The policy changes greatly affect the medical device industry

According to the April 26th report from the medical network, the new version of the Regulations is at the core, and departmental rules are the main body, supplemented by regulatory documents. China has established a medical device regulatory system that covers the entire process of medical device supervision. What are the implications for the medical device industry brought about by drastic changes in regulations and systems? Where should the relevant companies go? This paper will explore this issue.

The construction of China's medical device regulatory system began with the implementation of the Regulations in 2000. After two revisions in 2014 and 2017, the framework of the regulatory system has been basically established. According to the needs of the product life cycle management, the management department The supporting regulations have been substantially revised, basically reconstructing the contents of the original medical device regulatory system (see Table 1 for the medical equipment life cycle supporting regulations). At the same time, a special approval procedure for innovative medical devices has also been issued. 》"Medical Device Priority Approval Procedures""Medical Device Manufacturing Quality Management Regulations""Medical Device Operational Quality Management Standards" and other regulatory documents. In addition, in order to promote the implementation of these management practices, the CFDA uses various notices, announcements, and notices. There are nearly a hundred normative documents issued in such forms. These legislative work have established administrative regulations, departmental regulations, and regulatory documents as the main framework of the three-tier regulatory system. All this shows that medical device policies and regulations are undergoing a tremendous change.

According to statistics of Evaluate Med Tech, the global medical device sales volume in 2015 was US$390.3 billion, and the global medical device sales volume grew steadily from 2011 to 2015, with a compound annual growth rate (CAGR) of 1.90%. According to data from leading companies in the medical device industry, the composite annual growth rate of the world's medical device industry will reach 5% in 2015-2020, and the market size will reach US$514 billion by 2020. According to this growth rate, the 2016 global medical device The sales volume is 406.3 billion U.S. dollars. The development of China's medical device industry is even more noticeable in the world. Since entering the 21st century, the domestic industry has entered a period of rapid growth. The total sales volume has grown from 17.9 billion in 2001 to approximately 255.6 billion in 2014. , an increase of 14.28 times, the growth rate of the domestic medical device market is much higher than the global, becoming the world's second largest medical device market after the United States. The total market size of domestic medical devices in 2015 is approximately 308 billion yuan, 2015-2020 The medical device market will maintain a 20% growth rate. According to this growth rate, the scale of domestic medical device sales in 2016 was 369.6 billion yuan, the scale of the domestic medical device market. Greatly higher than the global growth rate, it is expected to reach 494.23 billion yuan in 2017, and the compound annual growth rate is expected to be 15.4%.

Medical devices are a strictly regulated industry and have qualification requirements for production and management entities. The revision of laws and regulations will have a significant impact on the scale of the industry, which is mainly reflected in the change in the number of qualified individuals. After the first amendment to the 2014 Regulations, the requirements Enterprises producing Type II and Type III medical devices should obtain a “Medical Device Production Permit” and require enterprises operating Type II medical devices to obtain operational record vouchers. Enterprises operating Type III medical devices should obtain “Medical Devices”. Business license. From Table 2, we can see that from 2012 to 2014, the number of enterprises holding licenses, due to the absence of major changes in regulations, both medical device manufacturers and operating companies, have shown a slow growth.

In 2015, the number of medical device manufacturing companies and operating companies were both promoted by the implementation of the new version of good manufacturing practices (GMP) and the first edition of the good supply practice (GSP) for medical devices. There was a decrease. Some manufacturing companies that did not meet the GMP requirements for medical devices and those that did not meet the GSP requirements for medical devices were eliminated. This shows that the New Deal has had an immediate impact on the industry.

In 2016, the total number of manufacturing and operating companies increased, indicating that more social resources continue to flow into the Chaoyang industry, a medical device.

From Table 3, we can better understand the impact of the implementation of new policies and regulations on different types of medical device manufacturing enterprises. From 2012 to 2015, the enterprises engaged in the production of the first type and the second type of medical devices are generally growing. Status. For the manufacturers of the third type of medical devices, there was a slight increase every year from 2012 to 2014, but it decreased in 2015 and 2016. This was in line with the state's request for the production of the third type of medical devices in March 2015. There is a direct relationship between the enterprise's full implementation of medical device GMP and non-compliance of the production quality system and the failure of rectification is directly eliminated.

In addition, China began to implement the “Medicine and Medical Device Flight Inspection Methods” from September 2015. The management department used flight inspection methods to conduct intensive and non-informative administrative inspections on medical device manufacturers. In 2016, all types of manufacturing enterprises The number has declined, which is not unrelated to the severe flight inspections that eliminated poor companies.

The listing of medical device products is a 'barometer' of industry development. Newly implemented policies and regulations have a direct impact on the number of product filings and registrations. As shown in Table 4, the 2014 “Regulations” will govern the registration of Class I medical device products. After adjusting to record management, the number of registered products has increased significantly, with a growth rate of 63.5%. The significant increase in the record-keeping rate of Type 1 medical devices was mainly due to the fundamental change in the management of Type 1 medical devices and the change from registration management. For the record management, stimulated the growth of the first type of medical devices.

At the same time, the number of first registrations for category II medical devices decreased from 7,029 in 2015 to 6,093 in 2016, a decrease of 13.31%; the number of first registrations of imported medical devices decreased from 1,559 in 2015 to 2016. 1037 cases, a decrease of 33.48%. The decrease in 2 data indicates that the verification of the authenticity of the clinical trial data for medical devices carried out in 2016 had a material impact on the company’s initial registration declaration. In addition, the registration fees for medical devices started in 2015 The system also made the registration of enterprises more cautious, and affected the number of registration applications for medical device manufacturers. Under the influence of these policies, the company's filing and registration activities were more standardized, and the quality of product filing and registration applications was improved.

It is worth noting that in 2016, in vitro diagnostic reagents emerged suddenly and accounted for a large proportion of registered products. From the registration data released by the CFDA, the number of registered IVD reagents accounted for 43% of the total number of registrations in the third type of medical devices in China. Of the imported medical devices, the number of in vitro diagnostic reagents registered accounts for 33% of the total number of registrations. These indicate that the share of in vitro diagnostic reagents will increase in the medical device industry.

In March 2014, China began implementing the “Special Approval Procedure for Innovative Medical Devices” to allow special approvals for innovative medical devices that meet the requirements. The starting point of this policy is to shorten the registration review time for innovative medical devices to accelerate the time to market. However, innovative medical device products are high-tech and interdisciplinary products with high risks and difficult technical evaluations, resulting in long review cycles and low efficiency. Slow, resulting in the policy can not fundamentally promote the innovative development of the medical device industry.

From Table 5, it can be seen that after the implementation of the special approval procedure for innovative medical devices, the throughput and market volume of innovative medical devices have been steadily increasing in 2014-2016, but due to the increasing filing volume, the listing rate has been slightly ups and downs. 2015 In 2009, CFDA approved the registration of 9 products such as acellular keratocyte matrix (including 5 active medical devices, 3 in vitro diagnostic reagents, and 1 passive medical device). In 2016, approved the registration of 3D cardiac electrophysiological mapping systems, etc. 10 products are listed (including 6 active medical devices, 3 passive medical devices, and 1 in vitro diagnostic reagent). 2016, regardless of the number of applications for registration of innovative medical devices, or the throughput after review, and finally The number of approved listings has risen, indicating that the special approval of innovative medical devices will continue to promote the upgrading of industrial technology and products.

From the above analysis, we can see that the medical device industry is quite sensitive to the changes in policies and regulations. A slight change in relevant policies and regulations will lead to a direct reaction from the industry. As medical devices are closely related to people's lives and health, the state must It implements the most stringent supervision, and its impact on the development of the industry is undoubtedly far-reaching.

After a large-scale change of policies and regulations, the development environment of the medical device industry will also undergo great changes. This change in influence is mainly reflected in the tightening of the institutional environment and the revitalization of the industrial environment.

(1) After the adjustment of policies and regulations, the 'cage' of the medical device management system has been woven tightly, strict supervision has become the main axis of industrial management, and the institutional environment has become strict. September 1, 2017, Supreme People's Court, Supreme People's Procuratorate The interpretation of certain issues concerning the applicable laws of criminal cases for the application of drugs and medical device registration for criminal cases was officially implemented. This judicial interpretation included the fraud of clinical trial data of drugs and medical devices into the criminal law, and further strengthened the strict supervision of the industry at the level of punishment. The judicial interpretation stipulates that drug non-clinical research institutions, drug clinical trial institutions, contract research organizations, medical device clinical trial institutions, drug and medical device registration application units, and drug and medical device supervision departments and their staff intentionally provide false medical devices. The clinical trial report and related materials, if the circumstances are serious, shall be investigated for criminal responsibility for providing false documentation. In addition, frequent inspections by the management department, 'double-random' inspections, random inspections, and verification of the authenticity of clinical data, etc. Activities also make the institutional environment of the industry become stricter .

On May 4, 2017, the State Council issued a decision on amending the "Regulations on the Supervision and Management of Medical Devices" (hereinafter referred to as the "Regulations"), which is already the second revision of the 'mother law' of the medical device industry in a short period of time. Aroused great concern from companies in the medical device industry. In 2014, after the first revision of the "Regulations", the management department substantially updated the supporting departmental regulations so that all links in the whole process of medical devices could be followed.

It can be seen from Table 6 that the total number of administrative penalties has been undulating in 2012-2016. The total number of cases investigated and punished in 2015 dropped sharply, and it rebounded in 2016. This shows that after the amendment of the “Regulations”, due to unfamiliarity with new penalties, management The agency's ability to investigate and deal with illegal activities has weakened, but it has increased in the later stages. Since 2013, the amount of fines has been steadily rising as a major penalty indicator, indicating that the intensity of supervision and penalties for medical devices continues to increase. The penalties have been increased. It is not uncommon for companies to be fined up to nearly 10 million yuan due to compliance issues in their production and operation. This is a failure of the majority of medical device manufacturers.

(2) The introduction of a series of favorable policies on encouraging industry innovation and development brings new opportunities for development in the industry, and the industrial development environment tends to be active. In addition to the “Special Approval Procedure for Innovative Medical Devices” policy will continue to promote industrial technologies and products. In addition to innovation, the “Priority Approval Procedure for Medical Devices”, which began in January 2017, will speed up the treatment of rare diseases. The malignant tumors have obvious clinical advantages or are listed in major national science and technology projects.

From May 11 to May 12, 2017, the CFDA issued four consecutive promotions on the 52nd, 53rd, 54th, and 55th in 2017. drug medical instruments The announcement of the Innovation Policy Consultation Draft reflects the trend of reforms in the management of pharmaceuticals and medical devices. Among the four drafts, the policy trends closely related to medical devices mainly include the following: First, the establishment of a medical device review team responsible for innovation Reviewing and implementing a project manager system for medical devices, which will directly improve the efficiency of review of current innovative medical devices and enhance the fairness of their review; Second, the qualification of medical device clinical trial institutions shall be changed to record management, encouragement Social capital invests in setting up clinical trial institutions, perfecting the ethics committee mechanism, and accepting overseas clinical trial data for medical device registration review. This not only provides a means to improve the current dilemma of insufficient medical device clinical trial institutions, but also enables some to have overseas clinical practice. Experimental resources enterprise Can seize the opportunity for registration approval; Thirdly, it will extend the experience of the implementation of the drug market holders' license implementation system to the medical device registration process, improve the medical device adverse event reporting and re-evaluation system, establish a professional medical device inspector team, etc. The production and registration of medical devices will be further unbundled to relax the restrictions on medical device registration applicants, thereby stimulating industrial innovation and development.

On October 8, 2017, the General Office of the CPC Central Committee and the General Office of the State Council issued the "Opinions on Deepening the Reform of Review, Approval, and Approval System and Encouraging the Innovation of Drugs and Medical Devices", and made top-level designs to solve the above problems. Some have long plagued the medical device industry. The bottleneck of innovation and development will be broken, which will have a profound and significant impact on the innovation and development of the medical device industry.

From the above analysis we can see that the medical device policy Regulation It is currently undergoing a period of change and presents a clear and severe trend. In an increasingly stringent industrial environment, the flexibility of policies and regulations has brought development opportunities to the industry. In the future, companies must make great efforts to improve quality and compliance. In order to meet strict regulatory requirements; also be good at using policy dividends to capture rare development opportunities.

1. Grasp the direction of development of medical device policies and regulations.

The “Opinions on Deepening the Review, Evaluation, and Approval System Reform to Encourage the Innovation of Drugs and Medical Devices” reflects the latest developments in industrial management. Enterprises should accurately grasp the trends in the development of medical device policies and regulations, and plan and plan new development plans as soon as possible. Especially with regard to medical treatment. In the review of equipment registration review, companies should pay close attention.

2. Do a good job of quality compliance management of medical devices before listing.

In a strictly regulated industrial environment, companies must solidly perform their legal obligations as stipulated by laws and regulations. In particular, they must do a good job of managing the quality of medical device products before they are put on the market. Companies should be responsible for R&D, inspection, clinical trials, registration, and production. In the pre-IPO period, the company fulfilled its obligations under laws and regulations to ensure the effective operation of the quality management system. The newly revised "Regulations" in 2017 has changed the qualifications of medical device clinical trial organizations to record management, which is already in the process of legislation. Previously, drugs have established a record management system for clinical trial institutions. In the future, more qualified institutions will be able to provide professional clinical trial services. This is of great benefit to the quality of medical devices. However, as mentioned above, In case of material fraud in the process of medical device registration application, if the circumstances are serious, it may be held criminally liable. Severe liability regulations should be a red line that companies cannot touch.

3. To fulfill the main corporate responsibility of the medical device after listing.

In the future, based on the needs of product life cycle management, the focus of management will continue to shift from pre-market approval to post-market monitoring. This will also require companies to assume a consistent legal obligation throughout the industrial development process. Medical device manufacturers and users According to the adverse event monitoring, re-evaluation and recall related regulations of listed products, actively report adverse events and recall defective products. Enterprises should strengthen self-discipline and strictly control product quality , Preventing adverse events from causing an impact on the industry. Medical institutions should deal with in-use medical devices to manage them centrally, so that they can concentrate their limited manpower, financial resources, and energy on medical technology, enhance their connotations, continue to innovate, and improve the level of diagnosis and treatment. Quality makes medical technology richer.

4. Implement industrial industry differentiation strategy.

Currently, the medical model is shifting from the previous diagnostic-therapeutic model to the preventive-diagnosis-therapeutic-rehabilitation-health care model. In this context, medical needs will show new trends. Home medical instruments, home assisted robotics equipment, and CBR With medical equipment, technologies and products for electronic health records will become new hot product areas. In the new regulatory and policy environment, 3D printing medical devices, mobile medical devices, gene sequencing, home medical devices and other sub-sectors should Seize the opportunity to gain a competitive advantage with a differentiated development strategy.

Since 2014, the drastic changes in China's medical device policies and regulations have changed the environment for industrial development. The medical device industry has experienced a double watershed system and industry. Under the background of the rapid development of medical device policies and regulations, the subject of strict industrial supervision It will remain unchanged in the future for a long time. Under the background of this huge change in policy and regulations, the medical device industry is also faced with rare opportunities for development. If companies can comply with changes in laws and regulations, they will strictly carry out production and business activities under the framework of the law and perform their tasks well. The main responsibilities of the company, focusing on innovation in technology and products and implementing differentiated competition strategies, will surely push industry development to a new level.