China Food and Drug Administration ("CFDA") issued the Measures for the Administration and Supervision of Online Sales of Medical Devices (the "Measures") recently and the Measures will take effect from 1^st March 2018. Shanghai Dongjin finds the following as the main points on the Measures.

1. The Measures clarify the different definition between “the third-party platform provider for online transaction” and “the medical device online sales enterprises”. “The medical device online sales enterprises” should have the same requirement as the offline enterprises and have the relevant medical device licenses. However, “the third-party platform provider for online transaction” cannot directly involve in the medical device sales.
2. The Measures state the obligations for “the third-party platform provider for online transaction” and “the medical device online sales enterprises” as below.

• The third-party platform provider for online transaction should be recorded at the provincial level. Whilst the medical device online sales enterprises is recorded at city level.
• The third-party platform provider shall establish necessary management systems for the verification and registration of enterprises on the platform and for the oversight of quality safety, and immediately cut off online transaction services provided to business operators with violations and for illegal products and report the circumstances to the authority. The third-party platform provider for online transaction services is obligated to check and confirm that any enterprise doing business on its platform has a physical store in practice.
• Both the medical device online sales enterprises which have the own website and the third-party platform provider for online transaction should have the internet medicine information service qualification license according to the Measures for the Internet Medicine Information Services. It should also meet the requirements for the business place, technology conditions and the management personnel.
• If the platform provider fails to have in place and implement the required management systems and is exposed to potential dangers in quality safety, the regulator may order it to suspend the online sales or to suspend relevant online transaction services.
• The record for online sales of medical device should be kept for 2 years, 5 years or forever, varied from the different situations.

3. The business scope of the online sales should not exceed that has been recorded or on the licenses.
4. The Measures states that if the medical devices are entrusted the third party for delivery or storage, it should be ensured that the entrusted party has pass the evaluation for the quality insurance for storage and delivery. Further, it should be clarified that who will take the quality safety liability during the storage and delivery.
5. The Measures also bring the punishment liabilities to the relevant individual (e.g. the legal representative).
6. Any online sales enterprise or third-party platform provider that refuses to execute the decision on the suspension of online sales activities will be included into the list of dishonest enterprises and the list of dishonest people, which will be announced to the general public.

Dongjin comments:

The Measures regulate much details for the online sales of the medical devices. The relevant company should have a self-check and control the legal risk.

If you have any questions, or need our help, please send the email to me.

Mr. Mike Chang

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Email: mikechang@shanghaiinvest.com