MEDICAL DEVICE REGISTRATION DEADLINE LEAVES 25%

UNCLAS SECTION 01 OF 02 TAIPEI 004936

SIPDIS

STATE FOR EAP/RSP/TC AND EB/TPP/BTA, STATE PASS AIT/W AND
USTR, USTR FOR WINELAND, WINTERS, AND STRATFORD, USDOC FOR
4431/ITA/MAC/AP/OPB/TAIWAN/MBMORGAN AND JDUTTON

E.O. 12958: N/A
TAGS: ETRD ECON TW ESTH
SUBJECT: MEDICAL DEVICE REGISTRATION DEADLINE LEAVES 25%
UNDONE

REF: A. TAIPEI 4396

B. TAIPEI 2731

C. TAIPEI 2626


1. Summary: The December 20 deadline for medical device
registration passed with only about 75% of medical devices
currently in use in Taiwan receiving licenses. Those that
have not yet received licenses are primarily in-vitro
diagnostic devices. In most cases, the Department of Health
(DOH) has not rejected the application, but is requesting
additional documentation prior to issuing licenses.
Manufacturers have four months to comply. Hospitals can
continue to use products in stock, but companies are
prohibited from importing or selling any device without a
license. DOH has promised to issue emergency import licenses
to non-substitutable products if the need arises. End
Summary.

=========================
Mixed Message at Deadline
=========================


2. December 20 was the DOH imposed deadline for all medical
devices to be registered and licensed before being legally
imported or sold in Taiwan. This requirement, first
announced in 2004, had already been postponed once when it
became clear that DOH lacked the manpower and technical
expertise to process the resulting thousands of applications.
DOH proudly announced December 9 that it had processed 100%
of applications in most categories and was confident that
only a few applications for in-vitro diagnostic (IVD) devices
would remain unprocessed by the deadline.


3. This promising news was tempered by reports from American
medical device firms that large numbers of products in some
categories have been processed but have not yet received
licenses. As predicted (reftel A),these are mostly IVD
devices. American companies estimate that more than 1000
devices are still awaiting DOH approval. DOH has requested
additional documentation for many of these pending
applications. In some cases, companies may have
inadvertently misclassified devices, leading to additional
delays. In other cases, reviewers have determined that kits
containing several products designed to be used together need
several licenses, again causing delays as companies struggle
to provide additional information or submit new registration
applications.


4. DOH says the delays are the fault of the companies that
did not submit complete applications or request needed
clarifications before submitting product applications.
Companies counter that the registration requirements are
sometimes unclear. DOH's use of poorly trained contractors
to process applications has resulted in an inconsistent
application of rules and sometimes strange requests for
additional documentation. Many companies tell AIT, in
addition to preparing their own registration applications;
they have had to informally train DOH contractors as well.

==========================================
DOH to Approve Emergency Imports if Needed
==========================================


5. DOH Bureau of Pharmaceutical Affairs Deputy Director
General Liu Li-ling told AIT December 20 that over 75% of the
registration applications received by June 20 had already
been approved. The remaining 25% have four months to submit
additional documents or requested information. These will be
approved as soon as the additional information is received,
she said. If companies are not able to provide the requested
information within four months, the application will have to
be resubmitted.


6. DDG Liu added that hospitals could continue to use
products that were already in stock, even if licenses had not
yet been approved. However, companies are prohibited from
importing or selling unlicensed products. This has
reportedly led to hospital stockpiling of some products that
have a long shelf-life. For those unlicensed products that
do not have acceptable substitutes, hospitals can apply to
DOH for an emergency temporary import license. DOH will
approve such emergency import applications almost
immediately, said Liu.

=======================================
Comment: A Band-aid for Medical Devices
=======================================


7. In spite of complaints, DOH has done yeoman's work to
process as many applications as they have over the past six
months. They have approved over 8000 applications since the
original June deadline. But the problem now faced by those
medical device manufacturers still waiting for licenses
should not surprise anyone. The medical device registration
process has been marked by inconsistent decision-making, poor
communication, and unmet expectations. That products already
commonly used in Taiwan should face potential exclusion from
Taiwan's market because of DOH's bureaucratic inefficiencies
is a sad but telling commentary on the future of Taiwan's
health care system. DOH's paternalistic and
non-communicative culture make it difficult to implement new
programs or promote meaningful reforms.


8. We expect DOH will use the emergency licensing process to
avoid any serious wide-scale shortages of needed medical
devices. That would be consistent with DOH's previous
practice of cobbling together ad hoc solutions at the last
minute -- DOH is adept at putting band-aids on more serious
wounds.
PAAL