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January 23, 2013
PRC Ministry of Health Issues Measures on Centralized Procurement of High Value Medical Devices

On December 17, 2012, the Ministry of Health (“MOH”) issued a new regulation that subjects certain high-value medical devices to a centralized procurement regime.

The Measures on Centralized Procurement of High Value Medical Consumables (“Measures”) defines “high value medical consumables” as those massively-used, relatively high-priced products that are used directly on the human body and require high safety standards. Vascular and non-vascular invasive devices, orthopedic implants, neurosurgery and electro-neurophysiology devices, pacemakers, extracorporeal circulation and blood purification systems, ophthalmology and stomatology devices are included. A detailed product catalogue is being developed by provincial health authorities.

Pursuant to these Measures, all non-profit medical institutions in China that are at or above the county level must purchase such devices through a centralized procurement process organized by provincial public health authorities. Private medical institutions may participate in such procurement on a voluntary basis. Manufacturers are required to participate in the procurement directly; exclusive distributors of foreign products or distributors owned by the manufacturers may participate in the procurement as if they were manufacturers. Products going through the procurement shall be directly delivered by the manufacturers or by its contracted distributors, and the logistics charges should be covered in the bidding prices.

There are a number of manufacturer qualification requirements listed. Penalties are also set forth for various violations including commercial bribery or failure to supply products, all of which could disqualify a manufacturer from participating for 2 years.


Sidley China Life Sciences Practice

Sidley has a powerful, fully integrated life sciences practice serving multi-national pharmaceutical, biotechnology, medical device and food companies in every aspect of their business operations in China. Sidley’s Foreign Direct Investment, general Commercial, Corporate, M&A/Joint Venture, Antitrust, FCPA, Licensing, IP, provincial government work, as well our Regulatory practice permits us to serve virtually every legal need of our life sciences clients in China.

Sidley is the first international law firm to establish a stand-alone, comprehensive food and drug regulatory practice in China. As an integral part of our Global Life Sciences practice, we bring our knowledge of industry practices in the U.S. and EU to each project in China and help develop global Standard Operation Procedures (SOPs) and benchmark best practices.

For further information on the China Life Sciences Practice, please contact:

Chen Yang
Partner
+86.10.6505.5359
  

Zhengyu Tang
Partner
+86.21.2322.9318
 

 Yuet Ming Tham
Partner
+852.2509.7645


Sidley Global Life Sciences Practice

On three continents, Sidley’s Global Life Sciences Practice team offers coordinated cross-border and national advice on Food, Drug and Medical Device Regulatory, Life Sciences Enforcement, Litigation and Compliance, Healthcare Regulatory, Products Liability, Intellectual Property, Corporate and Technology Transactions, Securities and Corporate Finance, International Trade and Arbitration, FCPA/Anti-Corruption, Antitrust/Competition, Environmental/Nanotechnology.

Globally rated as one of the top life sciences practices, our team includes former senior government officials, medical doctors and leaders in various life sciences fields.

For further information on the Global Life Sciences Practice, please contact:

Scott Bass
+1.202.736.8684
+1.212.839.5613

James C. Stansel
+1.202.736.8092

 

This Sidley Update has been prepared by Sidley Austin LLP for informational purposes only and does not constitute legal advice. This information is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. Readers should not act upon this without seeking advice from professional advisers.

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