How to access the Chinese Medical Device Market

Transcription

1 In Partnership With How to access the Chinese Medical Device Market The China Britain Business Council (CBBC) Tuesday 12 th May 2015 A project funded by the European Union

2 Get Ready for China! The EU SME Centre is an EU Commission funded project which helps EU SMEs prepare to do business in China by providing them with a range of information, advice, training and support services. The Centre is implemented by a consortium of six partners and was established in October It successfully completed its first phase in July 2014 and has now entered its second phase which will run until July

3 Please continue to submit your text questions and comments using the Questions Panel

4 Agenda Scene setting - Health China 2020 & Med Tech Sector 10 CBBC report - Medical Devices Sector in China 5 The latest China Food and Drug Andministration (CFDA) Regulation Updates and Medical Device Approval in China 30 Regulation Product registration process Clinical trial process in China Q&A 15

5 A vision for Health China 2020

6 Current Chinese Healthcare Provision Infrastructure Hospitals held by Government Hospitals Other Public Hospitals Healthcare Provision System Primary Care Community Centers Specialised Public Health Institutions held by Government Public Heath Institutions Other Specialised Public Health Institutions Current Provision vs. Accessibility Primary Secondary care Tertiary care China 90%-public 10%-private Developing Developed but Top teaching County-level Hospitals Specialised Public Health Institutions at County Level Financing vs. Affordability Fee for Services 10% public financing Municipality-level Hospitals Specialised Public Health Institutions at Municipality Level Secondary care - Hospitals Province-level Hospitals Ministry-level Hospitals Specialised Public Health Institutions at Province Level Specialised Public Health Institutions at Ministry Level Primary Care Community Centers Public Health Institutions

7 Chinese Healthcare Provision 2020 vs Key Indicators Target for Type of Target Number of beds (per 1,000 people) directory Hospitals in average directory Public hospitals directory including:province-level or above hospitals directory Municipality-level hospitals directory County-level hospitals directory Other public hospitals directory Non-public hospitals directory Grass-root Medicare institutions directory Number of licensed doctors (assistant) per 1,000 people directory Number of registered nurse per 1,000 people directory Number of public health personnel per 1,000 residents directory Number of general medical practitioner per 10,000 people Obligatory Doctor-to-nurse ratio directory Patients to nurse ratio in municipality-level or above hospitals directory Suggested number of beds for county-level comprehensive hospitals 500 directory Suggested number of beds for municipality-level comprehensive hospitals 800 directory Suggested number of sickbeds for province-level or above comprehensive hospitals 1000 directory

8 The medicines and healthcare products industry Gross revenue 2014 by Ministry of Industry and Information Technology (MIIT) The Industry Chemical APIs Manufacturing Chemical Preparation Manufacturing Chinese Herbal Medicine Processing Manufacture of Finished Traditional Chinese Medicine Manufacture of Biologicla and Biochemical Products Manufacture of Sanitation and Medical products Pharmaceutical Machinery Manufacturing Medical device and Apparatuses Manufacturing Total: Medicines & Healthcare Products Gross Revenue (RMB billion) Year on Year Increase % Proportion % Growth Rate 2013 %

9 The medicines and healthcare products industry Total profit and profit margin 2014 by Ministry of Industry and Information Technology (MIIT) The Industry Total Profit (RMB billion) Year on Year Increase (%) Profit Margin% Annual Profit Margin 2013% Chemical APIs Manufacturing Chemical Preparation Manufacturing Chinese Herbal Medicine Processing Manufacture of Finished Traditional Chinese Medicine Manufacture of Biologicla and Biochemical Products Manufacture of Sanitation and Medical products Pharmaceutical Machinery Manufacturing Medical device and Apparatuses Manufacturing Total: Medicines and Healthcare Products

10 Medical Technology Sector

11 Booming sector Chinese Prime Minister Li Keqiang Spoke at National People s Congress 5 th March 2015 in Beijing The Chinese medical device market is predicated to grow over the next 2 to 3 decades with CAGR over 20%-30%. The three main factors contributing to China s booming medical devices industries are increased elderly population; increasing demand from the middle class; China health reform (95% covered by health insurance). China s market device market size has reached RMB 170 million in China s estimated market share in the global medical devices market is to be 25% in China made medical devices have now moved from low-end to middle-to-high end.

12 Diversified demands Three major reasons contributing to the booming imports of medical devices in China I II III China entering ageing society and the demand for related medical devices/medicines Increased middle-class people want better healthcare services and therefore demands for imported medical devices China health reform - 95% of the Chinese are covered with insurance nowadays and government would spend more on it. Market Size 2015 (RMB billion) 2016 (RMB billion) Wearable Equipment Wearable Medical Equipment Opportunities for EU SME companies Low end to Middle medical devices If medical devices can be produced in both China and abroad with similar quality, then the government would prefer to purchase local brands. Middle to high end medical devices If a medical device is high-end medical and imported brands have a better quality, end-users will purchase imported brands (especially for high value and important medical devices e.g. implant, stent) in the short-term. Purchase foreign medical devices IP, and technology Chinese medical device manufacturing companies are willing to spend money purchasing imported innovation technologies and to make the products in China. Selling innovation, Intellectual Property (IP) is also a business opportunities for foreign medical devices companies. 5/14/201530/11/10

13 Distribution channels Distribution Channel in China 77% of the medical devices are sold in hospitals directly with 23% sold in retail channels. Market Sales Share 23% 77% Hospital Retail How to Identify relevant distributors Most of distributors are based in Beijing and Shanghai, or the coastal areas. Identify a distributor that can help with academic marketing is important. E-commerce is a new trend in China with leading company e.g. Sinopharm Group. The ideal distributor should have existed distribution channels to hospitals. Market Share between Traditional and E- commerce Retail 26% 74% Traditional Retails E-commerce Retails

14 Case Study I Beijing YES Medical From R&D to Commercialisation

15 Case Alternative study II Solution Sinopharm Group/Direct Sales Cross border on-line N.B. e-ccrcommerce HK = HongKong, FTZ = Free Trade Zone

16 Cross border e-commerce, alternative solution?

17 Recommendation Coming Relevant exhibition exhibitions information 73 rd China International Medical Equipment Fair (CMEF Spring 2015) (Over 2,000 companies came to attend last year) Date: th May 2015 Location: Shanghai Website: 5 th China (Tianjin) International Medical Equipment Exhibition Date: th June 2015 (396 companies attend in 2014) Location: Tianjin Website: Influence in China market Why attend? Identidfy China distributor Marketing & profile raising Understand business environment Get the latest market intelligence Meet up with stakeholders e.g. Healthcare professionals 16 th China (Shanghai) International Medical Devices Exhibition 2015 (Over 600 companies attended in 2014) Date: 8-10 th July 2015 Location: Shanghai Website:

18 CBBC Report - Medical Devices Sector in China Background: China s fast growing medical device market; Numerous enquiries & download of health publications from EU SMEs EU SME Centre commissioned CBBC to conduct research report 2 Months by CBBC Healthcare and Life Sciences Team

19 Medical Device Sector in China Methodology: Desk research; Public libraries and open databases; Interviews with CBBC partners and market insiders.

20 Medical Device Sector in China Structure: Definition, policies and regulations; Market overview; Interview and case studies; Opportunities and challenges; Practical advice; Other useful information.

21 Medical Device Sector in China Part One: Definition, policies and regulations Definition; Classification of medical devices; Terminology; Policies and regulations. 5/14/201530/11/10 21

22 Medical Device Sector in China Part Two: Market overview Market size and performance; Import and export of medical device; China domestic manufacturers; Foreign branded medical devices; Sales channels of medical devices.

23 Medical Device Sector in China Part Three: Interview and case studies Four interviews conducted Facts and advice from different perspectives 5/14/201530/11/10 23

24 Medical Device Sector in China Part Four: Opportunities and challenges Opportunities: China s new health reforms Ageing population Residents healthcare need growth Challenges: Legal and regulatory barrier Market barriers Operational barriers 5/14/201530/11/10 24

25 Medical Device Sector in China Part Five: Practical advice Short-term; Mid-term; Long term. 5/14/201530/11/10 25

26 Medical Device Sector in China Part Six: Other useful information Terminology; Exhibitions; Associations; Useful web-links; Key domestic players. 5/14/201530/11/10 26

27 CFDA Regulation Updates and Medical Device Approval in China CFDA Regulation System and Updates CFDA Registration for Imported Medical Device China Agent Registration Testing Clinical Evaluation & Clinical Trial CFDA Review Process

28 Law and Regulation system in China Approved by The State Council Approved by Bureau The Regulations for the Supervision Regulations for the Supervision and and Administration of Medical Administration of Medical Devices (State Devices (State Council Decree No. 650) Council Decree No. 650) CFDA Order CFDA Annoucement, Notification & Communication Letters

29 Updated Regulation Law after 14 years The Regulations for the Supervision and Administration of Medical Devices (State Council Decree No. 650) was released on March 31st, 2014 Effective from June 1st, Chapters and 80 articles: product registration and recording Production Distribution and application Incident and recall Supervision and inspection legal liability

30 April 2014 June 2014: Catching the last train A queue in front of the CFDA administration review center on May 25 th, 2014

31 June 2014 August 2014: Just like before the iphone release Endless Rumors The law came out but not the regulations for working procedures guidance. Draft Version Version for Public Opinions Internal Updates Standard Version

32 August 2014 October 2014: 27 new regulations were released within 2 months Regulations No. Regulations Name Issue date Effective date CFDA Order No.4 Provisions for Medical Device Registrations CFDA Order No.5 Provisions for In-vitro Diagnostics Registrations CFDA Order No.6 CFDA Order No.7 CFDA Order No.8 Announcement No.12 Announcement No.13 Announcement No. 14 Announcement No. 43 Announcement No. 44 Provisions for Medical Device Instruction for Use and Labels Provisions for Medical Device Manufacturing Supervision Provisions for Medical Device Trading Supervision Clinical Trial Exemption List of Class II Medical Device Clinical Trial Exemption List of Class III Medical Device List of Class III Medical Device for Clinical Trial Conduction Approval Requirements for Medical Device Registration Dossier Requirements for IVD Reagent Registration Dossier

33 October 2014 April 2015: Transition Phase If the case was submitted to the CFDA before 1 st October 2014, the old regulation will be applied For cases submitted after 1 st October 2014, the new regulation will be applied.

34 Imported vs. Domestic Medical Device Manufacturer Registration Address Regulatory CFDA Level Qualification needed to sell the product in China (Class II/III) Imported Medical Device Outside China Class I: Central CFDA Class II: Central CFDA Class III: Central CFDA 1. Registration and QMS certification in country of origin 2. Have a China agent 3. Product Registration/Recording Domestic Medical Device In China Class I: City-level CFDA Class II: Province-level CFDA Class III: Central CFDA 1. Product registration Certificate 2. QMS Audit (GMP included) 3.Manufacturer License

35 Registration Process for Imported Medical Device Class I Class II/III Device Registration Testing in a CFDA-listed Lab Clinical Evaluation Report / Clinical Trial in China Latest point to appoint China Agent Dossier Submission to the CFDA Immediate Acceptance Dossier Submission to the CFDA: Long Approval Process Latest point to appoint China Agent

36 Prerequisite: China Agent Qualification of the China Agent Representative Office of a Foreign Company Company registered in China 1. Does you have any office in China? 2. Who can be your China Agent? Distributor Any third-party Company

37 Big Change for Class I: Recording Old: Registration with 10 month approval process New: Recording with Immediate Acce

38 Registration Testing What kind of tests shall be performed? Tests shall be performed with the reference of Product Technical Requirements. What is Product Technical Requirements? Product Technical Requirements is a Document Reference to Chinese National/Industry Standards Requirements of products (Appearance, electrical parameters, performance ) Testing method For Product for which a National Standard is available, the compliance with the National Standard is mandatory.

39 Registration Testing Q: The tests have been done outside China before, is it necessary to run the tests in China again? A: Yes The international standards (ISO/IEC) are not directly recognized in China Chinese standards Title Related International standards GB GB/T YY/T YY/T Safety requirements for electrical equipment for measurement control and laboratory use- Part 1:General requirements Electrical equipment for measurement, control and laboratory use --EMC requirements --Part 1:General requirements Safety requirements for electrical equipment for measurement, control and laboratory use Part 2-101: Particular requirements for in vitro diagnostic (IVD) medical equipment Medical devices-application of risk management to medical devices IEC : 2001 IEC :2005 IEC : 2002 ISO 14971:2007

40 How is Registration Testing done? Product Samples Manufacturer & China Agent Product Technical Requirements Testing Lab in China Testing Report Party Product Document

41 CFDA-listed Testing Labs The CFDA announced 21 labs in total. 10 of them are authoritative and provide comprehensive type tests. 1 National-lab National Insitutes for Food and Drug Control 2 Beijing-lab Beijing Institute of Medical Device Testing 3 Guangzhou-lab Guangdong Medical Equipment Quality Supervision and Inspection 4 Tianjin-lab Tianjin Medical Devices Quality Supervision and Testing Center 5 Shanghai-lab Shanghai Testing & Inspection Insititute for Medical Device 6 Jinan-lab Shandong Quality Inspection Center for Medical Devices 7 Hangzhou-lab Zhejiang Insititute for the Control of Medical Devices 8 Shenyang-lab Shenyang Center For Medical Equipment Quality Supervision And Testing 9 Wuhan-lab Hubei Center for Medical Device Quality Supervision and Testing Pku-lab Medical Devices Quality Supervision and Testing Centre of Peking University

42 What can go wrong during testing? Shipping Product Samples Product samples can be shipped directly to the testing lab. However, please be aware that custom clearance is often required for a medical device Payments with the testing lab Testing labs often do not accept the payment from abroad. Please have a corporation/person to help with the transfer, who can be your Chinese office, your distributor, a consulting company or even a friend. Product modification with compliance of Chinese standards Often, products fail in the testing, especially EMC Prepare to have someone, such as an engineer or your distributor, who knows the product to modify the product sample to pass the test. Biocompatibility: A pain in the neck Avoid contact of the device to the patients Write Instruction for Use (user manual) correctly

43 Clinical Evaluation Report or Clinical Trials in China? The Regulation of Clinical Evaluation/Clinical Trial is currently an asking for public opinion version All MD and IVD (Class I, II, III) need to submit a document of clinical evaluation to the CFDA Class II and Class III MD and IVD need clinical trial data if not in the exemption list Clinical Trial Exemption List 488 Class II and 79 Class III Medical Devices An Entry consists of Product Name Intended Use Working Principle Chinese National and/or Industrial Standard if any

44 Clinical Evaluation Three pathways: 1. Exemption pathway: Comparing product to the product description in the Clinical Exemption List 2. Equivalence pathway: Comparing product to the predictive product registered in China 3. Trial pathways: Conduction Trial in China Medical Device In the Exemption List NO Yes Predictive product in China Exemption Pathway No Yes Trial pathway Equivalence pathway

45 Exemption Pathway In the Exemption List No Yes Other pathway Same description as in the list Yes No Comparing to the list Does the difference affect safety and effectiveness No Yes Describe difference and do the comparison Other pathways

46 Equivalence Pathway Predictive product in China No Other pathway No Clinical Trial data before China registratio n? Yes No Providing Docs Yes Difference with predictive Device Sales outside China NO Yes Adverse Event, Incidence, etc. Collecting Literature Yes The difference in clinical and nonclinical aspect does not affect safety and effectiveness Yes No Clinical Trial

47 Clinical Trials in China Follow GCP in China EC approval 2-3 months + Recruitment + follow-up + data process (2 months) Article 18: The conductor of the clinical trials shall be recorded to the city-level CFDA and Health Bureau. Article 19: Clinical trials for medical devices shall be conducted in qualified clinical trial organizations and shall accord with Quality Management Practices of Medical Device Clinical Trials. Article 20: The clinical trials for Class III high-risk products shall be approved by CFDA and also reported to the corresponding local CFDA and Health Bureau before the initiation

48 Process before CFDA Submission No Trial Needed Applicant appoints China Agent Clinial Trial Needed Applicant appoints a China Agent 20 working days Writing Product Technical Requirement (PTR) Running Tests in a qualified lab in China Passe d Applicant provides other files Clinical Evaluation Report Writing Product Technical Requirement (PTR) Running Tests in a qualified lab in China Passe d Clinical Trial in China Applicant provides other files Registration Dossier Preparation 10 working days Registration Dossier Preparation 10 working days Dossier to the CFDA Dossier to the CFDA

49 Process after CFDA Submission Dossier to the CFDA 5 working days 3 working days of Dossier Transfer Class II : 60 working days Class III: 90 working days Must be completed within 1 year, otherwise case is rejected 60 working days 20 working days Approved CFDA Submission 1st Technical Review Approved Supplementary Information Preparation 2 nd Technical Review of Supplementary Dossier Approved Administration Review QMS Audit of the manufacturer 30 working days 10 working days Certificate for CFDA review time: Class II 158 working days Class III 188 working days CFDA might require an aduit of the Quality Management System of overseas manufacturer

50 Do not underestimate the CFDA process CFDA Registration Cases on 2nd April 2014 waiting for the first review, 1330, 18% Overdue for supplemantry submission, 4114, 55%? waiting for the second review, 897, 12% waiting for the first review waiting for the second review in review process Overdue for supplemantry submission in review process, 1077, 15%

51 Disclaimer The contents of this webinar have been prepared for general informational purposes only and are not intended to be relied upon as legal or other professional advice. The opinions of the experts, whether the speaker or the moderator, orally or written during the webinar, do NOT constitute or represent that of the EU SME Centre on the subject matter. The EU SME Centre accepts no liability for any errors, omissions or misleading statements, and no warranty is given or responsibility accepted as to the standing of any individual, company or other organization mentioned. Consultation and confirmation are strongly suggested to be made with relevant government authorities or independent service providers before any action is taken.

52 Get Ready for China