Presentation from confere

1. PMS, Risk Management Plans

2. 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

3. 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
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4. 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

5. 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

6. 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???

7. 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.

8. Risk Management - Control of
Outsourcing
• While a Manufacturer may outsource
– processes
(sterilization, tooling, coating, testing, design, manufac
turing); 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
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9. 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
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10. Specific Contractual Issues
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11. 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
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12. 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”
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13. 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
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14. 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)
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15. 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
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16. 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
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17. 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
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18. 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
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19. 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)
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20. 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.
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21. 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)
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22. Case Studies
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23. 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
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24. 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
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25. 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
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26. 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)
alex@lawforddaviesdenoon.comvollebregte@eu.gtlaw.com
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