EU Commission Press Release: Safer, more effective and innovativemedical devices

EUROPEAN COMMISSION

PRESS RELEASE

Brussels, 26 September 2012

Safer, more effective and innovative medical devices

Ranging from simple sticking plasters to the most sophisticated life-supporting machines, medical devices and in vitro diagnostic medical devices are central to our health and quality of life. To ensure that these devices serve the needs and ensure the safety of European citizens, the European Commission today proposed two Regulations which are fit for purpose, more transparent and better adapted to scientific and technological progress. The new rules aim to ensure that patients, consumers and healthcare professionals can reap the benefits of safe, effective and innovative medical devices. The medical device sector is highly innovative, particularly in Europe and has an estimated market value of around €95bn.

Health and Consumer Policy Commissioner John Dalli said "Just a few months ago, everybody was shocked by the scandal involving fraudulent breast implants which affected tens of thousands of women in Europe and around the world. As policy makers, we must do our best never to let this happen again. This damaged the confidence of patients, consumers and healthcare professionals in the safety of the devices on which they rely every day. The proposals adopted today significantly tighten the controls so as to ensure that only safe devices are placed on the European Union's market at the same time, they foster innovation and contribute to maintaining the competitiveness of the medical device sector."

Who will benefit?

• Patients and consumers since all devices will have to undergo thorough assessment of safety and performance before they can be sold on the European market. Control processes are radically reinforced, but continue to ensure rapid access to innovative, cost-effective devices for European patients and consumers.

• Healthcare professionals will be provided with better information on the benefits for patients, residual risks and the overall risk/benefit ratio, helping them make the best use of medical equipment in their treatment and care of patients.

• Manufacturers will benefit from clearer rules, easier trading between EU countries and a level playing field that excludes those who do not comply with the legislation. The new rules support patient-oriented innovation and take particular account of the specific needs of the many small and medium-sized manufacturers in this sector.

Main elements of the proposals include:

• Wider and clearer scope of EU legislation, extended to include, for example, implants for aesthetic purposes, and clarified for instance, as regards medical software. This will ensure that the safety and performance of these products are correctly assessed before they are placed on the European market;

• Stronger supervision of independent assessment bodies by national authorities;

• More powers and obligations for assessment bodies, to ensure thorough testing and regular checks on manufacturers, including unannounced factory inspections and sample testing;

• Clearer rights and responsibilities for manufacturers, importers and distributors, applying also to diagnostic services and internet sales;

• Extended database on medical devices, providing comprehensive and public        information on products available on the EU market. Patients, healthcare professionals and the public at large will have access to the key data concerning medical devices available in Europe, allowing them to make better informed decisions;

• Better traceability of devices throughout the supply chain, enabling a swift and effective response to safety concerns. A Unique Device Identification system will be introduced to enhance post-market safety of medical devices, to help to reduce medical errors and to fight against counterfeiting;

• Stricter requirements for clinical evidence, to ensure patient and consumer safety;

• Adaptation of the rules to technological and scientific progress, for example the adaptation of the safety and performance requirements applicable to new health technologies, such as software or nano materials used in healthcare;

• Better coordination between national surveillance authorities, to ensure that only safe devices are available on the European market;

• Alignment to international guidelines, to facilitate international trade.

The revised regulatory framework for medical devices is comprised of the following:

• A proposal for a Regulation on medical devices (to replace: Directive 90/385/EEC regarding active implantable medical devices and Directive 93/42/EEC regarding medical devices);

• A proposal for a Regulation on in vitro diagnostic medical devices (to replace Directive 98/79/EC regarding in vitro diagnostic medical devices).

Waste Electrical and Electronic Equipment Directive (WEEE) Affects Medical Devices

In the new Directive 2012/19/EU on waste electrical and electronic equipment approved on 04 July 2012, medical devices are involved in the recovery and recycling scheme as well, whilst the recovery and recycling target tightens in the Directive. Active implantable & infective devices are still excluded.

Time line and recovery/recycling target are summarized as below.

Minimum targets applicable by category from 13 August 2012 until 14 August 2015 with reference to the categories listed in Annex I:

for WEEE falling within category 8 (medical device) of Annex I,

- 70 % shall be recovered, and

- 50 % shall be recycled;

Minimum targets applicable by category from 15 August 2015 until 14 August 2018 with reference to the categories listed in Annex I:

for WEEE falling within category 8 (medical device) of Annex I,

- 75 % shall be recovered, and

- 55 % shall be prepared for re-use and recycled;

Minimum targets applicable by category from 15 August 2018 with reference to the categories listed in Annex III:

for WEEE falling within category 4 (large medical equipment) of Annex III,

- 85 % shall be recovered, and

- 80 % shall be prepared for re-use and recycled;

for WEEE falling within category 5 (small medical equipment) of Annex III,

- 75 % shall be recovered, and

- 55 % shall be prepared for re-use and recycled

EU medical device manufacturers have to implement the Directive, non-EU medical device manufacturers also have to apply through their Authorized Representatives or Distributors, if they tend to market the devices in EU.

New references of harmonised standards for Medical Devices (OJ C262 of30 August 2012)

European Commission issued official journal (OJ C262) on 30 August 2012, which is the commission communication in the framework of the implementation of the Council Directive 90/385/EEC (of 20 June 1990) on the approximation of the laws of the Member States relating to active implantable medical devices, works as publication of titles and references of harmonized standards under the directive.

EU Commission Regulation on Electronic IFU of Medical Devices

EU Commission issued Regulation on Electronic IFU of Medical Devices (Nr. 207/2012) on 09 March 2012, a guidance cross-reference to directives AIMD 90/385/EEC and MDD 93/42/EEC.

A copy of the regulation can be downloaded here.

Outsourcing Medical Devices Production to China

There are over 5,000 medical device manufacturers in China, mainly producing Class I, Class IIa & Class IIb devices, as well as certain categories of IVD product. Class III players are few though the number keeps increasing. To outsource the production of Class I / II devices or IVD to a qualified OEM manufacturer in China could be a cost saving solution to many of the EU device manufacturers.

All the Chinese medical device manufacturers must be registered to and licenses by SFDA, therefore it is very easy to check if the Chinese enterprise who is willing to work with you is a real producer or simply a trader.

We would recommend EU medical device manufacturers who outsource the production to China, that the perusal of technical files is a crucial and essential step before you reach any agreement with the OEM supplier. Otherwise it could lead to the result of failure to obtaining CE marks for the devices in EU.

If you have the time and money, a third party audit to the OEM supplier in China is recommendable.

Or perhaps the deployment of a neutral buying agent shall be considered, to make sure that quality procedures are properly followed up. The agent shall not just pay regular visits to the OEM’s facility, but should also bear the knowledge of ISO 13485 & CE requirements in mind.

How to find distributors in China Market

Basically the nature of the very medical device a manufacturer is about to market in China (please check our other article on 'things to consider before entering China market') will be the key factor to be considered in marketing strategy. China is large in territory, and sometimes the situation may vary from province to province. One recommendable strategy is to divide the entire market into several sub-markets, then find different distributors to cover each individual sub-market.

Since the purchase of medical equipment by a hospital must go through public bidding, a strong local player may be a good partner of a device producer. Nowadays it's getting more and more difficult for a distributor to cover the entire national market, therefore a good set up of sub-markets and well selected regional distributors will assist medical device manufacturers to achieve a quick win in China market.

Hospitals in the eastern provinces are the consumers of high end medical devices/equipment, no matter it is a PET-CT or a surgery robot, or RFID tracking system for OR. One may find the same type of clients in some inland cities, where there are renown hospitals (mostly affiliated to a medical university) or top experts in a certain academic sector.

While hospitals in inland provinces must try the best to balance between demand and budget, stents and crafts definitely have market there, or MRI, but not likely for PET-CT kind of things. Anyhow, the vast territory of mid-west of China is an ideal stage for most of the devices, from Class I to Class III, provided you have the right product for the right client, with the help from the right partner.

For an imaging device manufacturer, a distributor with good back ground in the same sector could be ideal, but sometimes it is not necessarily the case. One of the important criterion is the capability to penetrate. If the distributor has good connections in his territory and is good at securing business, imaging or lab background shall not rank Nr. 1 when per-qualifying a distributor.

In China, NOT all the companies can market medical devices. Only those licensed business entities can legally sell medical devices/equipment, including imported medical devices (please check our other article on 'how to register medical devices to China SFDA').

How to register medical devices to China SFDA

After a medical device manufacturer finds a distributor in China market, the manufacturer must register the product to SFDA so that the product can enter Chinese market legally.

The manufacturer shall authorize a registration agent in China to handle all the registration processes, and nominate after-sales service party before hand. The after sales service agent can be the same as the authorized distributor (please go to our featured article 'How to find distributors in China'), or can be a third party. The manufacturer shall also issue 'Letter of Guarantee to Authenticity' to guarantee the authenticity of the documents provided to SFDA through the registration agent.

Then the manufacturer and the registration agent can work on legal documents requested by SFDA.

The application form should also be filled in and submitted together with the requested documents.

The whole registration process may cost some time, which may also involve establishment of standards and testing depending on the classification of the devices to be registered.

Invitro Diagnostic Devices Directive - IVDD 98/79/EC

IVDD 98/79/EC is the directive that regulates in-vitro diagnostic medical devices in the European market.

Please download a copy here for reference.

IVDD 98/79/EC

Things to consider before entering China market

There are around 15,000 hospitals in China, mainly public ones. Legal private hospitals shares less than 10 percent. Hospitals are classified into 3 grades, with Grade III as the most advanced and the highest academic level hospitals, followed by Grade II & Grade I hospitals. Numbers of Grade III hospitals does not exceed 5% of total hospitals, and are mainly located in the large cities in eastern provinces.

The purchasing of medical devices and equipment by hospitals is through public bidding. Grade III hospitals are the main stream end buyers of high-end imported devices & equipment, while Grade II hospitals have to balance between demand and budget.

There are many importers and distributors (please go to our featured article 'How to find distributors in China') in this industry in China, however we can hardly see that any of the players is capable to dominate the entire Chinese market geographically, no matter which product line a distributor is promoting. So if a distributor asks for exclusivity right in whole China market, we recommend you to think twice. There are some smaller players who are strong in local or regional market who might be suitable, just well follow up and management are necessary if you have two or more distributors.

The marketing strategy and choice of distributors may depend on the nature of your product. If your product and its applications are new, you may need certain time to educate the market first. References from certain healthcare institutions are also recommendable. In case you are about to launch a mature product, tier 2 or tier 3 cities in China might be good places to start with.

Register to State Food and Drug Administration (CFDA) is of course necessary (please check our featured article 'How to register medical devices to China CFDA'), the process may last for quite a time. But if you JV with or acquire a local business, it could shorten the process of market entry as well as put you into a good position in local competition.

You may also encounter competition from Chinese local producers. If you plan your business presence in China on a long term basis, and also you want to stop them from competing with you in other markets in the future, perhaps you may consider to buy your competitor out.

The Bible in EU - Medical Device Directive

The Medical Device Directive (Council Directive 93/42/EEC of 14 June 1993) is intended to harmonise the laws relating to medical devices within the European Union. In conformity with MDD 93/42/EEC enables a manufacturer to legally place a medical device on the European market. Medical devices conforming with MDD 93/42/EEC must have a CE mark applied. The Directive was most recently reviewed and amended by MDD 2007/47/EC and a number of changes were made, which compliance was implemented on March 21, 2010.

A copy of MDD 93/42/EEC can be download here for reference.

(Click to download)