The medical devices market in China and NMPA registration

China has seen exponential growth in the medical device sector. By 2021, the market will be worth 30 billion euros. With an annual growth rate (CAGR) in excess of 10% since the last 10 years, sales growth is underpinned by several key factors:

• An aging population: with a steadily growing elderly population, demand for medical devices for the diagnosis and treatment of age-related diseases is rising sharply.
  
  
• The prevalence of chronic diseases: the rise in chronic diseases such as diabetes, cardiovascular disease and cancer is driving demand for monitoring and treatment devices.
  
  
• Improved living standards: the rise of China's middle class and rapid urbanization are increasing access to, and expectations of, quality healthcare.

		Below are the top 10 families of medical devices exported to China in 2023, with import values and top countries of origin.
Products by use		China import value	The 3 first countries of origin
1	Diagnostic Equipment	USD 4.5 billion	USA, Germany, Japan
2	Monitoring Devices	3.8 billion	USA, Germany, Switzerland
3	Therapeutic Equipment	3.4 billion	USA, Germany, France
4	Surgical Instruments	3.1 billion	USA, Germany, Switzerland
5	Diabetes Management Devices	2.9 billion	USA, Germany, Japan
6	Medical Imaging Equipment	2.7 billion	USA, Germany, Switzerland
7	Intensive Care Equipment	2.5 billion	Germany, USA, France
8	Orthopedic Devices	2.3 billion	USA, Germany, Japan
9	Dental Devices	2.1 billion	USA, Germany, Switzerland
10	Rehabilitation Equipment	1.9 billion	USA, Germany, France
Source: figures based on infomation gathered from the NMPA, the Chinese customs, Mofcom and compiled by C.i. Process.

• The Healthy China 2030 plan: This strategic plan aims to improve healthcare services across the country and encourage innovation in the medical device sector.
  
  
• Strict regulations: the introduction in recent years of stricter regulations on the quality and safety of medical equipment is aimed at improving consumer confidence and guaranteeing high standards.
  
  
• Support for R&D activities: The government offers subsidies and tax incentives to encourage research and development of new medical technologies. These measures affect both domestic entities (with Chinese capital) and companies with 100% foreign capital (ex-WOFE) and sino-foreign joint ventures (JV).

China is investing heavily in the research and development of innovative medical devices. Local and international companies are working on cutting-edge technologies, including

• Artificial Intelligence (AI): AI is being used to develop medical devices capable of diagnosing diseases with greater precision. It also aims to analyze large quantities of medical data and personalize treatments.
  
  
• Internet of Things (IoT): connected devices enable continuous patient monitoring, proactive disease management and better care coordination.
  
  
• 3D printing technology: 3D printing is used to create personalized implants and anatomical models, improving the precision of surgical interventions.

 

 

4. Challenges and trends in the Chinese market for 2024

Although a source of many opportunities, the medical devices market presents a number of challenges:

Intense competition: the market is extremely competitive, with many companies looking to establish themselves or consolidate their market share. Regulatory barriers: navigating the Chinese regulatory framework for these products can be complex and demanding. It requires a thorough understanding of laws and regulations, local procedures and assiduous regulatory monitoring. Tender guidelines: official instructions have been provided to Chinese hospitals to favor, if possible, purchasing products made in China. Who benefits from this? Domestic companies, of course, but also established foreign companies who can then sell them locally and provide after-sales service and maintenance.

Intellectual Property: while its protection remains an essential concern for foreign companies operating in China, notable efforts have been made by the Chinese authorities. On January 3, 2024, the spokesman for China's Ministry of Foreign Affairs, told a press conference: “China is constantly expanding its openness to the protection of intellectual property, and promoting a greater business environment based on the market and rule of Law". More and more foreign applicants are seeking to do business and present their intellectual property rights in China. Over the past decade, applicants from 115 partner countries of the Belt and Road Initiative have filed 253,000 patent applications in China, an average increase of 5.4% per year. By the end of 2022, a total of 861,000 foreign invention patents were in force in China, an increase of 4.5% year-on-year.” (source)

5. Growth opportunities for health and medical equipments

For companies able to overcome these challenges, the Chinese market offers significant growth opportunities:

• strategic partnerships: collaborating with local companies can facilitate market entry and accelerate innovation.
  
  
• Adapting to local needs: understanding and responding to the specific needs of Chinese patients can help companies stand out from the competition.
  
  
• Expanding into the provinces: outside China's largest cities, there is vast untapped potential in rural areas where access to modern medical equipment remains limited.

 

OPPORTUNITIES IN A NUTSHELL The medical device market in China is dynamic and promising, fueled by government reforms, technological advances and a growing demand for quality healthcare. Companies that successfully navigate this complex environment and innovate can expect great rewards. With China continuing to play a key role in the globalized medical equipment sector, the future promises to be rich in opportunities for those prepared to invest and adapt to this rapidly evolving market.

 

 

 

6. The NMPA, China's medical device certification authority

7. Export regulations and how to certify medical apparatus in China

8. Classification, approval and registration of health equipment

8.1. Risk based classification

China uses a three (3) level risk-based classification system for medical devices. Class I comprises low-risk devices, Class II moderate-risk devices and Class III high-risk products.

8.2. Approval or licensing according to class

• License and registration for a medical device manufactured in China
• Registration, simple approval or license for an imported device.

2024 guide to marketing medical devices in China Here's a regulatory overview presenting the three classes and their qualification requirements. This classification is common to products imported into China or manufactured locally. It therefore applies to all Chinese and foreign operators. Class I : they are medical devices that present a low risk to the patient and are simpler in design and operation. Examples include bandages, canes, crutches, prescription spectacles, clinical thermometers, certain healthcare face masks, etc. The requirements for the approval procedure for Class I equipment remain fairly summary. A registration record is sufficient, without the need for a specific license. Class II : these devices include those that present a moderate risk to patients. They require more control to ensure their safety. Examples of Class II medical devices are dentures, certain contact lenses, MRI machines, medical scanners, cardiac monitors, certain catheters, insulin pumps, blood pressure monitors, etc. These examples are indicative and not exhaustive. These examples are indicative and not exhaustive. Their approval and testing require a license (certificate). Valid for 5 years and renewable. Class III : they are devices considered to present the highest risk to patients. They therefore entail the highest qualification and control requirements. Examples include pacemakers, hip and knee prostheses, implantable defibrillators, heart valves, ventricular assistance and deep neuro-stimulation equipment. The approval process and controls for Class III products also entail the issue of a license valid for 5 years. The formalities are the longest and most procedural. At sight of its high-risk classification, a product in this class requires clinical trial approval, to be conducted in one or more certified Chinese establishments. Tests for all products in the latter two classes must be carried out in China. Unless exempted, clinical evaluation tests must also be carried out in China, in accordance with applicable Chinese GB standards. As a reminder, the administration is requesting the appointment of a domestic agent (DRA) who is confirmed as the locally responsible relay with regard to the NMPA. The choice of this agent is not insignificant, as he must be professionally qualified. Most often, an importer or distributor offers to act as this agent. Companies with a China trading subsidiary usually handle this internally in order to limit dependence on an external partner. This illustrated and translated example of a certificate was issued in 2023 for one of our customers' medical scanners (Class II). The requirements for approval are both administrative and technical. The whole process of obtaining the certificate or license authorizing marketing is accompanied by official delays of between 5 and 6 months. Anticipating 1 year or more for Class III devices is realistic, depending on the outcome of the testing program that the sensitivity of the product will require. Since April 2022, a national directive has required Chinese hospitals and care centers to prioritize the purchase of Chinese or made-in-China devices. Business opportunities remain, however, for foreign manufacturers wishing to sell and export devices with real added value. In this case, they will be able to find markets in China and complete the formalities to have their products approved. We observe that foreign manufacturers are increasingly tending to have the equipment or materials they intend to market locally assembled in China (via a production subsidiary), where there is a proven sales potential. The purchasing process for these products often follows calls for tender for which they are then eligible.

 

The main product families presented in this article are non-exhaustive examples. Each product must be meticulously classified based on its nature and function to ensure compliance with the current NMPA qualification requirements.

• Prepare approval files for medical devices, hazardous products and chemicals.
  
  
• Regulatory analysis and monitoring, market reports and competition research.
  
  
• Export consulting and missions to find and select distributors or import agents.
  
  
• Foreign investment: drafting of feasibility reports, comparing investment opportunities in industrial parks, towns and districts.
  
  
• Advice, assistance and follow-up of conflicts and denunciations with the authorities.
  
  
• Registration of foreign-owned enterprises in China. Licenses, permits and certificates required to operate or expand target activities.
  
  
• Comparison of storage solutions. Warehousing and distribution of regulated products.
  
  
• Research and pre-qualification for manufacturing sites for sensitive goods.
  
  

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