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Driving force & recent news of China UDI implementation

Minghua Chen Summary information goes here

With the successive introduction and gradual implementation of UDI regulations in the United States, the European Union and many other countries, RA colleagues around the world are speeding up to learn and adapt to this new requirement. Everybody is aware of the importance of UDI and the complexity of its implementation but struggled by meeting the different requirements of different countries. Since NMPA (National Medical Products Administration) issued the announcement on UDI system rules and started the pilot program in 2019, we have been receiving inquiries from clients continuously, to help them understand the specific requirements of China's UDI regulation and the comparison with other jurisdictions such as Europe and the United States. My colleague Stephanie Huang wrote a blog about UDI in China, explained "what" and "how" (Manufacturers are under pressure to comply with NMPA’s UDI requirements (qservegroup.com), today I want to focus on “why”, that is, the background and driving force of UDI implementation in China, as well as the recent news we’ve already seen.

Why UDI?

IMDRF (International Medical Device Regulators Forum, the voluntary group of medical device regulators from around the world aims to accelerate international medical device regulatory harmonization and convergence) summarized the intention of establishing the UDI System in its published document IMDRF/UDI WG/N7FINAL:2013, which are listed below:
  • Traceability
  • Identification
  • Adverse Event Reporting and Field Safety Corrective Actions
  • Reduce Medical Errors
  • Documentation

These intentions have been well recognized among the medical device industry, but others from healthcare provider’s perspective may be overlooked as they’re not fully addressed either in the IMDRF documents or in EU-MDR/IVDR, such as UDI usage for procurement, expense settlement & reimbursement, custom clearance, anti-counterfeit and even for anti-corruption. Don’t be surprised if China hospitals ask for more than what the regulators said as they’re more aggressive of using the UDI system driven by the medical system reform. 

China UDI, in the context of Tripartite medical System Reform

China government has been committed to the reform of medical & healthcare system for the past 2 decades. To achieve its main purpose of building up a “safe, effective, convenient and affordable” medical system, the coordinated reform of tripartite systems, which are the health insurance system, medical service system, medical/medicinal product supply system is already a national wide consensus. You can easily tell the close tripartite cooperation if you saw the key UDI related documents always issued jointly by NMPA, NHC (National Health Commission) and NHSA (National Healthcare Security Administration).

Last month on June 17, 2021, the General Office of the State Council issued the notice lists key tasks for 2021 to deepen the reform on the government website. While stressing solid actions to promote the centralized procurement system and bulk-buying mechanism, the notice called for the consistent application of UDI in the fields of supervision, medical service and medical insurance. A very clear message from the central government that the UDI will be applied not only for traceability and vigilance, but also, or we should say more urgently, used for procurement and reimbursement by social insurance. If we study the data specification of the China UDI database carefully, the 20 digits’ medical insurance code has been listed as one of the key data elements, obvious intention here to mapping UDI with the medical insurance coding system. The medical insurance coding system, managed by NHSA, is the fundamental infrastructure of the standardization and informatization of the national medical insurance management, obviously very important for reimbursement. It will be composed by 15 modules, including those for diseases, surgeries, NHSA department & staff, hospitals, pharmacies, healthcare professionals as well as the coding systems for medicine and medical devices etc. Its national database has been put into pilot use since 2019, the same year of starting UDI pilot program.

The combination of the UDI database & the insurance database will compose a huge national big data. Lots of useful information will be generated for authorities and public. It’s difficult to give an exhaustive list of how it could be used, but we can easily imagine part of the usage already, such as:

  • the sales, distribution and procurement of one specific product or one type of product; with high level view, it will be much easier for the national procurement purchasing, e.g., urgent supply/delivery during pandemic; and when we zoom in into a detail, we can also find something interesting, e.g., easily discover an unusual procurement/usage by one hospital or one specific healthcare professional which might be a clue for the bribery case. We can tell from the news published by CCDI (Central Commission for Discipline Inspection) last month, they’ve already started to use this tool for their daily job.
  • the product pricing & efficacy, as well as comparison among similar products which could be a good reference of bulk-buying bargain.
  • the real-world use data and clinical research, can also indicate the direction for industry innovation.

Industry may think it will cost some time for implementing the top-down central government decision, so industry will have a grace period to change. It might be true from national wide perspective, but not true for some local governments that are more eager to reform compared with the others. Highlight below from some of the local governments (not an exhaustive list): 

First tier cities:

Other regions:

  • Fujian Notice for UDI implementation: in additional to those covered by the National catalogue, also require other local Class III device manufacturers and new Class II device registrant to submit DI to NMPA UDID by July 1st 2021, encourage other Class II device manufacturers to get the UDI assigned ASAP; mapping UDI and the other 3 codes system by July 1, 2021; specific guidance provided separately for manufacturer, distributor & healthcare providers
  • Anhui notice for the UDI implementation (1st batch): follow National catalogue as for the 1st batch, also encourage other Class II/III manufacturers to implement; involved industry association to support the training and communication
  • Shanxi workplan for the UDI implementation (1st batch): follow National catalogue as for the 1st batch, set the usage deadline not only for manufacturers, but also for distributors and healthcare providers, expected to be finished within 2021;
  • Yunnan work plan for the UDI implementation (1st batch): all Class III and part of the Class II devices included, stepwise implementation until 2022.

So, is China UDI used only for medical device regulatory compliance? No, it is critical for the business of the medical device manufacturers, in a direct way and coming very soon. It’s pushed by the central government instead of NMPA itself, to achieve its target for thorough national medical system reform and Health China Initiative. With this background, those healthcare providers, the China customers of the medical device industry may push very hard for the implementation of the UDI. In addition to study China UDI regulations from NMPA and other national or local authorities, manufacturers have to talk to their China customers and distributors to understand their specific needs for implementation.

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