Taiwan’s Medical Device Market: Growth Prospects in 2013

Taiwan might be an economic lightweight compared to its mainland cousin, but in the medical device market, the island nation of 23.3 million makes up for its small size. It has a medical device market of $2.5 billion, the fifth-largest in Asia. Taiwan’s rapidly aging population, high per capita GDP ($21,000) and high rates of healthcare spending make it an attractive market for foreign medical device companies.

According to a recent report by Taiwan’s Industrial Technology Research Institute, imports constitute roughly 70 percent of Taiwan’s medical device market. The market has grown at a rate of 7.2 percent annually since 2009, and it is expected to post even higher rates of growth from now through 2020.

THE NEEDS OF AN AGEING POPULATION

Taiwan is expected to join the ranks of “super-aged” societies by 2025. With no change in the current birthrate, one in five Taiwanese will be older than 65 by that time. Since Taiwan’s elderly population consumes roughly one-third of the country’s healthcare resources, foreign medical device companies specializing in diagnostic and geriatric products should have significant opportunities.

Leading causes of death in Taiwan include heart disease, diabetes and cancer. Cancer is by far the single greatest killer, accounting for one-third of all deaths in 2011. The high number comes from above average rates of smoking (nearly one in every five Taiwanese smokes) and widespread unwillingness to seek out healthcare at the early stages of illness. Elderly Taiwanese are especially prone to wait until it is too late: they believe that the very act of going to a doctor is bad luck and will make them sick.

Once patients receive a cancer diagnosis, some prefer traditional Chinese treatments, rather than the more aggressive methods of Western medicine.

As a result of the above, Taiwanese are demanding more sophisticated and better medical devices. Top medical device imports into Taiwan also include those products that diagnose or treat cancer, diabetes and cardiovascular diseases.

REGISTRATION OF MEDICAL DEVICES

All imported medical devices must be registered with the Taiwan FDA (TFDA), regardless of risk. Devices that pose the lowest risk are considered Class I, and products that pose the highest risk are considered Class III. Combination drug devices depend on the product’s primary function for classification.

Class II and Class III medical device registration requires two applications — product registration and Quality System Documentation (QSD). Companies registering for QSD should provide ISO 13485 or ISO 13488 certifications and quality system documentation (such as quality procedures and quality manuals). In lieu of that, they can submit a Certificate to Foreign Government and Establishment Inspection Report or an audit report along with a copy of their Free Sale Certificate.

Class I medical devices require QSD only if the device is sterile or if it is used for measuring.

QSD approval takes about six months and product registrations takes six to 18 months, depending on the device and its classification. Foreign device companies may submit product registration and QSD simultaneously.

ISSUES WITH COUNTRY OF ORIGIN

Foreign medical device companies may have trouble with the TFDA concerning the “country of origin” categorization. Right now, the TFDA recognizes only the actual manufacturer rather than the legal manufacturer when assigning country of origin. The actual manufacturer is the factory or facility that makes the product, irrespective of the original manufacturer. When components are outsourced or assembled by different producers, this can be an issue. Problems also arise when a company cannot get a Certificate of Manufacturing from its actual sub-contract manufacturer.

The TFDA might not promptly accept documentation or promotional materials from the legal manufacturer, since it is supposed to accept such items only from the actual manufacturer. While the TFDA is aware of issues caused by these delays, it has not yet systematically solved the problem.

REGULATORY CHANGES

One major change in Taiwan’s registration process is that the TFDA will soon begin using the Summary Technical Documentation (STED) format for technical document submissions. Starting July 2013, Taiwan will join the United States, the European Union, Canada, Australia and Japan in requiring the STED format for all Class II and Class III medical devices.

This change was announced in mid-2012. It is intended to align Taiwan with Global Harmonization Task Force standards and to help it achieve uniformity with the regulatory bodies of other major countries.

Foreign medical device companies registering their Class II and Class III medical devices after July 2013 should include: a description of the device, product specification (including components, variants and accessories) and an Essential Principles checklist (including risk analysis and control summary, design and manufacturing processes, product verification and validation and test reports for Class III devices).

From January 1, 2013 through June 2013, the TFDA is encouraging medical device companies to submit the above documents as part of a trial phase for transitioning to the new system.

The TFDA has also recently allowed selling Class I medical devices through so-called “virtual channels.” Virtual channels are those sales methods in which the customer cannot examine the product in person, like radio, television, newspapers and the internet. Starting July 2012, Class I device manufacturers have been able to sell their devices this way, as long as they meet several requirements: 1) The manufacturer must register with Taiwan’s Department of Health (DOH), 2) The manufacturer must have at least one functioning physical sales channel in the country, and 3) The manufacturer must register every virtual sales channel with the DOH.

CONCLUSION

Due to its rapidly aging population, Taiwan should see its medical device market grow significantly in the next five to ten years. To prepare for this, Taiwan has started implementing more favorable regulations to attract medical device products from around the world. It is also more accepting of foreign clinical data, and it is generally “friendly” to products that have already been approved in the European Union and in the United States. Unlike China, Korea, and other Asian nations that have tightened requirements and increased approval times over the last several years, Taiwan has made the approval process somewhat easier.