"China’s Medical Device Market"
China’s Medical Device Market Jay Biggs U.S. Department of Commerce Office of Health and Consumer Goods Objectives Market Size Regulatory Issues Reimbursement Issues Department of Commerce Resources to Help Boston Companies 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. U.S. Medical Device & IVD Exports to China (1998 – 2001) $Millions 600 500 400 300 200 100 0 1998 1999 2000 2001 2002 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 Medical Device Regulatory System in China China’sregulatory 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 System in China (cont.) Allimported medical devices to be sold in China must be registered with the SFDA Type-testingis required for class II and III medical devices before registration Medical Device Regulatory System in China (cont.) Clinicaltrials are required to be included in registration applications for certain class II and III products 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 Registration Requirements (cont.) Technicalspecifications and indication of how these specifications are tested Instruction manual (in Chinese) Type-test report 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 Registration Requirements (cont.) Statement of authenticity of materials submitted Other documents as may be required by SFDA Application Timeline 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. 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 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 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 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 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 Agencies Involved in Reimbursement Ministryof 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 Reimbursement (cont.) ProvincialHealth and Pricing Bureaus – Review regional purchases of large scale medical devices – Establish reimbursement rates for medical devices 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 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 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 Urban Health Insurance Begin in 1999 Main features 1) Wide coverage 2) Cost sharing 3) Combination of funds – cost pooling and individual accounts 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 U.S. Department of Commerce Activities In China – China JCCT Medical Devices and U.S. Pharmaceuticals Subgroup Co-chairedby State Food and Drug Administration Major JCCT Subgroup Issues Type-testing vs Quality Systems Adverse Event Reporting System IVD classification Clinical Trial requirements Re-registration of medical devices 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) 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/regulat ions.html Other Department of Commerce Resources Commercial Service Offices China Business Center Trade Compliance Center (TCC) 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 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@example.com, phone (202) 482-1191, or fax (202) 482-6097 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 Presented By: Jay Biggs Office of Health and Consumer Goods Phone: (202) 482-4431 Fax: (202) 482-0975 E-mail: firstname.lastname@example.org Web site: www.ita.doc.gov/td/mdequip/