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Hainan Medical Tourism Pilot Zone

On September 1st, 2020, the Hainan Provincial People’s Government issued the Integration and Innovation Reform Plan (IIR Plan) for the Hainan Boao Lecheng International Medical Tourism Pilot Zone (Hainan Medical Tourism Zone).
The latest reform plan focuses on improving the current administrative processes of respective medical industry players’ coordination and improving the flow of information, goods, personnel, and investment required for further innovative medical breakthroughs.
The Hainan Medical Tourism Zone is one of the core parts of the Chinese authorities’ broader blueprints to transform Hainan into the world’s largest Free Trade Port. Other industries like modern services and high-tech industries also play central roles in the plans. Establishing the zone in 2020 also tally with the national agenda to reprioritize healthcare by initiating structural reforms and promoting digitization, especially after the COVID-19 outbreak.

The IIR Plan further clarified the policy types and incentives available for businesses and individuals in the medical tourism zone. The Key measures within the China Integration and Innovation Reform Plan are as follows:

The Hainan Medical Tourism Zone IIR Plan

The latest IIR Plan includes ten main goals – four measures promoting the free flow of trade, investment, capital, and personnel, two measures promoting medical innovation, medical insurance payments, and new trial models of clinical real-world data application, and two measures establishing an utmost simplified approval system (for construction projects and promote the reform of ‘minimalist approval’ in medical and health care), and the two measures integrating and strengthening the risk controls within the current operating system.
Within the plan, the ten goals are into 34 specific policy measures. Some of the more notable measures are below:

The Implementation Plan of Boao Lecheng International Medical Tourism Pioneer Zone

Facilitating residence of foreign personnel in the zone.
Hainan has yet to introduce a series of measures to provide a more convenient pathway for high-level Doctors and medical talents, technical and skilled personnel, and international students to enter, reside, and work. However, the following changes have been made for the industry:
Facilitate the residence of foreign medical personnel and patients.
Medical personnel operation and working in the park can apply for a work-type residence permit consistent with the work contract;
Foreigners and their families can apply for medical treatment, private affairs visas, or residence permits.
Accessible and convenient trade-in licensing for medicine and equipment.The zone will introduced measures to allow medical institutions to more accessible the import of urgently needed foreign drugs and medical equipment that are not yet approved by Chinese authorities in this area:
Build a fully traceable platform for unlisted licensed pharmaceutical and medical devices using block-chain, IoT, 3D geographic information system, and other information technology of new generations;
Optimize the functionality of bonded warehouse for storage used for unlisted innovative drugs and equipment under the "warehouse first, quarantine later" model;
Host regular exhibitions to promote the international innovative medical devices that have not yet been listed.

Using real-world clinical data info to apply for directly imported product registration

Introduced recently in the Hainan Medical Zone Implementation Plan, the clinical data generated by urgently needed foreign medical devices and drugs can be used to apply for imported product registration if they meet the relevant requirements for Chinese medical device and pharmaceutical registration declaration.

This has reduced the time costs and registration fees for global innovative products’ entrance into the Chinese market, enabling international companies for innovative medical devices and drugs to actively promote their products in mainland China.

The reforms of “minimalist approvals.”
These reforms – approvals for project construction, medical institution setups, and registration will be streamlined. In addition, the plan canceled six project approval items and introduced the combined letters and certifications.

The Hainan Medical Tourism Zone

In recent years, the rise of health-orientated consumers and the aging population has caused a significant surge in demand for health products and medical services in China.

In 2018 only, it was reported that mainland Chinese residents spent an estimated USD 255 billion on health products and services. This proportion has been forecast to experience annual growth of 10% from 2019 to 2024.
In 2020, with the COVID-19 outbreak, the trend was accelerating multifold. China’s economy is uniquely based on manufacturing and exporting medical products and services to other countries

It also established a 2-in-1 institutional supervision model, whereby the health department would establish the medical and drug regulatory agencies would be established jointly to improve the licensing efficiency.
For medical institutions planning to register in the zone, approvals required will be reduced, and the need to obtain and approve an “approval for setting up a medical institution” will be removed. Now merely the “medical institution practicing permit” is still required.
Moreover, legal guidance has been planned to reduce the time limit for medical and nursing practice license registration. For example, domestic medical care registration would be completed within one day, while foreign medical care registration within five days.

Hainan Medical Zone investment prospects.

For these reasons, there are now more opportunities than ever before for the Chinese healthcare market. Hainan Boao Lecheng International Medical Tourism Pilot Zone is quickly becoming one of the country’s leading destinations for healthcare investment. Companies engaged in manufacturing, importing, distributing, or selling medical devices, medical technology, or pharmaceuticals may now be available for fast-tracked approvals and relaxed regulatory oversight. In addition, they could benefit from new technology and health insurance reform, which create a better investment environment.
Many foreign investors have already been able to use such policy incentives. For example, the data from the Hainan provincial department of commerce shows from January to June 2020, a total of 203 foreign enterprises have been registered in Hainan, up 24.54% yearly, with 65 of them established in June alone.
In 2020, newly registered companies WFOE hit a record of 75,000 from January to August, showing a year-on-year increase of 75.26%, the highest growth rate in the country, according to the provincial market supervision administration.

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