Hainan Province Unveils 21-Point Policy to Accelerate Digital Therapeutics Industry Development

VCBeat has learned that Hainan Province has just released the “Several Measures for Accelerating the Development of the Digital Therapeutics Industry in Hainan Province” (hereinafter referred to as the “Measures”), which specifies key details for advancing the digital therapeutics sector in the province. The plan aims to transform Hainan into a global innovation hub, a cluster for innovative resources, and an industrial highland for digital therapeutics within two to three years.

In late January this year, the Hainan Provincial Health Commission included “exploring pilot trials of digital therapeutics” as one of the key tasks in the 14th Five-Year Plan for Digital Health Development in Hainan Province. This marks the first time that digital therapeutics have been incorporated into a provincial-level plan, drawing significant attention from the industry and creating a demonstration effect, with local governments in multiple regions beginning to focus on digital therapeutics.

Nowadays,Hainan has once again taken the lead nationwide, with the Measures being the first policy in China and globally to provide full-lifecycle support for digital therapeutics.Meanwhile, this is another major piece of good news for the digital therapeutics industry.

VCBeat will follow up with further analysis; please stay tuned.

Screenshot from the Hainan Provincial People's Government Website

The full text of the policy is as follows:

Several Measures for Hainan Province to Accelerate the Development of the Digital Therapeutics Industry

To implement the spirit of General Secretary Xi Jinping’s speech at the conference celebrating the 30th anniversary of the establishment of Hainan Province and its special economic zone, which called for “Hainan to deepen supply-side structural reform, leverage its advantages, gather innovation factors, and actively develop the new-generation information technology industry and the digital economy,” and to seize historical opportunities, the following measures are hereby formulated. Through two to three years of efforts, Hainan will be built into a global innovation hub for digital therapeutics, a cluster for innovation resources, and an industrial highland. Digital therapeutics will be established as a “new engine” for the high-quality development of Hainan’s health industry, thereby promoting leapfrog development in healthcare and public health in Hainan and achieving the goal of increasing average life expectancy by two years during the 14th Five-Year Plan period.

I. Establishing a Nationally Leading Clinical Research and Demonstration Base for Digital Therapeutics

(1) Establish a cohort of digital therapeutics clinical trial centers. Select a group of tertiary hospitals with advantageous specialties across the province to establish digital therapeutics clinical trial centers, such as the Boao Lecheng International Medical Tourism Pilot Zone Digital Therapeutics Clinical Research and Translation Base, the Digital Therapeutics Clinical Trial Center for Mental Disorders, the Digital Therapeutics Clinical Trial Center for Attention-Deficit/Hyperactivity Disorder (ADHD) and Autism Spectrum Disorder in Children, the Digital Therapeutics Clinical Trial Center for Oncology, the Digital Therapeutics Clinical Trial Center for Ophthalmology, and the Digital Therapeutics Clinical Trial Center for Sleep Disorders. (Responsible entities: Provincial Health Commission, Provincial Medical Products Administration, Administrative Bureau of Boao Lecheng International Medical Tourism Pilot Zone; Implementation deadline: by October 31, 2022)

(II) Encourage technological breakthroughs and clinical translation of digital therapeutics. Medical institutions, universities, and research institutes are encouraged to conduct scientific research on digital therapeutics and promote their clinical translation. Active efforts should be made to apply for provincial key R&D special projects, the Provincial Natural Science Foundation, and other special science and technology funds. Mechanisms such as “open competition” (Jiebang Guashuai) should be explored to attract leading entities to tackle key technologies critical to the digital therapeutics industry. International scientific cooperation is encouraged, with a focus on developing global collaborative platforms for digital therapeutics research projects. Support shall be provided for the research, development, and innovation of digital therapeutics products. Enterprises, universities, and medical institutions may utilize the Provincial Biomedical Industry R&D Vouchers and other provincial policies supporting R&D and innovation. Subsidies and rewards will be granted in stages to these entities based on phased achievements in the product development and industrialization of digital therapeutics. Medical institutions are supported in providing preferential treatment to personnel actively engaged in or undertaking clinical research on digital therapeutics, particularly in areas such as position establishment, job promotion, and awards recognition. Within public hospitals, performance-based compensation distribution should appropriately favor staff involved in digital therapeutics clinical research. Cash rewards derived from the transformation of job-related scientific and technological achievements in digital therapeutics are permitted to be included in the total amount of the entity’s performance-based wages for the current year; such rewards are exempt from the total wage cap, excluded from the base calculation of the total wage bill, and not considered part of the base for social insurance contributions. (Responsible units: Provincial Department of Science and Technology, Provincial Department of Industry and Information Technology, Provincial Health Commission, Provincial Bureau of Talent Development, Provincial Department of Human Resources and Social Security, Provincial Department of Education; Implementation deadline: by December 31, 2022)

(3) Accelerate the development of public service and management platforms for digital therapeutics. Establish dedicated channels on the websites of relevant departments to facilitate the digital therapeutics industry, enabling stakeholders such as enterprises, medical institutions, and clinicians to submit clinical trial requirements and helping all parties rapidly connect and match resources. Establish a public disclosure system for digital therapeutics clinical trials, requiring digital therapeutics companies to promptly report detailed information and results of clinical trials; such information may serve as evidentiary basis for regulatory approval authorities. Attract a cohort of contract research organizations (CROs) and contract development and manufacturing organizations (CDMOs) specializing in digital therapeutics to establish operations in Hainan, support the construction of digital therapeutics CDMO platforms in Hainan, and facilitate clinical trial and commercialization collaborations between these platforms and physical hospitals as well as internet hospitals in Hainan. (Responsible entities: Provincial Health Commission, Provincial Medical Products Administration, Provincial Department of Industry and Information Technology; Implementation deadline: by October 31, 2022)

II. Accelerate the Registration and Approval of Digital Therapeutics Products

(4) Develop regulatory and registration approval guidance documents for the classification of digital therapeutics products. Establish a dedicated section on the departmental website to list regulatory policies and guidance documents related to the registration and approval of digital therapeutics. Based on the National Medical Products Administration’s guiding principles for the classification of medical device software, the technical review guidelines for the registration of mobile medical devices, and the classification determinations issued by the National Standardization Management Center, formulate opinions on the classification and definition of digital therapeutics and publish them in the dedicated section. Provide categorized explanations of applicable regulatory policies, regulatory documents, and operational guidelines for key stages of digital therapeutics products, including clinical trials, registration review and approval, and updates and iterations. (Responsible entity: Provincial Medical Products Administration; Implementation deadline: by December 31, 2022)

(5) Establish a dedicated channel for registration guidance on Class II medical device digital therapeutics products. Publish the hotline and email address for regulatory policy consultations on digital therapeutics on the websites of relevant departments, and establish a specialized rapid-response mechanism for providing guidance on Class II medical device digital therapeutics products. Designated personnel shall be responsible for addressing technical inquiries regarding digital therapeutics products, with responses provided in principle within 10 working days of receipt of the inquiry. Conduct training for enterprises on the registration procedures and policies for digital therapeutics products to enhance the standards and quality of their submissions and improve approval rates. (Responsible entity: Provincial Medical Products Administration; Implementation deadline: by October 31, 2022)

(6) Issue a catalog to encourage the development of digital therapeutics and establish a green approval channel for specific types of digital therapeutics. Priority encouragement shall be given to a batch of digital therapeutic products with solid evidence-based support, high technological maturity, urgent clinical needs in Hainan, and broad development prospects, by establishing a priority approval channel. Formulate priority approval procedures for digital therapeutics, specifying the conditions and work processes required for eligibility. The review and approval shall be completed within three months after the enterprise submits the registration application for digital therapeutic products in accordance with the requirements for medical device registration materials; however, the time taken for the enterprise to submit supplementary materials and for expert technical review shall not be counted within this time limit. For applications that are not approved, the applicant shall be informed of the reasons for rejection and provided with recommendations. (Responsible unit: Provincial Medical Products Administration; Implementation deadline: Before October 31, 2022)

(7) Explore a filing-based system for digital therapeutics and encourage the application of real-world data in product registration, approval, and post-market clinical validation. For digital therapeutic products with low risk that are applicable to public health areas such as screening and intervention, explore rapid promotion and application through a filing mechanism, provided that they comply with relevant national review and approval requirements. Encourage real-world studies, fully leverage the leading role of the National Medical Products Administration’s (NMPA) Regulatory Science Research Bases for Drugs and Medical Devices and the NMPA Hainan Key Laboratory for Real-World Data Research and Evaluation, and draw on the experience of approving specially permitted medical devices for market launch based on real-world studies. Promote the use of real-world data as evidence for the registration applications of digital therapeutic products, as well as for regulatory decision-making and post-market clinical validation of these products. (Responsible entity: Provincial Medical Products Administration; Implementation timeline: Long-term promotion)

III. Actively Promote the Application of Digital Therapeutics Products

(8) Establish digital therapeutics promotion bases. Select qualified medical institutions to serve as the first batch of digital therapeutics diagnosis and treatment centers, and gradually integrate digital therapeutics into the routine disease diagnosis and treatment pathways of all eligible medical institutions. In conjunction with initiatives such as Hainan Province’s “2+3” health service package, leverage digital therapeutics to enhance the healthcare service delivery capacity of primary medical institutions and improve disease management capabilities for patients and their families. Encourage medical institutions to promote digital therapeutics within their facilities, thereby raising awareness and usage proficiency among patients and the general public. (Responsible entity: Provincial Health Commission; Implementation deadline: by December 31, 2022)

(9) Promote the integrated development of digital therapeutics and internet hospitals. Encourage medical institutions to integrate digital therapeutics with internet hospital platforms, granting physicians the authority to prescribe digital therapeutics via internet hospitals. Drive internet hospitals to increase the application of digital therapeutic products, enhancing service capabilities in areas such as specialized disease prevention and control, and health interventions. Encourage physicians to utilize digital therapeutics as a tool for out-of-hospital patient management, leveraging functions such as follow-up consultations, prescription renewals, prescription circulation, and pharmaceutical delivery offered by internet hospitals to achieve comprehensive out-of-hospital patient management. Implement operational oversight of digital therapeutics through the Hainan Provincial Internet Hospital Supervision Platform. (Responsible entity: Provincial Health Commission; Implementation deadline: By December 31, 2022)

(10) Establish a nationally leading demonstration zone for digital therapeutics applications. Integrate digital therapeutics into the entire process of healthcare reform and development in Hainan, coordinating with initiatives such as the construction of a tiered diagnosis and treatment system and the establishment of diagnosis and treatment centers. Support the promotion and application of digital therapeutic products with urgent clinical needs and prominent clinical value within urban medical groups, county-level medical consortia, and the five major centers including chest pain centers. Encourage the use of patient data generated from digital therapeutics to assist physicians in secondary and tertiary hospitals in diagnosing complex and critical cases, and to support medical staff in primary healthcare institutions in managing chronic disease patients and tracking their conditions. Advance regional healthcare informatization by integrating interfaces between digital therapeutics and regional electronic medical record (EMR) databases and electronic health record (EHR) databases. Rely on Hainan Province’s “Integrated Network for Medical Care, Health Insurance, and Pharmaceutical Services” platform to achieve comprehensive supervision of digital therapeutics. (Responsible entity: Provincial Health Commission; Implementation deadline: By December 31, 2022)

(11) Encourage all sectors of society to increase the application of digital therapeutics products. Encourage relevant departments, public welfare foundations, and other institutions and organizations to procure digital therapeutics products. Focusing on key populations, diseases, and diversified, multi-level digital health needs, expand the use of digital therapeutics products in the treatment of mental health and behavioral cognition, effectively improve the effectiveness of chronic disease intervention and screening, empower community family doctors with digital therapeutics technology, innovate service models, and enhance residents' health intervention capabilities. (Responsible units: Provincial Health Commission, Provincial Disabled Persons' Federation; Implementation deadline: by December 31, 2022)

IV. Encourage the Exploration of Diverse Payment Methods

(12) Encourage the exploration of product innovation in “digital therapeutics + commercial insurance.” Pilot initiatives in the Boao Lecheng International Medical Tourism Pilot Zone shall explore incorporating digital therapeutics as health management services within special drug insurance schemes. Insurance companies are encouraged to legally and compliantly utilize digital therapeutics as tools for user health management and to establish reasonable pricing based on real-world data collected through digital therapeutics, in accordance with relevant regulations. Efforts shall be made to develop an upgraded version of the Hainan Huiminbao (inclusive health insurance), incorporating selected digital therapeutic products as health management services into the coverage scope of insurance products. The inclusion of digital therapeutic products in the product design frameworks of insurance institutions is encouraged. Support shall be provided for product development personnel at insurance institutions to participate in digital therapeutics training organized by medical regulatory authorities, thereby enhancing their understanding of digital therapeutics. (Responsible entities: Hainan Regulatory Bureau of the China Banking and Insurance Regulatory Commission, Provincial Department of Finance, Provincial Healthcare Security Administration, Provincial Health Commission, Provincial Tax Service, and the Administrative Bureau of the Boao Lecheng International Medical Tourism Pilot Zone; Implementation deadline: By December 31, 2025)

(13) Encourage the inclusion of digital therapeutics in the technical specifications and fee schedules for medical service items. Explore price formation mechanisms and health insurance payment models for digital therapeutics. In light of the actual diagnostic and treatment needs for specific diseases, actively explore clinical price formation mechanisms for digital therapeutics, and reasonably establish fee standards. Medical institutions shall submit applications to the Provincial Healthcare Security Administration for pricing items related to digital therapeutic services; these will be implemented after undergoing organized expert review and fulfilling relevant procedures. Guided by the strategic purchasing principles of health insurance—premised on alignment with economic development levels, directed by the goal of reflecting social equity in health insurance, and centered on enhancing value—study the inclusion of digital therapeutic products or medical services that demonstrate high clinical value, favorable cost-effectiveness, and affordability for both the health insurance fund and insured individuals into the scope of health insurance coverage. Include digital therapeutic products used by medical institutions within the scope of medical service revenue. (Responsible entities: Provincial Healthcare Security Administration, Provincial Health Commission; Implementation deadline: by December 31, 2022)

(14) Support the exploration of integrating digital therapeutics with reforms in health insurance payment methods. In light of the progress of health insurance payment method reforms across the province, select medical institutions that have already implemented digital therapeutics and accumulated relevant data to support the application of digital therapeutics in healthcare cost control and health management. Explore effective models for combining digital therapeutics with the promotion of diagnosis-related group (DRG) payment systems, thereby facilitating the establishment of a value-based and data-driven efficient payment mechanism. (Responsible entities: Provincial Healthcare Security Administration, Provincial Health Commission; Implementation deadline: by December 31, 2022)

V. Strengthening Promotion of Digital Therapeutics and Development of Industrial Clusters

(15) Build a high-quality digital therapeutics industry cluster. Compile a directory of domestic and international digital therapeutics companies and potential interested enterprises, and implement precise investment promotion across the entire industrial chain. Leveraging the policy advantages of the Hainan Free Trade Port, the full-cycle policy support system for digital therapeutics, and high-level data platforms such as the Electronic Prescription Center, we will attract innovative resources. By integrating the industrial foundations of key parks—including the Boao Lecheng International Medical Tourism Pilot Zone, Hainan Eco-Software Park, Haikou National High-Tech Industrial Development Zone, and Haikou Fuxing City Internet Information Industrial Park—we will establish several innovation hubs and industry clusters for digital therapeutics in the Hainan Free Trade Port. (Responsible units: Provincial Health Commission, Provincial Development and Reform Commission, Administration Bureau of Boao Lecheng International Medical Tourism Pilot Zone, Administration Bureau of Hainan Eco-Software Park, Administrative Committee of Haikou National High-Tech Industrial Development Zone, Haikou Fuxing City Internet Information Industrial Park, Hainan International Economic Development Bureau, etc.; Implementation deadline: by December 31, 2023)

(16) Actively introduce overseas digital therapeutics companies. Implement targeted policy measures for different types of overseas digital therapeutics companies, actively guide them to cooperate with local medical institutions, and achieve deep integration of overseas digital therapeutics into the local industrial chain. Leveraging the advantages of the Boao Lecheng International Medical Tourism Pilot Zone as a pilot site for the research and application of real-world data, introduce a batch of high-quality overseas digital therapeutics products for initial trial use in China, and support the use of their real-world study data for product approval. (Responsible units: Provincial Health Commission, Provincial Development and Reform Commission, Administration Bureau of Boao Lecheng International Medical Tourism Pilot Zone; Implementation deadline: by December 31, 2022)

(17) Accelerate the establishment of the Hainan Digital Therapeutics Innovation Island brand. Host the World Digital Therapeutics Conference in Hainan to gather resources such as government policies, leading enterprises, capital, innovative technologies, and talent. Release the annual World Digital Therapeutics Report (in multiple languages), establish a Digital Therapeutics Display and Experience Center, and create a large-scale, distinctive digital therapeutics exhibition hall using technologies and methods such as virtual reality, holographic projection, large digital screens, and physical exhibits. (Responsible units: Provincial Health Commission, Provincial Department of Commerce, Provincial Development and Reform Commission, Hainan Ecological Software Park Administration, Boao Lecheng International Medical Tourism Pilot Zone Administration; Implementation deadline: by December 31, 2022)

VI. Standardized Development and Other Safeguards

(18) Attract digital therapeutics-related associations or branches to establish a presence, formulate industry standards, and build an information exchange platform. Establish a Digital Therapeutics Expert Committee or similar organizations to research and develop industry standards for digital therapeutics; regularly hold training sessions and academic seminars on digital therapeutics to enhance awareness among clinicians and other stakeholders, and gradually promote the inclusion of digital therapeutics into expert consensus guidelines for the diagnosis, treatment, and management of various specialized diseases. Support the establishment of an International Digital Therapeutics Industry Alliance, organize domestic and international enterprises to conduct discussions on policies and regulations, review and approval processes, medical value, and health insurance reimbursement related to digital therapeutics, providing cutting-edge international theoretical guidance and practical experience for building innovative business models. (Responsible unit: Provincial Health Commission; Implementation deadline: by December 31, 2022)

(19) Strengthen data security supervision and enhance the utilization of data resources. Formulate policy guidelines on data security for digital therapeutics. Encourage the use of the provincial government information sharing and exchange platform to aggregate resident health data collected by digital therapeutic products into the provincial “Three-Medical Big Data Resource Center,” under the premise of strengthening security safeguards and privacy protection in accordance with the law, thereby steadily promoting the orderly opening of health and medical data resources. Provide specialized guidance on technical reviews for user information protection related to digital therapeutic products, and strictly hold accountable those responsible for any data breaches. Establish mechanisms such as user complaint channels, regular inspections, and random checks to promptly identify and handle relevant illegal and non-compliant activities in accordance with the law. (Responsible units: Provincial Cyberspace Administration Office, Provincial Big Data Administration Bureau, Provincial Health Commission; Implementation deadline: By December 31, 2022)

(20) Strengthen talent support for digital therapeutics. Encourage relevant institutions in Hainan to introduce courses and majors in digital therapeutics, support the development of related interdisciplinary fields, and intensify efforts to cultivate professionals in interdisciplinary areas such as the internet, big data, artificial intelligence, and bioinformatics, thereby providing talent support for the development of the digital therapeutics industry. Establish the Provincial Digital Therapeutics Research Institute based on Hainan Medical University. Implement provincial policies guaranteeing services such as household registration (hukou), vehicle purchase, housing, and medical care for talents, and encourage and support research institutes, universities, and enterprises in actively recruiting mid-to-high-level and senior talents from both domestic and overseas sources. Actively organize candidates from the digital therapeutics industry to apply for talent programs at all levels, and support high-end and urgently needed talents in digital therapeutics to enjoy individual income tax preferential policies of the Hainan Free Trade Port in accordance with relevant regulations. (Responsible units: Provincial Department of Education, Provincial Health Commission, Provincial Department of Finance, Provincial Talent Development Bureau, Provincial Department of Industry and Information Technology, Hainan International Economic Development Bureau, Hainan University, Hainan Medical University; Implementation deadline: by December 31, 2022)

(21) Leverage the role of the Free Trade Port Fund and adopt equity investment methods to support the development of the digital therapeutics industry. Fully utilize the leveraging effect of the Hainan Free Trade Port Construction Investment Fund, cooperate with industrial capital and financial capital in a manner guided by the government and operated according to market principles, promote the establishment of sub-funds in the medical and health sector, direct investments toward the digital therapeutics industry, and support the development of digital therapeutics enterprises in Hainan. (Responsible units: Provincial Department of Finance, Provincial Health Commission; Implementation deadline: by December 31, 2022)