The strictest new regulations are coming: Customized medical devices may not be entrusted to be produced

These Regulations put forward clear requirements for both manufacturers and medical institutions that produce and use customized medical devices, and explicitly stipulate that customized medical devices cannot be outsourced for production. In order to regulate the development of the customized medical device industry,7month4day, the National Medical Products Administration issued the "Regulations on the Supervision and Administration of Customized Medical Devices(Trial)",(hereinafter referred to as "the Regulations")will be officially implemented from2020year1month1day onwards.

These Regulations put forward clear requirements for both manufacturers and medical institutions that produce and use customized medical devices, and explicitly stipulate that customized medical devices cannot be outsourced for production. The Regulations are divided into six chapters, including general provisions, filing management, design and processing, usage management, supervision and management, and supplementary provisions, totaling35articles, clarifying requirements for aspects such as the definition, filing, design, processing, use, and supervision and management of customized medical devices.

Filling Regulatory Gaps

Personalized medical devices refer to medical devices designed and manufactured by medical device manufacturers based on the clinical needs put forward by authorized medical personnel in medical institutions, where existing products on the market in China cannot meet clinical needs, to meet the personalized requirements of patients. They are divided into customized medical devices and patient-matched medical devices.

Customized medical devices have their particularities, but in recent years, there have been instances of illegal elements producing counterfeit and substandard products for profit, resulting in great social harm. Meanwhile, the supervision of special customized medical devices has always been a gap in China's medical device supervision field.

The promulgation of these Regulations was not sudden; as early as2018year10month, the National Medical Products Administration solicited public opinions on the "Regulations on the Supervision and Administration of Customized Medical Devices(Trial)" from all sectors of society. More than half a year later, the "Regulations on the Supervision and Administration of Customized Medical Devices(Trial)" were promulgated, along with the filing system, and the prohibition against outsourcing production was also included in the relevant requirements.

The Regulations point out that, considering the product characteristics, customized medical devices are difficult to register through the existing registration management model; therefore, pre-market filing management is implemented for customized medical devices. The new filing method is: customized medical device manufacturers and medical institutions jointly serve as filers and should file with the drug supervision and administration department of the province, autonomous region, or municipality directly under the Central Government where the medical device manufacturer is located, before producing and using customized medical devices.(For imported products, the filer's location is)province, autonomous region, or municipality directly under the Central Government.

The Regulations also strictly control the qualifications of production units, set industry thresholds, and ensure product safety. When a customized medical device manufacturer does not have the valid registration certificate and production license for the relevant products, or if products with essentially the same main raw materials, technical principles, structural composition, key performance indicators, and scope of application have been approved for registration, the filing automatically becomes invalid, and the filer should proactively cancel the filing. The instructions and labels for customized medical devices should reflect the customized nature and be traceable to the specific patient. To strengthen post-market supervision, an annual reporting system is implemented for the production and use of customized medical devices. Corresponding requirements are also put forward regarding the use and advertising of customized medical devices and the protection of patient information.

Wang Jianwei, director of the Department of Pharmacy at Zhejiang University of Technology, said in an interview with a reporter from the International Finance News that the implementation of this policy can encourage enterprise innovation, regulate medical device production, and avoid excessive low-level production. Meanwhile, precision medicine is the future direction of development, and customization may become a trend; strengthening the management of customized medical devices conforms to the future prospects and needs of the medical industry.

Accelerated Listing of Medical Device Companies

Currently, China's medical device industry, especially domestic leading medical device companies, is still in its golden period of development. So, what impact will the promulgation of the Regulations have on medical device companies??

The reporter noticed that recently, many medical device companies have accelerated their listing pace.7month4day, the latest news from the Science and Technology Innovation Board stated that two medical companies, Nanwei Medical and Xinmai Medical, have disclosed documents such as the listing issuance arrangements, preliminary inquiry price announcement, and prospectus on the Shanghai Stock Exchange website. Both companies will conduct online and offline subscriptions on7month11day.

On6month28day, Hangzhou Kangji Medical Device Co., Ltd.((hereinafter referred to as"Kangji Medical")also publicly issued a prospectus, applying for listing on the main board of the Shanghai Stock Exchange, with a planned fundraising of6.51billion yuan. In Kangji Medical's prospectus, Kangji Medical showed its amazing operating capabilities.2016year to2018year3period, operating income reached1.7billion yuan,2.5billion yuan, and3.5billion yuan, with net profits reaching9500ten thousand yuan,1.4billion yuan, and2.2billion yuan, and a net profit margin of55.78%、56.81%、62.77%。

According to statistical data,2019in the first quarter of year, in the pharmaceutical and medical sub-sector, the non-net profit growth of biological products was40.69%， medical services increased by32.35%， medical devices increased by22.00%， and pharmaceutical commerce increased by21.27%， all far exceedingAshare's average growth rate.