By Alexander Chipman Koty
The China Food and Drug Administration (CFDA) recently announced revisions to the Medical Device Classification Catalogue, marking its first update in 15 years. The new catalogue, which will come into effect on August 1, 2018, is more comprehensive than the original 2002 version and includes new measures to address changes in technology.
The catalogue is one of the most important documents for regulating and classifying China’s medical device industry, which was worth US$53.62 billion in 2016. Medical device companies must undergo different registration procedures depending on the classification listed in the catalogue, while those not represented in the catalogue must face an expert panel for classification.
The revised catalogue lowers the risk level of 40 types of devices, reduces the number of device categories from 43 to 22, reclassifies several devices, and makes the classification system more transparent by offering significantly more details and examples.
Medical device companies should check whether the new catalogue reclassifies their products and make corresponding preparations to conform to the new standards before they come into force next year.
RELATED: China Plans to Accelerate the Review Process for Medical Devices
Changes to regulatory classes
The catalogue divides medical devices into three classes that are dependent on the level of risk they present to patients or users. Class I is the lowest risk class, meaning that registration is comparatively easier, and Class III the highest, meaning that registration involves a longer and more rigorous process.
Class I registrants only have to record-file with the municipal level Food and Drug Administration, while Class II registrants must be examined and approved by provincial-level authorities, and Class III by the state-level CFDA. Class I device registration usually takes about 10 to 15 months, while Class II and Class III registrations can take up to 24 months.
The updated catalogue downgrades the risk level of 40 types of devices, moving them from either Class III to Class II or from Class II to Class I. It also upgrades certain devices to Class III, such as automated blood bank systems and active breathing coordinators.
More detailed classifications
In addition to changing the risk level of several medical devices, the update reorganizes and adds detail to the product classification system.
The new catalogue slashes the number of device categories from 43 to 22, while splitting the previous classification system of 260 types into 206 primary types, which are then divided into 1,157 secondary types. Further, the update drastically increases the number of product name examples of these types from 1,008 in the original catalogue to 6,609.
The revisions streamline and add transparency to the classification process by introducing the tiered type system and providing ample product examples.
In addition to eliminating duplicate types that existed in the previous catalogue, the introduction of detailed product types accompanied with examples offers far more certainty as to which category a given product falls under. These additions also account for new technology that was not commonplace in the medical device industry at the time of the 2002 catalogue.
RELATED: Business Advisory Services from Dezan Shira & Associates
Stay aware of other regulatory requirements
While the catalogue is a key regulatory document for medical devices, businesses should be aware of other important legislation governing the industry.
The Regulations on Supervision and Administration of Medical Devices (State Council Order No. 680), which came into effect earlier this year, is the highest-level law for the registration and record keeping of medical devices. The CFDA has also released numerous regulations in support of the law, covering areas from labelling to manufacturing supervision.
Additionally, the Catalogue of Industries for Guiding Foreign Investment regulates what types of medical devices are permitted, restricted, and encouraged for foreign investment in China. The latest version, released in June this year, adds intelligent medical rescue devices to the encouraged category, meaning that they benefit from special government incentives.
With China’s rapidly aging population and rising affluence, the country’s market for medical devices and other medical services will continue to grow going forward.
Policymakers are aware of the country’s needs and have instituted reforms to further liberalize the sector as a result. For instance, the government has announced plans to move investment in the elder care industry from approval to record filing and reduce limits on foreign investment, while Zhejiang province recently approved China’s first private medical mall.
Foreign investors can therefore expect more reforms to China’s medical device and broader healthcare industry in the near future.
China Briefing is published by Asia Briefing, a subsidiary of Dezan Shira & Associates. We produce material for foreign investors throughout Asia, including ASEAN, India, Indonesia, Russia, the Silk Road, and Vietnam. For editorial matters please contact us here, and for a complimentary subscription to our products, please click here.
Dezan Shira & Associates is a full service practice in China, providing business intelligence, due diligence, legal, tax, IT, HR, payroll, and advisory services throughout the China and Asian region. For assistance with China business issues or investments into China, please contact us at firstname.lastname@example.org or visit us at www.dezshira.com
Dezan Shira & Associates Brochure
Dezan Shira & Associates is a pan-Asia, multi-disciplinary professional services firm, providing legal, tax and operational advisory to international corporate investors. Operational throughout China, ASEAN and India, our mission is to guide foreign companies through Asia’s complex regulatory environment and assist them with all aspects of establishing, maintaining and growing their business operations in the region. This brochure provides an overview of the services and expertise Dezan Shira & Associates can provide.
An Introduction to Doing Business in China 2017
This Dezan Shira & Associates 2017 China guide provides a comprehensive background and details of all aspects of setting up and operating an American business in China, including due diligence and compliance issues, IP protection, corporate establishment options, calculating tax liabilities, as well as discussing on-going operational issues such as managing bookkeeping, accounts, banking, HR, Payroll, annual license renewals, audit, FCPA compliance and consolidation with US standards and Head Office reporting.
China’s Investment Landscape: Identifying New Opportunities
China’s foreign investment landscape has experienced pivotal changes this year. In this issue of China Briefing magazine, we examine how foreign investors can capitalize on China’s latest FDI reforms. First, we outline new industry liberalizations in both China’s FTZs and the country at large. We then consider when an FTZ makes sense as an investment location, and what businesses should consider when entering one. Finally, we give an overview of China’s latest pro-business reforms that streamline a wide range of administrative and regulatory measures.
Dezan Shira & Associates