Transcript gross_d

Current Regulatory
Challenges in Asia
March 29, 2007
Presented by: Ames Gross
President of Pacific Bridge Medical
www.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.
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
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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
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Main regulatory body is Ministry of Health,
Labor, and Welfare (MHLW)
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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
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1st Consultation:
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Offers applicant initial feedback on their situation
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Takes place 7-10 days following consultation request
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Free of charge
2nd Consultation:
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Provides assistance with application without prior review of
application documents (i.e. new vs. partial change application)
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Cost: about 36,000 yen (about $350 USD)
3rd Consultation:
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MHLW gives recommendation on expectations for regulatory process
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Recommendation provides insight into what the MHLW is likely to
do, but is non-binding
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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
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MAH
Strong dossiers, less Q&A
More clinical trials (foreign clinical data)
Severe shortage of qualified regulatory
professionals
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Reimbursement
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After product registration, one must apply for
reimbursement.
Four different reimbursement classes:
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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
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There are two types of audits required for
foreign manufacturers:
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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.
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In some cases, foreign audits will be done.
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Intercultural Communication
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Consensus
No direct confrontation
Bowing and gifts
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China
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Demographics
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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
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Healthcare System
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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
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Product Registration
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Classification
Specification
Testing
Clinical Trials
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Pricing Policy for Medical Devices
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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.
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Increased Supervision
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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.
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Opportunities
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Product Sales
Local Manufacturing
Clinical Trials
R&D
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Intercultural Communication
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Personal Connections (Guanxi)
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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
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China Factories
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India
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Demographics
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Population: 1.1 billion
GDP real growth rate: 8.5 %
GDP per capita (PPP): $3,700
Unemployment rate: 7.8 %
Source: CIA World Factbook
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Medical Device Market
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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.
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Healthcare System
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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.
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Definition of Device
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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.
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Product Registration
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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.
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Insurance & Reimbursement
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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.
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Proposed Structure for Device Regulation
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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.
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Intercultural Communication
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Mid-east mentality, not East Asian culture
Who can you trust
Infrastructure problems
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Korea
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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).
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Singapore
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Currently, voluntary registration for medical
devices.
Main regulatory body is Health Sciences
Authority (HSA).
New Health Products Bill presented in
January 2007.
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Regulate manufacture, import, supply,
presentation and advertisement of medical
products
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Hong Kong
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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.
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Malaysia
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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.
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Web-based registration system.
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Cultural Issues
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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
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Conclusion
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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.
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Thank you for your
participation
and attention!
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