In recent years, the rise of health-orientated consumers coupled with aging population in China have caused a surge in demand for health products and medical services.
In 2018, it was reported that mainland Chinese residents spent an estimated USD 250 billion on health products and services This proportion has been forecast to experience an annual growth at 9% from 2019 to 2024.
In 2020, with the advent of the COVID-19 outbreak, the trend is accelerating multifold, and China’s economy is uniquely placed to manufacture and export medical products and services to other countries.
For these reasons, there are more opportunities than ever before for Chines healthcare market now. Hainan Boao Lecheng International Medical Tourism Pilot Zone is quickly becoming one of the leading destinations for healthcare investment in the country. Companies engaged in the manufacture, import, distribution, or sales of medical devices, medical technology, or pharmaceuticals may now be available to fast-tracked approvals and relaxed regulatory oversight, and could benefit from new technology and health insurance reform, all of which creates a better investment environment.
Many foreign investors have already been able to avail such policy incentives. Data from the Hainan provincial department of commerce shows that from January to June 2020, a total of 203 foreign enterprises has been registered in Hainan, up 24.54% year-on-year, with 50 of them established in June itself.
Similarly, in 2020, newly registered companies hit a record of 75,000 from January to August, showing a year-on-year increase of 75.26%, the highest growth rate in the country, according to the provincial market supervision administration.
On September 1st, 2020 the Hainan Provincial People’s Government issued the Integration and Innovation Reform Plan (IIR Plan) for the new Hainan Boao Lecheng International Medical Tourism Pilot Zone (Hainan Medical Tourism Zone).
The latest reform plan focuses on the improvement of current administrative processes of respective medical industry players’ coordination and the improvement of the flow of information, goods, personnel, and investment required for further innovative medical breakthroughs.
The Hainan Medical Tourism Zone is one of the core part of the Chinese authorities’ broader blueprints to transform Hainan into the world’s largest Free Trade Port. Other industries like modern services and high-tech industries, also play central roles in the plans. The establishment of the zone in 2020 is also tally with the national agenda to reprioritize the healthcare by initiating structural reforms and promoting digitization, especially after the COVID-19 outbreak.
The IIR Plan further clarified the types of policy incentives that would be made available for businesses and individuals in the medical tourism zone.
KEY MEASURES WITHIN THE INTEGRATION AND INNOVATION REFORM PLAN IS AS FOLLOWS:
The latest IIR Plan includes 10 main goals – four measures promoting the free flow of trade, investment, capital and personnel, two measures promoting the medical innovation (for medical insurance payments and new trial models of clinical real-world data application), two measures establishing a utmost simplified approval system (for project construction and promote the reform of ‘minimalist approval’ in medical and health care), and the two measures integrating and strengthening the risk controls within the current operation system.
Within the plan, the 10 goals are further broken down into 34 specific policy measures. Some of the more notable measures are stated below.
Facilitating the suspension and residence of foreign personnel
Hainan has yet introduced a series of measures to provide a more convenient pathway for high-level talents, technical and skilled personnel, and foreign students to enter, reside, and work in. Under the latest IIPR document, the following changes have been made that relate to the medical industry:
- New measures will be introduced to facilitate the entry, stay, and residence of foreign medical personnel, patients, and accompanying persons;
- Medical personnel working in the park can apply for work-type residence permit consistent with the work contract;
- Foreigners and their family can apply for medical treatment private affairs visa or residence permits with the same service period.
Free and convenient trade in licensed medicine and equipment
The Implementation Plan on Supporting the Construction of Boao Lecheng International Medical Tourism Pioneer Zone (2019) introduced measures to allow in-zone medical institutions to streamline the import of urgently needed foreign drugs and medical equipment that are not yet approved by Chinese authorities. Furthermore, the latest document introduces additional measures to facilitate trade in this area:
- Build a fullytraceable platform for unlisted licensed pharmaceutical and medical device using block-chain, IoT, 3D geographic information system, and other information technology of new generations;
- Optimize the functionality of domestic bonded warehouse storage used for unlisted innovative drugs and equipment under the “warehouse first, quarantine later” model;
- Host regular exhibitions to promote the international innovative medical devices that have not yet been listed.
Using clinical real-world data to apply for imported product registration
As previously introduced in the Hainan Medical Zone Implementation Plan, the clinical data generated by urgently needed foreign medical devices and drugs can be used to apply for imported product registration if they meet the relevant requirements for Chinese medical device and pharmaceutical registration declaration.
This has reduced the time costs and registration fee for global innovative products’ entrance of Chinese market, thereby enabling international companies for innovative medical devices and drugs to actively promote their products in mainland China.
Implementing the reform of “minimalist approvals”
Under this category of reforms – approvals for project construction, medical institution setups, and registration will be streamlined. For example, the plan canceled six project approval items and introduced the combined letters and certifications.
It also established a 2-in-1 institutional supervision model, whereby the medical and drug regulatory agencies would be jointly established by the health department to improve the licensing efficiency.
For medical institutions planning to register in the zone, approvals required will be reduced, the need to obtain an “approval for setting up a medical institution” will be removed. Now merely the “medical institution practicing permit” is still required.
Moreover, a standard guidance has been planned to reduce the time limit for registration of medical and nursing practice licenses. Domestic medical care registration would be completed within one working day, while foreign medical care registration within five working days.