Legal Review of New Regulations for Medical Devices (I)2014-11-192982
Changes to Regulatory Measures for the Registration (Filing) of Medical Devices
By David Tang, Min Zhu and Michael Xu1
On February 12, 2014, an amendment to the Regulation on the Supervision and Administration of Medical Devices was approved by the 39th executive meeting of the State Council (the " New Regulation"). The New Regulation was effective from June 1, 2014. The changes to the New Regulation, to a large extent, meet the mandate from the new decision-makers in China's central government to establish a more rigorous, wide-ranging food and drug regulatory system, which includes progress achieved in product classifications, product and manufacturer filing procedures, and supervision on the use of medical devices and post-sale regulation, etc.
To support the implementation of the New Regulation, the China Food and Drug Administration (" CFDA") has issued a series of amended department rules and regulatory documents (" Normative Documents") in connection with the classification, registration (filing), manufacturing, trading, use, and post-sale regulation of medical devices. This article is to summarize and analyze the latest changes to the regulatory measures for medical device registration.
A Brief Review of the Amended Department Rules and Regulatory Documents Regarding Registration (Filing)
The CFDA promulgated three amended department rules on July 30, 2014, the Supervision Measures for the Registration of Medical Devices (Order No.4) (the " New Registration Measures"), the Supervision Measures for the Registration of In-Vitro Diagnostic Devices (Order No.5) 2 and the Supervision Rules for Medical Device Manuals and Labels (Order No.6), all effective from October 1, 2014.
To better implement these three department rules, the CFDA has further promulgated a series of regulatory documents to provide interim guidance for the New Regulation, 3 the amended catalogue of product classification, 4 practical implementation of the new concept of "Product Technical Requirements," 5 as well as the requirements for clinical research 6, etc.
Furthermore, it has been stated that the CFDA will also amend the Catalogue of Medical Device Classifications, the Classification Rules for Medical Devices and the Management Measures for Medical Device Standards, formulate new Naming Rules for Medical Devices and Coding Rules for Medical Devices, and issue new regulatory documents regarding the layout of registration certificates and requirements for application documentation, operational rules for the approval of medical-device registration, and technical guidelines for clinical reviews (or clinical research).
New Changes to Registration (Filing)
Registration procedures for Class I Medical Devices replaced by filing procedures, with greater responsibility placed on applicants
Prior to the promulgation of the New Regulation, all medical devices were required to be registered, with Class I, II and III devices being approved by and registered with municipal, provincial and state food and drug administrations (collectively, the " Administration Authority"). The New Regulation provides, however, that Class I medical devices are now subject to filing rather than registration, while Class II and III medical devices are still to be registered with provincial and state level authorities. Imported Class I medical devices are to be filed with the CFDA.
Contrary to the original regulation that required all medical device registration applications to be subject to a substantive examination by the competent Administration Authority, the New Registration Measures require only an examination of documentation upon filing for Class I medical device applications. Pursuant to Article 58 of the New Registration Measures, if the filing documents meet the regulatory requirements in form, the filing application will be immediately approved. This will greatly streamline the regulatory approval process for Class I medical devices.
Nevertheless, this transition from registration to filing does not necessarily mean reduced requirements and a lower regulatory burden for prospective applicants. Article 9 of the New Regulation requires the exact same filing documentation requirements for Class I medical devices as well as for the registration of Class II and Class III medical devices. According to the original measures, however, clinical review materials and quality management system documents were not required for filing Class I medical devices. 7 As indicated by a CFDA spokesman, the changes to the documentation requirements do not ease the burden on applicants, but rather places greater responsibility on the applicants to comply with the law. 8
The registration examination exemption clause for Class II and III medical devices has been deleted, a clinical research exemption clause has been added, and registrations are subject to more rigorous examinations and require a longer period to complete
According to Articles 12 and 13 of the original registration measures, in certain circumstances, the registration or re-registration of Class II or Class III medical devices could be exempted from registration examinations. Such provisions, however, are deleted in the New Regulation and the New Registration Measures. Whether this deletion means higher requirements or a heavier burden upon applicants remains to be seen.
As an interesting comparison with the above deletion, certain clinical research exemption clauses have been added regarding the registration of Class II and III medical devices, i.e. Article 17 of the New Regulation and Article 22 of the New Registration Measures. According to CFDA registry officials' interpretation, the new clinical research exemption policy may narrow the scope of clinical research oversight and therefore be more scientifically reasonable.
Registration examination and clinical research are two separate phases in preparing the application documents for registration and each serves a different purpose. Therefore, limiting the scope of clinical research oversight and expanding procedures for re-registrants cannot simply be viewed as offsetting in terms of their effect upon the registration process.
Contrary to the shortened time of filing process for Class I medical devices, the time of registration process for medical devices under Class II or III is largely extended. According to the original measures, the approval and registration time for medical devices under Class I, II and III are 30, 60 and 90 working days, respectively. In the New Regulation, however, we find a clear division of Technical Review and Administrative Examination, two completely separate processes, which leads to extra 23 working days for registration time of the Class II and Class III medical devices. 9 On one hand, this change helps to relieve the Administration Authority from the pressure of reviewing of application documents caused by relatively short examination time. On the other hand, however, the extended time delivers the signal that the Administration Authority is adopting a more rigorous approach to the examination of Class II and III medical device registrations.
"Product Technical Requirements" replace "Registered Product Standards"
The original measures require that the applicant provide applicable product standards (national standards, industrial standards or the enterprise's registered standards, as the case may be) together with its application documentation. However, the New Regulation introduces a concept of "product technical requirements," which replaces registered product standards.
In law enforcement and judicial practice, the registered product standards have caused issues for applicants. First, the term's legal force and validity is uncertain because it is only briefly referred to in judicial interpretations. 10 Second, the content of the registered product standards are overly complicated and contain many subjective evaluation criteria and other items which may not be verified through testing. In addition, in administrative practice, many products have to be re-registered due to a change in applicable product standards, which can be unreasonably burdensome to applicants.
Unlike the registered product standards, the product technical requirements only include performance standards and their testing measures, and exclude subjective evaluation criteria, clinical review and product description requirements. With a specific definition and provisions in the New Regulation, however, the product technical requirements are not only granted proper legal status and force, but are separate from the product standards system, which, as a result, may prevent the need for re-registration due to frequent changes in national or industrial standards.
Production licenses no longer a pre-condition for enterprise registration with AIC and product registration
According to the original regulation, after obtaining a medical device production license, the manufacturer must then obtain a product registration certificate before it is allowed to produce or sell medical devices. This has been called the "Production License before Product Registration" process. There can be significant downtime between obtaining a production license until the completion of product registration which is burdensome to enterprises as they await approval to begin sales or production. At the same time, certain research institutes are reluctant to devote themselves to new medical device research and innovation because they have no means of obtaining a production license. Relevant enterprises and industry associations have long criticized this process.
The amendment this time introduces a new "Product Registration prior to Production License" process for the regulation of medical devices. Under this new framework, the product registration certificate holders may either apply for a production license by themselves or entrust other enterprises qualified with a production license to produce licensed medical devices. This change to regulatory process is intended to relieve enterprises of the burden of premature capital investment, spur medical devices innovation and help to incubate innovative medical device enterprises.
In addition, in the New Regulation, the AIC can no longer withhold business licenses from enterprises without a Medical Device Production License. This means that no prior approval formalities are required for a medical device manufacturer seeking to apply for registration with AIC.
Validity term for certificates has been extended, re-registration on expiry replaced by extension registration, re-registration on alteration replaced by alteration registration for approval items, certificate alteration replaced by alteration registration for filing items
According to the New Registration Measures, the validity term for product registration certificates has been extended from 4 to 5 years, while no validity term limitation exists for Class I medical device filing certificates. Upon expiry of a product registration certificate, an extension registration application, rather than the re-registration, is to be made 6 months in advance. According to the original registration measures, re-registration is not substantially different from initial registration in terms of documentation and approval criteria, and may include additional documentation requirements such as a product quality tracking report, etc. Under the New Registration Measures, however, the Administration Authority shall approve the extension registration upon application except for the three statutory circumstances where extension registration is not applicable, and approval of extension registration is deemed to be granted in the event that the registrant fails to renew within the statutory time limit.
According to the original measures, prior to expiry of the registration certificate, re-registration is required if there is any change to product type, specification, production site, product standard, product performance, structure and composition, product application scope or product classification, etc. A certificate alteration must be applied for in the event that there are any changes to these matters or any changes to the applicant's name, product name, agent, or post-sale servicer.
In the New Registration Measures, the registered items are divided into approval items and filing items. Approval items include product name, type, specification, structure and composition, application scope, product technical requirements, production site of imported medical devices, etc., which is basically consistent with those subject to re-registration under the original measures. Filing items include the name or address of the registrant and agent, and production site of domestic medical devices, etc., which is basically consistent with those subject to certificate alteration under the original measures. Since the Administration Authority has not clarified specific documentation requirements for changes to these approval items or filing items under the New Registration Measures, it remains to be seen what kind of effect these changes will bring to prospective applicants.
It is noteworthy that the original regulation only sets principles for the re-registration and certificate alteration applications while leaving detailed implementation rules to the registration measures. The New Regulation, however, directly defines "substantial change" and "non-substantial change" for those product changes which require registration or filing. Non-substantial changes to Class II or III medical devices need only be filed rather than registered. Whether a change is substantial or not depends on whether such a change will affect the safety or effectiveness of the medical device. Since there will likely be no measurable standard for judging the effect of any change upon the safety and effectiveness of medical devices, the Administration Authority may enjoy broad discretion in this regard. 11
Furthermore, the "production site" which is subject to re-registration in the case of alteration in the original registration measures is now listed as a filing item in the New Registration Measures. Some observers conclude this new rule supports manufacturers planning to move their production site or industrial zones seeking the relocation of target businesses. This conclusion, however, might not be accurate. According to the New Registration Measures, the registrant shall, upon relocating a domestic medical device production site, apply for an alteration registration only "after altering the corresponding production license." A product registration certificate holder, therefore, can only apply for a change in production site after first changing the production license, regardless of whether the holder manufactures the product by itself or entrusts others to do so. Thus, this change does not greatly reduce the administrative burden on the registrant. 12
Four administrative approvals regarding the registration of medical devices cancelled
To reduce government interference in the market, the amendment this time is intended to clean up unreasonable prior administrative approvals. There are sixteen administrative approval items in the original regulation while this figure has been reduced to nine in the New Regulation.
Apart from the aforementioned change from registration to filing for Class I medical device product registrations and non-substantial product change registrations for Class II or Class III medical devices, other cancelled administrative approvals for medical device registration (filing) also include:
(1) Approval of clinical research for Class II medical devices has been cancelled. According to the original regulation, clinical research for Class II and Class III medical devices was to be approved by provincial and State level Administration Authority respectively. The New Regulation, however, stipulates that clinical research for Class II medical devices need only be filed with provincial Administration Authority, and
(2) The scope of Class III medical devices subject to clinical research approval was narrowed. According to the New Regulation, only the Class III medical devices that present relatively high risk to human health need to be approved by CFDA. The catalogue of such Class III medical devices presenting relatively high risk to human health has been promulgated and is subject to adjustment from time to time by CFDA.
Influence of the New Rules Going Forward
In general, these changes outlined above reflect the desire of decision-makers in China's government to expedite the reform of government function and administrative approval processes. The changes made to the regulations and processes not only mitigate the burdens on relevant enterprises and encourage innovation of new products, but should also conserve administrative resources and stimulate innovation in the medical device industry.
1.David Tang is a partner, Min Zhu is of counsel and Michael Xu is an associate at AllBright in Shanghai.
2.In Vitro diagnostic devices are a special kind of medical device for which administrative measures are not substantially different from those of other medical devices. Therefore, this Article is mainly based on the Regulatory Measures for the Registration of Medical Devices.
3.Notice on Issues Concerning Implementation of the Regulation on the Supervision and Administration of Medical Devices (No.23 of 2014), Notice on Issues Concerning Filing of Class I Medical Devices (No.26 of 2014) and Notice on Issues Concerning the Implementation of the Regulatory Measures for the Registration of Medical Devices and Administrative Measures for the Registration of In-Vitro Diagnostic Devices (Shi Yao Jian Xie Guan  No.144)
4.Notice on Issuing Catalogue of Class I Medical Devices (No.8 of 2014).
5.Notice on Issuing Guidance for Preparing Product Technical Requirements of Medical Devices (No.9 of 2014) and Working Manual for the Pre-evaluation of Product Technical Requirements of Medical Devices to be Conducted by Medical Device Examination Institutions (Shi Yao Jian Xie Guan  No.192).
6.Notice on Issuing Catalogue of Class II Medical Devices Exempted from Clinic Research (No.12 of 2014), Notice on Issuing Catalogue of Class III Medical Devices Exempted from Clinic Research (No.13 of 2014) and Notice on Issuing Catalogue of Class III Medical Devices Subject to Clinical Research Approval (No.14 of 2014).
7.Similar to provisions under the original measures, however, the substantial documentation requirements for Class I medical devices are reduced compared to those for Class II or Class III. Pursuant to Article 10 of the New Regulation, the product examination report to be submitted for filing Class I medical devices may be a self-examination report prepared by the filing applicant. Clinic review documents need not necessarily include a clinical research report, but can include documents that are sufficient to prove the safety and effectiveness of the medical devices by citing references from research papers or data obtained from clinical research on similar products. Article 11 of the New Regulation, however, provides that the product examination report for Class II and Class III medical devices shall be issued by a qualified medical device examination institution; and clinic review document shall include a clinical research report (except for circumstances exempted from clinical examination).
8.This is evidenced by the amendment to the provisions of legal liability. According to Article 65 of the New Regulation and Article 69 of the New Registration Measures, if the filing applicant submits false materials during filing process, apart from punishment by the Administration Authority involving the publication of the names of the filing applicant and the product, the person being directly responsible, in serious circumstances, shall also be disqualified from engaging in medical device manufacturing and trading activities for a period of five years (qualification deprivation punishment).
9.The process of technical review exists before in the government's registration practice, but was not expressly stipulated in legal documents. The amendment this time expressly distinguishes between the two processes of technical review and administrative examination. Accordingly, in addition to a period of 30, 60 and 90 working days of technical review respectively for Class I, Class II and Class III medical devices, there is a 3 working day pre-approval process before technical review and a 20 working day administration examination process after technical review.
10.Interpretations of the Supreme People's Court and the Supreme People's Procuratorate on Several Issues about the Specific Application of Laws in the Handling of Criminal Cases Concerning Illegal Production or Sale of Counterfeit or Substandard Commodities (Fa Shi  No.10); Notice on Forwarding Interpretations of Supreme People's Court and the Supreme People's Procuratorate on Several Issues about the Specific Application of Laws in the Handling of Criminal Cases Concerning Illegal Production or Sale of Counterfeit or Substandard Commodities (Guo Yao Jian Xie  No.190).
11.Contrary to the clear and functional divisions between the original regulation and the original registration measures, the New Regulation and the New Registration Measures appear to conflict in their classification standards. Article 14 in the New Regulation distinguishes "substantial changes" and "non-substantial changes" based on the product itself. Article 49 in the New Registration Measures, however, distinguishes "approval items" and "filing items" based on the "content specified in the registration certificate and its appendixes." Furthermore, the scope of the approval items, such as the product name, type, specification and production site of imported medical devices, is much broader than that as provided in the New Regulation. In short, there is no substantial difference between the New Registration Measures and the original measures in this regard, which seems much more practicable than the newly established criteria in the New Regulation.
12.This is understood by referring to the amended Administrative Measures for the Production of Medical Devices. According to Article 15 and 16 of these new Measures, if there are non-actual changes to production site, application for a renewed medical device production license shall be filed with the original approval authority. If there is any actual change to the production site, an alteration to the Certificate of Medical Device Production Licenses shall be filed with the original approval authority within 30 working days.