current regulatory challenges in asia presented by: ames gross president of pacific bridge medical ...

Current Regulatory Challenges in Asia

Presented by: Ames GrossPresident of Pacific Bridge Medicalwww.pacificbridgemedical.com

Copyright © 2007 Pacific Bridge Medical. All rights reserved. This content is protected by US and International copyright laws and may not be copied, reprinted, published, translated, resold, hosted, or otherwise distributed by any means without explicit permission. Disclaimer: the information contained in this report is the opinion of Pacific Bridge Medical, a subsidiary of Pacific Bridge, Inc. It is provided for general information purposes only, and does not constitute professional advice. We believe the contents to be true and accurate at the date of writing but can give no assurances or warranties regarding the accuracy, currency, or applicability of any of the contents in relation to specific situations and particular circumstances.

March 29, 2007

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Overview of Asia

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Asia Medical Device Markets Country Market Size (US$)

China $ 5 billion

Hong Kong $ 550 million

India $ 1.5 billion

Indonesia $ 165 million

Japan $ 25 billion

Malaysia $ 330 million

Philippines $ 82 million

Singapore $ 450 million

Korea $ 2.5 billion

Taiwan $ 1.5 billion

Thailand $ 550 million

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JAPAN

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Demographics Population: 130 million GDP real growth rate: 2.8% GDP per capita PPP: $31,600 Unemployment rate: 4.1%

Source: CIA World Factbook

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Healthcare System Main regulatory body is Ministry of Health,

Labor, and Welfare (MHLW) Responsible for ensuring good living standards,

promoting development of new health programs or innovations to improve lives.

The Pharmaceuticals and Medical Devices Agency (PMDA) is branch under MHLW.

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Consultation Sessions 1st Consultation:

Offers applicant initial feedback on their situation Takes place 7-10 days following consultation request Free of charge

2nd Consultation: Provides assistance with application without prior review of

application documents (i.e. new vs. partial change application) Cost: about 36,000 yen (about $350 USD)

3rd Consultation: MHLW gives recommendation on expectations for regulatory

process Recommendation provides insight into what the MHLW is likely to

do, but is non-binding Cost: about 1,700,000 yen (about $16,000 USD)

There are new consultations types that the PMDA is currently proposing.

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Product Registration MAH Strong dossiers, less Q&A More clinical trials (foreign clinical data) Severe shortage of qualified regulatory

professionals

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Reimbursement After product registration, one must apply for

reimbursement. Four different reimbursement classes:

A, B, C, F Products are reimbursed based on a service fee or on the

cost of the device itself depending on the reimbursement category.

Central Social Insurance Medical Council (Chuikyo) sets reimbursement points and prices for medical devices and drugs; works with MHLW.

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Audits There are two types of audits required for

foreign manufacturers: Building and facilities accreditation audit

required before product registration Quality Management Systems (QMS) compliance

inspection In both types of audits, PMDA will do a

document review. In some cases, foreign audits will be done.


Intercultural Communication Consensus No direct confrontation Bowing and gifts


China


Demographics Population: 1.31 billion GDP real growth rate: 10.5% GDP per capita (PPP): cities ($6,000);

countryside ($3,000) Unemployment rate: 4.2% (urban areas)

Source: CIA World Factbook


Healthcare System Increased spending on healthcare, but over 80% of

population is without health insurance. 50% of people who should seek medical care do not. 47% of urban citizens and 31% of rural inhabitants

self-medicate instead of going to hospitals. Changing epidemiological profile


Product Registration Classification Specification Testing Clinical Trials


Pricing Policy for Medical Devices Some medical device products can be reimbursed or

co-paid by National Essential Medical Insurance and prices are controlled by the government.

National Development and Reform Commission (NDRC) issues price caps.

NDRC has issued various price caps, such as only allowing the price of disposable medical devices increasing 40% or less from manufacturer to patient.

NDRC also plans to strengthen price monitoring and lower sales margins for medical devices sold to hospitals.


Increased Supervision SFDA has increased its QA and GMP enforcement

with recent bribery scandal of former SFDA head. Increased unannounced GMP inspections,

establishment of SFDA’s regional branch responsibilities in terms of daily administration and supervision of medical device manufacturers.

Increased inspection to ensure proper labeling and translation of key documents in Chinese.


Opportunities Product Sales Local Manufacturing Clinical Trials R&D


Intercultural Communication Personal Connections (Guanxi)

Earning respect and trust should be considered first step to business interaction

Find a mutual friend to serve as intermediary to introduce you to potential business associates

If you have a strong relationship with your Chinese partner, everything is possible


China Factories


India


Demographics Population: 1.1 billion GDP real growth rate: 8.5 % GDP per capita (PPP): $3,700 Unemployment rate: 7.8 % Source: CIA World Factbook


Medical Device Market Local non-multinational medical manufacturers are small,

low tech, generally low cost, and medium quality: some are FDA/CE approved. There are about 120 significant local medical companies,

of which 25 are large companies. Products include syringes, needles, urine bags, gloves,

oxygen supply tubing, condoms, stents. Multinational medical companies also manufacture/import

into India. These include: Bausch & Lomb, Baxter, Boston

Scientific, J&J, Becton Dickinson, Siemens, Philips, GE Medical Systems, Zeiss, B. Braun, Terumo.


Healthcare System Public sector share is 70% and private sector is 30%

of healthcare delivery. Healthcare delivery market has recently grown at

13% per year and is expected to grow at 15% per year over the next 5 years.

Growth will be in both public and private sectors, though higher in the private sector.

As of now only 25% of population has access to allopathic healthcare, as other systems of medicine also used.


Definition of Device There is NO specific definition for a “device”

in the Drug & Cosmetics Act (DCA). DCA defines a “drug” as including any

medicine or substance which is used for treatment, prevention, mitigation, diagnosis of disease or condition, and any devices notified as drugs by the Government.


Product Registration Certain devices specified for regulation include

disposable hypodermic syringes, tubal rings, perfusion sets, IVD kits for HIV/HCV, surgical dressings etc.

After March 2006, new devices were added including cardiac stents, drug eluting stents, catheters, heart valves, orthopedic implants, etc.

Device registration uses drug forms and laws as templates.


Insurance & Reimbursement There is no single national health insurance

system. What exists is a number of schemes of free/

concessional treatments and insurance, mainly for hospitalization.

There is no system of pre-approval of drugs or devices for treatment / reimbursement.


Proposed Structure for Device Regulation Create a Central Drug Authority of India “CDAI” (like the US

FDA) headed by the Drug Controller General of India (DCGI), in place of the Central Drugs Standard Control Organization (CDSCO)

All manufacturing and import licensing with CDAI, State FDAs will inspect factories and grant wholesale/ retail licenses.

Define Medical Devices and nutraceuticals specifically under the DCA and provide rules and guidelines for their regulation.

CDAI has been approved by the Cabinet but legislation still pending.


Intercultural Communication Mid-east mentality, not East Asian culture Who can you trust Infrastructure problems


Korea Korea Food and Drug Administration (KFDA), main

regulatory body under Ministry of Health and Welfare. Devices MUST be approved in countries of manufacture

before product registration in Korea can start. Medical Device Act enacted in 2003, full enforcement

planned by May 2007 To sell devices in Korea, you need to have a product license,

Korean Good Manufacturing Practice certification and a Device Business License (Class II and III; Class I just needs a notification to government).


Singapore Currently, voluntary registration for medical

devices. Main regulatory body is Health Sciences

Authority (HSA). New Health Products Bill presented in

January 2007. Regulate manufacture, import, supply,

presentation and advertisement of medical products


Hong Kong Voluntary registration under Medical Device

Administrative Control System (MDACS). Medical Device Control Office (MDCO) is

main regulatory body. Conformity Assessment Framework official

for medical devices November 2006.


Malaysia Only radiation-emitting devices such as x-ray

equipment have specific requirements for import and registration now.

Only recently began regulations on medical devices with introduction of Voluntary Registration of Medical Devices Establishments (MeDVER) in 2006. Web-based registration system.


Cultural Issues It is important to understand the cultural and business

norms that are unique to a specific country or ethnic group

Western Approach Eastern Approach

*Do a deal *Build relationships

*Maximize short-term profits *Establish long-term

foundations

*Assess competitive capabilities *Assess integrity and trust

*Be frank *Don’t deliver bad news

*Make changes fast *Move when ready


Conclusion Next few years important as more nations

create regulatory authorities to oversee industry.

With ever-changing regulations, medical device companies and manufacturers will need to keep abreast of this evolving regulatory climate.

In each market, have a well thought-out strategy.


Thank you for your participation

and attention!

current regulatory challenges in asia presented by: ames gross president of pacific bridge medical ...

Documents

international copyright

medical devices agency

unemployment rate

foreign audits

subsidiary of pacific

types of audits

reimbursement points

reimbursement category