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
Paragraph 2 of Article 20
[1] 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.