Regulating Medical Device Virtual Manufacturers: What OBL and PBL Private Labelers Need to Know About the EU MDR
Most companies in the business of private labeling medical devices for sale in the EU are painfully aware that the new EU Medical Device Regulation (2017/745) is about to make their life a lot harder.
But in case you were not aware, we’ll break the bad news: EU private labeling is having chest pains and is in the ambulance headed for the hospital. The prognosis is uncertain.
A brief recap of the situation
The current Medical Devices Directive (MDD 93/42/EEC) may have permitted a type of own brand labeling (OBL) or private brand labeling (PBL) for placing medical devices on the European market. An original equipment manufacturer (OEM) could sell their product to a private labeler (now generally called a “virtual manufacturer”), who then would resell the product under their own brand name with no changes to the actual device. The packaging, labeling, and contact information would all be the own brand company’s, with no reference to the OEM. Under this scheme, the OEM would maintain the complete Technical File while the virtual manufacturer only had to maintain an abbreviated Technical File that omitted juicy proprietary information that OEMs want to keep private. The OEM and private labeler would typically establish a technical or quality agreement to assign regulatory responsibilities. In the past, this arrangement allowed the Notified Body to issue a CE Marking certificate to the private labeler that was generally accepted.
The EU MDR puts private labeling on life support
With the publication of the EU Medical Device Regulation (MDR) in 2017, the EU reinforced earlier guidance published by the MHRA. While private labeling is still technically allowed in the EU, in reality most Notified Bodies are following the MHRA guidance that severely limits aspects of private labeling, and the practice has a grim prognosis. Why? The EU MDR and MHRA documents dictate that the OBL has the same regulatory responsibilities as the original manufacturer…and that means the OBL needs to maintain the same technical documentation as the OEM. That’s a problem, because OEMs are none too eager to hand over their secret recipe to a potential competitor. Yet, those same OEMs are highly dependent on this symbiotic relationship with their private labelers.
Revising quality agreements
Section 6 of the MHRA guidance document details the requirements that must be met between the so-called virtual manufacturer and the original equipment manufacturer. These include (but are not limited to) provisions that require the OEM and virtual manufacturer to specify:
- Direct product link between the OEM device and the device being sold by the OBL/PBL (e.g., via device name and/or part number)
- Details on postmarket surveillance and vigilance activities, including who handles what and reporting of adverse events
- Provisions for conducting postmarket clinical follow-up (PMCF)
- Notification arrangements if changes are made to the device design
- Provisions for unannounced Notified Body audits
- Agreement that the virtual manufacturer cannot serve as the OEM for another virtual manufacturer for the same device
- Provision that the OEM has to supply unredacted technical documentation to the Notified Body of the virtual manufacturer upon request, without requirements for additional NDAs
All of these provisions must be covered in a detailed quality agreement established between the OEM and private labeler. That being said, here’s the reality: The EU MDR clearly states that the “manufacturer” shown on the label must have full access to the technical documentation at all times, and for proprietary or confidential reasons the majority of OEMs won’t allow this.
Strategies for medical device private labelers
Even though the EU MDR does not take effect until May 2021, most Notified Bodies are already enforcing requirements for manufacturers under the EU MDR or the recommendations put forth in the MHRA guidance, which required compliance starting September 2017. Currently there is no system established by Notified Bodies or Competent Authorities to review an OEM’s technical information on behalf of the private labeler; this means, in effect, that NBs and CAs expect the OBL/PBL to have the full technical documentation.
What’s next for the medical device OEM and OBL relationship?
For many years, medical device OEMs and their private label partners had a beneficial relationship that was based on simple fact that the OEM could protect their intellectual property (by limiting exposure of their Technical File) while expanding their sales reach through OBL partners. However, as medical device manufacturing and marketing/sales grew more complex, Notified Bodies and regulators increasingly focused on traceability and risk reduction. While the sales strategy of using private labelers is certainly not dead for the medical device OEM, these virtual manufacturers selling in Europe will have to work closely with their OEM partners and realize that they will be spending a lot more money on EU regulatory compliance than they have in the past. For many private labelers, the additional costs (or practicality) associated with EU MDR compliance won’t be worth it. Likewise, some original equipment manufacturers will weigh the risks against the upside, including consideration that they may need to share proprietary information they did not have to divulge the past. That being said, industry may find a creative solution that meets everyone’s needs.
Want to learn more about the OEM and private labeler issue?
We’ve barely scratched the surface of this issue. There are potential strategies OBL/PBL partners can employ to meet the EU MDR requirements and continue to work with their OEM partners. Get in touch with us and we can tell you more about how Oriel STAT A MATRIX can help. We also offer comprehensive MDR training classes as well.