Teresa Huang and Oli Wong
Medical devices are governed previously under the Pharmaceutical Affairs Act. On December 13, 2019, the Legislative Yuan adopted the “Medical Devices Act” (the “Act”) through the third-readings procedure, separating the governance of such medical devices from the “Pharmaceutical Affairs Act.” This distinction puts forth an independent resolution for a more comprehensive regulating system that serves the practical managerial needs of medical devices so to accelerate their introduction to the market and promote its industrial development. The Act went into effect on May 1, 2021, and its relevant rules and standards have been made public. (See Annex for detail)
The Act consists of 9 Chapters and 85 Articles. Its key points are as follow:
I. Regulations of medical devices firms
As stipulated in the Pharmaceutical Affairs Act, the medical devices firms consist of two categories: manufacturers and dealers. The new Act made several important refinements to accommodate the trend in a finer division of manufacturer. Specifically, it clarified the definition of manufacturer to include manufacturing, packaging, labeling, sterilization, and the final inspection of medical devices and added to the definition of manufacturer “engaging in the design of medical devices and marketing the devices under their name” (Article 10). Further, the Act mandated those involving in the manufacture, import, or maintenance of medical devices to recruit technicians according to the type of devices in use (Article 15).
The Act categorized dealers into wholesale, retail, import, export, leasing, and maintenance, and those dealers are required to apply for serving as medical devices firms before engaging any such activities. (Articles 11 and 13)
II. Improving regulations of pre-market risk classification of medical devices
In principle, medical devices must be applied for inspection registration; only after approval and the issuance of a license can it be manufactured and imported. However, the new Act simplifies this pre-market review process for low-risk medical devices. Instead of applying for inspection registration, listing the devices will suffice for several low-risk medical devices. Manufacturers should file an annual declaration related to its listing with the central competent authority each year to maintain its validity. (Articles 25, 28)
The issuance of licenses for medical devices is flexible regarding its term of validity. The maximum term of validity is 5 years, and extensions can be applied before the expiration date. Each extension shall not exceed 5 years. (Article 27).
III. Implementing regulations on pre-market clinical trials of medical devices
Clinical trial institutions or trial sponsors shall file an application to the central authority for approval before any clinical trial. Any adverse occurrences during the trials must be reported to the authority within 7 days of learning such occurrences. If any safety related risks arises during the trial, it may be suspended or terminated (Articles 37, 38, 39).
To manage the risks, clinical trials on medical devices that involve non-significant risks as announced by the central competent authority are not required to file applications for approval (Article 37).
IV. Improving post-market supervisions on the safety of medical devices
The competent authority announces categories and items of specific medical devices with restriction on their sale or supply type in response to various new forms of sales of medical devices (Article 18). As for the medical devices categorized as specific risk level as announced by the competent authority, medical devices firms and medical institutions should establish data on the source and flow of their products to help trace and monitor products in the market (Article 19).
For product safety considerations, medical devices manufacturer must establish a quality control system and report to the central competent authority for inspection to obtain a permission before proceeding in manufacturing (Article 22). Medical devices and dealers thereof announced by the competent authority must establish a quality distributing system that meets the distributing standards of medical devices, and obtain a distributing permission before any wholesale, import, or export (Article 24). Moreover, a communication protocol should be established for essential medical devices, especially when its manufacture, import ceases, or its supply is insufficient. (Article 34)
To supervise the management of medical devices, by considering the potential risk of certain medical devices, the competent authority may order medical devices firms to perform safety-monitoring plan on specified items at a time of their choosing so to monitor the safety of the medical devices. Medical institutions shall assist and provide any relevant data (Article 47). Furthermore, for the safety of its users, upon learning a likely risk of bodily harm from a medical device, the licensed owner or registrant of the such devices must immediately undertake corrective and preventive measures and report to the competent authority (Article 49).
V. Criminal liability for severe violators
Those in violation of the Act will be subject to administrative penalties in line with the nature of such violation, which may include fines; an order demanding corrective measures within a limited period; an announcement of the violator’s identity, name, and violation details; and suspension or license withdrawal (Articles 64-71). The following criminal penalties may apply to those in severe violation:
1. Those manufacturing or importing defective medical devices that result in misdiagnosis, or devices containing toxic or hazardous substances that result in bodily harm may be sentenced to a maximum of 5 years of imprisonment, criminal detention, or fined up to NT $50 million, or both. Violations by negligence may be sentenced to a maximum of 3 years of imprisonment, criminal detention, or fined up to NT $10 million, or both. (Article 60, Paragraphs 1 and 3)
2. Those who knowingly sell, supply, transport, store, mediates, transfer, or display with the intent to sell any defective medical devices may be sentenced to a maximum of 3 years of imprisonment, criminal detention, or fined up to NT $10 million, or both. Violations by negligence may be sentenced to criminal detention or fined up to NT $1 million, or both. (Article 60, Paragraphs 2 and 4)
3. Any person who misuse or use without permission the name, instructions, or labels of a legitimate medical device may be sentenced to a maximum of 5 years of imprisonment, criminal detention, or fined up to NT $20 million, or both. Those who knowingly import, sell, supply, transport, store, mediates, transfer, or display with the intent to sell any medical devices despite being cognizant of any aforementioned violations may be sentenced to a maximum of 2 years of imprisonment, criminal detention, or fined up to NT $10 million, or both. (Article 61)
4. Anyone attempting to sell or supply manufacture or import unapproved medical devices or unregistered devices that should have been registered; and those who knowingly sell, supply, transport, store, mediate, transfer, or display with the intent to sell despite being cognizant of any aforementioned violations may be sentenced to a maximum of 3 years of imprisonment, criminal detention, or fined up to NT $10 million, or both. (Article 62)
5. In the event that those who, in performing his/her duty, violated the aforementioned offenses are the representative, agent, employee, or any other personnel of a legal entity or a natural person, in addition to the penalties imposed on the violator, the said legal/natural person shall be subjected to up to ten times of the fine as set forth in all of the articles. (Article 63)
Annex: Compilation of relevant sub-laws authorized under the Act
|#||Article number of the Act||Description||Pertaining regulation(s)|
|1||Paragraph 2 of Article 3||Authorize to establish the regulations governing the categories, risk classification, items, standard for determination, and other relevant matters.||Regulations Governing the Classification of Medical Devices.|
|2||Paragraph 2 of Article 15||Authorize to establish the regulations governing the class, technicians’ qualifications and ratio, number of hours in training courses, and other relevant matters.||Regulations for Management of Medical Devices Technicians.|
|3||Article 18||Authorize to make the announcement of categories and items of specific medical devices that are regulated in either sales or supply.||Regulations on Communication and Trading Channels for Specific Medical Devices Items and Its Compliance Requirements. Regulations on the Type of Medical Devices That Are Allowed to Be Sold Through Vending Machines and Its Compliance Requirements for Sale.|
|4||Paragraph 3 of Article 19||Authorize to establish the regulations governing the scope in the source and flow of information of medical devices within certain risk class; how such information is established and stored; its term of storage; the method and content to be reported, and other relevant matters.||Regulations Governing Medical Devices Whose Source and Flow Data Should Be Established and Stored. Regulations Governing Medical Device Items Whose Sources and Flow Should Be Reported. Regulations of Medical Device Tracking Management.|
Paragraph 2 of Article 20
|Authorize to work with central industrial competent authorities to establish the standards for medical devices manufacturer||Establishment Standards for Medical Devices Manufacturer.|
|6||Paragraph 4 of Article 22||Authorize to establish the standards for quality control system of medical devices and regulations governing inspection content and methods; and standards for approval, procedures, review, issuance, valid terms, changes, revocation, or cancellation of approval, and other relevant compliance matters.||Regulations Governing the Inspection of the Medical Device Quality Management System and the Issuance of the Manufacturing License. Medical Device Quality Management System Regulations.|
|7||Paragraph 3 of Article 23||Authorize to establish the regulations governing application documents, product liability, contract requirements, labeling, packaging, and other relevant matters for the commissioning of manufacture.||Regulations Governing Contract Manufacturing of Medical Devices.|
|8||Paragraph 3 of Article 24||Authorize to establish the regulations for the good distribution practice and regulations governing authorities’ inspection content and method, standards for approval, procedures, review, issuance, terms, changes, revocation, or cancellation of approval, and other relevant compliance matters.||Regulations for the Inspection of the Good Distribution Practice for Medical Devices and Licensing of Distribution License. Regulations of Medical Device Good Distribution Practice.|
|9||Article 29||Authorize to establish the requirements, procedures, and review guidelines in regard to the application for registration and market approval and issuance of license or listing of medical devices; the requirements and procedures in regard to the application for alteration of the particulars of registration and market approval or listing; the procedures in regard to the application for extension, replacement, and re-issuance of licenses, and the procedures in regard to the annual declaration as well as other relevant matters.||Regulations Governing Issuance of Medical Device License, Listing and Annual Declaration.|
|10||Paragraph 2 of Article 35||Authorize to establish the regulations governing application requirements, review procedures, standards of approval, supply/sale restrictions, return, and other relevant matters in regard to the special approval for manufacture or import of specific medical devices.||Regulations Governing Special Approval for Manufacture or Import of Specific Medical Devices.|
|11||Paragraph 3 of Article 37||Authorize to establish the regulations governing the scope of management, code of practice, application procedure, review standards, conflict of interest avoidance, information disclosure, supervision, audit, the content of informed consent form, and other relevant compliance matters in regard to medical device clinical trials.||Regulations on Good Clinical Practice for Medical Devices.|
|12||Paragraph 3 of Article 47||Authorize to establish the regulations governing the methods of submission, term, content, format, restriction and maintenance on information gathering, monitoring period, evaluation, and other relevant matters that focus on information safety monitoring report for medical devices firms and medical institutions.||Regulations for Management of Medical Device Safety Surveillance. Regulations on Medical Devices to Be Monitored.|
|13||Paragraph 2 of Article 48||Authorize to establish the regulations governing methods of communication, term, content, and other relevant compliance matters when a medical devices firm or medical institution found a serious adverse occurrence with their medical device.||Regulations for Reporting Serious Adverse Events of Medical Devices.|
|14||Paragraph 2 of Article 52||Authorize to establish the regulations governing the product items, modes, methods, scope, fees for random inspection and testing of medical device and other relevant matters when importing specific medical devices.||Regulations Governing Border Inspection and Examination of Imported Medical Devices.|
|15||Paragraph 3 of Article 58||Authorize to establish the regulations governing the classification, approaches for recall operation, handling methods, and other relevant matters in regard to medical devices required to be recalled.||Regulations for Medical Device Recalls.|
|16||Paragraph 2 of Article 76||Authorize to establish the standards for the types and amounts of fees payable for certification, application, declaration, or letter inquiries for medical devices inspection, registration, and annual declaration under the Act.||Standard Governing the Administrative Fee Rates for Medical Devices.|
|17||Latter part of Article 77||Authorize to establish the regulations governing methods for appointing a subordinate agency or commissioning a relevant agency (or institution), legal entity or organization to conduct the testing of medical devices.||Regulations Governing Designation or Commission of Medical Devices Test.|
|18||Paragraph 1 of Article 78||Authorize to establish the regulations governing the accreditation and management of the commissioned legal person or organization conducting medical devices inspection and certification.||Regulations Governing Accreditation and Outsourced Accreditation Management of Medical Devices Institutions.|
|19||Paragraph 2 of Article 78||Authorize to establish the regulations governing methods for appointing a subordinate agency or commissioning a relevant agency (or institution), legal entity or organization to conduct the accreditation work.|
|20||Paragraph 2 of Article 79||Authorize to establish the regulations governing its commission, accreditation, avoidance of conflicts of interest and other relevant matters related to technicians’ education training, review of registration and market approval of medical devices, issuance of certificates, review and inspection of clinical trials, review of advertisements, reporting of serious adverse events, and inspection or general survey of medical device firms.||Regulations Governing Commission of Medical Devices Management and Accreditation of Commissioned Institution.|
|21||Paragraph 3 of Article 79||Authorize to establish the regulations governing its designation, commissioning, and related matters in regard to technicians’ education training, review of registration and market approval of medical devices, issuance of certificates, review and inspection of clinical trials, review of advertisements, reporting of serious adverse events, and inspection or general survey of medical device firms.|
|22||Paragraph 2 of Article 80||Authorize to work with central industrial authorities to establish the regulations governing the eligibility criteria, review procedures and other relevant matters in regard to the incentives for research and development of innovative medical devices technology.||Regulations Governing Incentive Rewards for Research and Development of Innovative Medical Devices Technology.|
|23||Latter part of Article 81||Authorize to make the announcement on the consent methods for gathering, processing, and the usage of personal information under Article 6, Paragraph 1, Subparagraph 6 of the Personal Data Protection Act.||Methods in Substitute of Written Consent for Gathering, Processing, and Using Personal Data with Medical Devices.|
|24||Article 84||Authorize to establish the enforcement rules of the Act.||Enforcement Rules of Medical Devices Act.|
 The authors are lawyers at Lee, Tsai & Partners. However, the contents of this article merely reflect personal opinions and do not represent the position of this law firm.