Counting down to the MDR date of application, and the legal stuff to get right before May 2020
Do you know that feeling that things look far away, but when you think about it are a lot closer than you think?
This is the feeling that the first medical devices companies are having because are facing the reality that they might not be in time any more to have a valid CE mark by the date of application, either because they did not timely renew their old CE mark, or because they are with a notified body that will likely not be accredited in time to process their conformity assessment application for an MDR CE mark before the date of application. This is the reality of this moment.
Like with Brexit I see companies that are prepared and have secured the first CE certificates under the MDR. As far as we know publicly now TÜV SÜD and BSI have issues the first CE certificates early September, BSI for a class IIa inhaler and TÜV SÜD for class III software. But after this proof of concept by two of the five notified bodies notified for the MDR we do not know at what speed MDR conformity assessments are being conducted and at what capacity notified bodies are operating. At this time there are two MDR notified bodies in the waiting period to be published in Nando and another two are in the MDCG procedure to be endorsed (according to the Commission verbally at the RMD 2019 yesterday), which will probably bring us at nine notified bodies by the end of the year. This will probably not be enough conformity assessment capacity to reliably serve the MDR system, which may lead to some tough political questions to be answered.
I also see companies spinning the roulette and putting all their chips on ‘not prepared’, hoping that developments will somehow save them from themselves. For example, still 1/6 of all certificates issued by UK notified bodies has not been transferred to an EU27 notified body, although the Commission has been urging companies to do so since January 2018. Competent authorities are telling me they are not going to give these companies a break.
As you will see in my below presentation at the Advamed MedTech conference in Boston recently a lot is happening at the moment:
At the RMD 2019 conference in Brussels yesterday the Commission made the deadpan remark that resources and expertise remain a point of concern at member state level. This does not bode well for the member states capacity to deal with regulatory contingencies. It is kind of shocking that in most of the You can imagine that companies that put their chips on ‘not prepared’ will not be met with understanding by the national authorities and will not find themselves on top of the ‘we will work with you as fast as we can’ pile.
Change is the constant
Major parts of the MDR system are falling into place now at a quickening pace, with the fifth notified body designated for the MDR in the mean time and more and more new MDCG guidance dropping, such as for the PRRC, the Summary of Safety and Clinical Performance and for Software as Medical Device recently. In the background the notified body designation procedure has been streamlined as to not make it dependent on the MDCG meetings anymore.
A new Corrigendum?
There are persistent rumors that there is a second Corrigendum in the works that will be much more exciting than the first one in April this year.
This Corrigendum may actually contain a moving of deadlines for some of all devices that are currently class I and will need a CE certificate under the MDR because of up-classification or the new reusable surgical instruments Ir certificate.
I’ve heard that the Corrigendum is in process at Council level now and will soon be passed to the Parliament for sign-off, but I will believe it when I see it.
Knowns and unknowns
Should you sit on your hands now? Better not. As you will see below there are still a lot of known unknowns and unknown unknowns.
Brexit has been ‘averted’ until 31 January 2020, and immediately the British Parliament took the measures that are the most unhelpful to solve the political impasse in the UK and make it as unlikely as possible that the UK will solve the problem by itself within three months. Member states that were still patient with the UK (some at considerable self restraint, like the French) might regret this now and decide to force the UK out by 31 January after all if only as a favour, so you should still plan for the possibility of a hard Brexit.
Smart companies will be learning from the experience gained in the first QMS audits conducted by the first notified bodies, so they know what to prepare for. Did you know for example that notified bodies will look at how your PRRC is set up and whether you have sufficient financial coverage for product liability for the devices you place on the market?
And there are other pertinent questions:
- Do you understand Eudamed and how your company will likely work with it?
- Which modules will likely be available by March 2020 and which ones not? Or is the more and more persistent rumor true that Eudamed will be delayed with two years altogether? In that case you need to understand the rather complex article 123 (3) (d) MDR which says what you obligations are in that case.
- Are you ready for the ever more likely hard Brexit by the end of (in the mean time) end of January 2020?
- Are you ready for Switzerland and Turkey potentially not implementing the MDR and IVDR in time? It looks like this might actually happen and that would affect companies with supply chains running through Switzerland and Turkey because those would, just like the UK after a hard Brexit, not be part of the Union in which the MDR applies.
The legal stuff
And then there are the ‘legal’ and contractual consequences and things to get in place before DoA. The MDR requires putting in place new contracts and revisiting a lot of existing ones, which I’ve conveniently summarised for you in my below presentation at the RMD 2019 conference in Brussels yesterday:
If you look at it, there are quite a number of ‘legal’ things the legal department of your company should look at, maybe do something with and in any event understand the following (non-exhaustively listed) items:
- How does the economic operator regime influence the contracts in your supply chain? Are you using your supply chain to collect PMCF data efficiently? Do you understand who has what role and what responsibility goes with that? Concepts as importer used for transfer pricing purposes do not mean the same in the MDR for example.
- How has your authorised representative agreement changed?
- How have you embedded the PRRC in your organisation and what does that person’s contract state?
- Has the certification agreement with your notified body been updated for post-May 2020 services?
- How will the agreement with your OEM change and have you moved from an OBL agreement to a virtual manufacturing agreement? If you do branded distribution, do you have an article 16 (1) (a) MDR agreement in place?
- Do you have a perspective on all the legal things that will be subject of QMS audit by your notified body, like the newly mandatory product liability coverage under article 10 (16) MDR?
- Is your M&A activity taking into account how to integrate or acquire targets with (AI)MDD certificates after May 2020 in a way that this transaction or integration does not give rise to a significant change that causes the certificate to be invalid and disrupt market access of the products concerned? This may completely skew the assumptions underlying the deal so kind of important. I see companies and investors already start to get this wrong and end up paying more than double for the target because it will take a lot of time to pivot from an invalid MDD certificate to a granted MDR CE certificate if you are not planning for that. I bet your deal financials turn out different if you find that you are suddenly faced with a market access disruption of about two years that you were not planning for. I am planning to discuss this in more depth in a follow up post discussing my presentation about medical devices M&A and MDR at the last RAPS Regulatory Convergence conference.
And the list of items goes on. Time to get your legal department on board if they are not already, and time for them to become MDR specialists!
It will end May 2020 before you know it.