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 multiple communication channels to work toward a more predictable and sustainable environment.
1.1 Minimize the impact on industry after implementation of the new Medical Device Act by strengthening communication and cooperation among the relevant competent authorities and ministries and building a consistent implementation policy.
The Medical Device Act was promulgated by the Office of the President on January 15, 2020. The Committee thanks the Ministry of Health and Welfare (MOHW) and Taiwan Food and Drug Administration (TFDA) for their efforts to institute a sound regulatory system for medical devices in Taiwan. Together with the new legislation, a number of sub-regulations will also come into effect, notably those pertaining to Good Distribution Practice (GDP), Medical Device Technician Management, Unique Device Identifiers (UDIs), Traceability Management, etc. It will take time and effort for industry to understand each new requirement and put the proper compliance procedures into place.
The Committee requests MOHW’s assistance by fully communicating with industry and providing a sufficient transition period to enable companies to smoothly adapt to the new Medical Device Act.
One of the welcome provisions of the new legislation is its recognition of the concept of legal manufacturer for such purposes as Quality System Documentation (QSD) review, product registration, determination of Country of Origin, etc. This principle should help ensure regulatory consistency among the various government units and facilitate the rapid import of goods, especially for medical equipment, components, and raw materials. We recommend that TFDA’s Medical & Cosmetics Division and Risk Management Division jointly develop a set of document-review principles and standards to promote efficiency and consistency.
1.2 Enhance National Health Insurance market access predictability, increase communications with industry, and disclose more NHI information.
A forward-looking government health policy and resource-allocation plan, as well as a healthy reimbursement environment, are critical factors in encouraging the introduction of advanced new medical devices and new medical technology. The committee commends the National Health Insurance Administration (NHIA) for modifying the Price-Volume Survey (PVS) mechanism for special materials to improve the reimbursement environment in recent years. In addition, establishment of an e-submission system for medical device reimbursement applications has increased the transparency of the review process.
Several significant changes occurred in NHI policies in 2019. For example, when revisions to the Balance Billing regulation accelerated NHI’s adoption of innovative medical devices, the operating mechanism for Price Volume Agreements (PVAs) – after many years of implementation – was changed at the same time. The new PVA principle increases manufacturers’ responsibility to evaluate the financial impact on NHI of reimbursement for new-function special materials. Having a smooth communication channel between the health authority and industry will help industry to better understand government policy objectives and implementation schedules, and to adjust their market plans in a timely manner.
The Committee therefore recommends that the health authorities increase the frequency of communication with industry, listening to industry opinions and providing sufficient grace period before implementation of major policies changes or revised regulations. We also urge NHIA to publish such NHI statistical information as the volume of medical service utilization and procedures, the special material utilization in each functional category, and Health Technology Assessment (HTA) reports for evaluating the new medical-service fee schedule. Access to that data will enable manufacturers to provide a more comprehensive and accurate analysis on new-device reimbursement applications.
Suggestion 2: Accelerate the pre-market approval process.
2.1 Revise the QSD regulations.
Accept the Medical Device Single Audit Program (MDSAP) audit report as a substitute for the current FDA EIR mode under the QSD-simplification approach. Submission of an Establishment Inspection Report (EIR) from the U.S. Food and Drug Administration (FDA) is one of the essential requirements under Taiwan’s simplified QSD mode for auditing manufacturing sites located in the U.S. 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 the simplified QSD mode.
Simplify the renewal requirements for QSD. QSD is renewed every three years. Currently, the requirements for the initial QSD application and renewal in standard review mode are the same. In the interest of making the review process more efficient, the Committee suggests that unless major changes are being made in quality-related matters or extensions are being proposed in the product line or scope, the QSD renewal requirements could be waived for quality documents related to tier 1 and tier 2 standard operating procedures. The result would be to significantly reduce the time for QSD renewal submissions. The manufacturer must be responsible for keeping all quality-related documents in a manageable and controlled manner so that they could be made available as necessary at any future time for review or inspection as requested by TFDA.
2.2 Improve the product registration process.
Discontinue document authentication for Free Sales Certificates (FSCs) used in medical device registration. The Committee requests that TFDA’s Division of Medical Devices & Cosmetics exempt FSCs from document authentication to reduce the cost of time and manpower required for authentication and also to shorten the document preparation time.
Amend the requirements for FSCs. To cope with the impact of Brexit and resolve the long-term issue of FSC issuance by Switzerland as a non-member of the EU, the Committee suggests expanding the wording in Article 7 of the “Regulation for Registration of Medical Devices” from “EU Member States” to “EU Member States, the UK, and Switzerland.”
For new product registration after participation in multinational and multicenter clinical trials, the Committee suggests that TFDA accept product submissions without FSC from the country of origin to enable parallel submission with other countries – or even ahead of other countries – to accelerate the launch of new innovative devices for the benefit of patients.
Set up a mechanism for companies to have a pre-filing consultation meeting with TFDA regarding innovative medical devices. In view of the wide variety, growing complexity, and continuous innovation of medical devices, countries such as the U.S., Japan, and South Korea have had a pre-filing consultation mechanism for many years. Taiwan’s adoption of a similar mechanism would expedite the product launch process for complex and innovative medical devices, improve the predictability of product registration for such products, and enhance the review efficiency by strengthening communication with industry. At present, the “Directions Governing Medical Device Project Consultation” are applicable only to domestic Class 2 and Class 3 medical devices and multinational and multicenter medical device clinical trial applications. Imported medical devices are excluded. The Committee suggests that TFDA provide a similar pre-filing consultation mechanism for imported medical devices.
Add a “change notification” option to the submission system. Following implementation of the EU’s “Medical Device Regulations/In Vitro Diagnostic Medical Devices Regulations (MDR/IVDR), it can be expected that TFDA will receive a large quantity of license applications to enable products to comply with this regulation. In order to relieve the constraints on manpower, accelerate the review time, and meet the urgent needs of industry, we recommend adding “change notification” as one of the modes of regulatory management. This practice would enable companies to notify the regulator regarding the change without a document review and approval process, while at the same time ensuring that the relevant information is available for reference. It would help industry avoid problems due to products being out of stock and prevent the quality of medical services for patients from being impacted.
Suggestion 3: Optimize the pricing mechanism and enhance out-of-pocket accessibility to ensure patients’ clinical benefits.
3.1 Establish a reasonable pricing mechanism for new-function medical devices.
Consult the medical association when NHIA and industry cannot agree on the definition of the function of a new device. The current reimbursement prices of medical devices were set based on the functional category, with devices in the same category given the same reimbursement price. Disagreements sometimes occur between NHIA and industry on the proper definition of the function of a newly licensed device, and surgeons may have limited or no experience in using the new device. In such cases. we recommend that NHIA request an opinion from the medical association.
Amend the criteria and add-on percentage for functional improvement devices that receive an add-on reimbursement price. If NHIA wishes to give an add-on reimbursement price based on the existing reimbursement price, there are seven criteria for functional improvement devices. Each criterion can increase the reimbursement price by up to 15%, for a maximum of 105%, though there is no actual case of an add-on of more than 45%. The add-on criteria should be able to reflect the benefit of the new technology and the amount of investment that went into developing it. Such other factors worth considering are whether the device would lower complication rates, shorten the hospital stay, reduce the length of the operation, and be more convenient for surgeons to use, as well as whether it has a patent, has been approved by the U.S. FDA or EU, and has been recognized by specialties, etc. We recommend that NHIA amend the current add-on criteria and percentages to reflect the value of advanced technology in encouraging industry to continuously bring innovative medical devices to Taiwan.
3.2 Shorten the time to market of new-function medical devices that provide the opportunity to accumulate clinical experience and evidence.
Given the ever-changing nature of medical devices, new-function medical devices usually come to market after the gradual accumulation of clinical evidence to prove their effectiveness. NHIA’s current practice of assigning temporary codes for new-function medical devices that are not yet reimbursed can help make such innovation more accessible.
Since the time needed to gather clinical evidence varies greatly, it is important that new-function medical devices receive early access to the market in order to start accumulating local clinical experience. We suggest keeping the current practice of assigning temporary codes, while allowing a transition period in which new-function medical devices can gain more clinical experience and evidence. This approach is also a way to encourage manufacturers to continuously introduce new medical technologies and new medical devices into Taiwan.