Is it a good news that the medical device testing fees would be eliminated in China?

15 Jun

Is it a good news that the medical device testing fees would be eliminated in China?

All the medical devices require local testing in China for CFDA registration, which is generally done in a CFDA-accredited lab. Recently, the Ministry of Finance of China has released a notice to eliminate several items of fees charged by the authorities (Finance Tax [2017] No. 20), including the certification fees for drug good manufacturing practice (GMP) and drug Good Supply Practice (GSP), as well as the testing fees for both drugs and medical devices. This notice became effective since April 1st, 2017.

The good intention of Chinese authorities is to reduce the burden of enterprises. Therefore, lots of news reporters considered it is a very good news for device companies to save significant amounts of money.

However, the change also raises lots of problems in the transition phrase. First, the immediate elimination of testing fees cuts down the income of testing houses significantly and results in lower motivation of workers to take into new cases. Second, rumors are spreading in the industry that the authority would like to open the market restrictions for medical device testing by establishing the free testing services in state-owned labs and allowing the private labs with charged services. The elimination procedure is just one step towards the goal, but unfortunately happens too early before allowing any private players into the ground. The manufacturers have no choice but wait for the labs. Third, it is said that some labs may change the legal structure from an institution to a limited company. Before the legal status is finalized, the lab would not function appropriately in routine tasks.

Therefore,  almost all the labs stop to take new projects for registration testing in since April and the on-going projects are delayed without given a clear time. It causes significant delay for manufacturers in registration process, especially crucial for those who are required by the CFDA to do tests within a limited time for replying the remarks after the technical review or in the certificate prolongation process.

On the other hand, it may be worth to mention that the eliminated testing fees would be most likely to be compensated by the government finance allocations. It is still unclear to see whether the foreign companies will get the free treatment eventually. The elimination might only work for domestic manufacturers.

We have summarized the current situation in the largest labs and keep updating the status.

Table is updated on June 15th, 2017

Testing labRegistration Test (type test, product performance)ContractTest (EMC/electrical safety/biocompatiblity)Accept new cases?
National labFree of chargewith chargeAccept new cases only with sufficient documents and samples. No product modification is allowed during tests. Tests for replying CFDA remarks are in priority.
Beijing labFree of chargewith chargeManufacturers shall consult the reception first. Prolonged processing time.
Tianjin labTBDTBDManufacturers can queue up with a reserving number. No new cases are accepted. On-going projects are in priority.
Shandong labShandong province and imported devices free of charge. Domestic non-shandong province devices TBD.with chargeDonot accept products manufactured out of Shandong province.
Guangdong labDomestic devices free of charge, imported devices TBDwith chargeAccept new cases of domestic devices. Imported device TBD.
Shanghai labFree of chargewith chargeAccept new cases only with sufficient documents and samples.
Shenyang labFree of chargewith chargeAccept new cases only with sufficient documents and samples.
Jiangsu labDomestic devices free of charge, imported devices TBDwith chargeAccept new cases only with sufficient documents and samples.
Zhejiang labTBDTBDAccept new cases only with sufficient documents and samples.
Wuhan labTBDTBDAccept new cases only with sufficient documents and samples.

Reference: Finance Tax [2017] No. 20, http://szs.mof.gov.cn/bgtZaiXianFuWu_1_1_11/mlqd/201703/t20170323_2563261.html

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