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While the China device market is huge and growing very quickly, once your device is approved there, market access can be very challenging. The Chinese government is reducing device reimbursement via tendering, volume-based procurement (VBP), separating the high cost of medical consumable products from medical services, Diagnosis-related Groups (DRG), Diagnostic Intervention Packets (DIP), etc.
Medical device market access and reimbursement for devices and medical services are determined by the Chinese national and provincial governments. In 2018, the state government established the National Healthcare Security Administration (NHSA) to centralize responsibilities. The medical service catalogue includes the diagnosis and treatment service items where the pricing department has set the charging standards for medical insurance.
The process to get a new charge code is difficult and time-consuming. The first step is for a specialist department to appeal to the hospital’s management committee. Then, if approved, a medical institution can submit its reimbursement application to the provincial medical insurance bureau for review by medical experts. If the medical experts in the local province agree to try and use the device, it will be used at local hospitals in that province for about 1-2 years without reimbursement. If the device does well during this 1-2 year period, a final reimbursement decision is made by the appropriate provincial insurance authorities.
Volume-based procurement has dramatically reduced many foreign device prices, including some by 50-90%. Over the last few years, prices for coronary stents, hip and knee implants, surgical staplers, dental implants, spinal implants, etc. have been severely cut. Undoubtedly, more foreign high-priced devices will be reduced in the future. Having unique and new devices will help foreign device companies maximize prices and avoid VBP.
Contact us today for a free consultation with a China regulatory affairs consultant to discuss your specific needs.
Written by: Ames Gross – President and Founder, Pacific Bridge Medical (PBM)
Mr. Gross founded PBM in 1988 and has helped hundreds of medical companies with regulatory and business development issues in Asia. He is recognized nationally and internationally as a leader in the Asian medical markets. Mr. Gross has a BA degree, Phi Beta Kappa, from the University of Pennsylvania and an MBA from Columbia University.