Innovative Development Plan of Implementing Hong Kong or Macao Marketed Drugs and Medical Devices in China's Greater Bay Area

On 25 November 2020, eight ministers and authorities at national level[1]issued the Work Plan for the Innovative Development of the Regulation of Drugs and Medical Devices in the Guangdong-Hong Kong-Macao Greater Bay Area of China (the "Plan"). On the same day, the National Medical Products Administration ("NMPA") released the official interpretation on the Plan. Based on this interpretation, the Plan is aimed at facilitating Hong Kong and Macao residents to work and live in the Guangdong-Hong Kong-Macao Greater Bay Area (the "Greater Bay Area") with regard to healthcare services. It will help attract local and multinational pharmaceutical, biomedical and health technology companies to expand their businesses in Hong Kong and Mainland China cities in the Greater Bay Area, benefiting patients in both places.

1. Overall Development Targets of Shaping a Healthy Bay Area

According to the Outline Development Plan for Guangdong-Hong Kong-Macao Greater Bay Area, the main target is to shape a healthy bay area and to set up cooperation in medical and healthcare services in the Greater Bay Area.

a) By 2022

(1) a system and mechanism for local medical institutions in the Greater Bay Area to use drugs and medical devices that are already sold on Hong Kong and Macao markets will be established;

(2) the designated medical institutions in the Greater Bay Area will be basically equipped to provide high-level medical equipment for Hong Kong and Macao;

(3) a "soft connectivity" mechanism for the development, production, circulation and use of drugs and medical devices in the Greater Bay Area will be established;

(4) pilot projects will be actively and steadily carried out, such as the review and approval of the external use of Chinese patent medicines in Hong Kong and Macao;

(5) the production of Hong Kong and Macao medicines and medical devices will be located in the Greater Bay Area;

(6) a national pharmaceutical and medical device technical support organization will be established to promote the rapid and healthy development of the pharmaceutical industry in the Greater Bay Area; and

(7) location advantage of the Greater Bay Area will be relied on to promote the standardization, modernization and internationalization of traditional Chinese medicines.

b) By 2035

(1) a complete drug and medical device supervision and coordination mechanism which can conveniently offer drugs and medical devices to Hong Kong and Macao residents in the Greater Bay Area will be established;

(2) a high-level scientific and technological innovation platform for the pharmaceutical industry will be established to realize the depth integration of the pharmaceutical industry in the Greater Bay Area;

(3) the upgrading of drug and medical device manufacturing in the Greater Bay Area will be realized; and

(4) to build a national pharmaceutical industry innovation and development demonstration zone and a world-class bay area.

2. Major Innovations of the Plan

a) Designated medical institutions operating in any of nine Pearl River Delta cities consisting of Hong Kong, Macao, as well as the municipalities of Guangzhou, Shenzhen, Zhuhai, Foshan, Huizhou, Dongguan, Zhongshan, Jiangmen and Zhaoqing in Guangdong Province ("Nine PRD Cities") of the Greater Bay Area will be allowed to use drugs and medical devices that are already sold on Hong Kong and Macao markets for urgent clinical use, and the approval authority of such use will be shifted from the NMPA to the People's Government of Guangdong Province ("Guangdong Government") as authorized by the State Council.

(1) Implementation scope

• "Designated medical institutions" means Hong Kong and Macao medical institutions that are established in the form of sole partnerships, joint ventures, or cooperation located in Nine PRD Cities of the Greater Bay Area and are subject to the examination and determination by the Health Commission of Guangdong Province ("Guangdong Health Commission").
• Phased implementation: the University of Hong Kong-Shenzhen Hospital is designated as the pilot medical institution in the first phase and such medical institutions will be gradually expanded to other designated medical institutions that meet the conditions and procedures to be formulated by Guangdong Health Commission.
• Catalogue of imported drugs: Guangdong Health Commission and the NMPA in cooperation with the health authorities in Hong Kong and Macao will determine the catalogue of imported drugs based on actual clinical needs and situations of drugs on the market, and to adjust such catalogue from time to time.

(2) Implementation procedures

• Import approval: the designated medical institution shall submit an application for the drug that has urgent clinical need to Guangdong Health Commission for review and assessment. Upon the decision of Guangdong Health Commission, which will issue a review opinion stating that such drug has urgent clinical need, such designated medical institution shall submit an application for using such imported drug to the MPA in Guangdong Province. Approval shall be issued by the Medical Products Administration ("MPA") in Guangdong Province if relevant requirements are met by such designated medical institutions.
• Customs clearance: the designated medical institution shall apply to the MPA at the port of the Greater Bay Area for the "Customs Clearance Form for Imported Drugs", and the competent customs shall handle relevant customs clearance procedures accordingly. The designated medical institution shall entrust qualified pharmaceutical enterprises to purchase, import and distribute such drugs in accordance with relevant laws and regulations.

b) The implementation of Paragraph 2 of Article 11[2] of the Regulations on the Supervision and Administration of Medical Devices, effective on 4 May 2017, in Nine PRD Cities of the Greater Bay Area, shall be suspended. Guangdong Government is empowered to approve the use of urgently-needed medical devices for clinical use that are already purchased and used by public hospitals in Hong Kong and Macao and that have advanced nature in clinical application, by designated medical institutions operated in the said regions.

(1) The implementation scope is the same as the scope above in Section 2- a) -(1).

(2) Implementation procedures

• Import approval: similar to the above in Section 2- a) -(2), a designated medical institution shall submit an application for the use of an imported medical device in the Greater Bay Area to the Guangdong Health Commission for review and assessment. The assessment shall be conducted by taking in consideration the following conditions, such as whether such medical device to be imported is urgently needed for clinical use and has no other existing medical treatment methods available, whether the products currently on the market in Mainland China can achieve the same treatment effect, and whether medical institutions have ability to use such medical device, etc. The MPA in Guangdong Province shall evaluate the advanced nature of clinical applications and determine whether to issue the approval opinion for importing such medical devices that have no same registered varieties in Mainland China. Besides, the Bureau of Commerce of Guangdong Province will issue a review opinion on the import of medical devices which are regarded as large-scale medical equipment in accordance with relevant regulations.
• Customs clearance: upon obtaining the approval opinion from the Guangdong Health Commission or the Bureau of Commerce of Guangdong Province (as the case may be), the designated medical institution shall apply for import customs clearance to Guangdong Sub-administration of General Administration of Customs.

c) Greater Bay Area sub-center of the NMPA shall be established for the evaluation and inspection of drugs and medical devices in order to provide national-level technical support for the innovative development of the biological medicine industry in the Greater Bay Area.

d) The development of the traditional Chinese medicine industry shall be supported in the Traditional Chinese Medicine Science and Technology Industrial Park of Co-operation between Guangdong and Macao located in Hengqin County, Zhuhai City, Guangdong Province ("Hengqin Chinese Medicine Industrial Park").

(1) Registration and approval procedures: to simplify the registration and approval procedures of Chinese traditional medicines for external use in Hong Kong and Macao. The NMPA has authorised the MPA in Guangdong to review and approve the commercialization of Chinese traditional medicines for external use in Hong Kong and Macao.

(2) Catalogue of Chinese traditional medicines for external use: the MPA in Guangdong in cooperation with the health authorities in Hong Kong and Macao shall determine the catalogue of Chinese traditional medicines for external use and file such catalogue with the NMPA.

(3) It is encouraged to establish Chinese medicine product innovation incubation centers in Hengqin Chinese Medicine Industrial Park, and Chinese medical institutions are encouraged to develop medical preparations and Chinese medical devices in the Hengqin Chinese Medicine Industrial Park.

e) The reform of the system of drug marketing authorization holders ("MAH") and medical device registrants shall be carried out in the Greater Bay Area.

If an MAH or a medical device registrant is a Hong Kong or Macao enterprise, it can appoint an enterprise in the Greater Bay Area to perform its duties as a MAH or a medical device registrant. Such appointed enterprise in the Greater Bay Area shall bear joint and several liabilities for such related Hong Kong or Macao enterprise. The Plan only addresses the main principles, and more detailed implementation rules are yet to be formulated by the MPA in Guangdong and other relevant authorities.

MAHs and medical device registrants in Hong Kong and Macao are encouraged to entrust qualified pharmaceutical enterprises in the Nine PRD Cities for production. (To learn more information about the local production of imported medical devices in China, please refer to our previous newsletter published on 2 November 2020[3]).

f) Establishing a new port permitted for drug import in Zhongshan City of Guangdong Province. The Zhongshan Laboratory of Guangdong Institute for Drug Control shall serve as the drug inspection office of the port.

3. Quality and Safety Control and Risk Management

a) Supporting systems and implementation rules to be formulated

According to the Plan, relevant authorities in Guangdong shall formulate a series of related systems and rules to strengthen the supervision of quality and safety of drugs and medical devices. The MPA in Guangdong shall work together with other relevant authorities to formulate a whole-process supervision system and management rules for the procurement, import, customs clearance, storage, distribution and use of drugs and medical devices by designated medical institutions in the Greater Bay Area and to refine requirements on storage, maintenance and management of drugs and medical devices as well as clarify the content of adverse reactions, adverse event monitoring, emergency responses, etc. especially to establish a product information system that can be traced throughout the entire process.

b) Strengthening the main responsibilities of medical institutions and pharmaceutical enterprises

Access conditions and requirements for medical institutions shall be strictly implemented and undertakings by legal representatives of such medical institutions shall be made. The medical institutions that urgently need to import drugs and medical devices for clinical use must execute a letter of undertaking by their legal representatives that they shall ensure that such drugs and medical devices shall be used within such medical institutions and take full responsibility for the use of such drugs and medical devices.

c) Improving rights remedy mechanism for patients

The designated medical institutions shall conclude consent forms with their patients to inform and clarify the dispute resolution methods to patients. The Plan refers to the internationally accepted insurance compensation mechanism to protect the legitimate rights and interests of patients in the event of a medical malpractice accident after using imported drugs and medical devices.

4. Our Preliminary Comments

The Plan will encourage more cross-border business activities among Hong Kong, Macao and Mainland China to optimize the allocation of medical resources in the Greater Bay Area. The Plan undoubtedly provides a convenient and cost-saving method for the use or localisation in the Greater Bay Area of drugs and medical devices which are marketed in Hong Kong and Macao. From now on, foreign pharmaceutical enterprises that have already commercialized drugs and medical devices in Hong Kong or Macao are entitled to enjoy the faster localization approach according to the Plan. Those drugs and medical devices already commercialized on Hong Kong or Macao market can be imported for use for urgent clinical need in the Greater Bay Area. The Plan is also aimed at developing and supporting insurance institutions in the Greater Bay Area, which can trigger more opportunities for foreign insurance companies to bring or develop innovative cross-boundary medical insurance products and provide facilitation services in the Greater Bay Area.

[1] These eight ministers and authorities at national level are the State Administration for Market Regulation, the National Medical Products Administration, the National Development and Reform Commission, the Ministry of Commerce, the National Health Commission, the General Administration of Customs, Hong Kong and Macao Affairs Office of the State Council, and the National Administration of Traditional Chinese Medicine.

[2] Paragraph 2 of Article 11 of the Regulations on the Supervision and Administration of Medical Devices provides that "for overseas manufacturers who export Class II and Class III medical devices to China, the representative institutions set up by such manufacturers in China or legal persons in China designated by such manufacturers as agents shall submit, to the drug supervision and administration department under the State Council, the application materials and supporting documents to allow such medical devices to be marketed."

[3] https://cms.law/en/chn/publication/a-new-announcement-on-the-local-production-of-imported-medical-devices-in-china