China's MOFCOM Unveils Landmark Policies to Boost Healthcare Sector in Hainan Free Trade Port

On April 7, 2021, with the approval of the CPC Central Committee and the State Council, the Ministry of Commerce issued the “Opinions of the National Development and Reform Commission and the Ministry of Commerce on Supporting the Construction of the Hainan Free Trade Port by Implementing Several Special Measures to Relax Market Access” (hereinafter referred to as the “Opinions”), so as to further support Hainan in establishing a market access system and business environment with Chinese characteristics for its free trade port, promote the free and convenient flow of factors of production, accelerate the cultivation of industries with international comparative advantages, and advance the high-quality and high-standard development of the free trade port.

Notably, the Opinion introduces multiple policies favorable to the healthcare industry, innovating market access mechanisms for pharmaceuticals, internet-based healthcare, medical devices, and high-end medical devices; encouraging the development of a diversified healthcare payment system; and promoting the translation of medical research achievements into practice, thereby providing unprecedented benefits to the development of the healthcare industry in the Hainan Free Trade Port.

The full text of the opinions concerning the pharmaceutical industry is as follows:

(Establish the Hainan Electronic Prescription Center in the Boao Lecheng International Medical Tourism Pilot Zone (hereinafter referred to as the “Lecheng Pilot Zone”) to provide third-party information services for prescription drug retailers. For prescription drugs marketed and sold in China, with the exception of those explicitly subject to special management under the National Drug Administration Law, all are permitted to be sold online via the Electronic Prescription Center without separate approval. The Hainan Electronic Prescription Center shall interface with internet hospitals, Hainan medical institutions’ prescription systems, various prescription drug sales platforms, medical insurance information platforms and payment settlement agencies, and commercial insurance institutions, to achieve centralized collection of prescription-related information and enable “one-stop online processing” for prescription drug purchases, information security certification, and medical insurance settlements. The Hainan Electronic Prescription Center and relevant departments of Hainan Province shall formulate detailed work plans, strengthen the management of high-risk drugs, and fulfill primary responsibilities for cybersecurity, information security, and personal privacy protection. Technologies such as blockchain and quantum information shall be utilized to achieve coordinated online and offline supervision, full-process traceability of drug distribution, and secure data storage. (Lead agencies: National Health Commission, National Medical Products Administration, National Development and Reform Commission, responsible according to their respective duties; Participating agencies: National Healthcare Security Administration, China Banking and Insurance Regulatory Commission, National Administration of Traditional Chinese Medicine))

Encourage the initial production of high-end medical equipment in Hainan. For domestically manufactured large-scale medical equipment that is produced in Hainan and included in the Guidance Catalogue for the Promotion and Application of Major Technical Equipment (First Set) or in the Catalogue for Configuration Licensing of Class A and Class B Large-Scale Medical Devices, implementation shall be carried out in accordance with relevant policy documents concerning the first set of domestically produced equipment. (Lead agencies: Ministry of Industry and Information Technology, National Health Commission, National Medical Products Administration; Participating agency: National Development and Reform Commission)

The People’s Government of Hainan Province shall optimize the environment for the research and development (R&D), testing, production, and application of pharmaceuticals (including traditional Chinese medicines, chemical drugs, and biological products). It shall encourage manufacturers of domestically produced high-value medical consumables, national innovative drugs, and traditional Chinese medicines to establish operations in Hainan, improve the financing support system for new drug R&D in Hainan, and formulate support policies for new drug R&D aligned with the Marketing Authorization Holder (MAH) system. Domestic and foreign pharmaceutical companies and drug R&D institutions are encouraged to develop various innovative drugs and improved new drugs in Hainan. Medical institutions located in the Boao Lecheng International Medical Tourism Pilot Zone shall be supported, in accordance with relevant regulations, to conduct clinical trials. For innovative drugs developed by pharmaceutical companies registered in Hainan that have completed Phase I–III clinical trials within China and obtained marketing authorization, qualified medical institutions in Hainan are encouraged to directly adopt these drugs in accordance with the principle of “immediate availability upon approval,” and relevant departments shall not impose additional market access requirements. (Lead agencies: National Medical Products Administration, National Health Commission; Participating agencies: National Administration of Traditional Chinese Medicine, General Administration of Customs)

The People’s Government of Hainan Province shall formulate policy opinions to support the establishment and development of contract research organizations (CROs) in Hainan, support the creation of a regional ethics center in Hainan that aligns with international standards for pharmaceutical research, and encourage collaboration between medical institutions in Hainan and CROs to enhance the technical capabilities and quality management levels of clinical trials in these institutions. The approval and filing processes for traditional Chinese medicine (TCM) preparations produced by medical institutions shall be optimized and improved. Relevant standards shall be developed in accordance with the principles of safety and efficacy, and pilot programs for TCM clinical trials and post-marketing re-evaluation shall be carried out in Hainan. (Lead agency: National Medical Products Administration; Participating agencies: Ministry of Science and Technology, National Health Commission, National Administration of Traditional Chinese Medicine)

Encourage renowned medical aesthetic institutions to establish themselves in the Boao Lecheng International Medical Tourism Pilot Zone. Medical aesthetic institutions within the Pilot Zone may utilize in bulk medical aesthetic products marketed in countries or regions such as the United States, the European Union, and Japan. Among these, drugs, medical devices, and cosmetics that require domestic registration or filing shall be registered or filed in accordance with the law. The Pilot Zone may formulate incentive measures. Relevant departments of Hainan Province shall study and propose a list of imported drugs, medical devices, cosmetics enterprises, and products needed for the development of the medical aesthetic industry in the Pilot Zone, assist relevant enterprises in carrying out registration, and receive support from the National Medical Products Administration. Support highly qualified foreign medical aesthetic practitioners to practice medicine in Hainan on a short-term basis in accordance with laws and regulations, promote the development of the medical aesthetic tourism industry, and support the introduction and organization of international, specialized medical aesthetic industry exhibitions, summits, and forums. Standardize the approval and supervision of medical aesthetic institutions. (Lead agencies: National Health Commission, National Medical Products Administration; Participating agencies: Ministry of Commerce, Ministry of Culture and Tourism)

(Pool high-quality resources of all kinds to promote the establishment of an International Transplant Science Research Center, accelerate the construction of tissue banks in accordance with internationally leading standards, continuously improve relevant systems and operational frameworks, and facilitate the application and commercialization of research outcomes in bio-regenerative materials in Hainan. Optimize the market access environment for various new drugs, diagnostic and testing reagents, gene technologies, and medical devices in the field of transplantation; streamline market access procedures covering development, registration, production, and use; and support eligible products in entering priority or innovative approval pathways. Apply consistent admission standards and ensure equal treatment for both socially funded medical institutions and public medical institutions in the accreditation and approval of qualifications for practicing human organ transplantation. Establish an International Transplant Medical Rehabilitation and Diagnosis/Treatment Center in the Boao Lecheng Pilot Zone, and coordinate with major medical institutions to carry out transplant-related medical rehabilitation and diagnosis/treatment services. Include eligible transplant medical projects within the scope of medical insurance coverage and facilitate cross-provincial medical insurance settlement. Encourage commercial insurance institutions to explore and develop insurance products related to transplant diagnosis/treatment and rehabilitation. Encourage top-tier traditional Chinese medicine (TCM) medical institutions in China to set up relevant facilities in Hainan, conduct research on integrated TCM and Western medicine approaches in transplant disciplines, and promote the integration of healthcare and wellness. (Lead agencies: National Health Commission, National Medical Products Administration; Participating agencies: Ministry of Science and Technology, National Healthcare Security Administration, National Administration of Traditional Chinese Medicine, Chinese Academy of Sciences))

Under the guidance of the National Development and Reform Commission (NDRC), support shall be provided for Hainan to establish a mixed-ownership reform fund for the healthcare industry, financed by social capital and operated on a market-oriented basis, so as to facilitate the landing and development of related industries. The China Securities Regulatory Commission (CSRC) shall actively provide support for the listing, mergers and acquisitions, and restructuring of key strategic enterprises backed by the mixed-ownership reform fund. (Lead agency: National Development and Reform Commission; Participating agency: China Securities Regulatory Commission)

It is proposed to optimize market access and the development environment in the financial sector by supporting the growth of the securities, insurance, and fund industries in Hainan. Financial institutions such as securities and fund firms shall be supported in establishing their presence in Hainan in accordance with the law.Encourage the development of commercial insurance for medical health and long-term care, and support the development of elderly care finance in various forms.(Lead agencies: the People’s Bank of China, the China Banking and Insurance Regulatory Commission, and the China Securities Regulatory Commission, each responsible according to their respective mandates; participating agency: the National Development and Reform Commission)

Emphasizing the easing of access and aggregation of resources in the education sector, it is encouraged that universities commercialize their scientific research achievements in Hainan.Support Hainan in establishing technology transfer bases for scientific research achievements in fields such as biomedicine, electronic information, computer science and big data, artificial intelligence, and marine science at universities within key development zones, including the Lingshui International Education Pilot Zone and the Boao Lecheng International Medical Tourism Pilot Zone.Encourage researchers at universities and colleges to start businesses, take on part-time positions, and commercialize scientific research achievements in Hainan in accordance with relevant national regulations. Encourage universities and colleges, while ensuring normal operations and institutional development, to participate in industrial investment funds that align with national strategies, and to promote the commercialization of scientific research achievements through methods such as licensing transfers and equity contributions based on asset valuation. (Lead agencies: Ministry of Education, Ministry of Science and Technology; Participating agencies: National Development and Reform Commission, Ministry of Finance, Ministry of Human Resources and Social Security)

(16) Encourage Hainan to vigorously develop vocational education. Improve the vocational education and training system, deepen the integration of industry and education as well as school-enterprise cooperation, and encourage social forces to establish vocational education institutions through sole proprietorship, joint ventures, cooperation, and other forms. Support Hainan in building public vocational skills training bases that serve national regional development strategies.Encourage Hainan to vigorously develop vocational education in fields such as healthcare, wellness and elderly care, cultural performances, and the restoration and authentication of cultural relics.A notification-and-commitment system shall be implemented for the approval of the establishment, modification, and termination of private schools that provide only vocational skills training, as well as for the approval of the establishment of technical schools. (Lead agencies: Ministry of Education, Ministry of Human Resources and Social Security, National Development and Reform Commission)