The Chinese State Council has passed the eagerly anticipated revisions to the PRC’s Regulations for Supervision and Administration of Medical Devices (see our recent news alert on this development here), which will come into effect on June 1, 2021 (the Regulations). The Regulations adopt a more progressive and aggressive approach to regulatory enforcement of medical device products in China. In particular, the Regulations will significantly increase the range and size of penalties that may be imposed for regulatory violations, which is consistent with the increase in the frequency and scope of post market enforcement actions taken by Chinese regulatory authorities over the past few years .
Under the current regulatory regime, post market compliance matters for medical devices generally cover registration and filing, device labelling, and reporting and investigating adverse events arising from product liability issues. In addition, Chinse regulatory authorities also undertake various surveillance actions against medical device products/manufacturers, including on-site inspections, sampling inspections, and unannounced inspections to verify whether manufacturers are in compliance with their regulatory obligations.
Recent increase in regulatory enforcement actions
Over the past three years (2018 to 2020), at the national level, the National Medical Products Administration (NMPA) has conducted multiple rounds of sampling inspections of various medical device products to examine their conformity to mandatory technical standards or NMPA-approved product technical specifications. A wide range of products were subject to these inspections, ranging from medical consumable items such as surgical gowns, infusion pumps, medical absorbent cotton, diagnostic reagents, to high value and high tech devices such as hemodialysis equipment, patient monitors, semiconductor laser treatment machines, high-frequency surgical equipment, etc. Both foreign and domestic manufacturers were the targets of these inspections. For non-compliant products identified, the most frequently imposed penalty is recall of the defective products. As reflected in the below charts, the overall number of inspections conducted, the categories of products covered, and the number of non-compliant products identified by NMPA during the past three years (2018 to 2020) remains high. There was a dip in the numbers during 2020 which should have been attributed to the COVID-19 pandemic. That said, we expect the level of surveillance actions undertaken by NMPA in 2021 to be higher than prior years.
(Data Source: Data source: https://www.nmpa.gov.cn/)
In addition, NMPA has conducted a number of unannounced inspections on medical device manufacturers, with various sanctions imposed against non-compliant manufacturers identified in these inspections. They range from recall of the non-compliant products to suspension of production and business operation.
At the provincial level, the chart below sets out the number of inspections/sampling tests carried by the provincial and city level Medical Products Administrations in Beijing, Shanghai, Guangdong and Shenzhen during period of 2018 to 2020.
The average number of inspections conducted on each medical device manufacturer by these local authorities during this period remains high. In one particular year (2019), Shenzhen Medical Product Administration conducted on average more than two (2.14) inspections on each medical device manufacturer. And despite the COVID-19 pandemic, the local authorities continued to increase the number of inspections being carried out in 2020, which again, indicates that inspection activities for 2021 should remain high.
With the imminent implementation of the Regulations, we anticipate that there will be more intensified post-market enforcement actions taken by these local regulatory authorities in the second half of 2021. In fact, on March 26, 2021, NMPA announced it would lunch an enforcement campaign targeting safety and product quality issues of medical devices5. This enforcement campaign will focus on the following types of medical devices: (1) medical equipment related to epidemic prevention and control, including testing kits, ventilators, masks, PPE and etc.; (2) selected products procured through centralized process, such as coronary stents; (3) sterile and implantable medical devices; and (4) medical equipment sold online. The enforcement campaign will also focus on those manufacturers/companies which have been targets of complaints in recent years, as well as those which have failed to pass prior onsite inspections and unannounced inspections. Following NMPA’s announcement, several Medical Product Administrations at provincial level (including Shanxi, Heilongjiang, Guangdong, Fujian, etc.) have taken various actions to implement the campaign, including on-site inspections and unannounced inspections, as well as requiring self-inspections by manufacturers.
The pace and frequency of regulatory enforcement actions in China coupled with frequent updates to existing legislation means companies need to continue to build and enhance their compliance program. Chinese regulatory authorities likely to increase its enforcement activities in the short to medium term. Hence, manufacturers will need to stay on top of these developments, including:
- Update and enhance existing crisis management protocols;
- Post-market compliance protocols should not be limited to traditional product recall procedures and be expanded to cover handling of random testing, inspections and other likely expected regulatory actions;
- Review and update (as needed) user manuals, device labeling and packaging marks and descriptions;
- Separate and specific response teams and guidance for each facility/office in preparation of these regulatory actions;
- Provide regular training to employees.