Supply Chain Management Is a Big Target for the FDA

Mark Crawford

According to Alan Schwartz of mdi Consultants Inc., a former supervisor of field operations for the FDA, supply chain oversight is the FDA’s next big area of concern.

About a year ago the FDA indicated plans to expand its enforcement reach over foreign device suppliers through consent decrees. The FDA also asked manufacturers and importers to assume a bigger role in managing their supply chains. An FDA spokesperson, compliance officer Carmelo Rosa, further stated that “currently the agency only has authority to establish import alerts for foreign companies with good manufacturing practice violations, but is looking at other options.”

“This is an interesting statement and if the FDA takes it seriously, it will start a new compliance incentive to shore up our borders and to prevent the entry of ‘adulterated’ devices,” says Schwartz.

Could the FDA actually take injunctive actions or civil penalties on foreign medical device manufacturers?

Probably not, says Schwartz, because the FDA does not have legal jurisdiction over foreign companies.

However, the FDA import alert does essentially impose a consent decree on the foreign manufacturer (the FDA can issue an import alert without visiting the foreign manufacturer’s site). If this happens, according to Schwartz, the following stipulations could be required before shipments enter the U.S.:

  • Private laboratory testing of each shipment
  • A copy of the foreign company’s quality system for the FDA to review
  • A third-party audit for QS compliance

Previously, the FDA has not viewed initial importers as having any regulatory responsibility for the products they import—under new regulations, however, this is starting to change.

“Initial importers are subject to Medical Device Reporting (MDR) under 21 CFR 803, Reports of Corrections and Removals under 21 CFR 806, and Medical Device Tracking under 21 CFR 821, if applicable,” says Schwartz. “Under the MDR regulations, importers are required to report incidents where a device may have caused or contributed to a death or serious injury as well as report certain malfunctions. The importers must maintain an MDR event file for each adverse event. All product complaints (MDR and non-MDR events) must be forwarded to the manufacturer. Under Medical Device Tracking requirements, certain devices must be tracked through the distribution chain.”

It is evident initial importers have very little responsibility for the devices they import and distribute. It is the foreign manufacturer/exporter that has the regulatory responsibility (510(k) standards, FDA registration and listing) and providing the assurance that the device is manufactured in FDA QSR/cGMP compliance.

It is increasingly likely the FDA will expect initial importers to be responsible for the quality of the devices they intend to import, even though they do not control the specifications, changes to the design, manufacturing, and any corrective actions made by the manufacturer.

“With this line of thinking, it is possible that if a device that is distributed is involved in a field correction and/or recall, the company that put that device on the market could be held responsible for the regulatory consequences, especially if this is a recurring event,” warns Schwartz.

To mitigate this risk, Schwartz recommends the following be addressed in an agreement with the contract manufacturer:

  • Require registration with the FDA of all foreign medical device manufacturers who export to the USA
  • Require the manufacturer to have a comprehensive quality system that is compliant with QSR/cGMPs regulations and that is documented; also, if there are intentions to sell to the European Union and/or Canada, the company must be ISO 13485 certified and must also be certified to Canadian standards.
  • The contract manufacturer will notify the importer of any past FDA regulatory actions, FDA 483 observations or warning letters that were issued, in addition to any pending or ongoing FDA investigations
  • The manufacturer will notify the importer when they are expecting an FDA inspection of their operations
  • The manufacture will notify the importer if they have received any written notifications from the FDA
  • The manufacturer will be notified in writing if there are any changes in any of the device raw materials or specifications, prior to making these changes
  • If a potential problem is found concerning the manufacturing process that may have affected the finished medical device(s), the importer will be notified immediately
  • The manufacturer must notify the importer if there any reported problems on their devices that they distribute in other countries that may affect the importer’s devices
  • The manufacturer ensures that it has an enforced insurance policy
  • As part of its quality system compliance, the contract manufacturer must make sure that all automated processes have been validated
  • The software in the operating systems of manufacturing equipment has been validated
  • The importer is allowed to audit the operations for QSR compliance
  • The importer is allowed to watch the manufacturing operations of its devices with unannounced visits

“It would appear that the least burdensome way for the FDA to increase its scrutiny on imported devices is to enforce device quality at the importer level,” concludes Schwartz. “Therefore initial importers should be prepared for a higher level of examination if problems arise that could possibly end up in warning letters and/or injunctions.”

Alan P. Schwartz of mdi Consultants, Inc. in Great Neck, New York has been providing strategic planning on FDA regulatory compliance issues since 1978. Contact Schwartz at 516-482-9001 or alan@mdiconsultants.com.

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