Bringing innovative medical technologies and new medical devices to the Taiwan market in a timely way to meet the healthcare needs of the Taiwanese public.
A medical device is any apparatus, appliance, software, material, or other article – whether used alone or in combination for human beings – which serves the purpose of diagnosis, prevention, monitoring, treatment, or alleviation of disease. Medical devices play a critical role in healthcare. Since multiple scientific disciplines (biomaterials research, cell biology, information technologies, etc.) each make advances and complement one another in medical device design, the medical device lifecycle has continued to shorten. As a result, the harmonization of global regulation and the speedy launch of new devices are imperative for improving patients’ quality of life.
With the rapid aging of the population, the demands on our healthcare system are increasing drastically. The member companies of the Medical Device Committee view our mission as making new and innovative technologies available in Taiwan to help meet that healthcare challenge. To achieve our mission, we consider it crucial to collaborate closely with Taiwan’s government authorities to streamline the registration process to help Taiwanese patients benefit earlier from cutting-edge technologies and products. It is also vital to implement a more predictable and sustainable pricing and reimbursement process to encourage the faster introduction of new technologies, despite the existence of financial constraints. We hope that all key stakeholders in Taiwan will work closely together toward that goal. Following are our specific recommendations:
Suggestion 1: Establish diversified communication for a more predictable and sustainable environment.
1.1 Minimize the impact of implementing the new Medical Device Act through strengthened communication and cooperation with industry, plus adoption of a grace period.
Taiwan previously regulated medical devices under the Pharmaceuticals Affairs Act, which was not an appropriate approach. This Committee welcomes the advent of a new regulatory structure in the form of the Medical Device Act now being deliberated by the Legislative Yuan. We believe its passage will encourage more innovation in the Taiwan market and greater efficiency in regulating an industry known for its complexity, wide range of products, and frequent advances in technology.
But introduction of the new law will also create disruption in the market if not handled skillfully. In connection with the new legislation, a number of sub-regulations will also come into effect, dealing with such areas as Good Distribution Practice (GDP), medical device technician management, Unique Device Identifiers (UDIs), traceability management, etc. Industry will need time to understand and bring itself into compliance with each new requirement.
We strongly urge the Ministry of Health and Welfare (MOHW) to provide a sufficient grace period before new regulations are enforced, and to use that period for extensive communication with industry to enable companies to smoothly adapt to the new Medical Device Act and its implementation rules. Also needed will be strengthened cross-functional communication and collaboration between different government authorities in order to establish a consistent policy. For example, establishing the review principle and rule of good manufacturing practice and product registration of the legal manufacturer will need coordination between the TFDA’s Medical Devices & Cosmetics Division and the Risk Management Division. Consistency of the country of origin and manufacturer location will need discussion between the Medical Devices & Cosmetics division and the Customs Administration of the Ministry of Finance.
1.2 Maintain positive interaction with industry and enhance the predictability of medical policies.
The Committee thanks the Taiwan Food and Drug Administration (TFDA) for regularly holding meetings with industry representatives for communication concerning medical device regulatory issues. For its part, the National Health Insurance Administration (NHIA) has addressed our White Paper recommendations seeking steady improvements in the transparency of the review process for new medical devices and in the Price Volume Survey (PVS) mechanism.
We urge the health authorities to continue this positive interaction with industry by holding periodic policy-communication meetings in the interest of building the best quality healthcare system for the Taiwanese people. Regular exchanges of view are necessary to assure the predictability of medical policy.
Suggestion 2: Accelerate the pre-market approval process.
2.1 Discontinue the document authentication process for Free Sales Certificates used in medical device registration.For the sake of a consistent approach to document requirements for drugs and medical devices, we suggest that TFDA’s Division of Medical Devices & Cosmetics refer to the practice of the Division of Medicinal Products in exempting Free Sales Certificates from document authentication. Currently such authentication is required under Article 7 of the “Regulations for Medical Device Registration.” Ending that requirement would shorten the preparation lead-time for applications for registration, enabling patents in Taiwan to benefit earlier from treatment with new devices.
2.2 Expedite the launch process for medical devices by expanding the items eligible for the Declaration of Pre-clinical Testing Conformity.As some Class 2 devices with lower risk have been developed to a very mature stage, the U.S. Food and Drug Administration in 2017 exempted some Class 2 devices from 510(k) review as part of the application process for Premarket Notification. Along similar lines, on July 1, 2016, TFDA announced a “Declaration of Pre-clinical Testing Conformity for Medical Devices” for four items, including infrared ear thermometers. We suggest that TFDA expand the applicable Class 2 devices eligible for this registration pathway so as to expedite the launch process for medical device and adhere to international standards in regulatory management. The Committee will provide the suggested items for Declaration of Pre-clinical Testing Conformity eligibility at a later date.
2.3 Accept the Medical Device Single Audit Program (MDSAP) audit report as a substitute for the current FDA EIR module under the QSD-simplification approach. Submission of an Establishment Inspection Report (EIR) from the U.S. FDA is one of the essential requirements under Taiwan’s simplified Quality System Documentation (QSD) approach for auditing manufacturing sites located in the United States. Since 2016, the U.S. FDA has recognized MDSAP audit reports as a substitute for EIRs. We urge TFDA to also accept MDSAP audit reports as a substitute for the FDA’s EIR report in applications for treatment under the simplified QSD approach.
Suggestion 3: Share the policy direction for new medical technology and the NHI budget, and apply sound policy and pricing mechanisms for new medical-device reimbursement.
The government’s policy direction, the priorities assigned to medical-resource allocation, and the budgeting of new medical technology under the Global Budget System are all key factors influencing the application and development of medical technology. Forward-looking policy directions and a sound NHI pricing mechanism would encourage manufacturers to introduce their new medical devices and technologies to create a better medical environment for Taiwan’s patients and doctors.
3.1 Exempt newly reimbursed, new-function special materials with annual expenditures under NT$60 million over three years from HTAs and PVAs.At present, reimbursement applications for new-function special materials are required to go through a Health Technology Assessment (HTA) process and complete a Price-Volume-Agreement (PVA) if the estimated NHI financial impact exceeds NT$30 million. However, the financial assessment is based on the total estimated sales volume of all special materials in the same functional category, regardless of differences in brand value and specifications. The low threshold of NT$30 million prolongs the review process while pushing down pricing to an even more unfavorable level, discouraging the manufacturers from applying for reimbursement for the special materials.
Considering that the budget-impact assessment combines all devices within the same category, we recommend extending HTA and PVA exemption to items causing NHI expenditures of less than NT$60 million annually in the three years after listing. Cases where HTA reports are proactively submitted should receive an incentive in the form of a premium reimbursement price.
We also recommend that new-function special materials undergo a Price Volume Survey every four years like existing-category special materials, rather than every two years as now.
3.2 Optimize the pricing of innovative medical devices and reimburse by fee-for-service to ensure patients’ clinical benefits. Innovative-function special materials are those that have shown breakthrough improvement in clinical function or efficacy compared with the current best similar-function special materials as proven by clinical-trial literature. In Taiwan, after clinical experts review the medical benefits, they may recommend listing under NHI and set reimbursement criteria to limit over-use.
However, if innovative-function special materials are treated within the scope of a TW-DRG (Taiwan-Diagnosis Related Group), they will tend to consume too much of the total fixed expenditure allocated for the TW-DRG, with the result that doctors will be reluctant to use them. For special materials with innovative functions, we suggest that reimbursement be handled on a fee-for-service basis, and not as part of a TW-DRG.
Besides, considering the wide variety but limited sales volume of medical devices, as well as the relatively small size of the Taiwan market, we recommend – so as to encourage the introduction of innovative medical devices into Taiwan and the NHI system – giving optimum pricing to special materials that have innovative functions or for which there is no substitution device.
3.3 Systematically plan NHI review processes and budgets for new medical technologies and special materials. Use balance billing to accelerate the introduction of new medical technology. The introduction of emerging medical technologies has driven the development of many new medical procedures and changes in healthcare systems. For example, the development of minimally invasive surgical devices and technology reduces surgical risks and mortality. The application of remote monitoring systems for post-acute care, chronic diseases, and home care will further change the medical care model for an aging society.
At present, the reimbursement assessment of novel medical technology and innovative medical devices come under different divisions in NHIA. For medical devices that also involve a new medical technology, the process of sequential review by the two divisions can take years to complete. In the meantime, Taiwan’s patients and medical community are deprived of the benefits of these technologies and devices.
To streamline the process, especially when an HTA is required, we suggest that the reviews of the new medical technology and innovative medical devices be carried out in parallel. This approach would also enable NHIA to plan for new-technology reimbursement and NHI resource allocation in a more integrated manner.
In addition, sufficient NHI budget should be allocated for new medical technology and innovative medical devices that have a big budget impact to avoid squeezing out other expenses. Utilizing the balance billing mechanism in the reimbursement of new medical technology and innovative medical devices would also improve patient access to new treatments. For innovative medical devices for which it is difficult to obtain appropriate reference items, the insurer could set a maximum reimbursement amount based on the medical efficacy and NHI budget.