China Proposes Expanded Criteria, Increased Penalties for Device Recalls

November 4, 2016

China FDA is proposing expanded requirements for medical device recalls and higher fines for manufacturers that fail to issue recalls.

The proposed rules would change the standards for when a recall is required. Under the new rules, a recall would be required for devices that do not comply with the technical requirements that were filed as part of the products’ premarket approval application.

Current rules require manufacturers to recall devices that present an “unreasonable risk of harm to human health and life safety in the course of normal use,” the law firm Covington & Burling said in a note to clients.

The draft removes the definition for “defects,” said Katherine Wang, a partner with Ropes & Gray in Shanghai. It further delineates the scope of device recalls into the following four categories:

  1. Any products that have unreasonable risks of endangering human health and safety that may be caused by such products under normal conditions of use;
  2. Any products that fail to meet mandatory standards or the technical requirements for device registrations;
  3. Any products that have unreasonable risks caused by failures related to GMP or GSP; and
  4. Other products that may require recalls.

The rules would significantly expand the agency’s reach, Wang said.

Expanded Reporting Requirements

The proposed rules would also expand defect reporting requirements for device distributors and hospitals. For example, a confirmed device defect triggers an adverse event report under current rules. The proposed rules “require a report if there is a possible defect,” according to Covington & Burling.

“If device manufacturers fail to meet any recall requirements from the CFDA or local FDAs or refuse to recall the devices, the administrative authorities may impose legal penalties,” Wang said.

Currently devicemakers pay a maximum penalty of up to three times the value of the medical device for failing to issue recalls. Under the proposed rules, devicemakers could pay up to 10 times the value of the device. The minimum penalty would increase from RMB 1,000 to RMB 5,000 under the proposal.

“Another highlight in the draft is that it imposes the recall obligations on the legal agent designated by a foreign device manufacturer in China for an imported device,” Wang said.

CFDA has steadily been revising its regulations for medical devices over the last few months.

In August, the agency announced an accelerated pathway for breakthrough medical devices that is similar to the country’s “green channel” for breakthrough therapies. To be eligible for the pathway, the intellectual property for the device needs to be held in China, and the device needs to represent an improvement over existing technology, John Balzano, special counsel for Covington and Burling said during a recent FDAnews webinar.

In late June, the agency announced it would be requiring distributors of Class II and III devices to conduct self-inspections and report on their business activities. Manufacturers with distribution hubs in China will also need to conduct audits of their distributors to ensure they are compliant.

In early June, the agency released details on how it will regulate clinical trials and onsite inspections. It outlined compliance policies and how it will authenticate clinical trial data in its first-ever draft guidance on clinical trials for devices. The document also discusses which devices will be exempt from clinical studies.

China has dramatically revamped its medical device regulations in every major area. Check out this new edition of Understanding China's New Medical Device Regulations which includes a new updated chapter written by experts John Balzano and Christopher Chen of Covington and Burling, LLP.

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