EU Regulation Is Driving Medical Device Manufacturers From EU Market

Companies say they plan to pull some or all of their devices

Dirk Dusharme @ Quality Digest

November 28, 2022

In 2010 a medical device scandal in France set the stage for a new European Union medical device regulation that, according to most experts in the medical device community, may cause more damage than the problem it was intended to address. An unreasonable deadline, lack of notified bodies to perform audits, and exorbitant costs are driving medical device manufacturers from the EU market, say experts—at a minimum leading to increased medical costs, but, some fear, potentially leading to shortages.

The well-meaning but reactionary enactment of Regulation (EU) 2017/745 and Regulation (EU) 2017/746, meant to address some of the issues raised by the 2010 PIP implant scandal, has placed medical device manufacturers in Europe and the United States in the untenable position of having to meet a standard—which literally cannot be met by all affected manufacturers in the time allowed—or be forced to remove their products from the European market.

In addition, assuming manufacturers could meet the deadline, many will not due to the increased costs of conforming to the new regulation. Already, medical device manufacturers representing about 70 percent of the revenue market selling in the EU have said they will reduce or completely remove their EU product offerings. According to industry regulatory experts, unless the deadline is pushed back and the excessive requirements for low-risk devices are removed or changed, you may expect more devices to disappear from the EU market, resulting in less access to medical devices there.

Background: PIP breast implants

In March 2010 the French government banned the use of silicone breast implants manufactured by Poly Implant Prothèse (PIP) after learning that the implants were made from industrial-grade rather than medical-grade silicone. This followed nearly a decade of complaints against the manufacturer.

According to the European Commission, an estimated 400,000 women were affected worldwide, with about 100,000 of those in the EU. PIP underwent a compulsory liquidation later in 2010, and the founder, Jean-Claude Mas, was eventually given a four-year sentence and fined €75,000.

Mas wasn’t the only one to face legal action. TÜV Rheinland, the notified body that issued PIP its CE mark (a safety certification) for the implants, was sued and eventually lost the case after appeals in a French court. Notified bodies are the entities that audit medical device companies for compliance with medical device regulations.

The argument was that TÜV Rheinland should have spotted the problem during PIP’s audits. In 2017, TÜV Rheinland was ordered by a French court to pay €60 million to 20,000 women—€3,000 each.

The European Commission’s response to PIP

Due to the scope of the PIP fraud (see sidebar) and apparent weaknesses in the medical devices regulatory framework that allowed it to happen, in 2012 the European Commission (EC) launched what was referred to as the “PIP action plan,” which led to a commission-staff working document, “Implementation of the Joint Plan for Immediate Actions under the existing Medical Devices legislation.” It’s clear from that document that there was significant pressure on regulators from the public, media, and politicians to make sure this kind of fraud never happened again. The PIP case would be used as a “stress test” during the preparation of any new medical devices regulation.

On May 25, 2017, the European Commission released Regulation (EU) 2017/745 for medical devices (MDR) and Regulation (EU) 2017/746 for in vitro diagnostic medical devices (IVDR), which replaced the existing directives 93/42/EEC (MDD) and 90/385/EEC (AIMDD).

Most of the people interviewed for this story are regulatory affairs specialists for their company or organizations. However, due to ongoing discussions with the European Commission, and not wanting to divulge their companies’ business decisions, many did not want to go on the record.

Also, because of the harm PIP implants did to thousands of women, many feel uncomfortable openly complaining about the burden of new regulations, fearing it may cast them as uncaring. But for them, the issue isn’t the regulation’s intent but its implementation.

“The EU regulations are a force for the betterment of patient outcomes through improved quality of products in the hands of healthcare professionals,” says EU regulatory expert Kenneth Shaw. “However, the increased cost of compliance and complexity of certain requirements and obligations feel like the EU may have shot themselves—economically—in the foot.”

According to one medical device trade organization analyst, the older regulations did need revamping and the industry didn’t really object. “The screwup is with the implementation and meeting the deadline because of a lack of resources,” he says. “The EU failed to recognize the scope and magnitude. It started to go south when, two years in, there were hardly any notified bodies to handle this.” Notified bodies are the entities that audit medical device companies for compliance with medical device regulations.

Although the difference between the MDD and new MDR are extensive (the MDD regulation was about 60 pages, while MDR is about 175), the key provisions that have angered manufacturers are the many complicated requirements around clinical evaluation reports and postmarket surveillance—including requirements for postmarket clinical follow-up, and the technical files for each type of product a company makes. Although these requirements are a heavy load for manufacturers of all classes of medical devices, they are excessively burdensome—and many would say unnecessary—for some low-risk class I and low- to medium-risk class II devices, many of which are made by small to medium-size enterprises.

“Some of these new demands now threaten to impose redoing technical files—even if the product doesn’t change—every two years or so,” a regulatory specialist for a West Coast manufacturer told us. “Many of these new requirements are being imposed across all devices, including the lowest-risk devices, such as a simple tongue depressor.” He adds that all of the complexity and cost is causing companies to leave the EU or severely cut back on what devices they can reasonably offer to the EU healthcare system.

A large multinational medical-device distributor reports that many of its clients are pulling out of the EU because of the standard. “Companies are going through their rationalization and their ability to meet the requirements,” he says. The problems are many. “Their notified body may no longer be accredited—they were accredited to MDD but aren’t to the MDR.... and a lot of notified bodies that are accredited aren’t taking on new clients because of the backlog.” Because of this, as well as import issues also related to the MDR, many of this distributor’s clients are withdrawing from the EU market.

A survey conducted by MedTech Europe, a European trade association for the medical technology industry, shows that more than 50 percent of respondents—representing about 70 percent of the revenue market—planned to reduce the number of products sold in the EU.

Too much to do, too little time

For the industry professionals we have spoken to, the main issues with the MDR fall roughly into three categories: excessive requirements; too tight a deadline, given the lack of notified bodies to perform the assessments; and the resultant costs.

Regarding costs, companies that have in the past sold certain low-risk devices in the EU are now required to go through extensive evaluation studies, which in turn must be audited by a notified body. The impact of this increased scrutiny is more work for the notified body—resulting in fewer audits in a given amount of time—and more audit-day expense for the company.

Excessive requirements

The main issues with the MDR can be found in requirements laid out in Annexes II and IX of the regulation. Annex II requires a “technical file,” and Annex IX requires both a “clinical evaluation report” and “postmarket clinical follow-up,” all innocuous terms that translate to “spend a whole lot of time and money.”

These requirements cannot be carried out by an administrative assistant. According to the EC’s MEDDEV 2.7/1 revision 4 (“Guidelines on Medical Devices”), clinical evaluators should have at least the following training and experience in the relevant field: A degree from higher education in the respective field and five years of documented professional experience; or 10 years of documented professional experience if a degree is not a prerequisite for a given task.

According to one trade organization analyst, although larger companies may have such people on staff, smaller companies do not, and what expert consultants there are were quickly snatched up once the MDR was released. “This is complicated stuff,” he says “And those people have been hired up. And paid a lot. You can’t train people quickly to do it. It takes two to three years to even get the basics. It requires knowledge of the product and of the regulation. And how you verify that scientifically. The notified bodies don’t have the resources, and the companies don’t have the resources.”

EC survey shows long delays for certification

Click image to enlarge. Source: European Commission report, “Notified Bodies Survey on certifications and applications (MDR/IVDR).”

The EU is as aware as the notified bodies and medical device companies that the backlog almost guarantees not all companies will meet the deadline.

All
of the notified bodies responding to an EC survey report that companies seeking both a QMS and product audit are looking at a 13- to 24-month time period to get their certificate. Anything over 18 months would put those companies past the deadline.

Notified bodies falling behind

Click image to enlarge. Source: European Commission report, "Notified Bodies Survey on certifications and applications (MDR/IVDR).”

The chart above shows that as of October 2022, notified bodies had received only 8,120 applications for MDR, and only 1,990 certificates had been issued. From the trajectory of the two curves, it’s apparent that the notified bodies are falling behind, and will continue to do so unless the EC changes the deadline and some of the requirements.

According to the EC, as of October 2022, there were about 22,793 MDD/AIMDD certificates set to expire some time before May 2024.

Impossible deadline, too few notified bodies

The deadline for completing the transition to the MDR for most companies is May 25, 2024. No one in the industry believes that all companies can meet the new regulation in that time frame. At this late date neither, apparently, does the European Commission, although it hasn’t quite come out and said so.

In order for class II, class III, and certain class I medical-device manufacturers to show they meet the requirement of the MDR, they must be audited by a notified body. However, there aren’t enough notified bodies to handle certification for the hundreds of thousands of medical devices sold in the EU. According to the MedTech Europe survey, only about 15 percent of the 500,000 devices currently covered under the old MDD have been certified to MDR.

Under the old MDD, there were about 60 notified bodies designated to carry out MDD audits. Two years after the enactment of the new MDR, there were only about 30 notified bodies that could do MDR audits. As of today, with about 18 months left until the deadline, there are still only 34 notified bodies designated.

Regulatory affairs specialists contend that is way too few for the number of companies out there. A recent survey from the European Commission shows notified bodies are reporting it will take from 13 months to two years to complete a client’s full QMS and product audit. (See sidebar.)

Companies that haven’t already lined up a notified body may be completely out of luck, according to the trade organization analyst. In short, without some sort of action on the part of regulators, there’s no way that all medical device companies will be audited by May 21, 2024.

Cost

One result of the excessive requirements and looming deadline are exorbitant costs—many times greater than those incurred with the old MDD, say sources. Along with a shortage of notified bodies and the cost of hiring experts to create the needed documentation comes another expense: audit days. The amount of paperwork auditors have to look at is much higher than it was under the MDD, and thus more time is needed for document review.

One medical device company shared with Quality Digest an invoice from its notified body for an MDR technical documentation review. To meet the deadline, the company had to pay for an accelerated audit. The cost was a staggering $80,000—roughly six audit days at a day rate of about $13,000 per day. This was about 400-percent more than what the company paid in the past for an MDD audit. That was only for the document review.

A further onsite audit and another microbiology audit bring the cost closer to $125,000, according to the company’s CFO. That’s for just one of the company’s four products sold in the EU. One down, three to go. Do the math.

In the United States, this same device is considered such a low risk that the U.S. Food and Drug Administration has exempted it from any premarket 510(k) review. That’s zero cost.

“We are a family-owned, U.S. manufacturer with 94 employees,” says the company’s regulatory specialist. “That is why we cannot endure Europe any longer. Although we have over 90 products listed with U.S. FDA, we are only able to justify the cost of selling four into the EU.” The company plans to pull 90 percent of its products out of the EU market that were previously CE-marked under the older MDD.

“I’m genuinely concerned for the loss of care in the EU, especially special therapies that our unique devices deliver,” he says. “Many lower-profit devices provide essential care, but we simply cannot justify the cost of this regulation that has been created by its complexity.”

In a letter to the Dental Trade Alliance (DTA), a company wrote, “The cost and complexity being imposed to meet the EU MDR, even for the lowest-risk devices we make, like our dental rubber dams, has made it impossible to continue CE marking. The amount of paperwork and effort, consulting fees to prepare ‘Technical Files’ demanded by our Notified Body under the EU MDR, not to mention their increases in fees—all this has forced us to remove 80 percent of those devices from Europe.”

To put some real data to all this, in July 2022, MedTech Europe released survey results representing about 70 percent market share of the medical device market. The survey showed that MDR certificates had not yet been issued for greater than 85 percent of the more than 500,000 devices previously certified under the MDD or AIMDD. Furthermore:
• The time-to-certification with MDR-designated notified bodies is taking 13 to 18 months on average, which aligns with the EC’s own survey. This is double the time historically needed for certification under the MDD.
• More than 50 percent of respondents plan portfolio reductions. These companies are currently planning to discontinue one third of their medical devices, on average.
• At least 15 percent, and up to 30 percent, of small and medium enterprises (SMEs) still have no access to an MDR-designated notified body.
• About 50 percent of respondents are deprioritizing the EU market (or will do so) as the geography of choice for first regulatory approval of their new devices.

The entire situation feels so dire for medical device companies that medical and dental trade organizations have been bombarding the European Commission with complaints. The DTA recently informed U.S. Dept. of Commerce Secretary Gina Raimondo that DTA members are reducing the number of dental devices they sell into the EU market or forgoing it entirely. The reasons included a lack of access to notified bodies, market delays caused by the same, and the rising costs of the notified parties.

“In turn,” wrote the DTA, “this means fewer U.S. manufactured dental devices being exported and the loss of jobs to U.S. workers in the dental medical device space. EU healthcare could suffer, too, as access to fewer dental medical devices may impact care, while it could also result in higher prices paid by both practitioners and patients.”

Shame on who

In response to pressure from the medical device community, the Medical Device Coordination Group (MDCG), responsible for assisting the commission and EU member states with implementing medical device regulations, issued several position papers. In its June 2022 paper, “Notice to manufacturers to ensure timely compliance with MDR requirements,” the MDCG acknowledged that of all the companies currently certified to the old MDD, 80 percent are being handled by 30 notified bodies. Recall that this is about half the notified bodies that were available for the older MDD.

But, in a bit of industry shaming, the MDCG pointed out that “data collected by notified bodies, and presented to competent authorities in December 2021, shows that nearly 37 percent of manufacturers’ applications have been refused on the basis of incomplete applications, underlining an overall lack of manufacturers’ preparedness.” (Emphasis ours.) They end by saying, “It is essential that all manufacturers adjust their system, finalize transition to the MDR, and apply to a notified body, submitting complete and compliant applications as soon as possible, and well in advance of the end of the transition period, to ensure timely compliance with the MDR.”

The MDCG glossed over the availability or timely response of those 30 notified bodies to perform audits on those 80 percent—not to mention the remaining 20 percent.

But Shaw says the MDCG may have a point. “Manufacturers of legacy products would have had at least five years’ worth of knowledge of the regulation by now if they had been proactive,” he points out. “So the original transition deadline, I would say, was quite fair, even if it took the EU some time to issue guidance.” On the other hand, he gets why many manufacturers may have waited (intervening pandemic aside). “No one wants to spend thousands of dollars implementing new changes or taking into account new requirements at the early stages of a new regulation,” says Shaw. “Many waited to see how things would develop with respect to enforcement and notified body interpretation.”

The MDCG paper also didn’t address the complexity and volume of documentation that medical device manufacturers and notified bodies must deal with, or as Shaw points out, how notified bodies choose to interpret the regulation or guidances.

“A big problem is the lack of consensus between the intended purpose of the regulation requirements and notified body assessments,” says Shaw.

The assessments can vary depending on how one notified body interprets the regulation vs. another. In some cases, says Shaw, low-risk devices are being held to an unnecessarily high standard that can only be justified for high-risk devices.

“In one such case, a class A sterile sample container (IVD) assessment report on technical documentation I had seen had in excess of 50 nonconformities, which is nuts,” he says. “Another notified body might not even look at the technical documentation for that device at all."

In a position paper released just two months later, MDCG’s tone was different. In its August 2022 paper, “Notified body capacity and availability of medical devices and IVDs,” the MDCG wrote that it “recognizes that significant and urgent challenges remain in ensuring sufficient capacity of notified bodies and readiness of manufacturers in order to allow medical devices and in vitro diagnostic medical devices to be certified in accordance with the MDR and the IVDR within the transition periods provided for in the regulations.”

It then outlined 19 contingency measures to help address both the capacity limits of notified bodies and the need to accredit more of them. Thirteen of the measures essentially acknowledged the enormous backlog faced by notified bodies and were oriented toward helping streamline the work that notified bodies do to build capacity into the system.

It’s too little too late, say analysts. “It is clear that even with the measures set out by the MDCG there will be a gap in certification for a number of manufacturers,” says Graeme Tunbridge, senior vice president of global regulatory and quality for medical devices for BSI, one the largest notified bodies, “...particularly those who hold current certificates with notified bodies that have only recently been or are not yet designated under the MDR.”

Tunbridge adds that BSI is “working closely with other notified bodies and with stakeholders across the EU to support discussions on what additional measures may need to be taken to avoid widespread unavailability of products for patients in the EU.”

Paul Brooks, former executive director of the Regulatory Affairs Professionals Society, as well as the former head of notified body BSI UK, is also skeptical. “Never mind new customers and devices; there are still so many legacy products to be reviewed. There’s no grandfathering-in of devices that are already CE-marked under the MDD. Therefore, a huge effort is required just to permit existing safe devices with good history to stay available on the EU market.”

Brooks, who was at BSI from the start of CE marking under the MDD in 1993 to BSI’s preparations for the MDR in 2016, says it doesn’t seem feasible that manufacturers and notified bodies have the capacity to complete all the work necessary to issue MDR certificates in time to address all the expiring MDD certificates in 2024. A survey from the EC shows there are about 23,000 older MDD certifications that would need to transition to MDR.

Even the EC doesn’t seem overly optimistic. “The Commission remains very concerned about the current level of notified body capacity and preparedness of medical device manufacturers,” an EC spokesperson told Quality Digest at the end of October 2022. “With more than 20,000 certificates expiring by May 2024, the situation is critical.... We believe that [the 19 contingency measures] will make a real difference and are important.... The Commission is aware that some member states, members of the European Parliament, and stakeholders—while supporting the MDCG position paper—consider that it is not sufficient and that additional measures are necessary.”

While the MDCG does mention that deadline extensions could be granted for some companies if they can show good cause, nowhere does it consider extending the deadline. And no one anticipates that, even with capacity-building steps, notified bodies will be able to meet the demand by the deadline.

“I think an amended approach of a phased, risked-based solution, including extensions to current timelines, will be needed for very many products to remain available on the EU market,” says Brooks.

Left unsaid is that no manner of extensions or streamlining notified body operations will noticeably affect cost, which hinges on the amount and complexity of the documentation. Streamlining just means you get to pay a lot of money faster, one regulatory specialist quipped.

Stay tuned

Whether a company is being barred from selling, or because it has simply abandoned the EU market, the result is fewer products. This leads to increased cost to patients and a negative impact on innovative devices reaching the EU market, say analysts. One trade representative said to think of what happened during the Covid-19 pandemic and the shortage of personal protective equipment and other seemingly commonplace medical products. Now imagine a similar scenario, but where the number of medical device vendors has been reduced.

With the deadline fast approaching, it seems inevitable that the EC will have to make more concessions. The commission is “listening attentively to the concerns expressed by several member states, members of the European Parliament, and stakeholders in order to address them in the most appropriate way possible and avert the risk of shortages of medical devices,” an EC spokesperson told us. He added that more solutions will be presented at the EC’s next Health Council in December 2022.

About The Author

Dirk Dusharme @ Quality Digest’s picture

Dirk Dusharme @ Quality Digest

Dirk Dusharme is Quality Digest’s editor in chief.