Cross-border Use of Medical Products in the Greater Bay Area

The Greater Bay Area consists of Hong Kong, Macau and nine cities in Guangdong, namely Guangzhou, Shenzhen, Zhuhai, Foshan, Huizhou, Dongguan, Zhongshan, Jiangmen and Zhaoqing.

Today, the Greater Bay Area is already equivalent to a large global economy. It has a population of 75 million (greater than the United Kingdom) with economic output of around US$1.6 trillion (close to South Korea). On a purchasing-power parity basis, the Greater Bay Area is reported almost equivalent to the size of the world’s 7th largest economy (about US$2.9 trillion).[1]

Introduction

On 25 November 2020, eight ministers and authorities at national level of the State Council, including the State Administration for Market Regulation (SAMR), the National Medical Products Administration (NMPA), the National Development and Reform Commission (NDRC), the Ministry of Commerce (MOFCOM), the National Health Commission (NHC), the General Administration of Customs (GAC), Hong Kong and Macao Affairs Office of the State Council (HKMAO), and the National Administration of Traditional Chinese Medicine (NATCM), jointly promulgated the Plan for the Development of Innovative Regulatory of Drugs and Medical Devices in the Guangdong-Hong Kong-Macao Greater Bay Area of China (Circular [2020]-159) (the "Plan"). 

Under the Plan, the Chinese regulators introduce innovative administration measures to allow eligible medical institutions within nine mainland cities of Guangdong Province (the “Nine Cities”) in the Guangdong-Hong Kong-Macao Greater Bay Area (the “Greater Bay Area” or GBA) to use Hong Kong or Macao approved pharmaceutical products and medical devices without prior certification with the NMPA.

We set out below the highlights of the Plan, on which further detailed implementing rules are expected to be released by the local authorities during the second half of 2021.

Localized import approval

Mandatory prior certification procedures with the NMPA for imported drugs and medical devices is required under the existing regulatory regimes applicable nationwide which often takes a few years. However, under the Plan, upon obtaining permits granted by agencies at the provincial level in Guangdong Province (“Guangdong Agencies”), the eligible overseas drugs and medical devices can be imported, marketed and used in the GAB without NMPA certifications.

The State Council delegates the authority to Guangdong Provincial People's Government to approve the use of eligible drugs and medical devices imported from Hong Kong or Macao, including:

examining and designating medical institutions eligible to apply for the innovative regimes under the Plan;

determining and granting permits to import drugs and medical devices eligible for use within the Greater Bay Area without NMPA certification; and

issuing detailed rules as necessary to implement the Plan to be applied across the Greater Bay Area.

Pilot-run by Hong Kong/Macao invested hospitals

The Plan will be rolled out by phased implementation. At the beginning, only medical institutions (“Designated Medical Institution”) obtaining prior approval with the Health Commission of Guangdong Province ("Guangdong Health Commission") are eligible to apply for using drugs and medical devices marked in Hong Kong or Macao in the GBA . 

The Designated Medical Institution must be satisfied with the following conditions:

being operated in one of the Nine Cities of the GBA; 

invested by healthcare service providers from Hong Kong or Macao in the form of sole proprietorship, equity or cooperative joint ventures; and

meeting other professional and safety criteria to be specified by the Guangdong Health Commission.

According to the Notice in relation to the Plan jointly issued by the Guangdong Agencies on 28 January 2021 (the “Guangdong Notice”), the University of Hong Kong – Shenzhen Hospital has been announced as the first Designed Medical Institution to pilot-run the Innovative Regime until 31 July 2021 under the supervision of Guangdong Medical Products Administration Bureau (Guangdong MPA). After the end of such pilot period, the relevant Guangdong Agencies would formulate further implementation rules and procedures and gradually expand the application to other Designated Medical Institutions that meet the conditions. 

Urgent clinical need

The Plan set out limited scope of drugs and medical deceives allowed to be imported (see the table below). The Guangdong Health Commission and Guangdong MPA are  responsible to respectively develop lists of Hong Kong or Macao marketed drugs and medical devices allowed to be used in the GBA (the “Catalogs”) following consultation with the drug and health administration departments in Hong Kong and Macao. The Guangdong Agencies are further required to monitor adverse reactions of the use and adjust the scope of the Catalogs from time to time. 

The Chinese government aims to gradually develop a standard list of drug and medical devices to be used in all cities within the Greater Bay Area through the implementation of the Plan. As a result, medical institutions in the Nine Cities in mainland cities in China may be equipped with advanced drugs and medical equipment similar to those in Hong Kong and Macao so as to facilitate the residents in three jurisdictions.

Applicant’s qualification & import approval procedures

The Plan and the Guangdong Notice introduced clear approval procedures for the medical institution wishing to import drugs and/or medical devices under the new regimes.A GBA medical institution invested by Hong Kong or Macao owenrsmay be filed with the competent Guangdong Agencies as follows:

Safety control and risk managements

According to the Plan, the relevant Guangdong Agencies will establish a series of systems of monitoring and supervision to ensure the quality and safety of related drugs and medical devices, including the following:

A strict import approval assessment system maintaining high standards on the application condition,  application materials, the import customs clearance process and the use management and so on;

A full-cycle supervision system for the procurement, import, customs clearance, storage, distribution and use of drugs and medical devices by designated medical institutions in the Greater Bay Area;

A product information system enabling tracking the drugs and customers throughout the process from import to consumption, in particular  adverse reactions reporting, adverse event monitoring and emergency situation handling. The Guangdong Agencies are required to adjust the Catalogs from time to time to remove items with high risk of adverse reactions;

A remedy mechanism for patients requiring the medical institutions’ legal representative to execute a letter of undertaking to take full responsibility for the use of the proposed imported drugs and medical devices, and to ensure that the drugs and medical devices to be used only within such medical institutions. The Designated Medical Institutions are further required to enter into consent forms with their patients to inform and clarify the dispute resolution methods with the patients. The Plan refers to the internationally accepted insurance compensation mechanism to protect the patients’ legitimate rights and interests in the event of any medical malpractice after using imported drugs and medical devices.

Encouraging local production of Hong Kong approved drugs and medical devices

The Plan reveals measures to be implemented to facilitate cross-territory cooperation on the R&D, production and marketing activities in bio-medical industry in the GBA:

NMPA GBA Center: The NMPA will speed up establishing the Greater Bay Area Divisional Center for Drug and Medical Device Review and Inspection. The center was launched on 23 December 2020 in Shenzhen which located at the heart of the GBA. It aims to provide easier-accessible technical guidance during the preliminary process of new drug registration and medical devices certification. This may reduce administration cost of Greater Bay Area bio-medical companies launching new products in China’s mainland market;

Reforming imported drug marketing license holders and imported medical device registrants system: Drug marketing authorization holders ("MAH") or medical device registrants which are Hong Kong or Macao companies are encouraged to authorize the production to qualified pharmaceutical enterprises or medical device manufacturers in the Nine Cities. These measures encourage Hong Kong and Macao bio-medical companies who have already obtained NMPA’s import registration certificates to transfer their production to the GBA.  

Overall significance

The Plan is the significant milestone for implementing a number of government policies to promote the Greater Bay Area as the global innovation hub and a ‘quality living circle’ since the Outline Development Plan covering broad areas of development of the Greater Bay Area was released in February 2019.

The Plan provides multinational pharmaceutical companies which have already been selling in Hong Kong or Macao with a steppingstone into the bigger market in the GBA  without needs to tackle through the regulatory procedures at the national level. They may acquire sponsorship from one of the Designated Medical Institutions as part of the expedited application process for their innovations and products not readily available but urgently-needed in China..

As Hong Kong’s regulatory requirements are much more straight forward, the Plan will help attract local and multinational pharmaceutical, biomedical and health technology companies to apply for registration of new pharmaceutical products in Hong Kong and to introduce medical devices to Hong Kong and Macao with a view to expand their businesses in Mainland cities in the Greater Bay Area. 

Hospitals in Hong Kong/Macao and new foreign entrants of China’s healthcare market could consider GBA a place to start. They will find a productive population, favorable policies, and lower cost of operations, as well as a fast-maturing ecosystem.

Insurance companies in Hong Kong and Macao are also encouraged to develop innovative cross-boundary medical insurance products to meet with needs of high-quality healthcare to GBA residents.

注释

[1]See McKinsey Global Institute report“Superstars: The dynamics of firms, sectors, and cities leading the global economy”, at https://www.mckinsey.com/featured-insights/innovation-and-growth/superstars-the-dynamics-of-firms-sectors-and-cities-leading-the-global-economy.

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 叶伟安  

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叶伟安律师现为竞天公诚合伙人，常驻上海及广州分所。叶律师2000年毕业于中山大学，获得国际经济法学士学位，2006年获得英国诺丁汉大学国际商法硕士学位。叶律师具有二十年执业经验，主要业务领域包括：跨境并购、资本市场、房地产、基金和私募股权投资；医疗大健康、航空、数据中心、教育等行业投融资业务经验丰富。叶律师为粤港澳大湾区的生命科学研究机构和大型产业园区提供法律顾问，包括香港创新医疗学会、复旦大学粤港澳大湾区精准医学研究院、广东医谷等；同时为生物医药、医疗器械、医疗服务及大健康行业的境内外企业提供法律服务，包括医疗器械生产许可备案和注册审批、防护用品进出口政策、国际认证、专利、并购、企业孵化、融资及合规等专业咨询服务。

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