Chinese regulators crack down on noncompliant medical products

We talk a lot about China as the world's factory, manufacturing and assembling goods for export, but the domestic market is equally worthy of our attention, as the country's urban population becomes avid consumers. The leading edge of this consumerized society is a burgeoning middle class—larger in size than the entire population of the United States—and it is demanding access to quality healthcare. Consequently, many large medical device manufacturing firms headquartered in the United States and Europe are producing medical devices in China, not for export, but for in-country use. Historically, it has not been simple to move a medical product through China's regulatory approval maze, but measured improvements have been implemented or are on the way. An article just posted by sister publication European Medical Device Technology provides a timely update on the evolving regulatory process in China.

China's medical market is projected to grow to $11.4 billion by 2015, according to research conducted by UBM Canon, the parent company of PlasticsToday. The country has enjoyed double-digit growth in healthcare for many years now, and that is not about to wane, as an expanding middle class, nearing 40% of the population, demands medical care commensurate with its socio-economic clout. The medtech market is expected to reach near parity with the developed nations of Europe by 2020, according to PwC China.

Because of several scandals and cases of fraud, the government made a number of changes to the regulatory system during the 2000s. The Chinese government set a dramatic example that it meant business in 2007, when the head of SFDA (now called CFDA), China's version of FDA, was sentenced to death for taking bribes.

The government continues to show resolve in ridding the country of counterfeit and unsafe medical devices. Just this month, authorities arrested 20 people who were allegedly involved in making and selling fake condoms and another 19 suspects were rounded up for the fabrication and sale of bogus medical devices. The two cases reportedly yielded millions of dollars worth of unsafe medical products. In making the announcement, CFDA noted that it plans to introduce new regulations in the coming months.

In the article published in EMDT, Julian Busch of Germany-based MPR GmbH and China Certification Corp. outlines some of the changes that are on the horizon.

There will be tightened monitoring of medical products and "stiffer penalties for manufacturers who are not in compliance with the [regulatory] requirements," writes Busch. You can expect substantial penalties, he adds, especially if you manufacture Class III (high-risk) devices. "Penalties up to 20-times the value of the medical device as well as criminal charges are possible for manufacturers, distributors, and buyers," he cautions.

On the other hand, legislation that went into effect last month relaxed some requirements on Class II devices, many of which will no longer require clinical trials. The catch, adds Busch, is that CFDA can request clinical trials for Class II devices on a case-by-case basis.

So, it seems that some opacity has been preserved in the regulatory process. Although conducting business in China probably will never be straightforward, medical device manufacturers have at least one compelling reason to persevere: The government has shown determination in providing something akin to universal healthcare to its vast population, but over half of the medical equipment in use is, technologically speaking, stuck in the 1980s, according to the China Association for Medical Devices Industry.

It's easy enough to do the math.

— Norbert Sparrow

Norbert Sparrow is Senior Editor at PlasticsToday. Follow him on twitter @norbertcsparrow and Google+.