Revised Regulations on Medical Devices Entered into Force

Effective 1 June 2021, the revised provisions of the Regulations on the Supervision and Administration of Medical Devices came into force. The new regulations have a wide-ranging impact on companies in the market and market conditions.

In particular, the new regulations specify the responsibility of companies in this market by tightening the responsibility of developers and manufacturers, especially for the safety and efficacy of the products. Furthermore, the revised regulation contains new provisions for the approval and registration of medical devices and expands the competence of the relevant authorities with regard to supervision and inspection. In addition to these expanded regulatory powers, the revised regulation also provides for higher penalties for violations, which in serious cases can extend to revocation of the license. Moreover, suppliers of medical devices are now obliged to label their products or make them identifiable in such a way that clear traceability is possible throughout their entire life cycle.

Class II and III medical devices must be registered and approved by naming an agent in China which shall be either a subsidiary of the manufacturers or an authorized legal entity in China. The revised regulations now provide that such an agent is also jointly and severally liable with the manufacturer. This applies both to violations of the regulations and to (faulty) services or in the event of a product recall.

The extension of liability to authorized agents may make it difficult for foreign manufacturers to market medical devices in China, as it is unlikely to be possible to find agents in China due to joint and several liability, or the costs may be too high due to the risks involved. In this context, it may be advisable to establish a local subsidiary, not only to save costs, but also to avoid potential risks associated with using an agent.