With the MDR and IVDR nearing completion in the trilogue negotiations the final outline of these two statutes become more and more clear. It looks now like the regulations will be agreed upon during this Presidency, which means they could be published in the Official Journal and enter into force this autumn. I’m referring to “they”, although there are some rumors now that since the remaining political difficulties are in the IVDR, it might be that the IVDR delay is adopted at a later stage.
These are rumors however, I’m not sure at all if this will actually happen. Also, if it would that would mean that the IVDR is would already be fixed in all the overlaps it shares with the MDR (which is a lot). It looks like one of the big items that the IVDR is stuck on is the genetic testing proposal of the Parliament, which I believe the EU does not even have constitutional competence to impose in the first place. Yet, political wishful thinking causes amendments like this to be pursued anyway.
Wishful thinking on liability for defective devices
Another amendment in that vein of political wishful thinking is the liability insurance regime that seems like it will make it into the MDR and IVDR. With the PIP breast implants scandal in mind it’s an ardent political wish of the Parliament and the Council that these regulations feature some kind of language regarding liability for defective devices, even if there is a perfectly good EU Product Liability Directive to deal with this – which is already interpreted very broadly by the EU Court in relation to medical devices by the way.
Will it blend?
But as professionals that have to work with these rules for decades to come we have to ask ourselves: “Will it blend? Will this serve the persons it is intended to serve and is it put together in a way that it actually achieves its objectives?”. As you will see in my below presentation yesterday at the Q1 Conference on the MDR and IVDR in Brussels this will not be the case:
As a result of the quite unclear formulation of the text, the disregard for how these clauses relate to the existing EU Product Liability Directive and the potential for making litigation so much more complex and long nobody will stand to benefit from this proposal, if it is adopted. It will make medical devices more expensive because the cost of insurance and disputes must go somewhere and it does not add any value over the existing Product Liability Directive regime.
I am pretty sure that there has been a lot of face palming among the highly qualified people in the Commission’s legal service that is usually asked after the fact whether such a proposal makes any sense legally in the first place. As you will see in my presentation, the proposal sticks together that badly. The text may be under discussion in the trilogue negotiations but the text in the Council’s general approach is really nothing to be enthusiastic about.
In addition, an impact assessment has not been made for this proposal that stands to add enormously to the costs of compliance for all involved.
Authorised representative liability
The liability of authorised representatives for costs associated with defective devices of manufacturers they represent is a unique feature in EU CE marking law and will pit these two parties against each other mercilessly. It will result in a situation where the interests of parties are diametrically opposed. Currently an authorised representative can rely on the exclusions in the Product Liability Directive to not be product liable, because it was not involved in design or placing the product on the market. That will change if this proposal is adopted.
The result will be that authorised representatives will be very skittish and quick to terminate agreements with costs going through the roof (insurance). Manufacturers, for their part, will be seeking to manage this by setting up their own authorized representative in empty legal entities in the EU staffed with an external consultant that meets the new authorised representative criteria. The more parties are potentially liable, Will that improve legal recourse for patients? Of course it won’t.
More costs, nobody benefits
So what will be the net result? Confusion Everywhere and more costs to the system. Patients spending years and years being sent from one party disclaiming liability to the other. Small companies will not be able to afford being the market of higher risk devices, whether they are manufacturer or authorised representative. And politicians claiming that they effectively legislated for ‘effective redress’ for the benefit of the patient. That is my impact assessment of this proposal.
medicaldeviceslegal 
Dear EriK, thank you very much for sharing this sharp analysis of the possible impacts via your blog.
Best Regards
Michael
Thanks Michael!
I’m sure I speak not only for myself, but for many others to say how much I appreciate your insightful comments regarding these coming regulations. They are always helpful.
Thanks Bill! That’s great fuel for more posts on this blog.
I agree with your sentiments on the new structure of “liability” for ARs in Europe and there is a high likelihood that legal manufacturers outside the EEA will establish “shell organisations” themselves. But there does currently appear to be a significant legislative gap whereby there is little or no potential recourse against an AR and unscrupulous manufacturers may operate unabated outside the region – whilst Competent Authorities rarely identify non-compliance and its even rarer that they take steps to resolve it.
I wonder if the regulatory problems with 3D printed implants were solved in the end? I read your interesting article about this issue about a year ago. What happened?
We don’t know yet. The text for the regulations was agreed yesterday but is not public yet (see https://medicaldeviceslegal.com/2016/05/25/breaking-eu-agreement-on-new-mdr-and-ivdr/). When the text becomes public we can check where this landed. Stay tuned!
In a meeting three days ago with the head of the EU Association for Authorized Representatives it was disclosed that the US government has filed a complaint with the Commission relating the liability of the Authorized Representative. We were told the US has taken the position that this is a serious Trade Barrier.The US has pointed out the inconsistencies with the MDD and Product Liability Directive as well as other discriminatory areas. Surprised your source does not have this information.
Not sure what source of mine you are referring
to (the Presidency will obviously not raise this in its press release about the negotiations closing) but that the AR liability is a bad plan has in the mean time been argued by many including myself, see https://medicaldeviceslegal.com/2016/05/24/product-liability-for-devices-under-mdr-and-ivdr/
Also, we still don’t know if it was agreed in the end as the final text is not public yet and the Presidency press release does not mention it.
Manufacturers with an AR, are, by definition, outside of the EU. Therefore EU law does not apply them, and so they need not carry product liability for the EU. In which case, product liability will rest solely with the AR. However, I guarantee there is not an insurance broker who will arrange cover for a company which (1) has never seen or handled the product (2) has not designed or manufactured the product (3) has no details of product sales price and number sold in the territory for which liability is required…
Hi Rod, thanks for this comment because it allows me to clarify this point. Manufacturers do have a positive obligation under the MDR to have product liability insurance or “measures in place to provide sufficient financial coverage in respect of their potential liability under Directive 85/374/EEC” as set out in article 10 (16) MDR. This applies regardless of where they are located. If the manufacturer cannot demonstrate that this requirement is complied with, the authorities can prohibit market access of the devices concerned. Your statement that “they need not carry product liability for the EU” is incorrect, because the MDR has extra-territorial effect in that regard. If you want to place devices on the market in the EU as manufacturer regardless of where you are, this must have been taken care of. The AR is jointly and severally liable, true, but this does not mean that article 10 (16) MDR does not apply to manufacturers not based in the EU. The MDR has more clauses with extra-territorial effect, like e.g. article 6 on providing a medical device remotely via the internet. Has to be CE marked, regardless of where the device itself resides (e.g. on a server in the US).
Hi Erik: thanks.
Very welcome!