Contract manufacturing of medical devices in China: new regulations are coming soon

On May 1^st, 2022, the new Measures for the Supervision and Administration of Medical Device Manufacturing ("2022 Manufacturing Measures") released by the State Administration for Market Regulation will come into effect and formally replace the 2017 version ("2017 Manufacturing Measures").

Together with the release of the Guidelines for the Compilation of Quality Agreements for the Contract Manufacturing of Medical Devices on March 22, 2022 and the new version of Catalogue of Prohibited Medical Devices in Contract Manufacturing on March 11, 2022, the 2022 Manufacturing Measures make a few significant changes in the administration and supervision of contract manufacturing of medical devices. As a general impression, the 2022 Manufacturing Measures  seem to be more practicable, and clarify the responsibilities of the legal manufactures (i.e., the holder of the Medical Device Registration Certificates) and the contract manufacturers in China.

Further Practical Adjustments on Contract Manufacturing

The 2022 Manufacturing Measures unbolt the shackle that "the legal manufacturers  can only outsource one same type of medical devices to one contract manufacturer in the same period" as provided in the 2017 Manufacturing Measures. This means that the legal manufacturers are now able to outsource the manufacturing of one type of medical devices to more than one contract manufacturers at a time, which further activates the manufacturing capabilities of contract manufacturers and allows the legal manufacturers to gather more local manufacturing resources in China.

Secondly, the 2022 Manufacturing Measures might relieve the regulatory record-filing burden imposed on the contract manufacturers a bit in the administrative process by deleting the previous requirement for the record-filing of the contact manufacturing activities with the local branch of the National Medical Products Administration (“NMPA”) at the provincial level where the contract manufacturers of Class II and III medical devices are located, which means, the contract manufacturers no longer need to go through the record-filing formality with the local branch of the NMPA now.

In addition, in the past, contract manufacturers who intend to specialize in contract manufacturing without holding of the Medical Device Registration Certificate(s) under their names were unable to apply for the manufacturing license, because the 2017 Manufacturing Measures required that the Medical Device Registration Certificate under the applicant’s name must be submitted for the application of manufacturing license. This situation began to change in 2020 after the implementation of the pilot regime of the medical device marketing authorization holder – the contract manufacturers in pilot regions can directly apply for the manufacturing license without holding of the Medical Device Registration Certificate(s). This pilot rule will be applicable throughout the country after the 2022 Manufacturing Measures comes into effect.

Clarification of the Product Release Responsibilities of Legal Manufacturers  and Contract Manufacturers

The 2022 Manufacturing Measures set forth a clear line of the product release responsibilities between the legal manufacturers and contract manufacturers. . Specifically, contract manufacturers shall set up the standard for the factory releasing of the products and make sure that products to leave the factory are in compliance with the relevant standards and conditions, while the legal manufacturers  shall review the relevant files in relation to the factory releasing prepared by the contract manufactures and are held responsible for the control point for the release of products  on the market, which is explicitly prohibited from being handed over to contract manufacturers.

Corresponding Alignment of the Responsibilities of Local Branches of the NMPA

Correspondingly, on 2 April 2022, the NMPA has released the Opinions on Strengthening the Collaborative Supervision of Cross-regional Contract Manufacturing of Medical Devices (the "Opinions"), so as to specify and streamline the local authorities' respective responsibilities in supervising and regulating legal manufacturers and contract manufacturers not within the same region in terms of administrative division, as well as having more complete coverage on medical device administration and supervision. According to the Opinions, the local branch of the NMPA at the place of the legal manufacturer  has more powers and heavier duties for the supervision, specifically, the responsibilities of the local branches of the  NMPA are divided as below:

Supportive Regulations to the 2022 Manufacturing Measures

The provision of the quality agreement for contract manufacturing was previously only applicable in the pilot regions of the medical device marketing authorization holder, instead of a general requirement applied nationwide. According to the 2022 Manufacturing Measures, in addition to the outsourcing agreement, legal manufacturers  and contract manufacturers are also required to prepare and enter into a quality agreement, with reference to the detailed Guidelines for the Compilation of Quality Agreements for the Outsourced Manufacturing of Medical Devices, in which the basic elements of the agreement are suggested to include (i) product scope of the contract manufacturing; (ii) definitions of the agreement; (iii) regulations and standards that the quality management system of the contract manufacturers shall meet; (iv) quality management system requirements applicable to the agreement, including the file and record control, transfer of technical documents, procurement control, manufacturing and process control, inspections and testing, release control, quality management system review, after-sale services, product complaints, adverse event monitoring, and change control; (v) responsibilities of the parties; (vi) dispute resolution; (vii) term and termination of the agreement; and (viii) IP protection, confidentiality and commercial insurance requirements.

Updated Catalogue of Prohibited Medical Devices in Contract Manufacturing

Compared with the old version, the updated Catalogue of Prohibited Medical Devices in Contract  Manufacturing has, on one hand, further clarified the specific classification of prohibited varieties, which is in one-to-one correspondence with the type codes in the Medical Device Classification Catalogue. On the other hand, the updated version has managed to remove some products with more mature manufacturing processes and relatively lower risk, e.g., implantable insulin pumps and absorbable surgical hemostatic materials.

Point yet to be Clarified

What is also worth mentioning here is that, in the 2017 Manufacturing Measures,  legal manufacturers are explicitly required to be equipped with an approval/record-filing for medical devices manufacturing in China, but the 2022 Manufacturing Measures seems to be silent at this point. A further check and regulatory monitoring in the local practice may be required as to whether such an approval/record-filing is required for o legal manufacturers  who plan to outsource all the manufacturing activities to contract manufacturers . 

In addition, the 2022 Manufacturing Measures is still silent on whether the cross-border contract manufacturing of medical devices would be allowed in the future. At present, the possibility for a green light to be turned on for cross-border contract manufacturing is not clear.

Conclusion

The enactment of the 2022 Manufacturing Measures has had an impact on the regulation of contract manufacturing of medical devices in China. Overall, Chinese regulators reduce governmental involvement in contract manufacturing, and give the legal manufacturers and contract manufacturers more freedom over the contract manufacturing activities. On the contrary, the 2022 Manufacturing Measures increase and refine the responsibilities of legal manufacturers and contract manufacturers with respect to outsourcing – they must be more reliable and cautious about the manufacturing activities.

Authored by Lu Zhou, Jessie Xie, and Carol Shao.