6 April 2016

From Directive to Regulation: Medical device industry still has a long road ahead

From Directive to Regulation: Medical device industry still has a long road ahead
The revision of the Medical Device Directive has faced numerous obstacles since it was first proposed in 2012. It has been reviewed by eight Presidencies of the Council, witnessed a change in European Parliament Rapporteur following the 2014 elections, and moved European Commission Directorates-General from DG SANCO to DG GROW along with the health technology and cosmetics portfolio. Despite these changes – or perhaps in part due to them – the proposed revision of the Regulation on Medical Devices has still not seen an end to its journey through the EU regulatory process. Currently in trilogue –negotiations between the European Parliament, Commission and Council, the legislation is still surrounded by question marks. Some accuse the medical device industry of unnecessarily stagnating the process with its interventions. What is really happening and what is at stake for the €100 billion European medical device industry which encompasses wheelchairs, stents, prostheses, and even disposable gloves?


So what does the regulation propose?


The European Commission’s proposal was issued against the backdrop of significant worries concerning the safety of medical devices which had been triggered by a series of unfortunate events. Safety quickly became the central and most prominent feature of the revised legislation. Other elements contained in the proposal include:
 
  • Widening the scope of the legislation to include, for example, implants for aesthetic purposes;
  • Granting independent conformity assessment bodies (aka notified bodies) additional powers vis-à-vis the manufacturers, including unannounced inspections in factories;
  • Enabling national authorities to supervise the notified bodies more strongly than before;
  • Requiring the European Databank on Medical Devices, also known as “Eudamed”, to make non-confidential information on medical devices publicly available on the EU market;
  • Improving the ability to trace medical devices through the supply chain, especially in case products need to be recalled due to safety problems or concerns;
  • Updating the classification of medical devices to include four different risk categories, which would also impact labelling rules;
  • Requesting the assessment of medical devices to be conducted on the basis of more strictly regulated clinical evidence.


Is the legislation close to a legal end?


The answer is yes and no. The progression of the Regulation through the European Parliament and Council inspired hope among industry and institutional representatives alike that the laborious and time-consuming discussions would lead to a swift conclusion following the trilogue. Skeptics of an expedited process, however, have long argued that the Regulation on Medical Devices and its partner in crime – the simultaneously negotiated Regulation on in vitro diagnostic medical devices – are too complex and technical for a quick resolution.  As it stands today, there are still several technical articles in both pieces of legislation that must be ironed out before the file is closed. Whether this will happen under the Dutch Presidency by 30 June 2016 is unclear, but even if it does, the conclusion of the trilogue signifies a closing of negotiations, not the end of the work that needs to be done.


When the trilogue concludes, delegated acts will be charged with tying up loose ends. While these cannot change the core of the legislation already on the table, they allow the European Commission to clarify technical requirements and supplement or clarify elements of the legislative act. For example, this may include making changes to an annex. Though this may sound minor at first, for a file as technical as the Regulation on medical devices, they are anticipated to be quite numerous and to play a role in the final implications for authorities, notified bodies, and companies.


Will the regulation have a bigger impact than the directive it will replace?


As an employer to over half a million people in Europe, the medical device industry is of substantial economic importance in several Member States. From a healthcare system perspective, the safety of and access to these technologies is imperative. The role of the new regulation will be to ensure that the economic vitality of the industry is maintained, without sacrificing safety and access. Providing binding requirements that will be directly applied by Member States excludes the possibility of interpretation and varied transposition across the 28 EU Member States, signifying a shift from the current directive’s divergences. This would imply a more harmonized system and improved patient safety across the EU.


What should the industry anticipate in the coming months?


Despite the progress made, the medical device industry cannot afford to lose interest in a file that will impact their business for years to come. Though drastic changes are unlikely to emerge from the trilogue, delegated acts will still have a very concrete impact on the industry and their formulation should not be overlooked by national actors.  The foreseen three year transition period will also require significant action nationally alongside coordination at the EU-level to ensure adherence to the legislation and avoidance of infringement proceedings. Changes for the medical device industry will thus continue into 2020 and perhaps beyond.


What can this look like practically in Member States? | A spotlight on Ireland


In Member States with a significant medical device industry, like France, Germany, and Ireland, continued involvement and coordination with the EU-level by manufacturers are crucial.  In Ireland, about 25,000 people work in the medical devices industry, which comprises a mix of multinational and smaller indigenous companies that design and manufacture everything from specialist wheelchairs to cardiovascular stents.  Ireland has the highest proportion of people working in the industry of any country in the European Union, and is the second largest exporter of medical devices after Germany with latest figures showing exports to the value of €10.6 billion.  Exports of medical devices and diagnostic products represent 8.5% of Ireland’s total merchandise exports.  The progressive investment into Ireland has stimulated the development of a domestic cluster over 100 innovation-led companies along the entire medtech value chain, positioning Ireland as a world-class centre of excellence for medical devices. 


When it comes to regulation and compliance, the frameworks are complex and can significantly delay product approval – and these delays can have consequences.  If a company cannot offer a product for sale, then there is no income and so a delayed return on investment.  It also means that patients are not getting the benefit from newer medical treatments.  Understanding these complexities helps to avoid unnecessary delays and allows for better forward planning for the periods involved. 


For an Irish company trying to break into the medical-devices market in the EU they must comply with European Union legislation which are transposed into Irish law as appropriate. The ‘competent authority’ acts on behalf of the Member State Government – in Ireland, this is the Health Product Regulatory Authority (HPRA).  The National Standards Authority of Ireland (NSAI) is the ‘notified body’ - the certification organization on behalf of the State that is responsible for ensuring compliance.  Finally, the legal manufacturer is the company that places the product on the market (although it may be manufactured by a different entity). 


When it has been demonstrated that the product design meets its intended requirements, approval file must be submitted to the regulatory authority.  In Europe, this means the ‘notified body’ (NSAI).  At this stage the build-up of costs can be significant, typically to develop a next-generation, Class II product can cost in region of €500,000 to €1 million.  Once the process of feedback and classification has been progressed, the work is still not completed.  After the launch of the device, post-market surveillance must be carried out.  This is a regulatory requirement to improve the protection of health and safety of patients, users and others by reducing the occurrence of adverse events. 


Developing a medical device is a complex, time consuming and expensive process.   The key thing is to understand medical device regulation as it pertains to your intended product and target market.  Concerns within the sector in Ireland still remain as to the proposed changes within the new Regulation and could significantly reduce the speed at which products get to market.  Currently, Europe and Ireland are at a competitive advantage to the US due to the speed at which companies can develop products.  Despite these concerns it is worth the effort – a new device can improve patient safety and patient care as well as underpinning a sustainable and profitable business. 
 
What three things can companies do to prepare for the changes?
  1. Stay informed: Surprises are rarely good for an industry, but when that industry is also linked to healthcare systems and the health of citizens, being caught off-guard could result in access delays for patients. It is the responsibility of the medical device industry to remain involved in the legislative process, both at national and European level, particularly in technical files such as this, which may require expert advice for policymakers.
  2. Maintain relationships: Engaging in candid dialogue with any stakeholder cannot happen overnight. Mutual trust and understanding must withstand a test of time. Waiting until a crisis strikes to engage is already too late. The medical device industry should remain open to questions and address concerns as they arise rather than shying away from difficult discussions.
  3. Don’t assume: Competent authorities and notified bodies are not always as involved in the formulation of new legislation as companies may presume. As these bodies must work in close coordination with the medical device industry, a role that will be further enhanced under the new regulation, it is in the interest of the whole industry to ensure that they are aware and prepared for the changes.
The original text of the Medical Device Directive dates back to 1993 and though it provided a sound regulatory framework, it cannot account for 13 years of change in a constantly evolving industry. The new Regulation on medical devices may be in place for at least as long and in order to be able to respond to crises like the 2010 metal-on-metal hip scandal, its formulation requires the medical device industry and competent authorities to work with national and EU-level policymakers until the final adoption. It is only through a coordinated effort that the legislation can be applied and sustained for the improvement of patient safety and continued innovation of devices.

Related contacts :

Magda Kalata
Account Manager, EU Public Affairs

email: Magda.Kalata@hkstrategies.com