The Regulatory Update
Already Pressed by a Plethora of International Rules, Medical OEMs Face Sweeping Global Changes
By Andy Teng
If death and taxes are the guarantees of everyday life, then the life of a regulatory professional can count on another certainty: a constantly evolving quagmire of global regulations guaranteed to, well, distract from the other two constants. Regardless of whether the market is the U.S., Europe or Asia, there’s no question that regulations for medical devices are becoming more complex, require greater attention and are embedded in virtually every operation of a company.
To be sure, 2005 is shaping up to be a pivotal year for regulatory agencies around the world. In the U.S., the FDA is cooperating with industry and lawmakers to keep the Medical Device User Fee and Modernization Act of 2002 (MDUFMA) from expiring on September 30. This landmark legislation—despite complaints from industry about excessive fees—has garnered broad support among medical device manufacturers and regulators since being enacted three years ago. However, Congress will have to revamp parts of the act to compensate for funding shortages that has led to double-digit rate increases in the first two years that the law went into effect.
Related to MDUFMA, the FDA using funds generated from the law has also embarked on a number of initiatives and programs designed to improve the safety of medical devices while facilitating product approval. Proposals such as electronic submissions, accelerated product reviews and even new post-market surveillance efforts are on the horizon. Similarly, the agency after beefing up its ranks through user fees is finally able to begin leveraging its larger staff to meet goals set by MDUFMA. However, with reauthorization not a guarantee, questions loom about the future of some initiatives.
While changes at the FDA may have the widest impact on the global medical device industry, they are for sure not the most drastic. That honor may belong to Europe, where upcoming wholesale changes to the European Union’s Medical Device Directive (MDD) will send many companies scrambling for cover as they reevaluate their regulatory strategy in this key market. These amendments, which are currently under draft form, will likely be adopted this year and go into full effect by 2007.
Similarly, this month’s enactment of major amendments to Japan’s Pharmaceutical Affairs Law (PAL) brought forth sweeping changes in the way foreign medical device manufacturers conduct business in the world’s second largest market. The most significant reform of the legislation since it was introduced in 1961, the law makes entry into its market much more difficult for foreign manufacturers, even though the changes also took a step toward harmonization of regulatory requirements. Even so, reporting and surveillance requirements will become more stringent and less familiar to manufacturers.
Changes in Japan, Europe and at the FDA are sure to keep any regulatory professional busy throughout the year as they try to keep up with evolving rules.
Undoubtedly, all eyes are fixed on Washington these days, at least for the next several months. As the user fee program approaches the sunset date specified in the legislation, regulators, industry and Congress will be under the gun to keep it from expiring on September 30.
The original legislation called for the program to expire if funding didn’t reach predetermined levels, and budget cuts and fee collection shortfalls in fiscal years 2003 and 2004 resulted in a whopping deficit of $40 million. For fiscal year 2005, President Bush had originally requested a budget that fully funded the program this year, but a last minute cut left it short again by about $139,000.
Part of the deficit stems from unexpected shortfalls in user fees collected. According to the Medical Device Manufacturers Association (MDMA), that amount totalled $4.8 million. A look at product submissions trends at the FDA’s Center for Devices and Radiological Health (CDRH) shows that the number has dropped sharply since fiscal year 2002, the year before user fees went into effect. The number of all submissions fell from 10,323 to 9,879 in 2003 and then 9,064 in fiscal year 2004. The number of 510(k) submissions, which accounts for nearly half of all filings, fell from 4,320 in 2002 to 4,247 in 2003 and 3,635 in 2004.
Because of the deficit in the number of submissions and Congress’ failure to fully fund the program, fees in the first two years rose sharply, by 34% for some submissions in 2003. That prompted outcries from industry, which claimed that the sharp hikes would discourage innovation in the medical technology field and result in fewer new products to help protect patients and save lives.
Even so, industry appears willing to support reauthorization of the act if changes are made. For instance, trade associations such as the MDMA and AdvaMed say user fees ultimately help reduce review times and benefit medical device companies. But they contend there must be a cap on fee increases, especially considering the sizable hikes passed in the first two years of the act.
Janet Trunzo, executive vice president of technology and regulatory affairs at AdvaMed, said she’s optimistic that the program will be retained. However, she added, the association wants a cap tied to the inflation index. This will prevent medical device companies from re-experiencing the sticker shock they felt during the first two years.
Mark Leahey, the executive director of the MDMA, said for industry to continue to support the act, four key stipulations must be met:
• Enactment of a cap on fee hikes
• Congress to forgive the submission shortfall incurred during the first three years;
• Full funding of the program in 2006 and 2007
• Revision of the act’s language on labeling requirements for reprocessed products.
He said that if the FDA and Congress agree to these four points, it’s likely that all of the key associations representing the medical device industry will support reauthorization.
Why would industry continue to support the fees? According to Trunzo, the additional resources provided to CDRH has resulted in the agency meeting most performance goals specified in MDUFMA. Review time goals with the exception of 510(k) submissions now meet goals set for fiscal year 2005. CDRH using 2003 and 2004 fees has hired 132 employees, a significant number of whom were assigned to review submissions. Although it comes at a cost, improvements in review times have won over the support of many companies.
Still, will the four stipulations being lobbied by groups such as MDMA find their way into a new bill? Although it’s not clear if industry will win all of its points, some are confident reauthorization will occur in one form or another.
"I have every confidence that Congress will act to keep the program going," said Trunzo, adding that AdvaMed will work with FDA and congressional officials to ensure that it does not sunset. "I don’t think there are opponents [to reauthorization]."
Leahey added that most likely, new legislation will be drafted before Memorial Day.
One program established under MDUFMA is third-party inspections, which allows medical device manufacturers to use an Accredited Person (AP) to perform facility inspections instead of FDA staff. According to the agency, the program was intended to "focus the use of third party inspections on manufacturers that operate in a global market and are likely to be subject to multiple inspection requirements." In other words, a single inspection by a third-party allows the user to satisfy the inspection requirements for the FDA as well as other regulatory bodies such as competent authorities in the EU and possibly Canada.
The program began accrediting companies to provide inspection services last year. Initially, the agency trained 15 companies, who were then each required to perform a series of three FDA-accompanied inspections. It was only recently that a handful of those firms completed the series. As of press time, according to CDRH’s website, four companies were qualified to provide independent, third-party inspections.
How can the program benefit medical device companies? By satisfying both the FDA and other regulatory authorities, it saves the manufacturer time and money associated with preparing for an inspection. In some cases, the manufacturer may already engage the AP for other services.
However, there are limitations and drawbacks to the program. Only companies that market products in the U.S. and in a foreign country (or intends to market abroad) qualify; the manufacturer must have passed its previous FDA inspection classified as no action indicated (NAI) or voluntary action indicated (VAI); and the AP selected must be accredited in at least one of the countries in which products are marketed.
Although the benefits are clear, industry may be slow to embrace the idea. The reason: the program is voluntary, so participating companies are "offering" themselves for inspection. Currently, Quality System inspections of medical device facilities average once every six years, but the third-party program was designed to take place every two years. So while companies may save themselves from having dual inspections at a specific facility, the frequency of inspections may be higher under the program.
Still, some observers say there are benefits, especially as CDRH adds resources to inspect facilities more frequently. Most likely, they point out, companies that have good quality systems and market abroad may want to turn to this program, much in the way that some companies embraced third-party reviews.
"If I felt pretty good about my quality system and I can get this (inspection) over in one fell swoop, there might be some benefits to that," said Brent Noblitt, senior partner at Noblitt and Rueland, an Irvine, CA-based consulting group.
He added that companies undergoing, for instance, an ISO 13485:2000 audit might also have their FDA inspection conducted at the same time by the same inspection company. Additionally, he pointed out, as global harmonization moves closer to a reality, participation in such a program may one day allow companies to satisfy many agencies with one inspection.
While harmonization is the wish of industry, the rapid rate of change in medical device regulations in key overseas markets makes this lofty goal seem untenable. For instance, amendments to the MDD being circulated for review will have a significant impact on existing products and new submissions. In fact, there is a greater emphasis on data gathering—in both pre- and post-market areas.
An EU proposal to require that the technical files of products contain clinical evidence or clinical summary on safety and effectiveness may force many Class I manufacturers to revisit the files of existing products, said Rene van de Zande, the CEO of the Emergo Group, a global consulting company based in both Europe and the U.S. He pointed out that the requirement for clinical evidence, which can contain historical information, clinical data and even scientific literature, won’t have much impact on higher class medical devices because their files already contain such data. However, the files of low-risk devices might not have it simply because competent authorities have never required it before.
While he said it won’t be difficult for the companies to obtain the information, it will take time to comply with the mandate. "It’s just a matter of making the effort to do it," he said.
Another proposed amendment is the reclassification of some medical devices. For instance, some non-sterile surgical instruments currently listed as a Class I device may be changed to Class IIA. Similarly, some joint replacements now certified as Class IIB may become Class III because regulators believe all joint replacement devices should be categorized as high risk.
One change that may be welcomed by industry is the adoption of electronic labeling. With 25 member nations, the EU makes it difficult for companies to provide labeling in all of those languages on a package. The alternative is to provide labeling on a disc or on the web in all of the languages spoken by the end users.
Sweeping regulatory changes are also occurring in Japan following the enactment of amendments to the PAL (see News from Japan, p. 22). The effect on U.S. and other foreign manufacturers could be more significant than the amendments being considered in Europe.
If ever an overwhelming feeling of being in crosshairs were justified, now would be that time for medical device regulatory professionals. With so many global regulations being enacted or revised, a company with international sales might easily feel overwhelmed. Then again, that feeling might not be so alien considering the regulatory hodgepodge that have come forth before.