1

The Comparison in

Medical Device

Regulation in China and

US

Challenges and Opportunities

Mingzi Deng

1

Contents

1. Background - Rapidly developing China ................................................................ 1

2. Chinese Medical Device Industry Snapshot ........................................................... 2

2.1 The Current Medical Device Market ............................................................ 2

2.2 Forecast and Potential Market ...................................................................... 2

2.3 Where is the medical device industry located? ............................................ 3

2.4 Where are the medical devices imported from? ........................................... 4

3. Medical Devices Regulatory Authority in China and US ....................................... 4

3.1 Medical Devices Regulatory Authority In China ......................................... 4

3.2 Medical Devices Regulatory Authority In US ............................................. 5

3.3 The Comparison of SFDA and FDA structure ............................................. 6

4. The Comparison of Medical Device Definition...................................................... 7

4.1 The Definition of Medical Device in China ................................................. 7

4.2 The Definition of Medical Device in US ..................................................... 8

4.3 The Comparison of Medical Device Definition ........................................... 9

5. The Comparison of Classifications of the Medical Device .................................. 10

5.1 The Classification of Medical Devices in China ........................................ 10

5.2 The Classification of Medical Device in US .............................................. 10

5.3 The Comparison of Classification of Medical Devices .............................. 11

6. The Differences of Medical Devices Administration System in China and US ... 12

2

6.1 The Legal Status ......................................................................................... 12

6.2 The Administration Status .......................................................................... 13

6.3 Opening Information .................................................................................. 14

6.4 Dealing With Adverse Events ..................................................................... 14

7. How to Improve the Chinese Medical Device Registration System..................... 15

7.1 Establish and Standardize the Nomenclature of Medical Devices ............. 15

7.2 Adjustment of the Product Classification. .................................................. 16

7.3 Scientific Clinical Trails for Medical Devices ........................................... 16

8. Challenges in Chinese Medical Devices Industry ................................................ 17

8.1 Standards in different levels are different ................................................... 17

8.2 Laws and Regulations are Constantly Changing ........................................ 17

8.3 Limited Official Announcement in English ............................................... 18

8.4 Much more Complex Relationships between Chinese Industry and

Government........................................................................................................... 18

9. Opportunities in Chinese Medical Devices Industry ............................................ 19

10. Conclusion ............................................................................................................ 19

References .................................................................................................................... 21

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1

1. Background - Rapidly developing China

China has the largest population

in the world, which is estimated at

more than 1.3 billion. Since opening

the economy to the West in 1978,

China’s economy has had an

unbelievable growth in these past 30 years. In the last decade, China has kept a rapid

GDP (Gross Domestic Product) growth rate at approximately 10%. According to the

data from the World Bank (Fig.1), from 2003 to 2008, China keeps a growth rate of

GAP over 9%.

In 2009, China’s GDP is 4984 billion

USD (The World Bank, 2009), and in this

year, China’s GDP is estimated to 5738

USD (EBI, 2007). Although the per capita

wealth is still low based on the large

population, China still is one of several

countries which can keep economic growth during the financial crisis. Figure 2 shows

the export and import levels in recent years. It is obviously that the trade level

quadrupled from 2002 to 2008 (The Word Bank, 2009). Based on its rapid

development and huge population, China has the potential to be an important part of

the global market, which includes the medical device market.

Figure 1

Figure 2

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2. Chinese Medical Device Industry Snapshot

2.1 The Current Medical Device Market

It is obviously that China is a very potential market, so how is the current

medical device market going? China is a large market, but how big it is, several

reports give us different answers. According to the data from Osec Business Network

Switzerland (OBNS), China’s medical device market in 2005 was 6.2 billion USD

(OBNS, 2007). Based on the Espicom Business Intelligence (EBI) estimated, it was

13.7 billion USD in 2006, with a 12.9% increasing from the last year (EBI, 2007). It

means that EBI estimated the China’s market as 12.1 billion USD, which is doubled

as the OBNS’s result. Otherwise, according to the report from the National

Development and Reform Commission (NDRC), in 2004, the medical device market

size was 6.6 billion USD; in 2005, it was 7.3 billion USD (NDRC, 2005).

2.2 Forecast and Potential Market

The three reports mentioned in last part have three different results, because

these are all independent research. Generally speaking, the report from NDRC should

be more authoritative as a Chinese official report. Although it does not have a unified

result, there’s one thing in common – all these report agreed that China is a very

potential market. EBI predicted the annual growth rate of the market in the period

2006-2011 is 11.1% (EBI, 2007); NDRC said it keeps a growth rate as 9 percent per

year (NDRC, 2005); and according to the data from OBNS, the supply of medical

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device in Chinese market only met approximately 60 percent of the demand from

2003 to 2005, despite the numbers of manufacturers increased 19% from 356 in 1985

to 10,447 in 2004 (See Figure 3; OBNS, 2007).

2.3 Where is the medical device industry located?

As the most populated country in the world, China has several economic

developing clusters, which is also related to the regional population. For instance, in

2007, according to the official data, Guangdong province had the largest population as

94.5 million people, equal as 7.2% of the total, and the Pearl River Delta, as one of

the famous industry zone in China, is in there. Eastern China, which is the most

populated region in the country, inhabits 379.8 million people, and includes the

Yangtze River Delta and the Circum-Bohai-Sea Region. The Pearl River delta,

Figure 3

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Yangtze River delta and the Circum-Bohai-Sea Region are the areas where the

medical device industry concentrates in. The sales income and output value in these

three regions account for over 80% of the national total (EBI, 2007; Report, 2009).

2.4 Where are the medical devices imported from?

“In the first half of 2007, the

top countries for China's medical

device imports remained the

United States, Japan and Germany.

China imported 580 million USD

worth of medical device from the

US, an increase of 11.15% over the

previous year; 350 million USD from Germany, an increase of 16.33%; and 330

million USD from Japan, a drop of 3.17%. In fact, 65.26% of all China's medical

device imports came from these three countries (See Figure 4; China, 2007).”

3. Medical Devices Regulatory Authority in China and US

3.1 Medical Devices Regulatory Authority In China

The main medical devices regulatory authorities in China include the State Food

and Drug Administration (SFDA), General Administration of Quality Supervision,

Inspection and quarantine (AQSIQ), Ministry of Health (MOH) and Department of

Commerce (DOC). The SFDA is mainly responsible for the medical devices

Figure 4

5

registration and supervision. The AQSIQ’s main responsibility is to supervise the

medical devices market, especially the import and export parts. The MOH is in charge

of supervising all the hospitals and healthcare centers. The DOC is responsible for the

macroeconomic regulation and control, and the policy implement on the medical

device industry.

There are two departments in SFDA related to the medical device – Department

of Medical Devices and the Inspection Bureau. The Department of Medical Devices is

responsible for the medical devices research and producing progress. The Inspection

Bureau supervises the process of medical devices distribution and using, and punishes

the manufacturers who build the unlicensed medical devices. These two departments

have their own responsibility, but also cooperate with each other, in order to ensure

the safety and effectiveness of the medical devices.

There are 5 offices under the Department of Medical Devices – the General

Office, the Registration Office I, and II, the Office of surveillance of manufacturing

and distribution, and the Office of Device Research and Evaluation. There are 5

offices under the Inspection Bureau – the General Office and the Inspection Office I,

II, III and IV. The Inspection Office II is the one who punishes the manufacturers who

build the unqualified medical devices (SFDA, 2010).

3.2 Medical Devices Regulatory Authority In US

The Food and Drug Administration (FDA) is one of the most respected

administrations in the world with a long history in the United States. The FDA

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compromises several offices and centers. In FDA, Center for Devices and

Radiological Health (CDRH) is the medical devices regulatory authority. It includes

the Office of the Center Director, the Office of Communication, Education, and

Radiation Programs, the Office of Compliance, the Office of Device Evaluation, the

Office of in Vitro Diagnostic Device Evaluation and Safety, the Office of

Management Operations, the Office of Science and Engineering Laboratories and the

Office of Surveillance and Biometrics.

There are other important offices in the FDA, which enforces the laws related to

medical devices and other products that the FDA regulates, called the Office of

Regulatory Affairs (ORA). It is considered the "eyes and ears" of the agency, it

includes 5 regional offices and 20 district offices; it is kind of similar as the

Investigation Bureau in the SFDA in China (About the CDRH, 2010).

3.3 The Comparison of SFDA and FDA structure

Based on the different national status, there is no one-to-one correspondence

between the departments in SFDA and FDA, although the main purpose is the same –

to protect and promote public health. Therefore, based on the same purpose and the

different national status, we can only know which departments have the similar

responsibilities. For instance, the Office of Regulatory Affairs (ORA) in FDA has the

similar responsibilities as the Department of Commerce (DOC) and part of the

Investigation Bureau; the Office of Device Evaluation, the Office of in Vitro

Diagnostic Device Evaluation and Safety, the Office of Science and Engineering

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Laboratories in FDA are similar as the Office of Device Research and Evaluation in

SFDA; the Office of Surveillance and Biometrics in FDA is in part similar as the

Office of surveillance of manufacturing and distribution in SFDA (See Figure 5).

Actually, it might not be suitable to compare these different departments in FDA and

SFDA, because the different registration and regulation system, although they have

the same purpose.

4. The Comparison of Medical Device Definition

4.1 The Definition of Medical Device in China

According to the Regulations for the Supervision and Administration of Medical

Devices (Decree of the State Council No. 276) (Regulations, 2000):

Any instrument, apparatus, appliance, material, or other article whether used

Figure 5

8

alone or in combination, including the software necessary for its proper application. It

does not achieve its principal action in or on the human body by means of

pharmacology, immunology or metabolism, but which may be assisted in its function

by such means; the use of which is to achieve the following intended objectives:

1) Diagnosis, prevention, monitoring, treatment or alleviation of disease;

2) Diagnosis, monitoring, treatment, alleviation of or compensation for an injury

or handicap conditions;

3) Investigation, replacement or modification for anatomy or a physiological

process;

4) Control of conception.

4.2 The Definition of Medical Device in US

FDA defines a medical device as "an instrument, apparatus, implement, machine,

contrivance, implant, in vitro reagent, or other similar or related article, including a

component part, or accessory which is:

1) recognized in the official National Formulary, or the United States

Pharmacopoeia, or any supplement to them,

2) intended for use in the diagnosis of disease or other conditions, or in the cure,

mitigation, treatment, or prevention of disease, in man or other animals, or

3) intended to affect the structure or any function of the body of man or other

animals, and which does not achieve any of its primary intended purposes through

chemical action within or on the body of man or other animals and which is not

9

dependent upon being metabolized for the achievement of any of its primary

intended purposes (FDA, 2010)."

4.3 The Comparison of Medical Device Definition

The definitions of Medical Devices in China and the US are similar, but still

have several differences, such as:

1. In China’s definition, it is seeing the medical used software as medical

devices, but the US doesn’t. The software does not mention in the definition

of medical devices, however, the US FDA has the “General Principles of

Software Validation,” and the software validation also administrates by the

Center for Devices and Radiological Health (CDRH). Therefore, this is just a

descriptive difference.

2. The US emphasizes that the devices are “recognized in the official National

Formulary, or the U.S. Pharmacopoeia, or any supplement to them.” The

FDA has a database which can check the classification of the medical devices,

whereas China has the “Product Classification Catalog of Medical Devices.”

3. The US contains the devices for “the other animals” as medical devices,

which China does not. China has a veterinary department the Ministry of

Agriculture administrates the veterinary devices. Thus, in China, medical

devices related to “the other animals” do not administrate by the SFDA; and

in the US, all medical devices administrate by the US FDA.

4. In the China’s definition, the devices related to controlling of conception are

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medical devices. In the US, there are no such words. Although I reviewed the

“Product Classification of Medical Devices,” I cannot find any devices

related to the control of conception.

5. The Comparison of Classifications of the Medical Device

5.1 The Classification of Medical Devices in China

The classification of medical devices in China divides by three risk levels from low to

high (Regulations, 2000).

Class I Medical Devices: safety and effectiveness can be ensured through routine

administration;

Class II Medical Devices: further control is required to ensure their safety and

effectiveness;

Class III Medical Devices: implanted into the human body, or used for life support or

sustenance, or pose potential risks to the human body and thus must be strictly

controlled in respect to safety and effectiveness.

5.2 The Classification of Medical Device in US

Class I: General Controls

Devices for which general controls are sufficient to ensure safety and effectiveness

Pose minimal harm to user.

Examples: bandages, examination gloves,

Class II: Performance Standards and Special controls

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General controls determined to be insufficient to provide reasonable assurance of

safety and effectiveness

However, there exists sufficient information to establish performance standard to

provide such assurance

Higher risk that class I

Examples: wheelchairs, infusion pumps, daily wear contact lenses, urological catheter,

condoms

Class III: Premarket Approval

Stringent regulatory class

Used for life-sustaining or life-supporting purposes, those implanted in the body and;

Those presenting potential unreasonable risks of illness or injury

These devices have insufficient information to provide reasonable assurance of safety

and effectiveness

Examples: overnight wear contact lenses, replacement heart valves, cardiac stents

(Part 860, 2010)

5.3 The Comparison of Classification of Medical Devices

The US FDA is the one who proposed to classify the medical devices in order to

improve the management effectiveness; The European Union and China have

followed and modified the pattern. The European Medical Devices Directive (MDD)

divides medical device products into 4 levels – I, IIa, IIb and III, as the US and China

have 3 levels. The Global Harmonization Task Force (GHTF), which is an unofficial

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international organization focus on achieving greater uniformity between national

medical device regulatory systems, considers the 4 level European classification is

more reasonable. The EU classification system is based on the principle of

classification; the US is based on the medical devices classification database, with the

experts support. Compare with EU and US, China uses the product classification

catalog of medical devices, similar as the US classification database, but also use the

principle of classification. Briefly, based on its unique status of the medical device

market, China learned from US and EU on the medical device classification.

Otherwise, the proportion of high-risk level medical devices is different in these three

systems. In EU and US, the medical devices divided into level III are much less than

the ones in China. Actually, too many products divided into level III will give the

manufacturers a heavy burden, and cause the low effectiveness on the governmental

administration.

6. The Differences of Medical Devices Administration System in China

and US

6.1 The Legal Status

In the United States, the medical device related laws were passed by the congress.

The current laws related to medical device include “Federal Food, Drug, and

Cosmetic Act (FD&CA)”, “Fair Packaging and Labeling Act”, “Medical Device

Regulation Act”, “Food and Drug Administration Modernization Act” and “Medical

Device User Fee and Modernization Act (MDUFMA).” All these laws were passed by

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the US congress. The Federal Food, Drug, and Cosmetic Act, as the basic law in

medical device regulation, has been modified many times, and has very detailed rules

for the specific medical devices, such as the definition on mislabeled or unqualified

medical devices. Other countries always use US standard as the reference standards.

The China’s “regulations on supervision and management to medical devices”

was promulgated by the State Council, so the legal status is not as high as the US

FD&CA. The detailed rules in China’s regulation are not so specific, because China

does not have so much experience as US does. Otherwise, there are some overlapped

responsibilities between the different departments.

6.2 The Administration Status

FDA is a federal agency, and it has district offices in more than hundred cities.

Compare with the FDA, SFDA has 2 levels, besides the national level, there is a

provincial level, which lead the city and country levels below. There are more than

hundred city level agencies and thousands country level agencies all over the nation.

The FDA model is more appropriate to implement the policies.

The administrational level differences are caused by the different political

systems. The United States is a federal country; every state has its own autonomous

rights. The federal government only controls inter-states and international business.

The federal government set the agency like FDA because the medical devices relates

to people’s health. It is serious, and need the communication between all the states, so

the states do not need to have their own state-level FDA, all in charge by FDA.

14

Compare with the US, China is a centralized country, the city level agencies lead by

the provincial level and national level agencies at the same time. China built the

surveillance and communication network from nation level to city level, in order to

enhance the management of medical devices.

6.3 Opening Information

FDA is one of the most respected administrations in the US legal system,

although it has been doubted in recent years. According to the official survey, the

approval rate of FDA is higher than the federal government. Even after the Vioxx

event, the FDA planed to have some innovation. The way FDA can get support from

public is the scientific decision-making, information opening and propagandizing

widely. FDA not only has the experts to evaluate the advanced medical devices, but

also prefers to get feedback from the public and make improvement. This is the way

FDA keeps a good relationship with the public.

Compare with FDA, SFDA emphasizes the pre-market approval and supervision.

All the medical devices need to get the pre-market approval, and the manufacturer

who produce level II and III medical devices also need the certification. The transfer

to pay more attention on post-marketing supervision will spend a long time for SFDA.

6.4 Dealing With Adverse Events

FDA and SFA have different ways on dealing with adverse events. If the FDA

meets such problems, their main actions will be correction and punishment. The FDA

15

encourages the manufacturers recalling the products, and sometimes the problem can

be solved by improve the product or correct the management on-site. Otherwise, the

FDA will release the warning letter to the public or the manufacturer. If the

manufacturer does not do anything, the FDA will enforce the punishment. SFDA has

the similar punishment policy as FDA, but it is has more freedom. In China’s medical

device regulation, there is specific punishment for the slightest illegal act, and there is

no policy about recalling and releasing a warning letter.

7. How to Improve the Chinese Medical Device Registration System.

7.1 Establish and Standardize the Nomenclature of Medical Devices

The naming of medical devices is a scientific nomenclature which should be

simple, practical, scientific and standard. The uniform of the medical device products’

name is directly connected with the uniform of medical devices market. All the

non-standard names, deceptive name and the name departure the legal advertising

regulations should be removed or corrected. Government should build a completed

system to standard the requirements of medical devices marketing, the testing

methods, and the guidelines for technical reviewing.

US FDA has already established a detailed naming system of medical devices. It

can also be used in China. But the most important thing now is to establish the

nomenclature for medical devices. In general, the name of medical devices is very

important as the basic theory and combined with functional objects, producing

purpose, forms and other elements.

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Standard name of medical devices should be regularly edited and announced in

public, then supervised by people and market.

7.2 Adjustment of the Product Classification.

The current category version of medical devices classification in China is too old

with unclear and unscientific standards. Different class of medical devices should

have different principles and different requirements followed with the general control,

special control and high-risk control.

Senior scientists reviewing or auditing review is necessary when it is unsure how

to make a product name. Classification should not proved only by a report from

manufacturer or a governor. Only the relevant departments of State Council on the

substantive reviewing and products evaluation can give the correct name.

7.3 Scientific Clinical Trails for Medical Devices

In Chinese pharmaceutical industry, not all the medical devices need to do the

clinical trail, some of which need to do the clinical trail even investigation after being

published, some of which only need to do the results comparison testing with another

similar functional equipment if the medical device is under a low management risk.

Different situation should be treated different.

Building the technical guidelines for different types of medical devices, different

type of clinical trails and clinical validations is the first important thing to do on

current situation to make clear requirements. The guideline should be built under the

17

control of government administration.

8. Challenges in Chinese Medical Devices Industry

8.1 Standards in different levels are different

In China, manufacturing and management standards always changed with the

development of technology, which makes a big challenge for companies and agents.

An application or manufacturing procedure used in one product can never be used in

another product. Governmental document said that “changes occur to the national

standards or industry standards for which the product standards are adopted, medical

devices which had received registration approval…should approved according to

original standards…however, the medical device should be manufactured according

to the new version”. It is unclear here that which version of standard we should follow,

the national standard, the industry standard or the product standard? And which

should be the original standard? Those confusing information also happened

frequently in all the related standards.

8.2 Laws and Regulations are Constantly Changing

Not only the standards, but also the laws and regulations are constantly changing.

Take the State Council Order 276 for example. Order 276 is regulation for the

supervision and administration of medical devices, governing China’s health sector. It

is enacted in April 1st, 2000 and has been amended on several occasions by “red

letters”, which is given legal effect. But until Sep. 6, 2010, Order 276 has been

18

amended 6 times, expanded from 6 chapters, 48 articles to 9 chapters, 88 articles.

8.3 Limited Official Announcement in English

The SFDA website is using simple Chinese as the official language which is hard

for foreign companies to understand and follow. Chinese government updates latest

domestic news about the safety of food and drug, also the policies and rules

frequently through the State Food and Drug Administration on its website. But all the

information is written in Chinese. The English translated website of SFDA does not

include all the information from the original webpage and only updated monthly with

few news and regulation guidelines. Some translations of regulations provides in

“Chinglish” which means “Chinese English”. “Chinglish” can annoy readers, and

embarrass non-native English speakers and always make them misunderstand the real

meaning of Chinese regulations and policies.

8.4 Much more Complex Relationships between Chinese Industry and

Government

With the development of thousands of years, relationship becomes very

important in Chinese culture. The same in health industry, all the business man in

medical device field have to learn the relationship between human beings, the

relationship between government and industry, the relationship between consumers

and producers. The manufacturer has to be aware of consumers’ needs and will take

them into account when deciding the course of the future actions which concern or

19

could concern themselves without any specific discussion or request. The

manufacturer should also consider about how to build a good relationship with

government and public, which is a big challenge for those who are not really familiar

with Chinese culture and custom.

9. Opportunities in Chinese Medical Devices Industry

April 6, 2009. Chinese government announced a new reform scheme on medical

and health system. About RMB 850 billion (about 127 billion dollars) will be invested

through 2009- 2011 to promote medical and health system reform, which is a good

news for both domestic and international medical device manufacturers. Expert in

related field estimated that at least RMB 16 billion will be used in Medical Device

investment. This is a big opportunity for those competitive companies which want to

expand capital in international market to fight for the benefits from this reform.

For those developed countries, they have competitive advantages to develop the

most advanced technologies or import new products to Chinese market. In China, they

don’t have any domestic medical device companies with the capital of more than 5

hundred billion dollars. The only few competitive companies are those international

Joint-stock cooperative enterprises or international investment company. But in the

world, it has more than 300 hundred companies in health field with the capital of

more than 5 hundred billion dollars. America takes 170 of them.

10. Conclusion

20

After comparing the medical device regulation difference in US and China and

analyzing the challenges in Chinese industry, we can find out that Chinese

government has paid more attention to promote the development of medical device

industry. With the improvement of related polices and regulations, Chinese will

become a large market to provide more opportunities to medical device manufacturers

and perfect its health system.

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