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Taiwan’s Medtech Market Poised for Growth; Biotech Growth in China; Regulatory News from Singapore

Taiwans Medtech Market Poised for Growth

Though its economy may not pack the global wallop of its Chinese cousins, Taiwan still is a significant player in the Asian medtech market. The country has a population of 23 million, with nearly 99 percent of its population covered by its National Health Insurance Scheme. Taiwan’s per capita gross domestic product (GDP) is approximately $20,000 and the country spends slightly under 7 percent of its GDP on healthcare. The medical device market in Taiwan is valued at about $1.8 billion, the fifth-largest medical device market in Asia.

Taiwan currently imports roughly 75 percent of its medical devices from overseas.

Population and Statistics
At its current birthrate, Taiwan is expected to become a “super-aged” society with more than 20 percent of its population over the age of 65 by 2025. The elderly population consumes approximately one-third of Taiwan’s healthcare resources. As a result, foreign medical device companies that specialize in exporting geriatric-related products can expect high growth opportunities in Taiwan.

The leading cause of death in Taiwan is cancer, which was responsible for about 30 percent of deaths in 2010. This high number is due to various cultural habits and traits of the Taiwanese people—particularly the elderly, who believe that the act of going to the doctor is “bad karma” and invites illness. This belief causes many people to delay seeking medical assistance. Once a cancer diagnosis is given, some elderly prefer to use traditional Chinese treatments rather than the more aggressive treatments prevalent in Western cultures. In addition, about 20 percent of the Taiwan’s residents are smokers, leading to a high incidence of lung and oral cancer. Other leading causes of death include heart disease, diabetes, and other cardiovascular diseases. Top medical imports into Taiwan include products that diagnose and treat cancer and diabetes.

Medical Device Registration in Taiwan
In Taiwan, all medical devices require registration with the Taiwan FDA (TFDA), regardless of risk. Class I devices pose the lowest risk and Class III devices pose the highest risk. For combination devices, classification depends on the product’s primary function.

There are two applications required for Class II and Class III medical device registration in Taiwan—Quality System Documentation (QSD) and product registration. Multiple QSDs can be registered simultaneously; companies registering for a QSD must provide certifications (ISO 13485 or ISO 13488) and quality system documents (quality manual and quality procedures), or a Certificate to Foreign Government and Establishment Inspection Report or an audit report with the Free Sale Certificate. For Class I medical devices, QSD is required only if the device is sterile or is used for measuring.

The timeframe for QSD is about six months and product registrations take about six to 18 months, depending on the device is and its classification. Foreign device companies can submit the QSD and product registration simultaneously.

Recent Regulatory Changes
In mid-2012, the TFDA announced that it would start using the Summary Technical Documentation (STED) format for medical device technical document submissions, joining regions such as Japan, Australia, Canada, the United States, and the European Union. This change occurred to align the country with the Global Harmonization Task Force standards and to aid the goal of achieving uniformity between various countries’ regulatory bodies. STED is expected to fully be implemented for all Class II and III medical devices by July 2013. For product registration, foreign medical device companies are advised to include: device description and product specification (including variants, components and accessories), as well as an essential principles checklist (including risk analysis and control summary, design and manufacturing process).

Another recent change made by the TFDA was allowing sales of Class I medical devices through “virtual channels” beginning in July 2012. Virtual channels are those in which the product cannot be examined in person (i.e. internet, radio, newspapers, television, etc.). Previously, no medical devices could be sold through virtual channels but now Class I medical device manufacturers can sell their devices this way if they fulfill several requirements: The manufacturer must be registered with the Department of Health (DOH), the manufacturer must have a functioning physical sales channel in Taiwan, and every virtual sales channel must be registered with the DOH.

Country of Origin
Medical device companies may run into issues with the TFDA during product registration over “Country of Origin.” Currently, the TFDA only recognizes the “actual manufacturer” rather than the “legal manufacturer.” An actual manufacturer is the factory that produces the product, regardless of the original manufacturer. This is an issue when components are outsourced, assembled by different makers, or if the company is unable to obtain a Certificate of Manufacturing from the actual manufacturer. Other times, promotional materials may be in the name of the legal manufacturer, which could cause delays because the TFDA only accepts documentation from the actual manufacturer. The TFDA is aware of these issues, though it has not resolved them just yet.

* * *
Taiwan’s medical device market is expected to grow significantly due to its rapidly aging population. As a result, Taiwan has been implementing more favorable regulatory policies to attract medical device products and companies worldwide. The DOH streamlined the medical device approval process in 2011, reducing the average process time to 82 days. While other Asian countries such as China and Korea have tightened registration requirements and increased approval timeframes over the last few years, Taiwan is more accepting of foreign clinical data and is “very friendly” to products already approved in the United States and European Union.


Ames Gross is president and founder of Pacific Bridge Medical, a Bethesda, Md.-based consulting firm that helps medical device companies succeed in Asia. A recognized national and international leader in the Asian medical markets, he founded Pacific Bridge Medical in 1988, which has helped hundreds of medical companies with business development and regulatory issues in Asia. For more information, visit www.pacificbridgemedical.com.

Other Asia News …
Five Ways to Foster Biotech Growth in China
Economists are not always the most accurate prognosticators but their intuitive prowess, contrariwise, can be quite impressive.

Case in point: Early last year, two economists predicted the end of China’s role as the “world’s factory.” Dong Tao, chief Asian economist at international financial services firm Credit Suisse, forecast the “beginning of the end of an era—China as the world’s factory” in a report he co-authored on the Middle Kingdom’s labor market. Ashley Davies, senior economist for Asian emerging markets at Commerzbank, offered up a similar prognosis about a month after Tao’s report was issued, telling CNBC, “They’ve [China] come to the end of a certain model of development. They need to move up the value spectrum.”

Just weeks later (as if on cue), Chinese politicians announced an initiative to advance along that value spectrum, releasing the 12th Five-Year Plan for National Economic and Social Development. The Plan identifies several Strategic Emerging Industries (SEIs) that are key to transforming the world’s second-largest economy from an investment-driven dynamo into a global powerhouse with a steadier and more stable growth trajectory. One of those industries is biotechnology, due to its potential for large productivity gains and its ability to solve health problems associated with the country’s rapidly aging society.

The Plan is scant on details about possible strategies to grow China’s biotechnology sector; the blueprint only claims to “support the development of innovative biotech products, high-end medical devices and patented medicines.” The government reportedly is prepared to spend 12 billion yuan renminbi ($1.8 billion) on the research and development (R&D) of new drugs through 2015.

To become a leading biotechnology innovator, however, China will have to do more than merely focus on pharmaceutical development. The country also must reward its inventors and provide access to capital. During the 2012 BIO International Convention in Boston, Mass., David W. Beier, a senior vice president at Amgen Inc. and former domestic policy advisor to Vice President Al Gore, outlined the five steps he believes are crucial to fostering the growth of biotechnology in China:
  1. Investing in R&D. A substantial part of the investment in SEIs must be funneled to biotechnology. “The seven industries [SEIs] together are targeted with $600 billion—with a “b”—worth of investment in the five-year timeframe,” Beier said. “A substantial part of the investment must be in biology.”
  2. Investing in a science-based regulatory environment. China’s State Food and Drug Administration must harmonize its standards with international criteria. “The decision-making has to be made on sound science and it has to be quite transparent and predictable.”
  3. Establishing a visible intellectual property system. Though it has taken steps to improve its IP system (acceptance into the World Trade Organization was a giant leap forward), China still has a long road to travel before its patent procurement system is on par with other leading economies, particularly the United States.
  4. Rewarding innovation. The government must provide an incentive for scientists, inventors and healthcare clinicians to create a product that addresses a serious unment medical need. “Countries across the world have struggled with this,” Beier noted. “It’s an issue in the United States. It’s an issue in western Europe and most other countries. I hope the Chinese people expect, from their government, payment for innovation.”
  5. Providing easy access to capital. Beier claims that access to capital must come from various sources. “There is a profound opportunity for multinational companies…to work and partner with Chinese colleagues,” he noted.

HSA Registration Process Too Bureaucratic, Doctors in Singapore Claim
American doctors apparently are not alone in their disdain for government bureaucracy. Their counterparts in Singapore seem to detest red tape as well.

In recent months, physicians in the island country have become more vocal about their contempt for a Health Sciences Authority (HSA) stipulation that requires them to register all medical devices for clearance before use. One of the major complaints with the new regulation—which took effect Jan. 1—is the time and cost involved in registering devices. Doctors claim that registration can take several months (detailed information must be provided by the manufacturer) and cost several thousand dollars, making it difficult and expensive to introduce new products to the market.

Another main grievance with the government’s revised record-keeping strategy is the vast array of products that now must be registered. Under the HSA’s “risk-stratified” regulatory framework, thousands of items are considered medical devices—from simple products such as bandages, wheelchairs, contact lenses, catheters and digital blood pressure monitors to more complex equipment like heart valves and magnetic resonance imaging machines.

Such a broad definition has significantly increased red tape and is discouraging many manufacturing firms from registering inexpensive devices, some doctors argue. Eye specialist Jerry Tan, for one, believes the registration process is too troublesome and pricey, particularly for low-cost, low-volume medical devices.

“These devices cost less than $50 and no company wants to register these devices for us as there is no profit to be made,” Tan told The Sunday Times of Singapore.

HSA officials, however, insist the tightened registration process is designed to ensure patient safety. “A patient who receives a cardiac pacemaker implant would want the device to perform reliably for the years that it remains in the body. Failure of such devices can have life-threatening consequences,” Singapore Minister of State for Health Amy Khor, Ph.D., said at an April 20 Town Hall session with the device industry. “Even simple medical devices such as contact lenses, if not properly made or used, could lead to lifelong disability and blindness with huge public health impact if product penetration to the population is extensive.”

Khor’s statement was not meant as a warning but rather a sobering reminder of the potentially damaging consequences of faulty devices. To better safeguard patients from defective equipment, Singapore has slowly revamped its medical device regulations over the last five years, modeling them after those in Europe, the United States, Canada, Australia and Japan. But the new system is far from perfect: During her springtime speech to industry executives, Khor acknowledged that Singapore’s medical device requirements need “constant refinement and tweaking.”

Some of the tweaking already has begun. On May 1, for instance, the HSA exempted all non-sterile, lowest-risk Class A devices from the clearance process (sterile products with the CE Mark blessing will move through the system more quickly, Khor promised). The May 1 exemption covers roughly 2,700 Class A product types and brings the total number of exempted Class A items to nearly 4,700, or 80 percent of all such devices.

The HSA also is reviewing its fee framework to “better stratify” its pricing structure for devices. The agency is finalizing a lower-tiered fee schedule for low-cost, low-volume devices introduced through Special Authorisation Routes (the new fee schedule were slated to take effect Aug. 1).

The HSA promised to introduce two fast-track approval processes for moderate risk Class B devices in September. The first is an immediate registration route for devices approved by two HSA reference agencies (the candidates being the U.S. Food and Drug Administration, the European Union, Health Canada, Japan’s Pharmaceuticals and Medical Devices Agency, and Australia’s Therapeutic Goods Administration). To qualify for “immediate registration,” devices also must have a clean safety record for at least three years.

The second accelerated registration process is limited to Class B devices that have been approved in two reference agencies or in one of those entities and sold either in one of those markets or in Singapore. Like the first fast-track approval process, these products also must have clean safety records for at least three years.

HSA officials expect the expedited registration system for Class B devices to impact more than 3,500 applications, or roughly 85 percent of current Class B submissions. The agency may use similar benchmarks (reference agencies and safety records) to eventually create an accelerated process for higher-risk Class C and Class D devices.

In addition to its tweaks and technical tuning, the HSA has pledged to work with the Singapore Manufacturers’ Federation to create a “concierge service” that helps companies with various pre- and post-marketing services, including training and consultation.

The industry also can help untangle some of the additional red tape from the new regulations by changing the way medical devices are marketed. For example, dealers can check with more purchasers first before grouping devices under one application, and non-institutional doctors can band together to buy a larger quantity of consumable items, Kohr suggested.

Still, patient safety must be at the heart of any refinement effort, HSA officials insist.
“We want to instill the sense of safety in doctors,” Dr. Raymond Chua, deputy group director of the HSA’s Health Products Regulation Group, told The Sunday Times. “You can’t quantify a cost to safety.”
—MPO Staff

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