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Independent Authorised Representatives facing contradictory liabilities under Council position
23 June 2015
Following the public availability of the compromise Council position on the new medical device regulation, discussed and approved at the 19 June 2015 EPSCO meeting, unless further changes are made during the trialogue process, Authorised Representatives (ARs) who are independent from the supply chain now face significantly increased insurance bills and the prospect of having to charge manufacturers much higher fees for their services under the new Regulation, that is if they decide to stay in the AR business.
This is because the original Commission draft has been revised by the Council to make ARs "legally liable for defective devices" if the manufacturer has not fulfilled its obligations under Article 8 of the revised draft. This not only flies in the face of European product liability law, but also appears to contradict the previous paragraph of the Council position, which identifies that a manufacturer may not delegate to the AR "the manufacturer's obligations laid down in Article 8(1), (2), (3), (3a), (5), (6), (7) and (8)". These obligations include:
Design and manufacture;
Technical documentation development and maintenance;
Drawing up a Declaration of Conformity;
Attaching the CE mark;
Complying with Universal Device Identification (UDI) obligations;
Maintaining conformity through series production;
Implementing and maintaining a post-market surveillance plan;
Provision of instructions for use;
Taking corrective action to bring non-conforming devices into conformity.
So despite having no control over any of these aspects of device design, development, marketing, importation or distribution, the AR is now expected to be "legally liable" for defective products. Exactly what liability this includes is not clear - maybe compensation for patient deaths? What incentive does this give to non-European manufacturers to provide any insurance cover in such circumstances, knowing that the AR will be "legally liable"?
While some degree of oversight is required by ARs for Class I devices, one could ask why have the ARs been singled out for liability for all defective devices, when they have no significant role to play in the conformity assessment of higher classes of device, whereas Notified Bodies have full responsibility for assessing the initial and continued conformance of devices in higher risk classes.
In addition, Article 8 paragraph 11 of the new draft Regulation states:
"Natural or legal persons may claim compensation for damage caused by a defective device in accordance with applicable Union and national law."
One would imagine that the "applicable Union law" in question would be the Product Liability Directive, 85/374/EEC, which states in Article 3 that the producer and importer are liable for defective products, or in the event that these entities are not identifiable, the distributor of the product is liable.
The role of an AR does not involve participation in the supply chain, so the suggested wording would be in direct conflict with established and long-accepted European law. It would also be confusing for patients seeking compensation for defective devices, as the AR is likely to be located in a country other than where the incident occurred or where the device was supplied, so would result in unnecessarily complicated legal processes and delays in reaching a settlement.
Quite what prompted the Council to consider making ARs liable for defective products is unknown, but it is to be hoped that common sense will prevail, or if not, the Commission Legal Services will step in to ensure sanity is restored.
Council positions reached on Medical Device and IVD Regulation texts
20 June 2015
At the EPSCO meeting of the Council of Europe on 19 June 2015, the Latvian Presidency managed to arm-twist the Council representatives into agreeing a series of compromises on difficult to resolve issues, so that trialogue negotiations between the Council, Commission and European Parliament can begin in earnest later in the year.
A press release issued by the European Council quotes Guntis Belēvičs, the Latvian minister for health and President of the Council as sayying: "We are pleased that under the Latvian presidency major progress could be achieved to strengthen the rules on medical devices. Today's agreement is a decisive step forward to improve patient safety and strengthen European competitiveness. Further work both within the Council and between the Council and the European Parliament is, however, needed to ensure that the benefits of the new rules are put into practice".
The truth is that many countries are still unhappy with a significant number of the proposals, and industry also has issues remaining that it considers serious, according to a press release issued by MedTech Europe, including:
The scrutiny mechanism (too complex and slow);
Reprocessing of single use devices (different levels of safety between original manufacturer, commercial reprocessor or hospital reprocessed);
Clinical evidence for IVDs (increased requirements compared with 2012 Commission proposal); and
Companion diagnostics (definition too broad).
The press release quotes Serge Bernasconi, MedTech Europe CEO, as saying: "The current Council texts as they stand still fail to ensure that every proposed measure consistently meets the two overarching objectives of these Regulations, namely to increase patient safety and to foster innovation in medical technology in Europe, bolstering a dynamic part of the European economy."
The financial impact of the new regulations was also discussed, as the costs for manufacturers, and hence device users and patients, will inevitably increase to compensate for the additional layers of red tape now being proposed. European industry has brought such financial concerns to the attention of regulators and law makers over the last three years, but only now have the regulators started to discuss the topic, because the new texts will have significant impact on the finances of national Competent Authorities. It remains to be seen how the parliamentarians will view the cost issue once the trilogue starts.
When the Council started its review of the texts back in 2012, comments were made about ensuring the right level of regulation was achieved, no matter how much time it took. Unfortunately, it looks as though time has got the better of all those concerned, so once again compromise politics has fashioned the final version.