REACH is upon us

REACH has been a dot on the horizon for some companies, while others have undertaken big investments in outcomplying others. In any event, I see in practice that companies have different senses of urgency when it comes to REACH compliance. I have the feeling that this is no different in the medical devices industry, while REACH applies to the medical devices industry more or less as it does to all other industries, except that in certain cases there is an exemption for the obligation to provide information about the substances throughout the supply chain. For a more precise discussion about the scope of REACH for medical devices, you can read my annotation of the first case at the European Court regarding REACH (in Dutch). It also discusses how REACH applies to medicinal products, which is convenient if your company happens to sell combination products or also sells medicinal products.

The first REACH deadline is now around the corner: 30 November 2010. Another important chemical substances related deadline expires on 3 January 2011 (notification on the classification and labeling of substances used in products to ECHA, the European Chemicals Agency, as required by the EU CLP Regulation ( Classification, Labeling and Packaging of substances and mixtures)). More about that in another post on this blog at a later date.

So, what happens on 30 November? The phase-in registration deadine ends for all EU/EEA manufacturers and importers of pre-registered substances in annual volumes of: (a) 1000 tons or more; (b) 100 tons or more if the substances are classified as very toxic to aquatic organisms that may cause long-term adverse effects in the aquatic environment (R50/53); or (c) one ton or more if the substances are classified as Cat. 1 or 2 carcinogens, mutagens, or toxic to reproduction substances (“CMRs”). For other applicable substances, the deadlines for registration are 31 May 2013 and 31 May 2018, as you can see in this nice overview I copied from on of ECHA’s guidance documents.

What is the consequence of the deadline expiring? Bad news: it is prohibited to manufacture, import and/or market substances subject to this registration deadline in the EU/EEA as of 1 December 2010 if they have not been registered. The prohibition does not only concern substances, but also the finished products of which they form part, such as medical devices. This can of course be severely disruptive for your business. A manufacturer of medical devices therefore should already have done due diligence on its suppliers of component and substances to be sure that the substances in them had been registered in time to avoid disruption of its own supply chain. In case of uncertainty about whether the suppliers have done their REACH homework and registered the substance also for the use of the medical devices manufacturer, the manufacturer can take things into his own hand. The manufacturer can choose to submit a registration to ECHA himself, even if that is incomplete, to make the deadline and continue operations without contravening the law. He can work on completing the dossier in the period that it will take ECHA to find out that the dossier is incomplete plus the reasonable period ECHA has to give to complete it. Furthermore the ECHA decision can be challenged at the EU General Court, which will buy the manufacturer even more time in which it can continue to supply the market.

Remember, REACH has been dubbed to be the most complicated piece of EU legislation ever and incredibly difficult to apply. So, are you sure your company has everything in order? The EU is ever more working on coordinating REACH enforcement by the member states’ authorities and penalties from non-compliance can be criminal sanctions or  administrative sanctions, depending on the member state concerned. The fines are stellar: for example up to 55 million Euros in Belgium and even no limit in the UK, according to the European Commission’s report on enforcement of REACH that provides a nice overview of what is going on in REACH enforcement. It’s like with the joke about the two guys being chased by the lion: maybe you can’t outrun the lion, but you can avoid being caught by it if you outrun the other guy. Time to start outcomplying your competitors, because the resources of the authorities are finite and they normally go for the most visible targets.

CLP, REACH

22/11/2010

1 Comment

Medical devices sector ripe for mergers?

Last Friday 12 November 2010 I read the analysis item “Sluggish medical device sector ripe for mergers” on Reuters and a more elaborate version of that article on Yahoo. The articles signal a significant pickup in M&A activity in the medical devices industry in 2010 as a result of big companies in pharma and devices being on the prowl for acquisition targets to broaden their portfolios and take advantage of undervaluation of smaller medical devices companies.

According to a recent Ernst & Young report the deals seem to relatively big during the first half of 2010, with 89 deals valued at $16.9 billion struck in the U.S. and Europe in the first half of 2010, compared with 172 transactions worth $15.7 billion in 2009. Ernst & Young does not expect the deals to remain this big and rather move to more mid-size. In the mean time I see lots of smaller medical devices deals take place, but these usually do not make for big news.

Selling a medical device company requires thinking things through and a good plan. Especially smaller and middle size medical devices companies often do not have the resources to be supported by an investment bank that runs the entire process for them, nor do they always have in-house experience on how to run an M&A deal. Some time ago I drafted a presentation with guidance for a  small to medium-sized medical devices company that wants to sell itself to a bigger company. This presentation may also be useful for business unit of a bigger medical devices company seeking to acquire a smaller medical devices company. It does not purport to be comprehensive, but it will you a rough outline of the steps and important items from a legal / regulatory perspective in an M&A deal in the medical devices industry.

M&A

, ,

17/11/2010

Leave a comment

Software as medical device – regulatory requirements, product liability

I attended an interesting seminar today about software as medical device organised by NEN, the Dutch standardisation institute. Speakers at the seminar highlighted the different views on this subject from the perspective of the Dutch competent authority, manufacturers of medical devices, hospitals and the legal/regulatory perspective. My presentation on legal and regulatory issues (in Dutch) is a condensed version of three other earlier presentations of mine in English that deal with the same subjects, which can be accessed here (medical devices regulatory & software), here (control over subcontractors) and here (software and product liability). It is also based on an earlier article I wrote with a colleague.

The presentations of the other presenters can be accessed now on the website of NEN.

My take-home of the seminar is that manufacturers are struggling with the situation of insufficient standards for software as medical device and with the borderline between software as medical device and software functioning in a medical setting (e.g. electronic patient files). With respect to the borderline it was argued from the side of the manufacturers that it would be more productive to develop validation and quality criteria for all software functioning in a medical setting rather than to have to determine on a case by case basis whether a particular program constitutes a medical device or not. Some illustrative examples of this borderline (as well as other valuable guidance) are given in an excellent document drafted by the Swedish Läkemedelsverket, the Swedish competent authority. As far as I am aware, this document is now being used as basis for the MEDDEV on software that is currently in advanced stages of development. I have seen a recent version of that draft MEDDEV and it is remarkably similar to the Läkemedelsverket document.

By the way, borderlines between medical devices and medicinal products are also a very interesting subject (for me at least) and I will be speaking among other things about that subject on the DIA Euromeeting in Geneva on 28-30 March 2011. I will also co-chair a half-day seminar about medical device law for pharma industry people at that meeting.

Hospitals, on their part, have problems with implementation and maintenance of software because of the constant influx of new software that needs access to and/or runs on hospital IT infrastructure and individual medical devices. They are faced with issues resulting from software being implemented in a wider setting, being customised locally, interfaces being developed that create new dependencies and the decision whether or not to have the manufacturer maintain the software (and if not, whether to conduct maintenance according to manufacturer specs or not).

The competent authority outlined its enforcement policy for the next year, which will also focus on software as medical device. It warned the audience that it was aware of severe underreporting of incidents and that it could identify at least some of the manufacturers that are underreporting, by reference to the reports of their competitors. This year’s policy focuses on classification (especially classification in a too low risk class) as well as missing CE marking, both highly relevant for software as medical device.

I discussed legal aspects, including some regulatory problems, how to control your subcontractors for software as medical devices manufacturer and how to deal with product liability issues. As said above, all these issues were condensed from two earlier presentations (this one and this one). My argument is that manufacturers have a lot to gain from improving their contracting strategies with third-party developers, which I find presently underdeveloped and insufficient to meet their obligations under the EU medical devices rules. In general manufacturers often forget that they are responsible for conformity of the device with the medical devices rules, and not their suppliers. Manufacturers can do a much better job than I normally see at encapsulating their software suppliers in their quality systems. And notified bodies might do a better job in checking that this actually happens.

Product liability, Software

, , , , , , , ,

15/11/2010

2 Comments

Reprocessing of single use medical devices in the EU

On 28 April 2010 the European Commission published the SCENHIR’s opinion on reprocessing of medical devices, which was adopted by the SCENHIR on 15 April 2010. This opinion was commissioned pursuant to article 12a of the Medical Devices Directive, which called upon the Commission to “no later than 5 September 2010, submit a report to the European Parliament and to the Council on the issue of the reprocessing of medical devices in the Community. In the light of the findings of this report, the Commission shall submit to the European Parliament and to the Council any additional proposal it may deem appropriate in order to ensure a high level of health protection.” The Commission published its report based on the factual information contained in the SCENHIR report on 27 August 2010.

Although this information as such is not that current at this time, I wrote a an article that I have used as a basis for some other publications in legal journals that explores regulatory obligations both for the OEM as for the reprocessor, as well as product liability consequences of reprocessing, that people may find interesting.

Reprocessing

, , , ,

11/11/2010

Leave a comment

Moving Molecular Diagnostics from Bench to Bedside

People have been asking me for copies of my presentation “From Bench to Bedside”  about legal and regulatory aspects of bringing a newly developed in vitro diagnostic device to the market that I gave on the Molecular Diagnostics Europe conference at the BIO IT expo in Hannover on 5 October 2010. So, why not share it on my blog? You can access the presentation here.

In Vitro Diagnostics

, ,

09/11/2010

Leave a comment

Dutch court allows e-labelling for medical devices

In a judgment of 20 September 2010 the The Hague District Court ruled that it was OK for AED that are CE marked to not be accompanied by paper instructions for use but rather by means of a CD-ROM that contains a URL that refers to the OEM’s Dutch language instructions for use on the website of the US based OEM.

This means that the court – probably without realizing it – ruled that e-labelling is now permitted, if the reasoning in the judgment is followed. Translated literally the court finds that ‘any argument why the provision [of instructions for use] should be limited to provision in paper form only has not been put forward, as a consequence of which this position must be rejected’ (point 4.18 of the judgment).

As far as I am aware the parties have not appealed the judgment. The Dutch authorities that I spoke to about this subject were surprised about the judgment and said it was against the law as they interpret it.

I will publish an extensive annotation of this judgment in the next issue (2010 nr 4) of the Dutch legal journal Jurisprudentie Geneesmiddelenrecht.

 

Labeling

,

08/11/2010

2 Comments

Newer posts «