The Regulation of Medical Devices – Contracting to Compliance

The new Medical Device Regulations (MDR) will come into force across the EU on 26 May 2021. The new Regulations will represent the most significant overhaul of the regulatory framework relating to the development and sale of medical devices in more than 25 years.

The impact of the new regulatory regime will be felt by all stakeholders in the supply chain (Manufacturers, Authorised Representatives, Importers and Distributors), now referred to as Economic Operators. However, given that established companies will be able to access expertise, both internal and external, to guide them through the regulatory framework, the impact of these new regulations will burden new entrants to the market most significantly.

As the new regulatory regime expands accountability across the medical device supply chain, it is vital that early stage companies have appropriate contracts in place with their counterparts in the supply chain to ensure that each party’s regulatory obligations are sufficiently encapsulated to help mitigate the risks associated with their roles under the MDR.

Below, we will set out some of the issues for early stage companies to consider in assessing any existing contracts and in negotiating new contracts along with some practical tips as to how to ensure contractual compliance.

Equivalence

In bringing devices to market under the existing Medical Device Directive (MDD), companies have become accustomed to using existing scientific literature and equivalent device statements in their Clinical Evaluation Reports.

This approach avoids the need for the performance of redundant clinical studies to demonstrate safety and performance. The widespread use of this approach, which has long been utilised by early stage companies who lack the resources to perform their own studies, has likely been assisted by the fact that the MDD does not define what ‘equivalence’ means and is, therefore, open to interpretation.

However, Section 3 of Annex XIV of the MDR mandates that any device to which a manufacturer claims equivalency must share the same technical, biological, and clinical characteristics. Moreover, any claim to equivalence must be supported by data which (presumably) will have to be obtained from a competitor. If so, the MDR stipulates that a contract must be in place between the manufacturer and equivalent device manufacturer to govern access to the relevant technical data.

In light of the above, the use of equivalence data in Clinical Evaluation Reports may become commercially problematic and is likely to decrease from May 2020. However, in the event that manufacturers are willing to share data either within an umbrella group of companies or between third parties, extreme care and skill will be required to ensure that the contract underpinning access to the technical data is particularly robust with respect to the following:

  • intellectual property
  • confidentiality
  • third party disclosures
  • residual clauses
  • data privacy

Persons Responsible for Regulatory Compliance (“PRRC”)

Manufacturers of all sizes must designate at least one member of staff as responsible for ensuring compliance to the MDR.

Under the regulations a specific contract must be in place between the manufacturer and the PRRC in the form of an employment or consultancy agreement in which their specific duties are detailed. Those duties should, at a minimum, include the following:

  • Ensuring that the device conforms to the manufacturers quality system prior to release;
  • Ensuring that the technical documentation and EU declaration of conformity are properly maintained;
  • Ensuring that the post-market surveillance obligations are complied with including post market surveillance plan, post-market report and periodic safety update report as applicable; and
  • Ensuring that the reporting obligations are fulfilled for serious incidents, field safety corrective actions and trend reporting.

In the event that there is more than one person responsible for regulatory compliance, then each person’s respective areas of responsibility must be agreed and set out in writing. Additionally, the terms of the contract should ensure the continuous availability of the PRRC and it should specify the qualifications of the PRRC in respect of the role as set out in the MDR.

Distributors

Distributors are deemed economic operators under the MDR. Each economic operator is required to ensure their own compliance with the MDR but must also keep an eye on whether previous operators in the supply chain are compliant. With this in mind, the Health Products Regulatory Authority in Ireland recommends that Distributors now implement a Quality Management System to help them ensure that only MDR compliant devices reach the marketplace.

The relationship between a Distributor and a Manufacturer or Importer must be set out in a detailed written mandate which ought to include the following responsibilities:

  • The Distributor must ensure that the device has been CE marked and that the EU declaration of conformity of the device has been drawn up;
  • The Distributor must ensure that the device is accompanied by the information to be supplied by the manufacturer in accordance with Article 10(11);
  • For imported devices, the Distributor must ensure that the importer has complied with the requirements set out in MDR Article 13(3) that where applicable, a UDI has been assigned by the manufacturer;
  • In order to meet the above requirements the distributor may apply a sampling method that is representative of the devices supplied to ensure compliance; and
  • The Distributor must inform the manufacturer/authorized representative/importer and co-operate with them (as appropriate) and with competent authorities to ensure that the necessary corrective action should they consider a device to be non-conforming to MDR.

In light of the above, it will be vital that the roles and responsibilities of manufacturer’s, importers and distributors are set out in detail to ensure clarity in the supply chain. Termination, renewal and liability provisions should be negotiated or adapted to take into account the new regulatory functions and reporting requirements.

Early stage companies and new market entrants will undoubtedly find regulatory compliance to be burdensome once the MDR becomes fully applicable. Ensuring that the roles and responsibilities of all economic operators with whom they interact in the supply chain are fully encapsulated in their contracts will go some way to mitigate risk and ease that burden to fullest extent possible.

How we can help

If you have any queries or concerns, or would like to discuss the above in further detail or generally in relation to medical device regulatory compliance, please feel free to contact David Scott in the Healthcare & Life Sciences Department of BHSM on 01 440 8300 / dscott@bhsm.ie.

This article is for general information purposes.  Legal advice must be obtained for individual circumstances.  Whilst every effort has been made to ensure the accuracy of this article, no liability is accepted by the author for any inaccuracies.

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