2013 Hong Kong Medical Device Market Update

2013 Hong Kong Medical Device Market Update

The medical device market in Hong Kong reached about $850 million in 2012, and it is expected to grow at an annual rate of 8.5 percent for the next five years. This is a good sized market, considering Hong Kong’s small population of 7 million and its geographic size of less than 430 square miles. Hong Kong boasts one of Asia’s highest rates of income per capita, and healthcare spending as a percentage of gross domestic product is 6 percent. Hong Kong residents spent close to $75 on medical devices in 2012, compared to $11 in China.

Hong Kong has no legislation in place that covers all medical devices. But it does have a voluntary registration system that will likely become mandatory in 2013 or 2014. International medical device manufacturers should understand this system, and they should carefully consider the advantages that come from registering products while the system is still voluntary.

HEALTHCARE SYSTEM

Several government bureaus deal with medical devices in Hong Kong. The Department of Health (DH), which licenses medical professionals and hospitals, also regulates pharmaceuticals, radioactive substances and medical devices. Under the DH, the Medical Device Control Office (MDCO) oversees the voluntary registration of medical devices.

The MDCO was established in 2004 to implement the voluntary Medical Device Administrative Control System (MDACS). Since November 2004, MDCO has slowly added device categories to its voluntary listing system. In addition to devices, it also oversees the listing of local manufacturers and importers, along with the screening of safety alerts and adverse incidents.

Another government organization — Hong Kong’s Hospital Authority (HA) — plays a central role in the procurement of medical devices. The HA is divided into seven geographic clusters, which cover a total of 44 hospitals. Although these hospitals are not required to carry devices listed with MDACS, increasingly they are turning to the voluntary list as a good procurement guideline.

VOLUNTARY REGISTRATION

Currently, there is no legislation to regulate the importation or sale of medical devices in Hong Kong, except those containing pharmaceutical products or emitting ionizing radiation. In the future, the MDACS will expand regulated products to include most medical devices and in-vitro diagnostics (IVD).

The MDACS uses a risk-based classification system, similar to that of the EU and modeled on Global Harmonization Task Force (GHTF) guidelines. Devices are classified on their intended use and level of risk. They range from Class I (low risk devices) to Class IV (high risk devices). Class II devices generally correspond to Class 2a of the EU classification system, and Class III devices generally correspond to Class 2b of the EU system. Examples of such products include:

  • Class I (low risk): bandages, surgical masks, wheelchairs and tongue depressors
  • Class II (medium-low risk): contact lenses, endoscopes and hypodermic syringes
  • Class III (medium-high risk): orthopedic implants, condoms, and X-ray machines
  • Class IV (high risk): breast implants and implantable cardiac pacemakers

IVD products are divided into Classes A, B, C and D, where D is the highest risk and A is the lowest risk. Examples of such products include:

  • Class A (low individual risk, low public risk): culture media and clinical chemistry analyzers
  • Class B (medium individual risk, low public risk): urine test strips and pregnancy self tests
  • Class C (high individual risk, medium public risk): human leukocyte antigen typing and blood glucose self tests
  • Class D (high individual risk, high public risk): HIV diagnostic tests

In addition to closely following the GHTF regulatory framework, Hong Kong’s system also uses the Asia Medical Device Nomenclature System (AMDNS) for product descriptions and identifications. The AMDNS is derived from the Universal Medical Device Nomenclature System (UMDNS). Device codes and terms used in the two systems are fully compatible and interchangeable.

BENEFITS TO EARLY REGISTRATION

Although the MDACS is still voluntary, foreign medical device companies will see both short-term and long-term benefits if they choose to register their products before mandatory implementation. Device registration under the current voluntary system is good for a period of five years. When the mandatory system is in place in 2013 or 2014, all voluntary registration will automatically transfer. According to the DH, there will be no need to submit additional applications for devices already voluntarily registered with MDACS.

During the voluntary application period, foreign medical device companies can also sell their products on the Hong Kong market. But once registration becomes mandatory, unregistered devices will no longer be allowed on the market. Manufacturers and distributors who continue to sell without registering may face fines and jail time. Additionally, a rush of registrations accompanying mandatory implementation will mean a backlog in processing. This will substantially delay the time it takes for device manufacturers to get their products back on the Hong Kong market.

Finally, another important reason for foreign device manufacturers to consider registering early is based on Hong Kong’s hospital procurement system. Hong Kong’s hospitals, which purchase the majority of medical equipment and device systems sold there, are beginning to use MDACS as a good procurement guideline. Products already registered with MDACS take precedence in the procurement process. Most of Hong Kong’s medical practitioners — whether public or private — are trained by the Hospital Authority (HA). So whatever equipment they see during their training will have an influence on what they decide to purchase at their own practices later.

Furthermore, the purchasing practices of the HA have a significant influence on hospitals in mainland China and a number of other Asian countries. Hong Kong is a major leader in the Asia Harmonization Working Party (AHWP) and a number of those countries will make reference to products registered in Hong Kong.

LRP AND ADVERSE EVENT REPORTING

The Local Responsible Person (LRP) is the legal representative of the device manufacturer in Hong Kong. He or she is responsible for listing applications for each Class II, III and IV medical device with MDCO. The LRP is the main point of contact for manufacturers, importers and Hong Kong regulators, and he or she must be physically present in Hong Kong.

The LRP ensures the safety and efficacy of devices registered with MDCO. He or she is also responsible for all adverse event reporting. All adverse events occurring in Hong Kong must be reported, but incidents occurring outside of Hong Kong do not need to be reported unless they lead to corrective or preventive actions in Hong Kong.

Adverse incidents that result in death or serious injury or constitute a serious public health concern must be reported to MDCO within ten calendar days. All other adverse incidents should be reported within 30 calendar days. For example, if a patient sustains injury from the uncontrolled motion of a medical device (like that of an X-ray vascular system), that incident will need to be reported. So will a “near incident” in which no one is actually injured. Another example has to do with medical IT equipment. For instance, if the manufacturer of a pacemaker already on the market discovers a software bug that could lead to serious injury, this must be reported by the LRP, too.

REIMBURSEMENT

Most reimbursement in Hong Kong is for drugs and not medical devices. However, there are certain devices that are reimbursed, primarily under the Samaritan Fund. This Fund has been managed by the HA since 1990, to help needy patients with privately purchased medical items (PPMI) or new medical device technologies.

Most medical devices are privately purchased in Hong Kong. Of those, only 2 percent are reimbursed. Patients who cannot afford the cost of expensive medical items (like prostheses and consumables) or items purchased for home use (such as wheelchairs and home use ventilators) may apply for help from the Samaritan Fund. So can patients needing costly medical treatment not provided in public hospitals (such as gamma knife treatment and Automatic Implantable Cardioverter Defibrillators).

CONCLUSION

Foreign medical device companies should be aware of regulations affecting their business in Hong Kong, especially the mandatory registration system that will be in place in the next several years. In order to prepare for this transition, medical device companies should seriously consider the short-term and long-term benefits of early, voluntary registration under MDACS.