Groundbreaking policy to attract western device manufacturers, investors and medical tourists to Hainan

The China State Council announced on April 4 that imported medical devices are allowed to be used clinically in the Boao City, Hainan province without the need for CFDA registration approval, as long as the devices have been approved by the Hainan Province FDA office.

The groundbreaking policy is to attract western device manufacturers, investors and medical tourists into Hainan, which is the very southern province of China.

Boao City, known for Boao Forum for Asia, was established as a pilot district for an international medical forum in February 2013. Soon afterward, multiple incentive policies were granted: selected stem cell trial was permitted, major medical equipment was used in private hospitals, overseas capital was allowed to invest in hospitals and to deduct tariffs for medical devices and pharmaceuticals, etc. None of the previous policies cross the CFDA bottom line – the only authorized state department to approve imported devices (Class II & Class III).

But the rule has been changed now with the latest announcement.

“For any Class II and Class III imported medical device in China, foreign manufacturers shall submit the application and home country approval to CFDA for registration approval,” the Medical Device Supervision and Regulations announced in March 2014.

Foreign drug manufacturers have already benefited from Hainan medical tourism policy. In September 2016, Hainan Cancer Hospital successfully imported Merck’s Keytruda (Pembrolizumab), a drug intended for non-cell lung cancer. It only took half a month to get the registration from Hainan Province’s local FDA, compared to 3-5 years of clinical trials for traditional CFDA pathway.

Global hospital groups focused more on business opportunities. Medical institutions from the U.S., Germany, Japan and Switzerland invested $3.33 billion in Hainan for the year of 2017 to concentrate on the stem cell trials, cancer treatments, anti-aging research and assisted reproductive technology (ART) applications.

Chinese citizens spent over $10 billion in overseas medical care in 2015. As medical tourism becomes hot in Hainan Province, now the Chinese expanding middle and upper classes do not have to go overseas to get treatment, which will also help central government to retain the medical revenue in China.