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Executive Summary of the Amendment of the Medical Devices Management Act

【Charlotte Wu, Partner, Zhong Yin Law Firm】

Dated on November 5, 2016, the Food and Drug Administration announced new draft legislation, the “Medical Devices Management Act”, (the “Act”) a specialized set of regulations that will be drafted independently of the Pharmaceutical Affairs Act. The legislation will be drafted based on the regulatory foundation provided by the Pharmaceutical Affairs Act and will take into account the shelf life/expiration of medical devices and risk management principles. To establish a practical management system that meets the requirements of the R.O.C., foreign legislative precedent and domestic medical device companies have been consulted to further understand the developmental needs of the medical device industry.

The primary goals of this legislation include: (i) incorporation of medical device design, rental, and maintenance businesses into regulatory management; (ii) establishment of a first-rate distribution system for medical devices; (iii) data management of medical device product flows; (iv) amendment of the registration system to manage low risk medical devices that will be updated yearly (to replace current market inspections); (v) incorporation of clinical trial research for medical devices into the regulatory scope of the Act; (vi) expansion of specified medical device manufacture or imports that meet special approval requirements; and (vii) management of medical device advertisements and other management scopes.

The objective goal of this legislation emerges from the rapid development and diversification of operational models in the medical device industry and also, the consideration that the risk levels, classifications, and grades for medical device management differentiates from pharmaceutical product management. Additionally, there is room for improving and conducting a fresh review of the model provided by the Pharmaceutical Affairs Act. And therefore, a separate, independent set of specialized laws shall be stipulated to account for new trends in medical device management.

Explanation of Key Amendments and New Regulations:

The draft legislation is comprised of nine (9) Chapters that contain eight-four (84) Articles in total including: General Principles (Chapter 1), Management of Manufacture and Sale (Chapter 2), Medical Device Registration and Market Approval (Chapter 3), Management of Medical Device Clinical Trial Research (Chapter 4), Management of Medical Device Advertisements (Chapter 5), Supervision and Prevention (Chapter 6), Inspection and Interdiction (Chapter 7), Penal Provisions (Chapter 8), Supplementary Provisions (Chapter 9) and others. Please refer to the following link to review the full draft legislation: http://www.fda.gov.tw/TC/newsContent.aspx?id=21519&chk=7b7e54a3-84e3-4a7f-97fb-39c84279bf90#.WKKBD2997X4

Please refer to the following explanation in regards to the primary focus of the legislation and added regulations:
Legislative Purpose of the Act and Definitions
Added Legislative Purpose:

In order to protect the health and well-being of R.O.C. citizens, the safety, effectiveness, and quality of medical devices shall be taken into account and managed accordingly. (Article 1)

Added Medical Device Definitions:

The addition of the definition, “Chemical Based Effects” has been introduced to fully reach the full potential and function of instruments, apparatuses, equipment, substances, software, in vitro diagnostic products, and other related medical device products for human use. (Article 3)

Addition of three clauses defining substandard medical devices that include:

Medical devices that do not meet specifications or standards of market approval and inspection, or other medical device products that fail to meet specifications and standards as announced by the central competent authority; medical devices that have failed to attain market approval due to specialized storage conditions; secretly added or attached substances that affect medical device product quality.

(Article 8 and Article 30)
Incorporate medical device design, rental, and maintenance businesses into the management scope: Incorporate publically listed medical devices designers as manufacturers, and incorporate rental and maintenance businesses within the scope of medical device sales to establish robust medical device management. (Article 10 to Article 11)

Medical Device Management Systems, Requirements for the Establishment of Product Flows, Manufacturing Quality Management, and Distribution Systems.
Due to the diversification of industry operational models, permit requirements shall be simplified or exempted:

In regard to the branch manufacturing facilities or offices of medical device companies, after announcement from the central competent authority, those medical device companies may be exempt from separately filing applications for office sales permits or registering as a sales office or medical device supplier; for medical device manufacturers that have completed registration requirements or have been approved to initiate the manufacture of medical devices, those medical device manufacturers will not be required to separately apply for sales permits; pharmacies that sell certified grade medical devices may also be exempt from obtaining sales permits. (Article 13 and Article 14)

Establishment of data management in relation to product flows and medical device company imports:

Owners of medical device import permits or other registered persons shall be required to employ IT professionals to manage product import information in accordance with relevant R.O.C. regulations; in order to effectively supervise market product trends, for the exception of sales records indicating direct sales to consumers, the Act prescribes that medical device companies shall establish data management systems to monitor product sources and flows. (Article 15 and Article 19)

Establishment of a first-rate distribution system for medical device companies and medical devices:

In order to ensure the quality of medical devices and safeguard the health and wellbeing of R.O.C. citizens, after announcement from the central competent authority, medical device companies shall follow first-rate transportation procedures for medical devices to the extent that the storage, transportation, delivery, and other related processes do not pose risks of impairment to medical device products. After passing inspection and obtaining applicable permits, medical device companies may initiate the distribution, import, and export of medical devices. (Article 24)

Registration and Market Approval for Medical Devices
Addition of registration systems and the simplification of review procedures for low risk medical devices before market entry:

1. A practical management system (for classifying medical device product risks) shall be implemented for low risk medical devices that will be based upon a registration system (as opposed to applying for market approval). After medical device products enter the market, the competent authority will continue to audit and inspect registered medical devices in an effort to strengthen the registration system and ensure the genuineness of registration data, in addition to the quality of medical devices. (Article 25)

2. The competent authority may also, when deemed appropriate, adjust management techniques in accordance with the technological development and risk level of medical device products and adopt a registration system for medical devices. Medical device companies are required to file yearly reports to extend the validity of registration. (Article 28)

Product packaging and user instructions for minimal sold medical device products shall be displayed in Chinese:

In order to protect the safety and efficacy of medical device use, the Act regulates that for medical device companies that manufacture and import medical devices, if when there is minimal sold product packaging, medical device companies shall display product labels and attached instructions in Chinese for the benefit of people to understand product information. (Article 32)

Expansion of approval terms for special cases in relation to the manufacture or import of specified medical devices:

For the exception of responding to public sanitation needs or for patient use, currently there are no suitable replacements for medical treatments in the R.O.C. that may be provided unless given special approval, therefore, the conditions for applying for these special cases of approval have been expanded and include: experimental use of medical devices, use of specially provided specimens or other provided items, and special maintenance. After medical devices are fixed/restored, such medical devices are prohibited from being sold on the market place unless an application is submitted to the central competent authority to obtain special approval for the manufacture or import of such medical devices.

Management of Clinical Trial Research for Medical Devices
The primary references for the additions to Chapter 4 are primarily sourced from the regulations of the “Regulations on Human Trials” and the “Medical Care Act.”

In principle, the initiation and execution of clinical trial research shall require prior approval.

To ensure the safety of persons undergoing clinical trial research, in principal, an application shall be made to the central competent authority by clinical trial research institutes when clinical trial research is performed. After obtaining approval, clinical trials may proceed; however, in order to simplify management, if the central competent authority announces that there are no obvious risks posed by clinical trial research, no application will be required. (Article 38)

Reporting of Adverse Circumstances
If persons during the period of undergoing clinical trial research or after termination, are adversely affected by clinical trial research at the clinical research institution, the clinical research institution shall within seven (7) days of acknowledging such adverse effects, submit a report attached with all information related to the event to be provided to the central competent authority for archival.

Medical Device Advertisement Regulations

The medical device advertisement regulations prescribed by the Act are relatively in line with the regulations already prescribed by the Pharmaceutical Affairs Act in regards to advertisements requiring prior approval from the competent authority (before implementation). It is important to note that although numerous Grand Justices of the Constitutional Court indicated in Constitutional Interpretation No. 744 that the review/prior screening systems for cosmetic products were unconstitutional and invalid, this does not substantially impact the final conclusion rendered in Constitutional Interpretation No. 414 in relation to the review/prior screening systems of pharmaceutical advertisements (Interpretation 414 deemed that review systems for pharmaceutical advertisements were constitutional). However, this also simultaneously indicates that the central competent authority will maintain a strict view of review/prior screening systems, and moving forward, whether or not this will impact medical device advertisement regulations, will require continued observation.

Other important regulations are listed as follows:
Applicants that intend to implement advertisements are restricted to owners of product permits or other registered persons. (Article 42)
Relaxing of restrictions on medical device advertisements:

If medical devices are specially designated for use by medical professionals or prior approval is provided from the central competent authority, advertisements in technical materials (for medical devices) shall not be restricted by the provisions of the Pharmaceutical Affairs Act in relation to technical materials for medical treatment. Also, advertisements may be displayed in technical materials in use by medical professionals, be disseminated in the media, and be displayed at any relevant medical tech events. (Article 45)

Although provided prior approval, the competent authority may stop the dissemination of advertisements suspect of endangering physical and mental health:

For medical device advertisements that received prior approval, but did not receive approval for amended items, if the authority that provided approval discovers that the content of advertisements or means of dissemination are suspect of endangering the health and wellbeing of R.O.C. citizens, the competent authority shall issue an order to immediately stop dissemination or impose a probation period to rectify such violations. (Article 42)

Safety and Supervision of Medical Devices After Market Introduction and Reporting Obligations for Medical Device Companies
In order to ensure the safety and quality of sold medical devices, Articles 48 and 49 of the Act provide that medical device companies and medical institutions shall cooperate to implement safety monitoring systems, hence that if on the condition serious adverse effects arise, medical device companies and medical institutions shall report such adverse effects. (Article 48 and Article 49)

If when medical device companies discover medical devices pose a danger to humans, those companies shall immediately report and proceed with rectifying and implementing protective measures to reasonably inform users of potential danger. (Article 50)

(such as stipulating warnings, replacing parts, testing products, suspending use, recycling products, or other necessary measures necessary for risk management)



If you should have comments or further interest in the above article,
please kindly contact Charlotte Wu, Esq.
TEL +886 2 2377 1858 EXT 8888