The Medical Devices Regulation 2017 and good business practice

05 July 2019

This article was first published by the Westminster Health Forum following its keynote seminar on 6 June 2019: "Regulation of medicines, clinical trials and medical devices in the UK"

We debated the regulation of medical devices at the Westminster Health Forum on 6 June 2019.

Phil Brown, representing the Association of British HealthTech Industries (ABHI), made a point about the EU Medical Devices Regulation (Regulation (EU) 2017/745). Mr Brown said that the Regulation is about more than just manufacturing standards. The ABHI's view is that compliance makes for good business practice generally. We agree. When it comes to risk management, businesses in general should take note of the issues covered by the Regulation.

When it takes effect in 2020 the Regulation will apply to medical devices but it provides useful guidance for manufacturers of any product that carries the risk of causing injury to the public. Here are three key approaches required by the Regulation that should be considered by any manufacturer keen to guard against product liability risks:

1. Take a lifecycle approach to safety

Under the Regulation, manufacturers will be required to obtain more data regarding the safe performance of their products, before they are put on the market. Once products are on the market, companies will have greater obligations to carry out vigilance and track how devices perform. This provides a number of benefits to business: products will have been put through more rigorous testing, making their products safer; products that do not perform well and present a risk to consumers will be recalled more quickly; and in the event of threatened litigation, companies will be better placed to refer in their defence to data that demonstrates the safety of the product.

2. Ensure there is financial cover in case of liability

The Regulation requires manufacturers to have sufficient financial cover to cater for their potential liability in the event that a product is defective. This could take the form of insurance or alternatively sufficient funds so that a company, in effect, insures itself against litigation. This makes good business sense. No company intends to attract lawsuits but unforeseen circumstances can lead to claims. The recent history of medical devices litigation includes examples of companies whose products were not defective but nevertheless became embroiled in disputes that were expensive to resolve. It is vital to have insurance (or a reserve fund) in place to avoid potential insolvency caused by protracted litigation. Businesses should examine their catalogues to assess where their litigation risk lies and what the financial impact of claims might be.

3. Engage with the distribution chain

Medical devices distribution chains are ever more complex as the number of available life sciences products increases and the healthcare market becomes more globalised. Manufacturers take on a disproportionate risk if distributors fail to do their part in making the tracking and recalling of products as efficient as possible. Under the Regulation, distributors and importers are required to cooperate with manufacturers to ensure the traceability of devices. This makes good business sense as all parties in a distribution chain will have responsibility to make sure that they can trace any product that has the potential to cause harm.

Medical products placed on the market in the EU are some of the most heavily regulated in the world. The Regulation is intended to bring legislation in line with technical advances, improve safety standards and reduce the risk of litigation on the scale that has affected the life sciences industry in recent years. Whilst it increases the compliance burden, any business supplying products with the potential to cause injury can take inspiration from the Regulation.

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