of origin)
9. Quality guarantee letter (certifying that the product being registered and sold in China is identical to the product approved in the country of origin)
10. Authorization letter to a Chinese agent, responsible for reporting adverse events accrued in China (includes an authorization letter from the manufacturer, and a promise letter from the Chinese agent, the agent's qualification document)
11. After-sales authorization (this includes an authorization letter from the manufacturer, a promise letter from the after-sales agent, and an after-sales agent qualification document)
12. Self-guarantee declaration (to vouch for truthfulness of submitted documents)

Previously, all documents executed in the US had to first be authenticated by a Chinese Embassy or consulate before they were eligible for use in China. As of March 22, 2005, authentication by the Chinese Embassy or consulate is no longer required. Additionally, copies of government certificates, i.e. Number (4) above, will be accepted by the SFDA, but should be notarized.

Product Registration Procedures
On August 9, 2004 the SFDA issued new regulations for the registration of medical devices in China. These new regulations have (to a certain extent) simplified the application and dossier review process for medical devices. Additionally, the Medical Device Clinical Trial Regulation, effective April, 2004, has laid out more detailed requirements for clinical protocol, clinical hospitals and clinical reports in China.

Previously, a company prepared a dossier (with all required documents) and then applied to the SFDA for a specification validation (for approval of the specifications of the device to be imported). Once the specification validation was reviewed and approved, the company was then required to send samples to a testing center. A company would then file its dossier, with the approved specifications and the official testing report, to the SFDA. The SFDA would review the technical documents and judge whether to issue product approval.

The new regulations have combined the dossier preparation and specification application into one step. Companies no longer need to apply to the SFDA for specification validation. Instead, they may use their own specifications as a basis for a testing agency to provide testing. The company then includes these test results in its completed dossier and submits it to the SFDA. The SFDA sends this dossier to the Medical Device Evaluation Center (MDEC) to review the specifications, dossier, government certificate and clinical report, if needed. The MDEC sends their conclusion to the SFDA and if everything is acceptable, the SFDA will issue the product approval license. While these new regulations have somewhat streamlined the process, they have not significantly altered the timeframe for medical device registration in China.

However, there are now several situations that can lengthen the new registration process. First, if the MDEC requires a supplement dossier, companies must complete the supplement and re-submit it to the SFDA within 60 working days. Second, since the specification validation is not required before testing, the testing is completed based on the company's specifications. It is possible that the MDEC may request the company to revise its specifications and re-test, adding additional time and money to the registration process.

Product registration is valid for four years. In order to change manufacturing locations or add a new manufacturing location, a new product registration must be submitted. To change basic information, such as the manufacturer's name, product name, or name of the manufacturing location, etc., an amendment to the product registration can be submitted. Requests for renewal of product registration must be made 6 months before the initial registration expires. Along with renewal forms, a copy of the original registration must be submitted. Product quality follow-up reports must also be submitted.