Beth Crandall, Managing Director—Global Solutions Delivery Leader, Maetrics05.18.20
With the recent approval of a one-year delay of the EU Medical Device Regulation (EU MDR) deadline, many affected companies will have the opportunity to be more fully prepared when it comes to their economic operator (EO) requirements. A survey of over 200 industry leaders in 2019 found 40 percent of organizations were still in the process of identifying their requirements relative to EOs, while a quarter (28 percent) had yet to begin working on them. This additional time will allow companies to confirm who qualifies as an EO and what their new obligations are under the regulation. This article aims to provide clarity and guidance on the matter, by breaking down these requirements and helping businesses understand the potential implications of having non-conforming EOs in their supply chain.
While the responsibility for compliance of medical devices has always been attributed to the legal manufacturers, the EU MDR is shaking up this notion with the concept of the economic operator and the clarification of the legal responsibilities associated with these entities. There are now four entities defined under the EU MDR as “economic operators” who will share the duty of ensuring compliance. The entities considered economic operators include: manufacturers, authorized representatives, importers, and distributors. Given the significant change some of the new requirements represent, these entities must make fundamental changes to business-as-usual operations within the available time. While the delay of the EU MDR deadline to May 2021 gives all EO entities one more year to get their compliance matters in order, it is important efforts continue and businesses take full advantage of this additional time.
As compliance responsibilities are being distributed further across the supply chain, manufacturers will continue to play a major role in ensuring these requirements are met if they wish to continue placing their products on the market. This is because issues from any one of the EO entities can have direct legal implications on the other EOs involved. For this reason, it is vital that manufacturers map out their supply chain and identify each EO entity as defined in Article 2 of the EU MDR. This important mapping will serve as a foundation to the overall efforts to assess and confirm the ability of their EOs to fulfil their responsibilities.
The manufacturer, authorized representatives, and importers must also prepare to be registered. Given the delayed launch of EUDAMED (European database on medical devices), this process of registration is still uncertain. It will be important to stay up-to-date as new guidance is provided, as another method of registration may be provided.
Added Responsibilities for Importers
Importers will see a significant change to their expectations and requirements. Their role is to place devices from an outside country on the EU market, and they now must meet specific regulatory requirements and must verify information from the manufacturer. For example, they will have obligations relating to non-conforming products, product recalls, and vigilance incidents. Concretely, this means should Importers identify a non-conforming device, they must have a system in place to notify the manufacturer, the authorized representative, and the competent authority. Other responsibilities include keeping a copy of the Declaration of Conformity of the device and any copies of certificates, amendments, and supplements. They must also provide full cooperation to provide samples of the device and access to it. These duties are new to most Importers and may require additional resources with specific expertise to be successfully implemented.
Distributors’ Duties
Distributors make devices available on the market and are often separate entities from the importer. Under the EU MDR, they are the only EO entity not specifically listed as being jointly and severally liable, and not required to register in EUDAMED. They will be required to act with due care and ensure storage or transport conditions comply with those set out by the manufacturer. They must also verify instructions for use are included with each device (where required) and must ensure the CE mark, Declaration of Conformity, and any required unique device identification is present. They must also report incidents to manufacturers within their distributor agreements. Considering the previous directive contained no regulatory duties for distributors, these requirements represent considerable new responsibilities for distributors.
Authorized Representatives Assume New Obligations
Where the manufacturer of a device is not established in a member state, the device may only be placed on the European Union market if the manufacturer designates an authorized representative (AR). Entities falling under this category must register themselves in EUDAMED, or whichever alternative EO registration system is adopted until EUDAMED is implemented. ARs must also have access to a person responsible for regulatory compliance. After May 26, 2021 (the date of application), ARs will also need to allow for financial coverage with respect to potential “liability,” as they will be made jointly liable for the devices, alongside the importer and manufacturer. These new requirements and increased legal liability present new challenges for the role of authorized representatives, and may require organizational authority changes for certain businesses.
Conclusion
With so many new responsibilities spread across the economic operators in the supply chain, manufacturers will do well to engage their regulatory teams and educate their executive management about the implications of these changes. Involving the executive management level of the company will help during assessments of legal impact, product portfolio decisions, and resource implications, including decision making authority and staffing levels. Businesses should also assess their compliance needs, notably by ensuring the right personnel are ready to manage EOs through supplier controls and audits.
The process of assessing and maintaining compliance throughout the supply chain is likely to add pressure on smaller businesses lacking the necessary resources and skills, while larger manufacturers have a bigger task at hand given the complexity and scale of their network. All EO entities alike should begin tackling these requirements now in order to have all their systems and processes correctly set up before the EU MDR deadline. The consequences of non-compliance, which may involve losing market access and facing new legal liability, must be carefully considered by executive management. At a time of complex change like this, it may be worth manufacturers reaching out to an external expert for guidance, and to assess and confirm compliance across their EO network.
A recent whitepaper provides greater detail on the new responsibilities for economic operators required by the EU MDR. Click here to download a free copy of the Maetrics paper.
While the responsibility for compliance of medical devices has always been attributed to the legal manufacturers, the EU MDR is shaking up this notion with the concept of the economic operator and the clarification of the legal responsibilities associated with these entities. There are now four entities defined under the EU MDR as “economic operators” who will share the duty of ensuring compliance. The entities considered economic operators include: manufacturers, authorized representatives, importers, and distributors. Given the significant change some of the new requirements represent, these entities must make fundamental changes to business-as-usual operations within the available time. While the delay of the EU MDR deadline to May 2021 gives all EO entities one more year to get their compliance matters in order, it is important efforts continue and businesses take full advantage of this additional time.
As compliance responsibilities are being distributed further across the supply chain, manufacturers will continue to play a major role in ensuring these requirements are met if they wish to continue placing their products on the market. This is because issues from any one of the EO entities can have direct legal implications on the other EOs involved. For this reason, it is vital that manufacturers map out their supply chain and identify each EO entity as defined in Article 2 of the EU MDR. This important mapping will serve as a foundation to the overall efforts to assess and confirm the ability of their EOs to fulfil their responsibilities.
The manufacturer, authorized representatives, and importers must also prepare to be registered. Given the delayed launch of EUDAMED (European database on medical devices), this process of registration is still uncertain. It will be important to stay up-to-date as new guidance is provided, as another method of registration may be provided.
Added Responsibilities for Importers
Importers will see a significant change to their expectations and requirements. Their role is to place devices from an outside country on the EU market, and they now must meet specific regulatory requirements and must verify information from the manufacturer. For example, they will have obligations relating to non-conforming products, product recalls, and vigilance incidents. Concretely, this means should Importers identify a non-conforming device, they must have a system in place to notify the manufacturer, the authorized representative, and the competent authority. Other responsibilities include keeping a copy of the Declaration of Conformity of the device and any copies of certificates, amendments, and supplements. They must also provide full cooperation to provide samples of the device and access to it. These duties are new to most Importers and may require additional resources with specific expertise to be successfully implemented.
Distributors’ Duties
Distributors make devices available on the market and are often separate entities from the importer. Under the EU MDR, they are the only EO entity not specifically listed as being jointly and severally liable, and not required to register in EUDAMED. They will be required to act with due care and ensure storage or transport conditions comply with those set out by the manufacturer. They must also verify instructions for use are included with each device (where required) and must ensure the CE mark, Declaration of Conformity, and any required unique device identification is present. They must also report incidents to manufacturers within their distributor agreements. Considering the previous directive contained no regulatory duties for distributors, these requirements represent considerable new responsibilities for distributors.
Authorized Representatives Assume New Obligations
Where the manufacturer of a device is not established in a member state, the device may only be placed on the European Union market if the manufacturer designates an authorized representative (AR). Entities falling under this category must register themselves in EUDAMED, or whichever alternative EO registration system is adopted until EUDAMED is implemented. ARs must also have access to a person responsible for regulatory compliance. After May 26, 2021 (the date of application), ARs will also need to allow for financial coverage with respect to potential “liability,” as they will be made jointly liable for the devices, alongside the importer and manufacturer. These new requirements and increased legal liability present new challenges for the role of authorized representatives, and may require organizational authority changes for certain businesses.
Conclusion
With so many new responsibilities spread across the economic operators in the supply chain, manufacturers will do well to engage their regulatory teams and educate their executive management about the implications of these changes. Involving the executive management level of the company will help during assessments of legal impact, product portfolio decisions, and resource implications, including decision making authority and staffing levels. Businesses should also assess their compliance needs, notably by ensuring the right personnel are ready to manage EOs through supplier controls and audits.
The process of assessing and maintaining compliance throughout the supply chain is likely to add pressure on smaller businesses lacking the necessary resources and skills, while larger manufacturers have a bigger task at hand given the complexity and scale of their network. All EO entities alike should begin tackling these requirements now in order to have all their systems and processes correctly set up before the EU MDR deadline. The consequences of non-compliance, which may involve losing market access and facing new legal liability, must be carefully considered by executive management. At a time of complex change like this, it may be worth manufacturers reaching out to an external expert for guidance, and to assess and confirm compliance across their EO network.
A recent whitepaper provides greater detail on the new responsibilities for economic operators required by the EU MDR. Click here to download a free copy of the Maetrics paper.