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A New Announcement on the Local Production of Imported Medical Devices in China

2 November 2020

On 25 September 2020, the National Medical Products Administration (“NMPA”) promulgated the Announcement on Matters Concerning the Production of Imported Medical Device Products by Enterprises within the People’s Republic of China (the “PRC”) with effect from the date of promulgation (the “Announcement”). Back to earlier this year, the NMPA promulgated the Announcement on the Transfer of Medical Devices with Imported Registration Certificates to Chinese Domestic Enterprises for Production on 5 March 2020 which is the draft for comment version of the Announcement.

1. Background and Highlights

Before the implementation of the Announcement, a foreign enterprise which already holds a registration certificate for Class II or Class III imported medical devices or in vitro diagnostic (“IVD”) products (“Foreign Registrant”) should manufacture the imported medical devices outside the PRC according to the requirements in the registration documents, including the place of manufacturing. Thus, in practice, if a foreign medical device company would like to distribute its products in China without going through the import medical devices registration procedures or if such foreign medical device company would like to localize the medical devices to China in order to reduce the manufacturing costs, it should entrust a Chinese company to manufacture the products under its technology licence. That foreign company should first license the technology and trademarks associated with such product to a Chinese company, and such Chinese enterprise shall apply for and complete the registration or record-filing for such device manufactured by the Chinese enterprise as a domestic device, which indicates that such Chinese enterprise will have to go through the registration procedures for a domestic medical device in the PRC.   

The Announcement provides an accelerated pathway for the localization of imported medical devices and IVD products in the PRC. According to the Announcement, a Foreign Registrant is permitted to let its subsidiary established in the PRC (“Domestic Registrant”) register the same product as a domestic product and hold the relevant registration certificate. The NMPA recognizes and accepts the Domestic Registrant to use part of the registration application materials which were originally submitted by the Foreign Registrant during the registration of an imported medical device, to accelerate the registration process, as long as the product design, the main raw materials, and the production processes of such medical device remain unchanged and the quality management systems are consistent.

On the same day of the promulgation of the Announcement, the NMPA also published an Interpretation of the Announcement on Matters Concerning the Production of Imported Medical Device Products by Enterprises within the People’s Republic of China (the “Interpretation”) which clarifies and addresses the background, reasons and main principles of the Announcement and also explains the requirements of the Announcement. Here we summarize the highlights of the Announcement and the Interpretation below:

2. Scope of Application and Main Requirements

a) Scope of Application

According to Article 1 of the Announcement, it applies to the Foreign Registrants of imported medical device. Through the establishment of their foreign-invested enterprises in the PRC, the Chinese subsidiary of such Foreign Registrant can produce the Class II and Class III medical devices or IVD products already registered by the Foreign Registrant with the NMPA in the PRC.

b) Qualification for Domestic Registrants

The following two types of Chinese companies can be regarded as the Domestic Registrants:

(1) A foreign-invested company registered in the PRC which is owned by the Foreign Registrant; and

(2) Where the Foreign Registrant is invested by a PRC company, the PRC company can be the Domestic Registrant.

c) Requirements on Registration Materials

(1) The registration application materials shall, in principle, be consistent with the relevant information indicated on the annex of the corresponding imported medical device registration certificate, except for the name, domicile and the production site of the Domestic Registrant.

(2) The Domestic Registrant shall submit registration materials in accordance with the NMPA requirements.

For medical devices other than IVD products, the Domestic Registrant shall prepare and submit the registration application documents in accordance with the Announcement of Medical Device Registration Application Document Requirements and Approval Document Format (National Medical Products Administration 2014 Announcement No. 43).

For IVD products, the Domestic Registrant shall prepare and submit the registration application documents in accordance with the Announcement of In Vitro Diagnostic Reagents Registration Application Document Requirements and Approval Document Format (National Medical Products Administration 2014 Announcement No.44), and other requirements of the NMPA to submit the registration application documents.

(3) The following registration materials of the imported products for which a Class II or Class III registration certificate has been granted may be used for the registration:

(a) Medical devices: general information, research data, clinical evaluation data, and product risk analysis materials;

(b) IVD products: general information, research data of main raw materials (if applicable), research data of main production processes and reaction systems (if applicable), analytical performance evaluation materials, positive judgment value or reference interval determination materials, stability materials, clinical evaluation materials, and product risk analysis materials.

(4) Declaration of consistency: both the Foreign Registrant and the Domestic Registrant shall ensure that the above-mentioned registration materials are consistent with the original registration materials submitted by the Foreign Registrant to the NMPA at the time of the registration of the imported medical devices or imported IVD products.

(5) The registration procedures shall be carried out in accordance with the Administrative Measures for Registration of Medical Devices, the Administrative Measures for the Registration of In Vitro Diagnostic Reagents, and other relevant regulations on the electronic declaration of medical devices.

(6) The registration certificate number of the imported medical device or IVD product that has been already approved for registration shall be indicated on the remark column of the new registration certificate obtained by the Domestic Registrant.

d) Verification Requirements of the Registration System

(1) The Domestic Registrant shall ensure that the domestic production includes the main production process of the medical devices or IVD products and undertake that the main raw materials and production process shall be the same. The Domestic Registrant shall prepare a self-inspection report which shows that its domestic production quality management system conforms to the Quality Administration Practice for the Manufacturing of Medical Devices of the PRC (i.e. Medical Devices GMP), and a comparison report on the equivalence of domestic and foreign quality management systems to the NMPA.

(2) The NMPA shall conduct a comprehensive verification of the Domestic Registrant, focusing on the consistency and traceability of the domestic quality management system and the overseas quality management system, and whether changes in the system brought about by the modification of the production process will generate new risks and cause changes in the registration items, etc.

e) Other Regulatory Requirements

(1) After obtaining a registration certificate, the Domestic Registrant shall apply for a medical device manufacturing license in accordance with the relevant requirements and procedures set out in the Measures for the Supervision and Administration of Medical Device Production.

(2) Domestic Registrants shall bear the main responsibility for the quality and safety of the products and be responsible for quality management throughout their life cycles.

3. Non-application of the Pilot Market Authorisation Holder (“MAH”) Regime for Medical Devices

According to the Interpretation, the purpose of the Announcement is to optimize the registration application materials for the Foreign Registrants apply for local production in the PRC. The medical devices or IVD products shall be produced by the Domestic Registrants and does not fall under the scope of the pilot MAH regime for medical device registrants, which means that such manufacturing procedure should not be considered as a commissioned manufacturing under the pilot MAH regime.

4. Our Comments

The implementation of the Announcement gives possibility for a foreign medical device to have its Chinese subsidiary to manufacture its medical devices which is granted an imported medical device registration certificate by the NMPA without the need for its Chinese subsidiary to redo the whole application for a Chinese domestic medical device.

Foreign Registrants may consider licensing the technologies of its medical devices to its Chinese subsidiaries for manufacturing, and the latter will act as the Domestic Registrants to apply for the registration and attain the local production of such products in the PRC, in order to reduce its manufacturing costs.

However, the registration and the production cannot be separated, which means the Domestic Registrant is required to obtain a medical device manufacturing license for the imported product that it intends to be locally produced. In practice, quite a few existing Chinese subsidiaries of foreign medical devices companies are incorporated as medical device consulting and/or trading companies which do not have the qualification and capacity to produce medical devices in the PRC. Such subsidiaries of foreign medical devices need to first be converted into a medical device manufacturing company to have qualification and capacity to produce imported medical devices. Therefore, to which extent and how this Announcement can actually work still remains to be seen.

Authors

Nicolas Zhu
Nicolas Zhu
Partner
Shanghai
Jennifer Zhang
Associate
Shanghai