China, FDA Sources of New Regulatory Developments

As two recent developments make clear, fledgling regulatory frameworks for medical devices are in a state of churn in several nations, but the more mature regulatory systems are anything but static. The first of these two latest developments bodes well for industry where a massive Asian market is concerned, but the second would seem to suggest that digital health has a number of hurdles to overcome in the U.S.

China Overhauls Medical Device Regulations

China’s State Drug Administration recently announced several proposed changes to its regulatory framework for devices and diagnostics, but the changes arrived as Washington and Beijing haggle over trade in a dispute that could lead to a significant boost in tariffs.

One of the more significant of the proposed SDA changes is that industry would not have to obtain approval for manufacturing in China prior to obtaining marketing approval for that device. Another important change is that the SDA would no longer require that the manufacturer also serve as the holder of the certificate, which would free up device makers to do business with local representatives who are in a better position to avoid delays. These two changes alone would seem to represent a significant reduction in time and/or hassle to market.

Another significant change is that SDA may accept clinical studies conducted outside China, although this provision would not apply to high-risk devices. Precisely how much this helps device makers is not clear inasmuch as clinical studies are categorically mandated only for high-risk devices. One bit of seemingly good news on the moderate-risk device front is that provincial authorities will no longer be tasked with premarket review, a switch that hopefully will create a more predictable process.

The agency also said it intends to form a dedicated facility inspectorate by hiring inspectors on a full-time basis. The impact of this change might not be obvious in the near term, but the fact that these inspectors will not be distracted with other matters might at least lend more consistency to inspections.

By some accounts, the draft rule would eliminate the nation-of-origin rule that has rankled device makers for a number of years. Device makers in the U.S. have argued for some time that nation-of-origin rules left device makers in other nations at a competitive advantage. That particular problem may soon be a thing of the past. SDA is taking comment on the proposal through July 24.

Device makers have worked for years to pry open the Chinese market with middling success, but the ongoing trade controversy could be a setback. Among the targets of the Trump administration’s tariff list on Chinese products are medical devices, and U.S. device makers are concerned that a retaliatory tariff may be in the offing. The predicament is serious enough that Rep. Erik Paulsen (R-Minn.) penned a May 15 letter to the U.S. Trade Representative recommending caution, given that the trade deficit for medical technology is relatively narrow and actually favors the U.S. in some categories. Trade discussions between Washington and Beijing are ongoing, however, and both sides still have ample room in which to negotiate.

Legality of FDA’s Precert Program Questioned Again

The FDA’s effort to streamline its review of software as a medical device (SaMD), a vital cog in its overall digital health enterprise, revolves around a program for precertification of SaMD vendors, but the latest update has prompted observers to question again whether the agency can legally step around its current authorities to deploy the program. At stake is the future of a program seen as critical to sustaining the digital health pipeline, although some might question whether there will be a challenge to what some argue is the FDA’s extralegal approach to digital health regulation.

As previously discussed in the May 17 blog, the agency’s digital precert program would replace a product-by-product review process with one that certifies the vendor’s quality program instead. This approach carries with it a presumption that the FDA will more closely track outcomes and adverse events associated with the SaMD in question, and possibly exercise more rapid remediation of any problems than might otherwise be the case.

Version 0.2 of the precert program emerged in late June, proposing to revise the two levels of precert accreditation. Previously, the FDA had proposed a leaner precert process for companies with histories of successful navigation of the agency’s premarket and postmarket requirements, but the latest update would eliminate prior regulatory experience as a determinant, and instead allow entities that score well on a number of key performance indicators to employ the less cumbersome process.

The questions surrounding the legality of the precert program were not long in coming. In an Aug. 16, 2017, post at the blog for Health Affairs, a trio of authors described the precert program as “an experiment in medical product regulation” that lacks any statutory backing, even with passage of the 21st Century Cures Act, which FDA commissioner Scott Gottlieb has cited as an authorizing text.

The authors of the Health Affairs editorial are not the only ones who have misgivings. Bradley Thompson of Epstein Becker Green gave voice to a similar concern recently. Thompson, who has represented several ad hoc medical technology alliances over the past few years, suggested the precert pilot as currently understood would amount to a suspension of both statutory and regulatory authority.

Obviously industry will not want to make waves in connection with the precert program, but there are other stakeholders with different incentives. Public Citizen and the National Center for Health Research are well known for looking askance on device approvals, and so can be expected to track the precert program as it moves along. Any related litigation would end up in the U.S. District Court for the District of Columbia – which is known for giving federal agencies the benefit of the doubt – but a lawsuit could impede the precert program considerably, even if it did not derail the program entirely.

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