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EU Proposes Significant Changes for Importers and Distributors

The European Union’s proposed Medical Device Regulation (MDR) will cause drastic changes to the obligations of manufacturers, importers and distributors involved in the medical device supply chain. These regulations differ from the current European Union (EU) Medical Device Directive (MDD), which provides obligations only for manufacturers. Importers and distributors are currently subject to fragmented national law obligations. Replacing the current MDD with a Regulation will require all economic operators in the medical device supply chain to be subject to the same rules everywhere.

These rules come from the EU’s New Legislative Framework for the Marketing of Products (also known as the Goods Package), consisting of Regulation No. 765/2008 on Market Surveillance and Decision No. 768/2008 on the Marketing of Products. These contain a common framework of general principles and reference provisions for the drawing up of community legislation harmonizing the conditions for the marketing of products. The MDR now implements these for the medical device field.1

This article will give a brief overview of the changes to be brought about by the MDR for medical device manufacturers, importers or distributors and how these may impact current supply and distribution agreements.

New Under the MDR
Compliance with the MDR will require the following steps prior to placing the device on the EU market and resale in the EU market.

An important change in the new supply chain checks system is that each downstream economic operator has to verify that the previous economic operator complies with the MDR requirements. Thus, importers and distributors have to make sure that, prior to placing a device on the market, the manufacturer, the importer and the device itself meet the MDR requirements.2

Importers
This will mean that the importer must ensure that:3

  • the appropriate conformity assessment procedure has been carried out by the manufacturer
  • an authorized representative in accordance with Article 9 has been designated by the manufacturer
  • the EU declaration of conformity and the technical documentation have been drawn up by the manufacturer
  • the device bears the required CE Marking of conformity
  • the device is correctly labeled and accompanied by the required instructions for use and EU declaration of conformity
  • a Unique Device Identification has been assigned
  • while a device is under their responsibility, storage or transport conditions do not jeopardize its compliance with the general safety and performance requirements set out in Annex I
  • the manufacturer has taken out appropriate liability insurance coverage, unless the importer himself ensures sufficient coverage that meets the requirements of that paragraph

The importer must furthermore:

  • be able to identify any economic operator to whom they have supplied a device, any economic operator who has supplied them with a device and any health institution or healthcare professional to whom they have supplied a device for a period of five years
  • label the device with their contact details
  • take corrective action (e.g. recalls and report to authorities) autonomously
  • engage in post-market surveillance (among other things report complaints)
  • refuse to import devices of which he has reason to believe are not in conformity with the requirements

These importer obligations have far-reaching consequences. In practice, the importer will evaluate whether the manufacturer located outside the EU has the technical, scientific and financial capacity to produce a medical device compliant with the MDR. The importer is expected to investigate the manufacturer’s expertise and make the results of this assessment transparent by sharing them with the competent authorities and make them available also on his own website.5 A downright tricky obligation is that the importer has to verify that the manufacturer has applied the “appropriate” conformity assessment procedure and that the device bears the “required” CE Marking of conformity. This means that the importer cannot simply rely on a warranty with indemnity by the manufacturer in regards to compliance, but will need to actively audit the manufacturer and establish his own judgment as to the compliance of the manufacturer and refuse to import a noncompliant device. The EU authorities can enforce against the importer for noncompliance with these requirements.

The importer has an autonomous obligation to take corrective action and engage in post-market surveillance, which means that the agreement between the manufacturer and the importer will need to address how this will work among themselves.

Distributors
The distributor must verify that:6

  • the product bears the required CE Marking of conformity
  • the product is accompanied by the information to be supplied by the manufacturer
  • the manufacturer and, where applicable, the importer have complied with the MDR requirements
  • while a device is under their responsibility, storage or transport conditions do not jeopardize its compliance with the general safety and performance requirements set out in Annex I

The distributor must furthermore:

  • label the device with his contact details
  • take corrective action (among other things, undertake recalls and report to authorities) autonomously
  • engage in post-market surveillance (i.e., report complaints)

Consequently, the distributor also accepts significant additional regulatory burden, with the obligations to verify that (1) the product bears the required CE Marking of conformity and (2) the manufacturer and, where applicable, the importer have complied with the MDR requirements. Like with the importer, the distributor will have to demonstrate to the authorities that it has actively checked these points and is not relying on the other party’s representations and warranties.

An interesting new question is raised by the distributor and importer responsible for storage and transport “while a device is under its responsibility.”7 When is a device “under the responsibility” of the distributor or importer? If this refers to contractual responsibility, distributors and importers will have a strong incentive to limit the duration that they are responsible for a device or try to push out this responsibility as much as possible. Also, does transport include both transport to and from the importer’s or distributor’s warehouse? And what if the importer or distributor doesn’t have a warehouse, but has products delivered directly from the factory to the manufacturer? This provision is likely to cause a lot of confusion until the concept of “responsibility” is interpreted by the European Court of Justice.

     
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