Hong Kong’s government currently does not strictly regulate most medical devices. However, in late August 2010, Hong Kong’s Medical Device Control Office proposed a framework for comprehensive and mandatory regulation of medical devices and in-vitro diagnostic medical devices. The new framework draws significantly from the Global Harmonization Task Force (GHTF) and the World Health Organization (WHO). Companies dealing with medical devices in Hong Kong should begin preparations for these upcoming regulations.
Hong Kong’s proposed system will align with the GHTF for medical device definition and classification. Specifically, medical devices will be classified into Classes I, II, III, and IV based on risk levels (where Class I is the lowest risk and Class IV is the highest risk). For in-vitro diagnostic medical devices (IVDMDs), there will be Classes A, B, C, and D (where Class A is the lowest risk and Class D is the highest risk).
Before medical devices can be sold in Hong Kong’s market, they will need to be registered with Hong Kong’s Department of Health (most likely through the Medical Device Control Office). The registration process and details have not been released yet. Registration for medical devices will be carried out in phases.
Local manufacturers, importers, exporters, distributors, and "Authorized Representatives" (i.e. local representative) will need to register with Hong Kong’s Department of Health. Both Authorized Representatives (ARs) and manufacturers will have significant responsibilities for post-market control.
To aid in implementing these upcoming medical device regulations, Hong Kong plans to allow for Conformity Assessment Bodies (CABs). CABs will be regulatory bodies (usually independent of the government) that will be involved in the registration process.
Japan’s reimbursement regulatory update
In April 2010, Japan officially updated its reimbursement prices. The complete details of this update were released on the Ministry of Health, Labour and Welfare (MHLW) website on September 1, 2010. This update has led to an overall net positive 0.19 percent change in medical treatment reimbursement rates. This 0.19 percent will increase medical reimbursements in Japan by approximately USD $840 million per year.
The 0.19 percent was calculated by comparing the medical treatment reimbursement rate changes against the medical device and drug price changes. Specifically, the medical treatment reimbursement rates went up while the medical device and drug prices went down. The MHLW reports that it has been ten years since there was a net positive outcome.
The update targets reimbursement for cancer, dementia, infectious diseases, and hepatitis. Thus, medical devices and drugs remedying these conditions may experience market growth.
Furthermore, high difficulty surgeries carried out in hospitals will have an increased reimbursement rate between 30 percent and 50 percent. There are approximately 1,800 items that fall under this high difficulty surgery description, and about half of them will receive these reimbursement rate increases.
Japan has a universal healthcare system characterized by employer contributions, payroll deduction taxes, and patient co-payments. The reimbursement system in Japan groups medical devices and drugs into categories for the reimbursement application process. Medical companies aiming to attain reimbursement status for their products in Japan should focus on these categories.
China’s pharmaceutical regulatory system and collaboration with the U.S. FDA
Since 2007, the United States Food and Drug Administration (FDA) has been working more closely with China’s primary medical regulatory authority, the State Food and Drug Administration (SFDA) to increase regulatory control of imported and exported medical goods. Regulatory harmonization deals such as the "Agreement on the Safety of Drugs and Medical Devices" in 2007 have resulted in this increased collaboration between the U.S. and China. In 2008, The U.S. FDA created its own branch agencies in China, to more closely monitor the country’s medical activities. Since then, the U.S. FDA has carried out over 30 inspections of medical facilities in China.
For international companies exporting medical products to China, familiarity with the SFDA’s role and function is a must. However, the SFDA operates differently from organizations that oversee food and drug regulations in the United States and Western Europe.
One key difference is the level at which drug regulatory compliance inspections are carried out. In both China and the United States, there is decentralization of authority within the SFDA and FDA, respectively. The U.S. FDA may have regulatory officials from a local office visit a drug manufacturing facility, but the results of that inspection would be reviewed by the agency’s central authority. In contrast, China’s system allots significantly more autonomy to the provincial SFDAs. China’s provincial SFDAs can operate relatively independently of the national SFDA when it comes to inspections. In other words, if a drug distribution company were to undergo an inspection by a provincial SFDA, then oftentimes that same provincial SFDA would also be the one to review and issue results of the inspection.
India increases inspections of foreign drug manufacturers
The Drug Controller General of India (DCGI) will begin inspecting importers’ overseas manufacturing facilities to ensure compliance with standard industry practices. Despite having established provisions for such inspections in the Drug and Cosmetic Act, this is the first time the DCGI will do so. Over 100 import licenses have been cancelled this year by the DCGI due to quality issues, putting the heat on officials to begin verifying quality parameters with manufacturers. As a first step, inspectors from India will be sent to facilities in China and Europe by early 2011.
India imports almost $3 billion (US) worth of pharmaceuticals each year, according to DCGI estimates. India’s total pharmaceutical industry is worth about $22 billion (US). "With increasing volumes, we have decided to send our drug inspectors before we grant registration to import bulk drugs," says the DCGI Surinder Singh. "Though there was a provision in the Drugs and Cosmetics Act earlier too, it required a lot of budgetary support. But in the current scenario, we are serious in conducting audits before allowing imports and have taken up the issue with the ministry. We are awaiting ministry approval for the step and bring more transparency into the system."
Ames Gross is president and founder of Pacific Bridge Medical, recognized nationally and internationally as a leader in the Asian medical markets. Founded in 1988 PBM has helped hundreds of medical companies with business development and regulatory issues in Asia. Contact PBM at email@example.com.
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