Post marketing surveillance april 2011

PMS, Risk Management Plans

Agenda

• Legal Basis of PMS• Why it is Important?• Implementing PMS Throughout the Supply

Chain• PMS as Key to Overall Compliance• British and Dutch Perspectives

Healthcare is Very Heavily Regulated

• Healthcare may be the world’s most heavily regulated sector• In addition to general regulations (Bribery, Procurement, Product Liability, REACH

and WEEE) there are rules re:– Design and testing of the device– Classification and certification of the device– Control of quality of the device and each component of the device– Promotion of the device (everything from to whom and contents)– Provision of information about the device (e.g. off-label promotion)– Interactions with Healthcare Professionals– Interactions with independent parties such as Notified Bodies and Authorised

Representatives– Distribution of the device– Post Marketing Surveillance– Recalls, field safety corrective actions and field safety notices– Reimbursement

• Increasing Harmonisation of International Requirements

Informa Brussels – May 2011 3

Obligations re PMS

• Manufacturer must establish a Post Marketing Surveillance system for each product

• PMS is a critical element of the Quality Management System– PMS plan must include mechanisms to monitor

(and update) the QMS– Notified Body must continually audit

Manufacturer’s compliance• Risk Management must also address PMS

Three Mandatory Elements of PMS

1. Handling of complaints and reportable incidents

2. Reviewing literature (and other sources of data) for similar/equivalent devices

3. Vigilance reporting of reportable incidents

PMS Incorporated Beneficially

• Well-Implemented PMS plans can provide significant benefits

• Information should be fed into product design, marketing and M&A teams

• Information should be used to assist with reimbursement negotiations, health technology assessments and label extensions

• Assists with Product Liability claims and availability of defences

• Vigilance obligations constantly increasing• EUDAMED???

PMS Extends to Subcontractors

• The Manufacturer must control all activities including those subcontracted out

• Level of control depends on the nature of the device and the nature of the component or service supplied by the subcontractor. – The control of a supplier of packaging will be different to

that of supplier of power supply– The level of control may change over time– Requires an audit of each material subcontractor and its

quality systems. This can be a direct audit of the subcontractor or an audit of its notified body.

Risk Management - Control of Outsourcing

• While a Manufacturer may outsource– processes (sterilization, tooling, coating, testing,

design, manufacturing); and– products (components, subassemblies or entire

devices), it must maintain control.

• Manufacturer must incorporate appropriate risk management activities for these processes and products by planning and by ensuring risk control measures are appropriately applied.

• This includes evaluation of the supplier’s own systems and establishing systems to obtain feedback.

• Recommended Reading: GHTF Guidance SG3/N17/2008

Informa Brussels – May 2011 | 8


Types of Contracts• Subcontractors/Suppliers:

– Design of device (or part thereof)– Manufacturing of device (or part thereof)– Development of software (or part thereof)– Production of components / raw materials– Supply of devices that form part of pack or system– Inspection / testing / sterilisation– Clinical evaluation (CRO)– Authorised Representative– Business unit of group of companies

• Consultancy Agreements• Distribution Agreements• Agency Agreements

Specific Contractual Issues


Standards; “Compliance with Law”• Avoid “compliance with law” boilerplate

– Tubing example: the tubing complied with “applicable law”, namely the law applicable to a supplier of rubber tubing, but not the MDD.

– Software example: the revisions to the software was permitted for software that was not a medical device

• Specify standards to follow– ISO 9001: for quality systems– ISO 13485: for medical devices– ISO 14971: risk management system for medical devices– ISO 62304: medical devices software development – That these are often addressed in an escalating process

• For critical suppliers to decrease the risks of divergent practices, detail the obligations at an SOP level


Standards and Change Control

• Given the significance of the risk (Manufacturer may not stay within scope of CE marking), this is a critical issue

• Mechanism for reporting design or QS changes• Mechanism for prior agreement to design or QS changes• Mechanism to compel support of previous version• Mechanism to force supplier to implement a change

– Enhanced standards imposed in a recast of the MDD– Consider a right to take over (whether for bug fixes or to take

to a supplier with an adequate QMS)– Consider limitation to “where required by a regulator or by

law”Informa Brussels – May 2011 12

Traceability

• For suppliers of critical components (or services) seek obligations regarding traceability of their batches

• Expressly refer to vigilance and PMS obligations and impose contractual obligations on them to comply with these requirements

• Notified Body should also have an interest in verifying this aspect of the quality system

• Distributors must also have obligations as regards the products that they supply


Intellectual Property

• Ensure that the supplier/subcontractor provides a licence to copy, modify and sub-licence the relevant IP– Crucial for certain types of Field Safety Corrective Actions– This should extend to foreground and background IP– Query access to third party IP licensed to the supplier

• Access to source code for software (escrow)• Consider consequences of insolvency of supplier• Consider consequences of termination• Consider IP Insurance (Offensive, Defensive and After

the Event)


Record Keeping

• Record-keeping obligations for a medical device manufacturer are an absolute requirement and are a crucial element of PMS

• Automatic access rather than a contractual obligation to provide– little value if the supplier is insolvent or there is a

breakdown in the relationship• Consider also a power of attorney


Regulatory Actions• Some partners should be obliged to assist with regulatory matters

– Investigations– Queries– Complaints– FSCAs– Recalls

• Dual (prompt) notification and, where appropriate, Manufacturer should have the opportunity to make representations

• Assistance (at counter-party’s cost) with disputes, responses etc• Include obligations re PMS (particularly vigilance and market feedback) in

certain cases• Agree process for the co-ordination of :

– responses to threats, claims and litigation by third parties;– enforcement and inspection matters; and– EUDAMED filings


Consequences of Termination• Enable new supplier to take over the work and understand procedures• Intellectual Property (foreground and background):

– transfer to Manufacturer; or – perpetual, irrevocable, royalty-free, worldwide, sub-licensable and probably

non-exclusive (consider exclusive or sole) licence to use and modify IP• Transfer of information and know-how• Release of source code or documents from escrow• Ensure all relevant regulatory data is handed over in a readable form

– Old subcontractor may not have an obligation to retain the data• Right to source raw materials• Consider a positive obligation to assist (e.g. show-how)

– any significant changes may need to be looked at by the Notified Body!– probably a sunset clause on such a provision


Change of Control/Assignment

• If a subcontractor makes a critical component– provide for options to avoid Sophie’s Choice

• terminate agreement if the subcontractor is acquired, e.g. by competitor, or

• make agreement difficult to terminate, e.g. by means of poison pill, or

• level the playing field with an MFN clause

– subcontractor should not assign its contractual obligations or the entire agreement

– subcontractor should not to subcontract outside of scope of QS audit


Miscellaneous

• Inspection and Acceptance– Avoid deemed acceptance provisions in a supplier contract

where inspection is either difficult or impossible (e.g. sealed until used)

• Exclusivity– Can become a double-edged sword commercially

• supplier may not have access to industry or QMS improvements (conversely, it may not have the ability to meet multiple QMS requirements)

• supplier may become overly dependent on Manufacturer• Manufacturer may become overly dependent on the supplier if mutual

– Consider a limited field or priority of supply or MFN– Beware competition Issues (present and future)


Miscellaneous (2)

• Claims Management and Product Liability– Subcontractor has an interest to argue that the defect is

attributable to• the overall design of the device; • the instructions given by the Manufacturer

• Power of Attorney to allow Manufacturer to execute documents – If counter-party objects – limit to situations where:

• the counter-party refuses to do act;• the counter-party is incapable of taking the action; and/or• Manufacturer [acting reasonably] determines that the action is

critical.


Miscellaneous (3)

• Force Majeure– Ensure that Force Majeure clause is appropriate to the circumstances– Positive obligations to assist to overcome or develop a workaround

• Severability of provisions– Challenges to procurement decisions and opportunity to rewrite

contracts– Consider benefits or otherwise of interlinking provisions

• Choice of Law and Forum– Specifically consider arbitration in countries with maturing legal

systems:• China (often in Hong Kong); and• India (often in Singapore)


Case Studies


Tubing Component for Pump

• The tubing complied with the technical specification, but did not work as anticipated in the clinical environment

• The tubing was not defective (as per the supply agreement), but resulted in a Field Safety Corrective Action of the device

• The supplier was not contractually obliged to:– Provide feedback regarding the actual performance of the tubing– Assist with the FSCA– Meet the additional specifications for the medical device– Undergo an audit by the Notified Body

• The relationship deteriorated and the supplier would only assist with the FSCA on payment of a significant sum


Supplier of Software Component• The diagnostic device (scanner) incorporated third party software• The GUI and the database management software was not supplied exclusively to the

device company or to the medical device sector• The software company updated the GUI and the database management and

deployed automatically via the internet• No clinical investigations were undertaken in respect of the upgrade/update• The scanner no longer complied with the CE Mark• Potential Consequences

– Product Recall– Suspension of Sales while new CE Mark obtained– Loss of Insurance cover

• The device company did not have the right to:– copy or modify the software;– reinstate previous versions of the software;– be notified of the upgrade; or– prevent the upgrade being deployed


Insolvent Supplier

• The device company and the supplier jointly fund the development of the tool to manufacture the component

• The component is crucial• The supplier will own the tools and associated IP but:

– will only use the tool for the device company; or – grants the device company a perpetual, royalty-free licence of IP

• The supplier becomes insolvent• The liquidator disclaims the licence to the device company and

sells the IP/tools to a third party

– The same issues arise with software source code


Thank You

• The information in this presentation is provided for information purposes only. The information is not exhaustive. While every endeavour is made to ensure that the information is correct at the time of publication, the legal position may change as a result of matters including new legislative developments, new case law, local implementation variations or other developments. The information does not take into account the specifics of any person's position and may be wholly inappropriate for your particular circumstances. The information is not intended to be legal advice, cannot be relied on as legal advice and should not be a substitute for legal advice.

• Unless otherwise stated, the information is limited to the position in the UK and the Netherlands.

•Alex Denoon: Erik Vollebregt

+44 20 3441 0908 (office)+31 20 30 17 436 (office)+44 7540 123 519 (mobile)+31 6 47 180 683 (mobile)[email protected]@eu.gtlaw.com


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Health & Medicine

Post marketing surveillance april 2011