Proposal for Shared R&D Laboratories to Support SMEs in Medical Device Sector Gains Momentum

● Reporter of China Securities Journal, Fu Su Ying

"In terms of R&D, small and medium-sized enterprises (SMEs) in the medical device industry generally face significant risks such as high R&D investment, long development cycles, scarce resources, and a high probability of failure," said Chang Zhaohua, member of the Chinese People's Political Consultative Conference and Chairman and CEO of MicroPort, in a recent interview with China Securities Journal. He suggested reducing the burden on these SMEs by sharing resources during the R&D stage to allocate limited resources toward innovation. Additionally, he proposed further improvements to the technical review process for Class II medical device registration and advancing the allocation of production resources across administrative regions for medical device companies.

Allowing medical device enterprises

Resource Sharing in the R&D Stage

From 2017 to 2021, the number of medical device manufacturing enterprises in China increased from over 16,000 to more than 28,000. Small, medium, and micro enterprises have become an important driving force for the development and innovation of the medical device industry.

"Such a large number of small and micro enterprises are generally faced with enormous risks, including high R&D investment, long development cycles, scarce resources, and a high probability of failure," said Chang Zhaohua. In recent years, the implementation of the registrant system has, to a certain extent, addressed the issue of resource allocation among medical device companies through contract manufacturing. However, it still cannot fully resolve the development challenges faced by small and micro enterprises in reducing operating costs and improving R&D efficiency during the research and development phase, especially for those within the scope of the "List of Medical Devices Prohibited from Contract Manufacturing."

"By sharing resources during the R&D phase, limited resources can be utilized for innovation, promoting the early market entry of innovative products." Chang Zhaohua suggested establishing and improving regulatory requirements to clarify that medical device products are allowed to share sites and facilities during the R&D phase, while setting basic conditions and requirements for such sharing. It is necessary to improve the regulations, guidelines, and detailed rules upon which product registration system inspections are based. The primary responsibility of medical device companies should be enforced, ensuring they establish a quality management system in accordance with medical device regulatory laws, regulations, and medical device production quality management standards, identifying and controlling risks associated with R&D work conducted on shared sites, and assuming primary responsibility. The quality management responsibilities for shared sites and facilities should be clearly defined through contracts (including quality agreements) or other means. A pilot mechanism for inter-company sharing of sites and facilities during the R&D phase of medical devices should be implemented.

"Initial trials can be conducted within corporate groups or mature health industry parks; regulatory authorities should actively explore ways to strengthen supervision, manage risks, and optimize development, accumulate experience, and expand the scope of application when appropriate," said Chang Zhaohua.

Improve the second class of medical devices

Registration Technical Review

In 2021, the National Medical Products Administration (NMPA) organized the revision of the "Operational Specifications for the Registration and Approval of Class II Medical Devices Manufactured in China" and issued nearly 200 related technical review guidelines, achieving positive results. Drug regulatory authorities in multiple provinces and cities, including Zhejiang Province, Guangdong Province, Beijing, and Shanghai, successively introduced "Special Review Procedures for Innovative Class II Medical Devices Manufactured in China," promoting industrial development.

"Due to certain differences in the knowledge structure, professional level, and comprehensive judgment ability of reviewers across regions, there are varying focuses and inconsistent standards in the review of the same type of product conducted in different provinces and cities. The lack of unified review standards has caused some confusion for enterprises and also affected the efficiency and quality of the review process, which in turn impacts the control of safety and effectiveness of Class II medical devices," said Chang Zhaohua.

To further improve the technical review of Class II medical device registration and unify the review standards across China, Chang Zhaohua suggests promoting or directly adopting the quality management system of the Center for Medical Device Evaluation (CMDE) under the National Medical Products Administration (NMPA) within provincial-level medical device technical review organizations. This aims to continuously optimize the workflow for the technical review of Class II medical devices and ensure the quality of the technical review.

Chang Zhaohua suggested speeding up the release of more technical review guidelines for Class II medical devices, unifying the standards for technical review requirements for the same type of product across different regions to reduce inconsistencies caused by individual cognitive and interpretative biases of reviewers; strengthening the professional development of review teams across regions, enhancing training and assessment of reviewers' professional capabilities, establishing unified national assessment and authorization standards, and requiring reviewers to undergo standardized training, qualification recognition, and authorization before conducting technical reviews to ensure that all reviewers in China execute reviews with equal capability and consistent standards; promoting the informatization of technical review systems across regions to increase transparency; encouraging electronic submission of registration materials for Class II medical devices; publicly disclosing technical review reports nationwide for Class II medical devices approved through innovative, priority, or special approval processes; establishing a consultation and reconsideration mechanism to enhance communication, exchange, and collaboration among reviewers across regions.

Promote Medical Device Enterprises

Cross-administrative region allocation of production resources

Regional integration is becoming the main battlefield and primary engine for leading national economic transformation and development. The regional integration of the medical device industry, in particular, can help form distinctive, large-scale national and regional medical device industrial clusters, optimizing resource allocation to the greatest extent.

"Under current regulations, due to factors such as local supervision, medical device companies are still required to establish a new company locally, reapply for product registration, and then apply for a production license when adding new production sites across administrative regions. This greatly restricts the needs of medical device companies to reasonably allocate production resources across administrative regions," said Chang Zhaohua.

According to reports, the National Medical Products Administration (NMPA) has recently been actively formulating relevant regulatory policies. These policies are expected to permit companies to allocate production resources across administrative regions, which will help maintain the consistency and continuity of quality management systems and reinforce the primary responsibility of registrants for full lifecycle quality management.

Chang Zhaohua suggested accelerating the implementation of relevant policies and regulations to allow medical device companies to add production sites across administrative regions (provinces, autonomous regions, municipalities) while keeping the main production license unchanged. The "application-acceptance-approval-post-certification supervision" closed-loop process and requirements should be clarified. A cross-regional communication and supervision mechanism should be established to ensure information exchange between regional regulatory agencies, further deepen regional regulatory collaboration, and promote mutual recognition of inspection results among medical device companies. A national-level information data platform for medical device companies should be built to establish a unified database for the medical device industry and an integrated supervision platform. Through informatization and digital means, interconnection and data sharing among different levels of medical device regulatory departments can be achieved to ensure high-quality and efficient supervision. Corporate primary responsibility should be strengthened by urging manufacturing companies to enhance full-site, full-process, and full-lifecycle management of their products. A quality management system suited to cross-administrative resource allocation activities should be established and effectively maintained to ensure the safety and efficacy of medical devices.