Industry Favorable News! The MAH system for medical devices is implemented nationwide.

【Summary】On July 7, the State Council issued the "Notice on Doing a Good Job in Copying and Promoting the Experience of the Sixth Batch of Reform Pilot Projects in Free Trade Zones". The Notice points out that the local governments and relevant departments where the free trade zones are located, combining their respective functional positioning and characteristics of the free trade zones, have made every effort to promote institutional innovation and practice, forming the sixth batch of reform pilot experience of the free trade zones, which will be copied and promoted nationwide. Article 36 mentions the entrusted production model for medical device registrants. In addition to producing products themselves, medical device registrants can entrust enterprises with the corresponding production conditions to produce products. The responsible unit for the entrusted production model for medical device registrants is the National Medical Products Administration, and the promotion scope is nationwide. This will undoubtedly bring benefits to the medical device industry. Medical Device MAH is Considered a Disruptive Reform in the Industry The medical device registrant system, namely the marketing authorization holder system in the medical device field. Under this system, qualified medical device registration applicants can apply for medical device registration certificates independently, and then entrust qualified and capable enterprises to produce them, thus realizing the "unbundling" of medical device product registration and production licenses. Previously, China's medical device industry implemented a "bundled" model of product registration and production licenses, requiring registrants to set up their own factories to produce products. If they wanted to entrust production, both parties must have both the medical device registration certificate and the production license. This not only increased the cost for enterprises and prolonged the product launch time, but also hindered enterprise innovation, especially for small and micro-enterprises with R&D capabilities. On the one hand, production control capabilities cannot be formed overnight, and on the other hand, the huge investment in medical device production is difficult to bear. Therefore, the "medical device registrant system" is also considered a disruptive reform in the industry. According to Huo Shi Chuangzao, there are a total of 45,403 medical device-related enterprises in China, including 16,000 production enterprises, of which more than 90% are small and medium-sized enterprises. Less than 10% are large-scale enterprises, and less than 400 have an annual output value exceeding 100 million yuan. Most enterprises have low technical content, among which there are 16,035 enterprises related to surgical instruments. The introduction of medical device MAH can effectively solve the difficulties faced by start-up enterprises in their early stages, such as limited funds, compliance, and lack of production personnel, allowing innovative enterprises and R&D enterprises to focus on product R&D, opening up the production link to professional service enterprises, strengthening innovation while reducing enterprise costs. According to statistics, enterprises that use outsourcing to produce Class II medical devices can save nearly 10 million yuan in three years and significantly reduce the product launch cycle. According to Yuanxin Medical's electrocardiograph, the first medical device product to use MAH, it shows that it took only 26 working days from formal acceptance to approval for listing, which is 82% shorter than the statutory time limit. In recent years, the domestic medical device market has developed rapidly, from 114.1 billion yuan in 2010 to 370 billion yuan in 2016, 448 billion yuan in 2017, and exceeding 500 billion yuan in 2018, with an annual growth rate exceeding 20%. Key development areas of medical devices, such as diagnostic reagents, imaging equipment, and high-value consumables, are becoming rapidly developing industrial sectors in various regions. Against this backdrop, the medical device MAH system will continue to deepen. Review of Relevant Policies on Medical Device MAH In 2016, the marketing authorization holder system for pharmaceuticals was launched. At the end of 2017, the medical device MAH was piloted in Shanghai, and in May 2018, it was expanded to Guangdong and Tianjin. In the beginning of 2019, the Beijing-Tianjin-Hebei region was included in the pilot area. The introduction of MAH brings new opportunities and challenges to enterprises and government work. In 2016, China began piloting the marketing authorization holder system for pharmaceuticals in ten provinces and municipalities, including Shanghai, Jiangsu, and Beijing, allowing marketing authorization holders for pharmaceuticals to entrust production. On December 7, 2017, the "Implementation Plan for the Pilot Program of the Medical Device Registrant System within the China (Shanghai) Pilot Free Trade Zone" was issued and implemented by the Shanghai Food and Drug Administration. The Shanghai Free Trade Zone took the lead in piloting the medical device marketing authorization holder system (MAH), allowing qualified medical device registration applicants within the free trade zone to apply for medical device registration certificates independently and then entrust qualified and capable production enterprises to produce them. On July 5, 2018, the Shanghai Municipal Drug Administration issued an announcement "expanding the pilot reform of the medical device registrant system to the entire city", allowing medical device registration applicants within Shanghai to entrust Shanghai medical device production enterprises to produce products. On January 9, 2018, the State Food and Drug Administration issued the "Announcement on the Pilot Program of the Medical Device Registrant System by the Shanghai Municipal Food and Drug Administration (No. 1 of 2018)". On May 24, 2018, the State Council issued the "Further Deepening Reform and Opening-up Plan for the China (Guangdong), (Tianjin), and (Fujian) Pilot Free Trade Zones", clarifying that the medical device registrant system reform has been approved to be expanded from Shanghai to Guangdong and Tianjin. The scope of the "separation of licenses and certificates" pilot program has been further expanded. On July 5, 2018, the Shanghai Municipal Food and Drug Administration issued the "Announcement on Expanding the Pilot Reform of the Medical Device Registrant System to the Entire City", deciding to expand the pilot program to the entire Shanghai city. In October 2018, Shenzhen Mindray Bio-Medical Electronics Co., Ltd. was awarded the first Class II medical device product registration certificate after the implementation of the Guangdong Provincial Medical Device Registrant System. The company's injection pump became the first medical device product approved for listing under the "Guangdong Provincial Medical Device Registrant System Pilot Program". On February 22, 2019, the Chinese Government website issued the "Reply on the Comprehensive Pilot Program for Expanding the Opening-up of the Service Industry in Beijing", agreeing to continue and comprehensively promote the comprehensive pilot program for expanding the opening-up of the service industry in Beijing for a period of three years from the date of approval. It proposes to allow Beijing medical device registrants to entrust medical device production enterprises in the Beijing-Tianjin-Hebei region to produce medical devices, exploring for the first time the cross-regional industrial chain development of "registration + production". In August 2019, the National Medical Products Administration issued the "Notice on Expanding the Pilot Program of the Medical Device Registrant System", further expanding the pilot program of the medical device registrant system. The Notice clarifies that the medical device registrant system will be piloted in 21 provinces, autonomous regions, and municipalities directly under the Central Government, including Shanghai, Tianjin, and Guangdong. These other provinces and cities also include Beijing, Hebei, Liaoning, Heilongjiang, Jiangsu, Zhejiang, Anhui, Fujian, and Shandong. On December 29, 2019, the drug regulatory authorities of Shanghai, Jiangsu, Zhejiang, and Anhui jointly issued the "Implementation Plan for the Pilot Program of the Medical Device Registrant System in the Yangtze River Delta Region", allowing medical device registration applicants in the Yangtze River Delta region to entrust production enterprises in the Yangtze River Delta region to produce products. This means that the pilot program of the medical device registrant system will realize cross-regional entrustment in the above four provinces and cities. Entrusted production of medical devices refers to medical devices classified as Class II or Class III according to the medical device classification rules (including innovative medical devices and samples), excluding Class I medical devices. Products that are included in the catalog of medical devices prohibited from entrusted production issued by the former State Food and Drug Administration are generally not included in the pilot program.

On July 7, the State Council issued the "Notice on Doing a Good Job in Copying and Promoting the Experience of the Sixth Batch of Reform Pilot Projects in Free Trade Zones." The Notice points out that the local areas and relevant departments where the free trade zones are located, combining the functional positioning and characteristics of each free trade zone, have made every effort to promote institutional innovation and practice, forming the experience of the sixth batch of reform pilot projects in free trade zones, which will be copied and promoted nationwide.

 

Among them, Article 36 mentions the entrusted production model for medical devices. In addition to producing products themselves, medical device registrants can entrust enterprises with the corresponding production conditions to produce products. The responsible unit for the medical device registrant's entrusted production model is the National Medical Products Administration, and the promotion scope is nationwide. This will undoubtedly bring benefits to the medical device industry.

                                                                        

The medical device MAH is considered a disruptive reform in the industry.

 

The medical device registrant system, namely the marketing authorization holder system in the medical device field. Under this system, qualified medical device registration applicants can apply for medical device registration certificates separately and then entrust qualified and capable enterprises with production, thereby achieving "decoupling" of medical device product registration and production licenses.

 

Previously, China's medical device industry implemented a "bundled" model of product registration and production licenses, requiring registrants to set up their own factories to produce products. If they wanted to entrust production, both parties must have both the medical device registration certificate and the production license. This not only increased enterprise costs and extended product launch times, but also hindered enterprise innovation, especially for small and micro-enterprises with R&D capabilities. On the one hand, production control capabilities cannot be formed overnight, and on the other hand, the huge investment in medical device production is difficult to bear. Therefore, the "medical device registrant system" is also considered a disruptive reform in the industry.

 

According to Huoshi Chuangzao, there are a total of 45,403 medical device-related companies in China, including 16,000 production companies. More than 90% of these are small and medium-sized enterprises, with less than 10% being large-scale enterprises and less than 400 having an annual output value exceeding 100 million yuan. Most enterprises have relatively low technological content, with 16,035 companies related to surgical instruments.

 

The introduction of medical device MAH can effectively solve the difficulties faced by start-up companies in their early stages, such as limited funds, compliance, and lack of production personnel. It allows innovative R&D companies to focus on product R&D, opening up the production process to professional service companies, strengthening innovation while reducing enterprise costs.

 

Statistics show that companies using outsourcing to produce Class II medical devices can save nearly 10 million yuan in three years and significantly reduce the product launch cycle. According to Yuanxin Medical's electrocardiograph, the first medical device product to use MAH, it shows that it took only 26 working days from formal acceptance to approval for listing, shortening the statutory working time limit by 82%.

 

In recent years, the domestic medical device market has grown rapidly, from 114.1 billion yuan in 2010 to 370 billion yuan in 2016, 448 billion yuan in 2017, and exceeding 500 billion yuan in 2018, with an annual growth rate exceeding 20%. Key development areas of medical devices, such as diagnostic reagents, imaging equipment, and high-value consumables, are becoming rapidly developing industrial sectors in various regions. Against this backdrop, the medical device MAH system will continue to deepen.

 

Review of relevant policies on medical device MAH

 

In 2016, the marketing authorization holder system for pharmaceuticals was introduced. At the end of 2017, the medical device MAH was piloted in Shanghai and expanded to Guangdong and Tianjin at the end of 2018. In early 2019, the Beijing-Tianjin-Hebei region was included in the pilot zone. The introduction of MAH brings new opportunities and challenges to enterprises and government work.

 

In 2016, China began piloting the drug marketing authorization holder system in ten provinces and cities, including Shanghai, Jiangsu, and Beijing, allowing drug marketing authorization holders to entrust production.

 

 

On December 7, 2017, the "Implementation Plan for the Pilot Program of the Medical Device Registrant System within the China (Shanghai) Pilot Free Trade Zone" was issued and implemented by the Shanghai Food and Drug Administration. The Shanghai Free Trade Zone took the lead in piloting the medical device marketing authorization holder system (MAH), allowing qualified medical device registration applicants within the free trade zone to apply for medical device registration certificates separately and then entrust qualified and capable production enterprises with production.

 

On July 5, 2018, the Shanghai Municipal Drug Administration issued an announcement "expanding the pilot reform of the city's medical device registrant system to the entire city," allowing medical device registration applicants within Shanghai to entrust Shanghai medical device production enterprises with the production of products.

 

 

On January 9, 2018, the State Food and Drug Administration issued the "Announcement on the Pilot Program of the Medical Device Registrant System by the Shanghai Municipal Food and Drug Administration (No. 1 of 2018).

 

On May 24, 2018, the State Council issued the "Further Deepening Reform and Opening-up Plan for the China (Guangdong), (Tianjin), and (Fujian) Pilot Free Trade Zones," clarifying that the medical device registrant system reform has been approved to expand from Shanghai to Guangdong and Tianjin. The scope of the "separation of certificates and licenses" pilot program has been further expanded.

 

On July 5, 2018, the Shanghai Municipal Food and Drug Administration issued the "Announcement on Expanding the Pilot Reform of the City's Medical Device Registrant System to the Entire City," deciding to expand the pilot program to the entire Shanghai municipality.

 

In October 2018, Shenzhen Mindray Bio-Medical Electronics Co., Ltd. was awarded the first Class II medical device product registration certificate after the implementation of the Guangdong Provincial Medical Device Registrant System. The company's injection pump became the first medical device product approved for listing under the "Guangdong Provincial Medical Device Registrant System Pilot Program Implementation Plan."

 

On February 22, 2019, the Chinese Government website issued the "Reply on the Comprehensive Pilot Program for Expanding the Opening-up of the Service Industry in Beijing Municipality," agreeing to continue and comprehensively promote the comprehensive pilot program for expanding the opening-up of the service industry in Beijing Municipality for a period of three years from the date of approval. It proposes to allow Beijing medical device registrants to entrust medical device production enterprises in the Beijing-Tianjin-Hebei region with the production of medical devices, exploring for the first time the cross-regional industrial chain development of "registration + production."

 

In August 2019, the National Medical Products Administration issued the "Notice on Expanding the Pilot Program of the Medical Device Registrant System," further expanding the pilot program of the medical device registrant system. The Notice clarifies that the medical device registrant system will be piloted in 21 provinces, autonomous regions, and municipalities directly under the Central Government, including Shanghai, Tianjin, and Guangdong. These other provinces and cities also include Beijing, Hebei, Liaoning, Heilongjiang, Jiangsu, Zhejiang, Anhui, Fujian, and Shandong.

 

On December 29, 2019, the drug regulatory authorities of Shanghai, Jiangsu, Zhejiang, and Anhui jointly issued the "Implementation Plan for the Pilot Program of the Medical Device Registrant System in the Yangtze River Delta Region," allowing medical device registration applicants in the Yangtze River Delta region to entrust production enterprises in the Yangtze River Delta region with the production of products. This also means that the pilot program of the medical device registrant system will realize cross-regional entrustment in the above four provinces and cities.

 

Entrusted production of medical devices refers to medical devices classified as Class II or Class III according to the medical device classification rules (including innovative medical devices and samples), excluding Class I medical devices. Products that are included in the catalog of medical devices prohibited from entrusted production issued by the former State Food and Drug Administration are generally not included in the pilot program.