Other BriefingsHainan Province in China Allows Import of Urgently Needed Drugs and Medical Devices from May 1
Hainan has optimized its policy allowing the import of urgently needed drugs and medical devices in the Boao Lecheng International Medical Tourism Pilot Zone. The new regulations will come into effect May 1, 2023, and will allow overseas unapproved medical devices, in vitro diagnostics (IVDs), and drugs to be used in the Pilot Zone if they can get the status of ‘clinical urgency’ and cannot be replaced by already available alternatives.
On March 28, 2023, the Hainan government issued new guidelines regarding the administration of urgently needed imported drugs and medical devices in the Boao Lecheng International Medical Tourism Pilot Zone of the Hainan Free Trade Port.
The Regulations on the Administration of Urgently Needed Imported Drugs and Medical Devices in the Boao Lecheng International Medical Tourism Pilot Zone of Hainan Free Trade Port, which will come into effect on May 1, 2023, will allow overseas unapproved medical devices, in vitro diagnostics (IVDs), and drugs to be used in China – if they can get the status of ‘clinical urgency’ and cannot be replaced by already available alternatives.
The new guidelines optimize existing policies that came into effect in 2019. The policy is a significant development for China’s medical industry, as it allows overseas manufacturers to sell and commercialize their products more quickly. Additionally, it provides them with an opportunity to gather real-world data from China’s local clinical evidence to support national registration approval.
This article discusses the new regulations, their scope and application process, and the potential impact on China’s medical industry.
How does China classify urgently needed imported drugs and medical devices?
As per China’s regulations, urgently needed imported drugs and medical devices in the Boao Lecheng International Medical Tourism Pilot Zone (referred to as the ‘Pilot Zone’) are medications and medical devices imported by medical institutions in the Pilot Zone for clinical emergencies. These drugs and devices have been authorized for sale abroad but have not yet received registration approval in China, or there are no equivalent products registered in China that can be used as a substitute.
Importantly, these urgently needed imported drugs and medical devices must only be used for specific medical purposes in designated medical institutions. These institutions are responsible for ensuring their safe use and bear the main responsibility for associated safety risks.
Specifically, the Boao Lecheng International Medical Tourism Pilot Zone Medical Products Administration Bureau (referred to as the ‘Lecheng Medical Products Administration Bureau’) is responsible for supervising and managing the urgently needed imported drugs and medical devices in the Pilot Zone.
Moreover, in case the real-world data produced by these urgently required imported drugs and medical devices satisfies the criteria for drug and medical device registration and declaration in China, the applicants can include the data in their application documents for national registration.
Application and approval process
The application and approval process for urgently needed imported medical products in Hainan involves several steps and requirements outlined in the new regulations. First, the designated medical institution must meet specific criteria, such as holding a medical institution practicing license, having the capabilities of a tertiary Grade A hospital, and having professional departments suitable for the clinical use of urgently needed imported drugs and medical devices.
The medical institution must also have protection measures and management systems in place for circulation, transportation, and storage that meet the requirements of the clinical urgently needed imported drugs and medical devices being applied for. They must establish a drug adverse reaction/event monitoring organization, be equipped with trained personnel to perform monitoring duties correctly, and have emergency response plans and disposal capabilities for serious adverse reactions/events.
Once a medical institution meets the criteria, it can apply for a qualification assessment review from the provincial health authority responsible for evaluation. If approved, the medical department or team that intends to use the product must hold a valid practice license and have sufficient knowledge of the product to use it correctly and reasonably.
The designated medical institution must then submit an application for use through the Clinical Urgently Needed Imported Medical Products Traceability Management Platform, ensuring that the application materials are legal, accurate, and traceable. The provincial drug supervision and administration department should complete the assessment within seven working days of receiving the application.
If the product meets the criteria, the provincial drug supervision and administration department will issue an administrative license within the prescribed time limit, including a review of the product’s overseas marketing status and any associated adverse reactions or events.
What has changed with the new guidelines?
The new guidelines on the import and use of urgently needed medical devices in China contain 36 articles divided into six sections, expanding on the original document’s 27 articles.
These guidelines outline the roles and responsibilities of various entities, such as provincial health and drug regulatory departments, medical institutions, and pharmaceutical enterprises.
Provincial health and drug regulatory departments must manage the importation, circulation, and use of these devices, assess associated risks, prevent illicit drug flow, and ensure proper control of drugs with special management requirements. Medical institutions designated to use these devices are responsible for their proper use and disposal, while pharmaceutical enterprises must follow relevant regulations for purchasing, storing, and distributing these devices.
If a patient is harmed due to the use of an urgently needed imported medical device and drugs, the designated medical institution must accept liability and provide appropriate compensation. The guidelines also recommend that designated medical institutions purchase medical commercial insurance to protect against unforeseen events. Failing to comply with these regulations will have repercussions for medical institutions.
Benefits for foreign medical device manufacturers
The new regulations offer a range of benefits for overseas manufacturers.
First, it provides them with access to the world’s largest market for medical products, estimated to reach US$300 billion by 2025. By participating in the program, overseas manufacturers can expand their business and increase their revenue by providing high-quality and in-demand products to Chinese consumers.
Additionally, the program provides an opportunity for overseas manufacturers to establish partnerships and collaborations with Chinese companies, further enhancing their competitiveness and market reach.
The Hainan Medical Pilot Zone
The Chinese government launched the Hainan Boao Lecheng International Medical Tourism Pilot Zone in 2018 to develop the healthcare industry in the region. The zone has sought to attract commercial investment and cooperation with foreign institutions, including international hospitals, testing laboratories, medical colleges, and tourism institutions, to attract both domestic and international patients.
To achieve this goal, the Beijing government has implemented various preferential policies to upgrade the medical techniques, devices, and drugs available at the Pilot Zone and meet international standards by 2025.
As the only “special medical zone” in China that allows foreign participation in the medical field, the Pilot Zone has attracted high-end medical tourist services and cutting-edge medical research outcomes, creating an industrial cluster of international medical services.
Over 20 medical institutions have already opened here, and 10 more specializing in fields like cancer prevention and treatment, cosmetic medicine, anti-aging, health management, and rehabilitation are set to join.
The new regulations on urgently needed drugs and medical devices are just the latest effort to enhance Hainan’s healthcare industry. The establishment of the Hainan Free Trade Zone (FTZ) is expected to further boost the medical tourism zone project and leverage market opportunities created by the growing demand for medical products and services.
Opportunities for foreign investors in Hainan’s healthcare
Hainan’s success in establishing itself as a pilot FTZ presents exciting opportunities for foreign investors in the healthcare sector. With significant investments made towards developing the healthcare industry in the region, Hainan is on track to becoming a world-class medical tourism destination and medical technology innovation center by 2030.
Foreign investors can leverage the favorable tax policies, incentives, and advantages available in Hainan to invest in various healthcare sectors, such as international hospitals, third-party testing institutions and laboratories, medical colleges, pension insurance companies, and medical tourism institutions. By doing so, they can capitalize on the increased demand for medical products and services and contribute to the growth of the healthcare industry in the region.
China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done so since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com. We also maintain offices assisting foreign investors in Vietnam, Indonesia, Singapore, The Philippines, Malaysia, Thailand, United States, and Italy, in addition to our practices in India and Russia and our trade research facilities along the Belt & Road Initiative.
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