On September 7, China’s Ministry of Commerce, National Health Commission and National Medical Products Administration issued a notice (the “Notice”) announcing the expansion of the pilot program for foreign investment in the healthcare sector, marking a significant relaxation of China’s long-standing restrictions on foreign investment in the healthcare industry.
This expansion affects two main areas:
1. Biotechnology
Starting September 7, 2024, foreign-funded companies will be allowed to engage in the development and application of human stem cell and genetic diagnostic and therapeutic technologies in the Beijing Free Trade Zone, Shanghai Free Trade Zone, Guangdong Free Trade Zone and Hainan Free Trade Port. These activities aim to facilitate the registration, listing and production of related products, which once registered and approved, will be available for use across the country.
Foreign enterprises participating in the pilot program must comply with relevant Chinese laws and regulations, including human genetic resource management, drug clinical trials (including international multi-center clinical trials), drug registration, production, and ethical review, and complete the necessary management procedures.
2. 100% foreign-owned hospital
The notice also allows the establishment of wholly foreign-funded hospitals (excluding traditional Chinese medicine hospitals and excluding the acquisition of public hospitals) in Beijing, Tianjin, Shanghai, Nanjing, Suzhou, Fuzhou, Guangzhou, Shenzhen and Hainan Island. Specific conditions, requirements and procedures for the establishment of such hospitals will be announced in a separate notice.
The notice further emphasized that relevant authorities in the pilot areas, including departments in charge of commerce, health, human genetic resources, and drug regulatory affairs, will work harder to promote the new policy by actively engaging with foreign enterprises, improving services, and creating a favorable environment for foreign investors interested in investing in China’s healthcare sector.
