The People’s Republic of China, by some estimates, has already surpassed Japan to become the second largest medical device market in the world after the U.S. Medical device market experts estimate that the medical device market in China will grow between 15 to 20 percent annually over the next five years. Despite a recent drop in economic growth, China’s economy is still on the upswing, and so is its medical device market. One could say that it is out of control. On the contrary, it’s not.
China is home to nearly one-fifth of the world’s population, and with 1.3 billion people and an expanding middle class, it has witnessed an almost unbelievable rise in healthcare consumption. More citizens are spending more money on healthcare, including sophisticated medical devices. No wonder U.S. companies want to play the import/export game with this rising star.
Competition for China’s medical device market is aggressive, and more Chinese medical device manufacturers enter the market every day. The idea that Chinese-made products are inferior is changing dramatically. In spite of quality assurance problems and events like the 2008 heparin scare, overall quality systems in China are much better than they were five or six years ago. Most Chinese medical device companies and component suppliers alike are ISO 13485 and ISO 9001:2008 certified, respectively, and a rising majority meets U.S. FDA and European Union manufacturing standards.
In the past, Chinese medical device manufacturers produced mostly Class I and Class II devices. Today, they are making more sophisticated Class III devices. This is due for the most part to the adoption of global manufacturing standards. I have conducted third-party audits in China for more than 11 years, and the companies that I visit have come a long way to achieve and maintain regulatory and quality compliance. You still have to know what to look for because of cultural differences, but for the most part, quality management systems in China are straight up compliant. I have also noticed that the quality and regulatory paradigm has accelerated into a mode of excellence due to the innovation of Western-trained Chinese returnees. Many Chinese math, science and engineering Ph.D.s who cannot secure H1-B visas in the U.S. return to China, where they are snapped up by local device and component companies. These individuals are bringing technological control with them—not just technology, but controls to foster process excellence.
Medical Device Administration in China
In China, the State Food and Drug Administration (SFDA) supervises the medical device sector at the national level. In practice, the SFDA delegates a lot of administrative powers to its local branches. The food and drug administrations of the provinces, autonomous regions and municipalities directly under the central government (local FDAs) are authorized to issue specific licenses and product registration certificates to medical device companies. One of the characteristics of China’s market is that different local FDAs may have their own specific examination and approval requirements that go beyond national requirements. This can make things complicated. Not to worry, because if you are interested in doing business in a specific region of China with specific requirements, the Chinese company with which you are working will make the registration and listing process happen on your behalf. Believe me.
Classification of Medical Devices in China: Risk-Based and Closely Harmonized with the U.S. FDA
According to the definition provided in China’s medical device law, a medical device is a tool, apparatus, material or other good, including but not limited to software, that is independently or jointly used on the human body. In order to effectively supervise and manage the medical device market, the SFDA classifies various medical devices into three classes (i.e., Class I, Class II and Class III – just like the U.S.).
The classes were determined according to their properties and risk, uses and other aspects, essentially based on the risk to the user. Depending upon the classification into which the device falls, before the medical device can be placed on the market, different procedures and requirements apply in order to obtain relevant licenses and certificates.