International Regulatory Compliance

Holding Registrars And Notified Bodies Accountable In ISO 9001 Lawsuits

Introduction

In several blogs I have mentioned the standard, ISO/IEC 17021: 2006 Conformity assessment – Requirements for bodies providing audit and certification of management systems. In a previous blog, I reviewed working as Legal Expert in a lawsuit where ISO 9001: 2000 became a central focus of litigation between a US plaintiff and defendant. In this particular case, the opposing party stated that they did not have a recall or quarantine procedure for their products, further, they did not have records concerning the product in question.

The law student intern who first contacted me for the law firm said he thought that the opposing party was certified to ISO 9001. I replied that I could find out if they were certified and if they were, what records and documents could be obtained in legal discovery. After filing an Affidavit identifying the opposing party’s certification to ISO 9001 and identifying the records and documents we wanted to examine, their response was, “Oh those records!” The judge was not amused by their duplicity and ordered the company to produce the records and documents requested.

In their response, one of the corporations employees stated that he was the management representative and that he worked with all of the plants in question concerning this product. His statement resulted in a second Affidavit where I noted that his comment was interesting because management representatives usually report to a plant manager. However, since he worked with several plants involved in manufacturing the product in question, this meant that he was a management representative at the corporate level and reported to corporate management. It also meant that in addition to the plants being certified to ISO 9001 there was a corporate ISO 9001 certification.

The immediate response was no, we do not have corporate ISO 9001 certification, however, within a couple of weeks a full corporate Quality Manual, Procedures, Documents and Records were sent to our attorneys and “lo and behold”, there was a formal corporate recall and quarantine policy. By now the judge was approaching livid, not amused and quite angry.

Enter The ISO 9001 Registrar 

The Registrar in this case was well known to me. I was familiar with their work as a notified body for the EU Medical Devices Directive and had recommended them to some clients who wanted to CE Mark their medical devices. They always acted professionally. I also was familiar with their work as a Registrar for ISO 9001 and had visited their US Registrar headquarters. Consequently, I was startled by their behavior vis-á-vis their client in this lawsuit.

ISO/IEC 17021: 2006 Conformity assessment – Requirements for bodies providing audit and certification of management systems

To provide a basis for evaluating the behavior of the Registrar in this case, I wrote a Critique for the law firm to use in deposing the Registrar and consider bringing them into the lawsuit if their behavior could adversely affect the outcome of the lawsuit. The basis for such a move would derive from comparing their behavior with their client (the opposing party in this lawsuit) with the requirements of the International Standard (ISO/IEC 17021: 2006) that governs their behavior as a third party ISO 9001: 2000 Registrar.

In the Critique I stated my opinion that the Registrar violated its role as an impartial third party and instead:

1) chose to act on behalf of their client to deny access to information regarding the ISO 9001 certification status of their client;

2) chose to help their clients obtain a consultant to address the company’s certification to ISO 9001; and

3) chose retroactively to change the long standings certification status (seven years) of a company site during a lawsuit between the company and our client to help their client win their lawsuit.

This Registrar, along with all ISO 9001:2000 Quality Management System certification Registrars must abide by the requirements set forth in ISO/IEC 17021:2006 Conformity assessment – Requirements for bodies providing audit and certification of management systems.  This Critique will draw from the requirements of the standard to substantiate and highlight these points.

1.) When I called the US headquarters of the Registrar, I asked if the opposing party in this lawsuit was a client of theirs, if they had certified several plants and the corporate headquarters to ISO 9001:2000. I was told that they would have to consult with their attorneys to see if they could divulge such information. A few hours later I received a call stating that their attorneys advised them that such information could not be given without their client’s consent. (Basically, US attorneys are clueless about international compliance standards, unless informed of such standards by their clients.)

 ISO/IEC 17021:2006, Clause 4.5 Openness

4.5.1 A certification body needs to provide public access to, or disclosure of, appropriate and timely information about its audit process and certification process, and about the certification status (i.e., the granting, extending, maintaining, renewing, suspending, reducing the scope of, or withdrawing of certification) of any organization, in order to gain confidence in the integrity and credibility of certification. Openness is a principle of access to, or disclosure of, appropriate information.

 

4.5.2 To gain or maintain confidence in certification, a certification body should provide appropriate access to, or disclosure of, non-confidential information about the conclusion of specific audits (e.g. audits in response to complaints) to specific interested parties.

2.) Certification bodies (e.g. Registrars) must maintain impartiality in their operations. Recommending an ISO 9001:2000 consultant to a client violates their duty of impartiality and creates a conflict of interest for the Registrar.

3.) The Registrar retroactively changed the long-standing corporate certification status of their client during the lawsuit to help the client win its case.

5.1 Legal and contractual matters

5.1.1 Legal responsibility

The certification body shall be a legal entity, or a defined part of a legal entity, such that it can be held legally responsible for all of its certification activities. A governmental certification body is deemed to be a legal entity on the basis of its governmental status.

5.2 Management of Impartiality

5.2.1 The certification body shall have top management commitment to impartiality management system certification activities. The certification body shall have a publicly accessible statement that it understands the importance of impartiality in carrying out its management system certification activities, manages conflict of interest and ensures the objectivity of its management system certification activities.

5.2.5  The Certification body and any part of the same legal entity shall not offer or provide management system consultancy. This also applies to that part of government identified as a certification body.

5.2.1.2 All Certification by personnel, either internal or external, or committees, who could influence the certification activities, shall act impartially and shall not allow commercial, financial or other pressures to compromise impartiality.

5.2.13 Certification bodies shall require personnel, internal and external, to reveal any situation known to them that may present them or the certification body with a conflict of interests. Certification bodies shall use this information as input to identifying threats to impartiality raised by the activities of such personnel or by the organizations that employ them, and shall not use such personnel, internal or external, unless they can demonstrate that there is no conflict of interests.

Conclusion

What you have read is an abbreviated portion of my 16 page Critique of the Registrar for a lawsuit. We conducted some preliminary depositions and were preparing to return for more in depth depositions that would be used to bring the Registrar into the lawsuit, however, the opposing party signaled that they would like to settle the case. The results, of course, were sealed.

Most appalling in this case was the either the ignorance and indifference (or both) of the Manager of the Registrar who wanted to please a wealthy client, not realizing the liability exposure for his company. Further, the Registrar would face potential sanctions from ANAB (ANSI-ASQ National Accreditation Board), assuming that ANAB Registrar oversight is rigorous. Unfortunately, this is one of several times that I have watched third parties like Registrars or Notified Bodies demonstrate unethical behavior – the absence of a Moral Compass.   

My focus on International Regulatory Compliance has always included both the requirements of regulatory authorities and the legal implications of compliance, non-compliance, documentation and sloppy attention to detail that could result in a lawsuit in a US Federal Court. I also focus on product safety and the steps necessary to create a safe product. If you have questions regarding ISO 9001 or CE Marking lawsuits you can contact me for a free preliminary consultation at my e-mail address jameskolka@gmail.com. 

IS FDA's 510(k) A Plausible Solution For the EU's CE Marking Problem With Silicon Breast Implants?

 

Introduction

The preceding four blogs discussed some of the problems I have observed with clients concerning private for-profit Notified Bodies and regulatory compliance with the three EU Medical Devices Directives. In the January 31, 2012 blog, I wrote the following paragraph concerning one possible alternative Notified Body approach to Medical Device approvals: 

“Something akin to an FDA 510(k) also should be created with device efficacy built in as major requirement. It isn’t a perfect solution because the 510(k) predicate device requirement doesn’t always avoid device defects in design and materials, but it is overseen by FDA not a private third party.”

The Mutual Recognition Agreement (MRA) signed between the US and EU in 1997, covered four areas, one being medical devices. The MRA provided for the creation of CABs (Conformity Assessment Bodies) approved by FDA to administer 510(k)s for selected Class II Medical Devices. Several of these CABs also are EU Notified Bodies. In this blog I want to return to the statement, “It isn’t a perfect solution because the 510(k) predicate device requirement doesn’t always avoid device defects in design and materials.”

US Politics Today 

Presently, there is a move in the US House of Representatives supported by some Senators to ease medical device regulations for Medical Device Manufacturers, hypothetically to encourage innovation and speed devices to the market. Even though the US has just begun to emerge from the disaster of deregulation of the US economy that allowed financial institutions to run amuck and create the worst financial crisis since the Great Depression, a convoluted ideology continues to appeal, i.e., regulation is bad, deregulation is good! Political ideology is a powerful force, uninformed by scientific knowledge and intelligence. Teddy Roosevelt and Abe Lincoln would have been appalled.  

The regulatory and enforcement problem afflicting CE Marking breast implant manufacturing and enforcement for the EU Medical DEvices Directives is different from the regulatory problem in the US, namely the weakness of the 510(k) approach. On February 1^st my wife received the following correspondence from Jim Guest, the President of Consumer Reports.

“It's a nightmare scenario. The implant that fixed your knee or your heart may actually be a ticking time bomb that could disable or kill you.
This isn't science fiction. Millions of medical devices including artificial hips, contact lens solution, heart stents, and pacemakers are being recalled - 700 different products a year.

And the vast majority of recalled products were never safety tested in humans, because the manufacturers claimed they were "similar" to products already on the market.

Tell Congress we don't want to be guinea pigs anymore!

Every new prescription drug must undergo rigorous testing on humans before it can be sold, even if it is similar to another drug already in use. Not so with medical devices. Because of this loophole in our safety laws, more than 90 percent of medical devices aren't safety tested before being sold nor are they routinely tracked afterwards to identify safety problems.

For example, a metal hip implant marketed by Johnson & Johnson was approved in 2005 without first undergoing clinical safety trials. It was recalled five years later after having a 1 in 8 failure rate in the UK, and releasing potentially toxic metals into the body. Countless patients had to undergo a second, painful 'revision' surgery.

It's time safety standards for medical devices are as strong as those for prescription drugs! E-mail your members now!

The device industry has unleashed an army of lobbyists and they don't want things to change. It will take a wave of consumers weighing in to make sure medical devices are safe and effective. Please take action, then forward this to friends and family. Thank you!

Sincerely,

Jim Guest
President, Consumer Reports

(Note: Consumer Reports is the largest and oldest independent non-profit testing and information organization in the US, serving only consumers since 1936.)

What are some of the problems with the 510(k)? 

Today the 35 year-old 510(k) System is used by FDA to review 90 percent of medical device applications each year. After numerous problems and ongoing billion dollar lawsuits concerning 510(k) approved medical devices, in 2009 FDA commissioned the Institute of Medicine (IOM) to study the problem and report back to FDA, which they did in August 2011.

The IOM report stated, “the process of using existing or “predicate” devices as the basis for evaluating the safety and effectiveness of a new device is “untenable.” The authors recommended that the FDA immediately stop using the protocol for Class III devices – considered to pose the highest potential risk to patients. “As devices have evolved and become more complex, our device-approval system has become incapable of assuring safety and effectiveness,” wrote New England Journal of Medicine executive editor Dr. Gregory Curfman and Dr. Rita Redberg, editor of the Archives of Internal Medicine. The system we use today was created 35 years ago in an era of much simpler and fewer devices and it is now outdated.

The New England Journal of Medicine editorial discussing the IOM report, specifically pointed out the ongoing problems with metal-on-metal hip implants including Johnson & Johnson’s DePuy ASR Acetabular System and DePuy ASR Hip Resurfacing System. The DePuy ASR XL Acetabular System was introduced in the US in 2005.

 The [DePuy] ASR was constructed by borrowing a metal alloy cup from a different hip device known as the [DePuy] ASR Hit Resurfacing System and retrofitting it onto a standard hip implant. The manufacturer successfully made the case that the reengineered implant was “substantially equivalent” to a predicate device. Its marketing clearance was therefore based not on trials or other clinical data but on bench testing in a laboratory, which was inadequate to simulate the stresses that would be placed on it in patients’ bodies. It soon became clear that the device failed at the astonishing rate of at least one in eight. (Brett Emerson, Injury Board.com, October 20, 2011) 

The metal-on-metal hip implants were found to shred minute metal particles into patients’ bloodstreams over time.

What Are The Institute of Medicine Recommendations? 

To begin the IOM, recommended that the agency (FDA) ditch the program entirely and replace it with an “integrated pre-market and post-market regulatory framework. It’s not clear that the 510(k) process is serving the needs of either the industry or patients, and simply modifying again will not help, said David Challoner who chaired the committee that wrote the report. The 510(k) Process cannot achieve its stated goals – to achieve innovation and make safe, effective devices available to patients in a timely manner – because they are fundamentally at odds with statutes that govern how FDA must implement the process.

Other IOM recommendations are:

• Boosting post-market surveillance and strengthening the FDA’s post-market authority;

• Ban all Class III devices, those of the highest risk, from the 510(k) fast-track process;

• Eliminate clearance using multiple predicate devices, by which a new device can be cleared by demonstrating equivalence to device that was also cleared through equivalence, forming a chain of devices that were never clinically tested, and 
• 
  
• Implement a formal post-market surveillance program.

The [IOM] report concluded that it was impossible for 510(k) clearance to assure safety and effectiveness, because it assesses neither, instead establishing only “substantial equivalence” to an existing device. 

 Summary 

As anticipated, the medical device industry rose up to complain about the reforms even though billion-dollar product liability lawsuits are working their way through the courts right now and will cost medical device companies a substantial amount of money. Not to mention that patients who suffer pain from the existing device and need to have the devices explanted and a new device inserted with no clear indication of how the surgical costs will be covered.

To return to the question about whether FDA’s 510(k) might serve as a model for EU regulation of its medical devices directives, the answer is no. The two regulatory systems face different issues:

• In the EU the issue is the competence of Notified Body device experts, the effectiveness of 70 for-profit Notified Bodies overseeing medical device manufacturers’ ISO 13485 Quality Management Systems, and the professional quality of oversight by 27 EU competent bodies.

• In the US the issue is a regulatory process that employs two strategies, (1) clinical trials for new high-risk device medical device, and (2) a 510(k) System focused “substantial equivalence” and expedience that doesn’t assure the safety and effectiveness of medical devices and consequently doesn’t focus on patient safety and product (device) safety.

Both the EU and US will have to work out their respective regulatory systems in the context of what presently exists but is not working. It’s not a simple process and it will take some work but it is essential that it be resolved in both the EU and US. Hopefully, private self-interest, political interference and intrusion won’t create a corrupted process that worsens what exists today.

My focus on International Regulatory Compliance has always included both the requirements of regulatory authorities and the legal implications of compliance, non-compliance, documentation and sloppy attention to detail that could result in compromised product safety and product liability lawsuits. In particular, I focus on product safety, patient safety and the steps necessary to create a safe product. I would be happy to help. If you have questions regarding CE Marking lawsuits you can contact me for a free preliminary consultation at my e-mail address jameskolka@gmail.com. 

Notified Bodies And CE Marking – Potential Legal Issues In US Lawsuits #4

 

Continuation 

In this blog I want to focus specifically on the Silicon Breast Implant controversy involving the breast implant manufacturer Poly Implants Prothèses (PIP) and the EU regulatory structure for CE Marking medical devices. In my preceding three blogs times I have noted several problems concerning medical device product quality. In the first blog I quoted former European Commission Vice President Martin Bangemen.

In his preface to The Guide to the Implementation of Community Harmonization Directives Based on the New Approach and the Global Approach, Brussels, 1995, Vice President of the European Commission, Martin Bangeman stated the following:

The novelty of this new approach resides essentially in the use of community technical rules of “quality instruments” such as European Standardization and conformity assessment procedures (testing, product certification, certification of manufacturers’ quality control procedures, accreditation, etc.). These instruments, drawn up on the basis of consensus of all the economic partners involved, enable manufacturers to affix the CE marking--a real “technical passport”--to their industrial products, which must conform to these community directives.

The idea of separating compliance into product quality and process quality seemed like a good and workable idea at the time. However, looking backward from 2012, the growth of the EU to 27 Member States and a population of 500 million people, the separation into product quality and process quality needs to be readdressed. 

EU Medical Device Oversight Structure 

Medical Device Product Quality

In the EU, device regulations are not conducted by member state Competent National Authorities, instead they are conducted by one of the 70 approved for-profit Notified Bodies that must be approved by one of the EU’s 27 Competent National Authorities (called competent bodies) to act as a Notified Body for one of the three Medical Devices Directives. Consequently, member states are removed from direct legal oversight and legal enforcement of medical device regulations and hampered in their ability to oversee medical device failures.

To reason that 70 for-profit Notified Bodies can employ 70, 60 or 50 device experts for hundreds of different medical devices in multiple offices around the world isn’t credible. Consequently, the dearth of available device experts will continue to negatively affect the quality of medical devices being manufactured. While it might be reasoned that large established Notified Bodies could field multiple device experts, even they struggle to provide adequate product safety oversight. The Notified Body chosen by Poly Implants Prothèses (PIP) was TUV Rheinland, a well-established and respected Notified Body. The inspection however, occurred with advanced warning at the PIP plant in China, which raises a whole set of questions.

I have talked with principals at several Notified Bodies who privately admit that it is difficult for them to hire and retain qualified medical device experts. The number of silicon breast medical device manufacturers approved by the EU Notified Body structure has been estimated in various newspaper accounts at 80 to 120. If this is even remotely true, it is outrageous. In the US FDA has approved 6 medical device manufacturers for silicon breast implants.

While 6 silicon breast implant manufacturers approved for 313 million people in the US might seem small, 80 to 120 silicon breast implant manufacturers for 500 million people in the EU is preposterous and beyond oversight. Further, FDA requires that US manufacturers must be able to continually demonstrate the efficacy of their medical devices. No such requirement exists in the EU. 

Medical Device Product Quality Recommendations

• While several approaches to correct the administrative structure should be explored, one approach that might work would be to draw upon CEN and EU Member State Standards Bodies (DIN, AFNOR, BSI, etc.) to identify and/or provide medical device  experts to evaluate medical devices. Their services could be paid for by Notified Bodies, but they must not be employees of for profit Notified Bodies so that their judgments could be compromised.

• Something akin to an FDA 510(k) also should be created with device efficacy built in as major requirement. It isn’t a perfect solution because the 510(k) predicate device requirement doesn’t always avoid device defects in design and materials, but it is overseen by FDA not a private third party.

Medical Device Process Quality

All in all, Notified Bodies do a better job with process quality oversight, not perfect but better than their oversight of medical device product quality. Unfortunately, in their zeal to obtain business, some Notified Bodies could be accused of providing the best oversight money can buy. 

Medical Device Process Quality Recommendations

• Notified Body process quality oversight must be improved, which means that Member State Competent Body oversight of Notified Bodies must improve. Notified Bodies also must have greater awareness of their liability exposure. Thus far they have dodged the proverbial litigation bullet, but this will change in the US as well as in the EU. Presently there are several US lawsuits involving CE marked PIP breast implants in the US and the number of lawsuits will increase.

• FDA’s QSIT (Quality System Inspection Technique) adopted in 1999 as a guidance tool for FDA inspectors and an instructional tool for medical device manufacturers was a clever move that accompanied the adoption of FDA’s Quality System Regulation (QSR) in 1996. It introduced the use of a quality management system as a Good Manufacturing Practices regulatory approach to medical device manufacturing in the US. It also set a serious tone concerning what to expect when FDA conducts a medical device plant inspection. The Internal Quality Management Audit Checklist (ISO 13485:2003/ISO 9001:2000) is the closest approximation I could find to QSIT for the EU. A formal adoption of such a structure for use by EU Notified Bodies and oversight by Member State Competent Bodies could serve the same purpose. Every US medical device manufacturer conducts QSIT audits before being visited by FDA. The same type of rigor should exist for the EU.

• In addition to Member State Competent Bodies acting as Third Party Registrars overseeing their Notified Bodies, some effort should be made to instruct their Notified Bodies to be conversant with and abiding by the legal requirements of ISO/IEC 17021:2006 Conformity Assessment – Requirements for bodies providing audit and certification of management systems. In 2008, I served as legal expert in a national lawsuit in a US Federal Court in Los Angeles. As we proceeded to collect material in legal discovery, I contacted the Registrar for the opposing company to verify that they were the ISO 9001:2000 Registrar for the company. Since the Registrar was a division of a European Third Party that also was a Notified Body with whom I had worked with for some of my EU medical device clients, I anticipated no problem. Instead, I was informed that their attorneys advised them that they could not share such information, which was in clear violation of ISO/IEC 17021:2006. I know that US attorneys are clueless when it comes to such standards, but it quickly became clear that the Registrar also was clueless about the standard. From that point on, the Registrar proceeded to violate the requirements of ISO/IEC 17021:2006 with impunity, including modifying he scope of their ISO 9001:2000 Certification three years after it had been granted, to accommodate their corporate client. We began preparing expanded depositions and inclusion of the Registrar in the lawsuit when the case was settled. Clearly, the Registrar had no moral compass whatsoever. Also, my opinion of the related Notified Body went downhill.

• Notified bodies also must be made aware of their legal obligations in the event of a product liability lawsuit. For example, litigants in US Federal Courts have a legal right to ask for relevant records and documents in discovery such as the Quality Manual and Quality Procedures, Contract Records, Certification Audits, Surveillance Audits, Management Review Minutes, Non Conformity Records, Corrective and Preventive Action Minutes and records, Internal Audit Minutes, design records, process control records, Technical File records, complaints, etc. It makes no difference if these records and documents describe devices manufactured outside of the US. If they are relevant to devices sold in the US, they must be produced or the company can be held in contempt of court and fined. It doesn’t end there. Additional fines and potential criminal prosecution could follow. I mention this because presently I am working as legal expert on a CE Marking lawsuit in US Federal Court where a German manufacturer has been resisting our requests for discovery of their ISO 9001 records and documents and CE Marking Technical Files, etc. under the mistaken impression that a US Federal Court can not compel discovery from a non US manufacturer, not realizing that any manufacturer that sell products in the US is subject to US law.

Conclusion

There is a lot I like about the EU approach to the administration of its new approach Directives. However after seeing first hand the problems with Notified Bodies attempting to find medical device experts and observing mixed success with their administration of quality management system oversight, something must be done to improve the regulatory administrative approach. Also, consideration must be given to the efficacy of their approach as applied in different countries.

When working with a company in Atlanta three years that owned a manufacturing plant in China, I was asked to review their CE Marking materials from China. They had concluded that their Chinese counterparts didn’t understand CE Marking and decided to shift the administration of CE Marking their products to the US. It was about the same time that a US Manufacturer of Heparin was caught up in a controversy where 80 people died and several others were gravely ill from their Heparin sold in the US. The response from the American manufacturer was that they bought their supplies from Consolidation Laboratories in China. At the same time I was looking at pictures in the New York Times of diseased pig intestines draped over concrete sinks in rural China being rinsed with dirty water and shipped to Consolidation Laboratories. The American manufacturer never checked the full depth of their supply chain.

The use of industrial grade silicon instead of medical grade silicon and the resulting problems it has caused thousands of women in the EU and throughout the world is appalling. It is encouraging that the French police have detained the founder of the company. I trust that he might also spend a substantial amount of his remaining time in a French prison.

Clearly it is time to revaluate the effectiveness of the approach for the manufacture of medical devices. I hope that some of my suggestions prove to be useful. As mentioned in my previous blog I would be happy to help. My focus on International Regulatory Compliance has always included both the requirements of regulatory authorities and the legal implications of compliance, non-compliance, documentation and sloppy attention to detail that could result in a lawsuit in a US Federal courtroom. I also focus on product safety and the steps necessary to create a safe product. If you have questions regarding CE Marking lawsuits or medical device regulatory oversight you can contact me for a free preliminary consultation at my e-mail address jameskolka@gmail.com.  

Notified Bodies And CE Marking – Potential Legal Issues In US Lawsuits #3

Continuation

I want to return to the issue of Notified Bodies and the problem with silicon breast implants in the EU. As noted in my two previous blogs, I have observed various problems with Notified Bodies and CE Marking clients over time. Medical devices present a more complex regulatory dimension for CE Marking. In the US, FDA regulates medical devices using its Quality System Regulation (QSR) for medical device design and manufacturing. While FDA employs a quality management system similar to the EU’s ISO 13485, FDA oversight is far more rigorous and intensive with an ability to impose a range of legal sanctions from Warning Letters to Civil and Criminal penalties. Further, FDA can issue a Federal Consent Decree and fines, (e.g. $100 million, $60 million and extended oversight follow up) for the most egregious cases. The key issue is public health and safety.

In the EU, device regulations are not conducted by member state Competent National Authorities, instead they are conducted by one of the 70 approved for-profit Notified Bodies that must be approved by one of the EU’s 27 Competent National Authorities (called competent bodies) to act as a Notified Body for one of the three Medical Devices Directives. Consequently, member states are removed from direct legal enforcement of medical device regulations and hampered in their ability to oversee medical device failures. There is no comparable enforcement structure to FDA.

In the US all medical device manufacturers must have a FDA compliant QSR quality management system. Unless a company wants to manufacture a Class I medical devices not requiring CFR 820.30 design controls it generally must submit a 510(k) to receive FDA approval before manufacturing a medical device or seek Pre Market Approval from FDA and conduct a Clinical Trial to obtain FDA approval before manufacturing a new type of (generally Class III) medical device. FDA has the legal authority to enforce its regulations.

Problems With Notified Body Governmental Oversight

As mentioned in my previous blog, Notified Bodies perform two oversight functions, evaluating and approving medical devices (product safety) and ongoing evaluation of manufacturers’ ISO 13485 Quality Management Systems (process quality). Of the two functions, product quality is the most difficult because of the lack of device experts. To reason that 70 for-profit Notified Bodies can employ 70, 60 or 50 device experts for hundreds of different medical devices in multiple offices around the world isn’t credible. Consequently, the dearth of available device experts will continue to negatively affect the quality of medical devices being manufactured.

As a result, most Notified Bodies focus on the quality management system, ISO 13485 and process quality. The certification audit and surveillance audits operate much like ISO 9001 certification and surveillance audits except that the requirements of the relevant Medical Device Directive are incorporated into the ISO 13485 Quality Management System. Likewise the type of Medical Device(s) will be central to the QMS.

As noted in my previous blog, the quality of Notified Body QMS oversight isn’t always as rigorous as it should be, certainly not as rigorous as an FDA plant inspection. No Notified Body has issued anything comparable to FDA’s QSIT (Quality System Inspection Technique) setting forth the procedure and questions a manufacturer should expect and be able to answer when FDA conducts an on-site inspection of a manufacturing plant. AdvaMed – Advanced Technology Association has developed papers, Different Points to Consider When Preparing For An FDA Inspection for different QSIT Subsystems. There is no comparable preparation for an audit by a Notified Body.

This is not to say that audits by Notified Bodies are treated lightly by medical device manufacturers rather it speaks to the legal authority of an FDA audit when compared to the legal authority of Notified Body audits. In addition to the audit example described in my previous blog where a Notified Body wrote good observations for a Class III medical device manufacturer but failed to issue non-conformities, did not serve their client well. Whether this was done to placate a client to retain their business isn’t clear. What it did accomplish was to prompt their client to ask me if I thought they would survive an FDA site inspection, to which I said no. 

In contrast, FDA at the very least would have issued a Warning Letter and might even have shut down the facility until major changes were implemented. This is not the only case where I have observed a Notified Body conduct an “audit-lite.” A few other examples are listed below:

• A colleague and I spent two days at a medical device manufacturer’s only US CE Marking plant in Arizona while conducting a GAP Analysis for the manufacturer. They wanted to extend CE Marking capability to all of their US manufacturing plants and asked if we could evaluate their Arizona operation. When we arrived at the plant we asked to examine their Technical Files for medical devices being manufactured at the Arizona plant. To which the plant manager responded, “What’s a Technical File?” Following this exchange we proceeded to conduct our audit. We found storage of medical devices in a warehouse lacking heating and cooling was having a serious adverse effect on device quality. We also found boxes containing devices that were marked with the corporate address 1000 miles away, but not the address of the plant in Arizona that was CE Marking the devices. Several more problems were found. We recommended that they identify the unique features of each QMS, but integrate their QSR and ISO 13485 Quality Management Systems for greater control in the future.

• I recently received a call from a Medical Device Manufacturer in Atlanta asking if I could meet them at their corporate office for consultation. They had just been told by their Notified Body that they received two major non-conformances on their most recent surveillance audit and had one month to make the necessary correction or they could no longer CE Mark their medical devices. The quality and regulatory managers flew in from the manufacturing plant in question with the surveillance audit report. The managers were shocked because this was their fifth surveillance audit report and previously they had not received any non-conformances. Nothing had changed in their manufacturing operation. The Notified Body informed them that their Competent National Authority (competent body) had just completed a review of all of their audits and found problems with their findings. The Notified Body was informed that they had to meet with all of their clients and inform of these changes and the reason for the changes or the Notified Body would be stripped of its CE Marking authority. Fortunately, my client was able to make the necessary corrections and continue CE Marking their medical devices.

• In another case I visited another manufacturing client in California at the request of their medical device insurance company to examine their Quality Management System and complaint handling system. The manufacturer had experienced some difficulties and wanted a legal perspective on corrective steps that might be taken. The quality manager mentioned that they had a recent surveillance audit from their Notified Body. (The manufacturer made radioactive plates for Magnetic Resonance Imaging machines.) They were surprised that the Notified Body device expert seemed to be afraid of entering the manufacturing area for fear of exposure to radiation. They weren’t convinced that he was much of an expert. The company has dealt with many experts in radioactive devices throughout their operation.

These are not idiosyncratic observations. While I have worked with several exceptional Notified Bodies administering CE Marking regulatory oversight for the EU Medical Devices Directives, they too have experienced glitches and these have been corrected when discovered. Clearly, strong Competent Body oversight is vital to the process. 

As mentioned previously there also are Notified Bodies more motivated by making money than quality medical device regulatory oversight. A colleague of mine encountered one such Notified Body a few years ago when working with a company that manufactured active implantable medical devices. He helped the manufacturer meet with the FDA regional office and review their quality management system. He was then asked by the manufacturer if he would review their most recent Notified Body surveillance audit, which he did. They asked his opinion and he said it was inadequate, which angered the Notified Body.

He subsequently learned that the company, however, was not fully candid with him, the FDA and the Notified Body. Not only were there manufacturing problems, four people had died from their implants and several others were experiencing serious problems with the device. FDA took action and several product liability lawsuits followed.

Had plaintiffs’ attorneys realized the role of the Notified Body in CE Marking these devices they could have sought Technical Files, ISO 13485 records, documents and notified body Certification Audits and Surveillance Audits in discovery to see what additional useful information could be obtained for use in the lawsuits. Notified Bodies are not exempt from US lawsuits. Further, the Notified Bodies could have been sued directly if their regulatory behavior could be partially attributed to device failures. The irony here is that the notified Body never realized how close they came to becoming a part of the lawsuits.

Observation – Privatized Oversight

The concept of privatized regulatory oversight is not unique. However, fragmented regulatory oversight involving 27 different Competent National Authorities (Competent Bodies) of different size, expertise and financial capability overseeing 70 Notified Bodies operating on their behalf is unique and extremely cumbersome. Until the structure is corrected, problems will continue to arise. The Friday January 27, 2012 issue of the New York Times contains an article about the breast implant manufacturer Poly Implants Prothèses, the founder Jean-Claude Mas and the apparently undetected use of industrial grade silicon in place of medical grade silicon.

The problem now is the immediate solution and the long-term solution. I understand the desire to create a strong EU structure while preserving national sovereignty. My political science and legal training tells me that it is possible, not easy but possible. I would be happy to help. 

My next blog will conclude this series and specifically address the problem with the silicon breast implants and prospective solutions. My focus on International Regulatory Compliance has always included both the requirements of regulatory authorities and the legal implications of compliance, non-compliance, documentation and sloppy attention to detail that could result in a lawsuit in a US Federal courtroom. I also focus on product safety and the steps necessary to create a safe product. If you have questions regarding CE Marking lawsuits you can contact me for a free preliminary consultation at my e-mail address jameskolka@gmail.com. 

Notified Bodies And CE Marking – Potential Legal Issues In US Lawsuits #2

Introduction 

The preceding Blog reviewed the Minimum criteria to be taken into account by Member States for the notification bodies set forth in Annex XI of the 2006/42/EC Machinery Directive. I want to revisit the criteria to consider how they might come into play in a lawsuit. Several issues need to be kept in mind when dealing with notified bodies in lawsuits. To begin, notification varies for each directive. Therefore, it is critical to know what notification means for the Directive or Directives relative to a particular lawsuit and the role of notified bodies vis-à-vis your client.

Not All Notified Bodies Play According To The Rules

You must be aware that not all notified bodies behave ethically concerning their notified status. I have encountered notified bodies implying that their services are officially sanctioned (i.e., notified) by a Member State Competent National Authority to the European Commission for a Directive, such as the Machinery Directive, when in fact they are acting as consultants. This has been especially true for the Machinery Directive, where notification is confined to Annex IV of the Directive. Everything outside of Annex IV, is consulting with no official sanction by a Member State Competent National Authority. 

I mentioned previously an instance in 2003 where a Dutch Notified Body issued two EC Type Examination Certificates for machines a manufacturer wanted to CE Mark for the EU. They also issued a paper stating that other machines couldn’t be CE marked until certain steps were taken. Since none of these machines were listed in Annex IV, the issuance of the CE Type Examination Certificates was outside the legal authority of the notified body. The statements on the other machines were not identified as comments by a consulting body. Instead they were presented as the authoritative judgments of a governmentally recognized notified body. To accomplish these tasks the Dutch notified body sent a team to the US to conduct their work at great expense to my client.

Clearly, the notified body was aware that their American Clients didn’t understand CE Marking or the legal requirements of the Machinery Directive. I informed my client that their two EC Type Examination Certificates were worthless and had no standing in EU law or US law, however, if something happened where the certificates would be important in a lawsuit, the notified body could be sued for fraud. 

Since I had been working with representatives in the UK’s Department of Trade and Industry DTI (now the Department for Business, Enterprise and Skills BIS) on other projects, I asked them for help in contacting the Dutch Competent National Authority to complain about the behavior of the Dutch notified body. DTI tried for several months to contact the Dutch Competent National Authority and received no response.

They suggested that I should try to make contact directly and see if I fared any better. I wrote e-mails for several months to the Dutch Competent National Authority and even wrote directly to the head of the Dutch Competent National Authority and received no response. Finally, I transmitted my long train of e-mails to DTI & the Dutch to EU Commissioner Liikanen chief administrator of the EU Directorate General responsible for Machinery explaining what had transpired. Three weeks later I received a letter on March 23, 2004 from Mr. Fabrizio Sachetti of the Committee on Machinery affirming that our position was correct. They copied the Dutch Competent National Authority and the Dutch notified body of their statement. 

What Is The Operating Structure For Notified Bodies?

• Given the fact that notification varies with each Directive, it is essential that the precise legal authorization for notified bodies be known. It varies widely from Directive to Directive. The most stringent oversight was created for the Medical Devices Directives, however, recently the quality of notified body oversight of the Medical Devices Directive has been called into question concerning failed silicon breast implants in the EU and the French medical device manufacturer PIP (Poly Implant Prothèse). I will return to this case in my next blog.

• Every third party that wants to become a notified body for a new approach Directive must submit their credentials to the Competent National Authority of the country in which they are located. Presumably, each Competent National Authority has the technical expertise to evaluate the ability of the notified body to approve a CE Mark for a medical device and conduct effective continuous oversight of their notified bodies. Clearly, however, not all EU Member State Competent Authorities are equal. France, Germany, the UK, Italy, the Netherlands, Denmark, Ireland, Sweden and Finland have well developed oversight Competent National Authorities and are capable of being effective oversight bodies. Some of the smaller countries will not take on this task. A critical follow-up question is how effective is the oversight of the Member State Competent Authorities by the European Commission?

• Recall the discussion in my previous blog of January 9, 2012 regarding the dual function of many notified bodies concerning product safety and process quality. The dual function is particularly important to the oversight of medical device manufacturers. I have found, however, that some notified bodies address their dual function very well and others have been sloppy. This can be a problem when it comes to medical devices.

• Process Quality: Depending on the device classification, process quality refers to the type of Quality Management System, e.g. ISO 13485 used to assure that the medical devices are manufactured at a consistent quality level. The notified body conducts the certification audit and the surveillance audits to assure that process quality is being maintained. Basically, a medical device manufacturer contracts with a notified body as its "private FDA" for manufacturing medical devices for the EU, whereas in the US medical device manufacturers must follow FDA’s Quality System Regulation (QSR) and are subject to FDA oversight.

• Product safety: Medical device safety in the EU is governed by the classification of a device set forth in the Active Implantable, Medical Devices or In Vitro Diagnostic Directives. Once the classification has been determined, it is necessary to identify which Essential Requirements apply to a device, which EN Standards will allow a manufacturer to demonstrate conformity to the Essential Requirements and finally determine which Conformity Assessment Procedure applies to the manufacturing of a particular medical device.

• A medical device manufacturer in the EU, US, Canada, China, etc. can choose to contract with the notified body of their choice for a particular product, which means that manufacturers can shop around for price, service and convenience. While notified bodies are headquartered in the country where they have been approved, they have offices throughout the world. A fair question is the competence of the notified bodies in a country like China to carry on day-to-day functions as opposed to their US counterparts. I have worked with manufacturers who were not happy with the CE Marking abilities Chinese notified bodies and moved it to the US or EU.

What Are Some Of The Concerns Regarding Notified Bodies?

• Notified bodies must operate in accordance with the rules set forth in the particular Directive for which they have been approved by their Competent National Authority. While it might be obvious, it should be noted that each notification is different for each Directive. Notification for one Directive has nothing to do with another Directive.

• In spite of sincere pledges to create a firewall to prevent a conflict of interest between their official status as a notified body for a Directive and consulting for the same Directive, notified bodies are aware that Americans do not understand these subtleties and believe that consulting by a notified body is officially sanctioned by an EU Member State. A few years ago when I was working on a project with the California Manufacturing Technology Center in Fresno, we submitted a bid to a California packaging machine manufacturer. When we lost the bid, I asked my colleague in Fresno, if we were too high and he said no, the notified body quote was four times higher than ours. The manufacturer was under the impression the notified body was officially sanctioned by the German Government.

• Notified bodies are private for profit organizations. While most conduct themselves in a respectful manner, I am aware from a few former colleagues who have worked on a contract basis that a few notified bodies are rather mercenary with their employees violating criteria number two on the list, The body and its staff shall carry out the verification tests with the highest degree of professional integrity and technical competence and shall be free from all pressures and inducements, particularly financial… Some notified bodies essentially drive their employees to produce quotas or be dismissed, especially when conducting Quality Management System Certification and Surveillance Audits.

• Medical devices pose a special problem when it comes to device expertise. Often it is difficult for them to find and hold onto experts who can evaluate devices because medical device manufacturers will offer better pay to these persons. It speaks well to the quality of their expertise, but it creates a serious device quality and potential safety problem nonetheless.

• Medical Device Quality System oversight is another area where potential problems can arise. A few years ago I worked with a medical device manufacturer of a Class 3 Medical in California who had just completed a surveillance audit from their notified body. They asked if I would review the audit and write an Executive Summary. Their biggest concern was how I thought they would fare when FDA conducted an on site inspection. While it was a good audit, it had no teeth. It made some excellent observations, but it issued no non-conformities. I told my client that I thought they would not survive an FDA and could be shut down. They asked if I would highlight the areas for improvement in my executive summary. I did so and they called six months later to say they passed their FDA inspection with no write up in a FDA 483 Warning Letter.

Conclusion

The preceding are just a few experiences I have encountered working with notified bodies. It isn’t all negative, I have had excellent experience with several notified bodies and enthusiastically recommend their services to my clients. The recent experience with the French silicon breast manufacturer, however, points to areas where improvements are critically necessary. I also want to spend some time discussing notified bodies and potential US Federal Lawsuits since this area is beginning to heat up. Information provided in Technical Files could become fair game for CE Marked medical devices in legal discovery. Finally, I want to compare the European approach to medical device regulation with FDA’s medical device regulatory approach.

My focus on International Regulatory Compliance has always included both the requirements of regulatory authorities and the legal implications of compliance, non-compliance, documentation and sloppy attention to detail that could result in a lawsuit in a US Federal courtroom. I also focus on product safety and the steps necessary to create a safe product. If you have questions regarding CE Marking lawsuits you can contact me for a free preliminary consultation at my e-mail address jameskolka@gmail.com. 

Notified Bodies And CE Marking – Potential Legal Issues In US CE Marking Lawsuits #1

Introduction

I received an e-mail this week asking this question, “Are you aware whether or not the notified bodies in Europe are expected to possess professional indemnity insurance, to cover them in cases of a poor opinion of compliance or failure of post Market surveillance, with thanks for your advice.”

I answered, “Yes, in every new approach Directive there is an Annex that spells out the criteria for notified bodies. For Example, in the 2006/42/EC Machinery Directive, Annex XI sets forth, "Minimum criteria to be taken into account by Member States for the notification of bodies" Paragraph 6 states, "The body shall take out liability insurance unless its liability is assumed by the State in accordance with national law or the Member State itself is directly responsible for the tests."

Notified Body Requirements

The question about notified body “indemnity insurance” raises a number of questions that should be explored concerning the EU legal requirements for notified bodies and their potential legal implications in US courts. The full list is stated below:

Minimum criteria to be taken into account by Member States for the notification bodies 

1. The body, its director and staff responsible for carrying out the verification tests shall not be the designer, manufacturer, supplier, or installer of machines which they inspect, nor the authorized representative of any of these parties. They shall not become involved, either directly or as authorized representatives, in the design, construction, marketing or maintenance of the machines. This does not preclude the possibility of exchanges of technical information between the manufacturer and the body.

2. The body and its staff shall carry out the verification tests with the highest degree of professional integrity and technical competence and shall be free from all pressures and inducements, particularly financial, which might influence their judgments on the results of their inspection, especially from persons or groups with an interest in the result in result of verifications.

3. For each category of machinery for which it is notified, the body must possess personnel with technical knowledge and sufficient and appropriate experience to perform a conformity assessment. It must have the means necessary to complete the technical and administrative tasks connected with the implementation of the checks in an appropriate manner, it must also have access to the equipment necessary for the exceptional checks.

4. The staff responsible for inspection shall have:

-- sound technical knowledge and vocational training,

-- satisfactory knowledge of the requirements of the tests they carry out and adequate experience of such tests,

-- the ability to draw up the certificates, records and reports required to authenticate the performance of the tests.

5. The impartiality of inspection staff shall be guaranteed. The remuneration shall not depend on the number of tests carry out or on the results of such tests.

6. The Body shall take liability insurance unless its liability is assumed by the State in accordance with national law, or the Member State itself is directly responsible for the tests.

7. The staff of the body shall be bound to observe professional secrecy with regard to all information obtained in carrying out its tasks (except vis-à-vis the competent administrative authorities of the State  in which its activities are carried out) under this Directive or any provision of national law giving effect to it.

8. Notified bodies shall participate in coordination activities. They shall also take part directly or be represented in European standardization, or ensure that they know the situation in respect of relevant standards.

9. Member states may take all necessary measures they regard as necessary in order to ensure that, in the event of cessation of the activities of a notified body, the files of its customers are sent to another body or are made available to the Member State which has notified it.

Notified Bodies 

Notified bodies are created by each New Approach Directive.  The criteria are established by each Directive.  Notification may be to a specific clause, such as Annex IV of the Machinery Directive dealing with dangerous machines, which is the only clause to which a body may be notified for that Directive. Notification also may be confined to those clauses for which it has technical competence or it may extend to all of the clauses of a directive.  The decision belongs to Competent National Authorities who use the EN 45000 series to evaluate notified bodies. When a Competent National Authority approves one of their third parties for a Directive, they “notify” the European Commission. The Commission periodically publishes the list of notified bodies in The Official Journal of the European Communities.

Product Safety and Process Quality--Two Elements of CE Marking A Product 

In his preface to The Guide to the Implementation of Community Harmonization Directives Based on the New Approach and the Global Approach, Brussels, 1995, Vice President of the European Commission, Martin Bangeman stated the following:

The novelty of this new approach resides essentially in the use of community technical rules of “quality instruments” such as European Standardization and conformity assessment procedures (testing, product certification, certification of manufacturers’ quality control procedures, accreditation, etc.).  These instruments, drawn up on the basis of consensus of all the economic partners involved, enable manufacturers to affix the CE marking--a real “technical passport”--to their industrial products, which must conform to these community directives.

Considered one of the architects of the new approach, vice president Bangeman’s quote deserves some attention.  To begin, when he talks about a “consensus of all the economic partners involved” he is referring to the fact that the CEN, CENELEC and ETSI working groups that draft EN safety standards are comprised of manufacturer representatives, representatives of Member State standards organizations (e.g., BSI, DIN, AFNOR, etc.), testing laboratories, academic faculty and in some cases consumer representatives.  While Member State standards organizations direct working group schedules, there is a conviction that the affected parties are participating in writing the standards.

The reference to “quality instruments” such as European standardization and conformity assessment procedures points to two aspects of virtually all new approach directives.  One aspect is the element of product safety. The technical file referred to in most directives contains a checklist of the directive’s essential safety requirements and the EN harmonized safety standards and/or the tests performed and approvals granted which a manufacturer has used to demonstrate conformity to the Directive’s essential safety requirements.  Generally, among those tests will be an application of the principles of safety integration applied to the product in question and a risk assessment. The technical file should demonstrate and record the companies’ efforts to achieve an acceptable level of product safety.

The second aspect is the element of process quality. Once an acceptable level of product safety has been built into a product, the manufacturing process must be able to assure consistent quality so that products number 5, 905, and 20,005 are of consistent and dependable quality. This dual objective of achieving acceptable product safety and consistent process quality will be familiar to manufacturers of regulated products such as medical devices using ISO 13485, and ISO 9001 for manufacturers of products covered by other Directives.

Conclusion

Notified bodies play an integral role in New Approach Directives such as the Medical Devices Directives and variable role in other New Approach Directives, e.g. except for Annex IV of the Machinery Directive where notified body involvement is required, manufacturers self-certify to the requirements of the Directive.

The areas where third parties are “notified” varies for each Directive. Since Notified Bodies (along with ISO 9001 Registrars) will increasingly become involved in CE Marking lawsuits in US Federal Courts, I want to examine notified body involvement and behavior since the beginning of CE Marking products and identify areas where notified body involvement in US lawsuits should be anticipated.

My focus on International Regulatory Compliance has always included both the requirements of regulatory authorities and the legal implications of compliance, non-compliance, documentation and sloppy attention to detail that could result in a lawsuit in a US Federal courtroom. I also focus on product safety and the steps necessary to create a safe product. If you have questions regarding CE Marking lawsuits you can contact me for a free preliminary consultation at my e-mail address jameskolka@gmail.com.  

CE Marking Lawsuits – Applying Forensic Law To Evidence & Discovery

Introduction

As I mentioned in my previous Blog, US Federal Courts – The New Venue For CE Marking Lawsuits, posted on November 30, 2011, we can expect to see an increasing number of CE Marking lawsuits in US Federal Courts. The rationale for the increased number of lawsuits is spelled out in the Blog. I have previously mentioned that I am serving as legal expert in three such lawsuits in US Federal Courts. The earliest lawsuit is nearing completion and appears to have met with success in translating European EN Safety Standards and EU Directive Essential Safety Requirements in a US courtroom. The other two lawsuits are still underway. I also mentioned having served as legal expert in lawsuits involving ISO 9001. These have been settled out of court, however, based on some recent inquiries I anticipate more such lawsuits in the future.

The purpose of today’s Blog is to revisit a few of the previous observations and amplify the points being made. I noted previously that US litigation attorneys often proceed in a somewhat routine fashion not fully understanding the different product safety requirements of EU New Approach Safety Directives and EN safety standards. Also as noted, I have seen botched discovery requests and frustrated Judges regarding ISO 9001 records and document requests in discovery. 

New Territory

This area, CE Marking New Approach Safety Directives, often intermingled with a quality management system, such as ISO 9001 is new territory that requires competent legal understanding if litigation attorneys and defense counsel hope to succeed on behalf of their respective clients.

To begin there are 27 New Approach Safety Directives, drafted at different times. Several are in various states of revision and new Directive combinations. These Directives affect approximately 65% of products entering the EU. They range from Directives addressing Machinery Safety, Medical Devices (General, Active Implantable, In Vitro Diagnostic), Toy Safety, Low Voltage, Electromagnetic Compatibility, Pressure Equipment, Equipment and Protective Systems in Potentially Explosive Atmospheres (ATEX), Construction Products, Personal Protective Equipment, Radio and Telecommunications Terminal Equipment to mention some of the more prominent Directives. 

Each Directive also has Essential Safety Requirements and EN standards that allow for demonstration of conformity to the Directive’s essential safety requirements. There are thousands of standards that are reviewed every 5 to 7 years to consider whether they should be maintained in their present state, revised or eliminated. As noted in the prior Blog, the revision of these standards is now coordinated between the EU Standards Bodies, CEN, CENELEC and ETSI and ISO and IEC to improve the revision process and invite EU standards expertise into these considerations. Also participating in ISO and IEC deliberations on behalf of United States is the American National Standards Institute (ANSI). Consequently, these revised standards will become both American and EU standards. Therefore, the time when a product is manufactured could determine if a standard in question was also an American Standard, if that issue is relevant to a lawsuit.

Also, depending on the Directive or Directives in question and the nature and safety of a product, a company might have chosen what the Europeans call a Conformity Assessment Procedure to assure that the product is manufactured at a consistent quality level. In these cases, third parties which the Europeans call “Notified Bodies” will be involved in the product compliance process. Therefore, notified body records, often including ISO 9001 Quality Management System documents and records could be involved.

It is critical for litigation attorneys and defense counsel to understand how these safety standards are applied and how this information could critically impact a lawsuit affecting their clients. Sophomoric American assumptions could adversely affect the outcome of a lawsuit. 

Timing

As noted in my previous Blog, timing is critical to understanding the relevant facts concerning a lawsuit. It is important to know when a product is manufactured in order to determine the legal status of a Directive, e.g. whether or not it had been revised at the time of design and manufacture, and it is important to know which standards apply to a product. If a Conformity Assessment Procedure was involved and a Notified Body also was involved, certification audits and surveillance audits could become important to the disposition of a lawsuit. Likewise, it is important to know how many Directives might be involved in the manufacture of a product.

For example, I have worked with machinery manufacturers whose machines had to comply with the Machinery Directive, Low Voltage Directive, Electromagnetic Compatibility Directive, Pressure Equipment Directive and the Explosive Atmospheres Directive. Therefore the requirements of each directive and the standards necessary to comply with the requirements of each directive need to be examined. Likewise, it is critical to know what requirements were in place when the product was manufactured. Of course, attorneys will want to know how this all might be litigated in a US Federal Court. 

Observation

In previous Blogs where the topic was a malfunctioning product such as machine, specific compliance with the requirements of these New Approach Safety Directives can be examined to see if the company actually attempted to satisfy the requirements of the Directives and the relevant standards. In one case presently being litigated in a US Federal Court, it was clear that the company, a US machinery manufacturer, did not create a Technical File containing all of the steps required by the manufacturer to comply with the Directive. The file also contained no risk assessment standard and risk assessment judgments.  Further, after two accidents that killed one worker in the EU and maimed another worker in the US who will require 24 medical care for the rest of his life, it was clear that the company did not comply with the safety requirements of the directive and this failure caused both accidents. 

Forensic Law   

In order to address these cases and effectively use this information in a US Federal Court, it is necessary how these Directives and their Standards interplay and the status of each at the time the machine in question was designed and manufactured. Simple assumptions will not work. Knowing when critical components were manufactured also is important as well as the date that the product itself is manufactured. Knowing how the EU directives and standards work is different, but it can be successfully tackled and lawsuits can be won.

I first encountered the term “forensic” when I received a call several years ago from young man was working with a law firm applying the requirements of ISO 9001 and ISO 9004 to some product failure cases in Atlanta. I asked what his background was and he said he was a forensic engineer. 

Since then, and in a totally different application in California involving a product that was causing a medical device manufacturer to experience manufacturing difficulties with diabetic test trips, I was asked to determine if a supplier had failed to follow requirements of its ISO 9001 Quality Management System and if that failure caused the test strip difficulties. It did. I also was working with a forensic accounting firm who were determining if the financial loss calculated by the manufacturer was accurate. It was. 

The term forensic applies equally to the law and litigation. Attorneys continually attempt to dissect products and events to understand what happened and apply this knowledge on behalf of their clients. In the case of the 27 EU New Approach Safety Directives and thousands of EN harmonized safety standards the forensic analysis is complex, but doable. The biggest problem I have observed are US attorneys who transmogrify an EU legal issue into a more familiar American setting thereby mutilating the critical issues and facts affecting their clients.  

Conclusion

To successfully tackle a CE Marking lawsuit, it is necessary to apply forensic analysis to the Directives and Standards that apply to a case. As noted in my prior Blog, while it can be hard breaking litigation and defense attorneys of some bad habits and reining in their egos, it is to their advantage to approach a lawsuit having all of their facts in order and achieving the best possible result for their client. Fortunately, I’ve worked with several attorneys who have achieved this objective and prevailed on behalf of their clients.

My focus on International Regulatory Compliance has always included both the requirements of regulatory authorities and the legal implications of compliance, non-compliance, documentation and sloppy attention to detail that could result in a lawsuit in a Federal or State courtroom. I also focus on product safety and the steps necessary to create a safe product. If you have questions concerning EU Directives and Standards and product liability litigation, you can contact me for a free preliminary consultation at my new e-mail address jameskolka@gmail.com.

US Federal Courts – The New Venue For CE Marking Lawsuits

 

Introduction

I have discussed the CE Marking implications of product liability lawsuits in US Federal Courts several times. I want to expand on this topic. As mentioned in previous blogs, presently, I am serving as legal expert in three lawsuits involving the EU Machinery Directive in US Federal Courts. ISO 9001 also is involved in two of these cases. 

As long as one of the litigants is a US resident (individual or corporation), the dollar amount meets federal monetary requirements and a legitimate cause of action exists, the suit can proceed. This means the following types of lawsuits can be filed:

• Non US citizens, corporations or companies that suffer injury and/or damage from a CE Marked product manufactured by a US corporation or company can file a lawsuit, e.g. product liability claim, breach of warranty, breach of contract, etc. in a US Federal Court.

• US citizens, corporations or companies that suffer injury and/or damage from a CE Marked product manufactured by a US, EU or other foreign corporation or company can file a lawsuit, e.g. product liability claim, breach of warranty, breach of contract, etc. in a US Federal Court.

What Does This Mean?

To begin, it means that citizens of other countries who are injured by a CE Marked product manufactured by a US company can bring a product liability lawsuit against a company, a legal remedy not available in their own country. It also means that a foreign manufacturer of a CE Marked product that injures a US resident or company can be sued for damages in a US product liability lawsuit. It is a reason that manufacturers can anticipate product liability lawsuits for their CE Marked product failures in US Federal Courts. It is one of the reasons that I am presently serving as legal expert in three CE Marking lawsuits in three different Federal Courts. I have also served as a legal expert in ISO 9001 lawsuits between US corporations and EU corporations. 

For foreign companies selling their CE Marked products in the US it likely will be their first exposure to legal discovery. From what I have experienced thus far, it means that many of these companies will experience requests for information and documentation for the first time and try to resist turning over anything that might be injurious to their legal position. That certainly has been the behavior of some German corporations involved in a few product liability lawsuits. Thus far, it has not been the behavior of ISO 9001 lawsuits between UK corporations and US corporations. The sample, however, is quite small.

Another surprise is the request for CE Marking Technical Files. As mentioned in previous blogs, one of the cases I am working on involves a US corporation manufacturing a CE Marked machine. They turned over a Technical File that has to be described as a junk file or gibberish. Clearly, the company had not paid attention to or chose to ignore the specific requirements of the Machinery Directive. The manufacturer also was found to be duplicitous in their dealings with UK authorities and opposing counsel. Fortunately, as this case moves along, the failure to comply with the requirements of the Directive have become apparent to the Court and likely will result in an adverse judgment which most likely will be settled out of court to the monetary detriment of the US machinery manufacturer. 

Of course, the request for information contained in Technical Files will be an even bigger surprise for EU manufacturers of CE Marked products and the intense scrutiny concerning the quality of compliance of these manufacturers with EU Directives. One attorney asked me why EU EN harmonized standards would be relevant in a US court. After all they are not  American standards.

I told him that EN standards like all ISO and IEC standards are revised on a periodic basis, approximately every 5 to 7 years. By agreement between the European Committee for Standardization (CEN) and ISO and the European Committee for Electotechnical Standardization (CENELEC) with IEC the new standards that emerge from this collaboration will be both International and European standards. In addition and even more important in the US, ANSI (American National Standards Institute) participates in all of the ISO and IEC standards deliberations and revisions. Consequently, at the end of the revision process the new standards also will be both European and American standards.

Litigation Attorneys

The role of litigation attorneys dealing with CE Marking Directives, CE Marked products, European standards and occasionally ISO 9001 or ISO 13485 is another issue. Often I have found that the attorneys proceed in a somewhat routine fashion not fully understanding the product requirements and the issues they are dealing with. On occasion, I have seen botched discovery requests and frustrated Judges regarding ISO 9001 records and documents requests.

Also, I have seen some, not all, attorneys become rather arrogant and possessive about "their" lawsuit and not helpful in providing information so that I can be of greater value to their case. They tend to think they can puzzle their way through the CE Marking process. However, with 27 New Approach Directives in various stages of revision and new combinations and thousands of EN harmonized standards in various stages of revision, it isn’t remotely as simple as it might appar. When I do work with attorneys who are open and share the issues at hand, the collaboration can work extremely well. My role is to serve as a legal expert not a litigation attorney.

Timing

Timing is critical to understanding the relevant facts concerning a lawsuit. For example, in some of the Machinery Directive lawsuits it is important to know when the machine was manufactured, the status of the Directive, e.g. revisions of the relevant EN standards that should have been followed to satisfy the Annex I Essential Health and Safety and Requirements.  It is also important to know what other Directives may be involved. I have worked on CE Marking several machines that involved the Machinery Directive, Low Voltage Directive, EMC Directive, Pressure Equipment Directive and Explosive Atmospheres (ATEX) Directive. Other Directives could be added today, e.g. RoHS2. This information may seem arcane, but it could be quite critical to the manufacturer’s actions regarding the machine. The same is true for ISO 9001, e.g. are we talking about ISO 9001:1994, ISO 9001: 2000 or ISO 9001: 2008? I’ve seen several instances where the attorneys did not understand the revision of the standards and didn’t realize that there was continuity in compliance with one standard to the next.

The same issue comes into play regarding EN standards. For example, I recently discovered that CE Marked components that were incorporated in a machine by a client were in fact “out of date.” We called the component manufacturer and brought this matter to their attention saying that we have to have components that comply with current EN standards. After some grumbling, the component suppliers produced components compliant with the most recent standards. This may seem like a small matter, but it could be quite costly for the manufacturer in case of a product liability lawsuit.

Conclusion

While it can be hard breaking litigation attorneys of some bad habits and reining in their egos, it is to their advantage to approach a lawsuit having all of their facts in order to achieve the best possible result for their client. Fortunately, I’ve worked with several attorneys who have achieved this objective and prevailed on behalf of their clients. My focus on International Regulatory Compliance has always included both the requirements of regulatory authorities and the legal implications of compliance, non-compliance, documentation and sloppy attention to detail that could result in a lawsuit in a Federal or State courtroom. I also focus on product safety and the steps necessary to create a safe product. If you have questions concerning medical device litigation, you can contact me for a free preliminary consultation at my new e-mail address jameskolka@gmail.com.

FDA’s Quality System Regulation – Management With Executive Responsibility #2

Continuation

In the first part of this Blog I reviewed what FDA expects of Management with Executive Responsibility as spelled out in its Quality System Regulation and what FDA inspectors will be looking for in on-site inspections as spelled out in FDA’s Quality System Inspection Technique (QSIT). The regulatory emphasis is quite clear. 

Insurance Company Litigation Study

Next I want to review the observations about Management With Executive Responsibility from the unpublished findings of the litigation history of a Medical Device Insurance Company. A sample list of observations about management is quite interesting:

• Management failures frequently occurred due to noncompliance with FDA, EU Medical Devices Directives and other regulations and unawareness of the requirement for notification to the appropriate regulatory bodies and the attention that regulators would place on clinical studies

• Management staff of new emerging medical device companys selected to conduct clinical trials/studies often do not possess the appropriate expertise/experience with clinical investigations. They are very familiar with the research and development of the device under study, but often do not have the professional clinical competencies needed to manage a clinical study.

• Management often has shown a failure to use proper or adequate legal assistance to review, launch or be involved in clinical studies.

•  Management often shows a lack of indemnities/disclosure in the informed consent agreements between IRBs, sponsors and patients of clinical studies.

• There often are ethics issues regarding “conflicts of interest.”

• The study found that medical device manufacturers and their contract manufacturers often relied on the mistaken belief that they are immune from product liability because of their manufacturing relationships with each other. These are situations where no risk management techniques have been applied before beginning the manufacturing – actions that could have helped avoid potential exposure to product liability litigation.

• Contract manufacturers supplying a component part to device manufacturers often did not carry any product liability insurance coverage and this was not questioned by the device manufacturer.

• The study found management failure to comply with FDA Quality Management System regulations for contract manufacturing agreements.

• In this era of outsourcing, the study found that contract manufacturing agreements often were deemed unenforceable in foreign legal jurisdictions.

• Management often failed to create a product safety policy statement or reference patient or product safety in the company’s quality statements under the mistaken belief by top management that the quality statement alone is adequate on the subject.

• Management had philosophical conflicts in which members of management teams wanted to fight FDA and their “observations” or “warning letters”, rather than mutually cooperate in resolving implementation plan for integrating the observations into their manufacturing processes.

• Several product liability claims that were taken to jury trials mentioned the use of the company’s quality management system and quality manuals against the manufacturer – the company’s own quality processes were not being followed or audited.

• The study noted a lack of company management staff training on product safety and quality management systems and the documentation of this training.

• The study found that in most cases management teams were very lean in young medical device firms in early commercialization; untrained and unfamiliar with the basic principles of product liability avoidance.

• Management ego issues were noted as confused in regards to product liability risks when management teams decided to fight FDA citations/observations versus demonstrating a spirit of committed cooperation to correct or arbitrate observations.

• In many medical device companies that experienced product liability claims, executive management underestimated the amount of time and corporate resources that would be needed to defend the company against product liability litigation.

• The silence of senior management in regard to product liability litigation was seen as their acceptance of the behaviors that caused or led to the product liability litigation.

• A lack of general and specific training for managers concerning their product safety responsibilities was noted as a recurring problem in the management of product liability avoidance.

As noted earlier, this is sample drawn from a much larger list of observations. Each observation came as a cost to each of these companies resulting in increased litigation expenses to the companies above the amounts paid by their insurance companies, possible FDA fines and punitive damage losses. And of course, increased  premiums and an increased deductible. 

Warning Letters

Finally, I wanted to look at some FDA 483 Warning letters regarding Management With Executive Responsibility: 

August 5, 2011 – Failure of management with executive responsibility to review the suitability and effectiveness of the quality system at defined intervals and with sufficient frequency to established principles to ensure the quality system satisfies the requirements of 21 CFR 820, as required by 21 CFR 820.40.

For example, according to your firm’s Executive Vice President your firm has not established management review procedures.

For example, according to your firm’s Executive Vice President there are no quality audit procedures and no quality audits have been performed. [The letter goes on t detail other failings of top management.] 

March 16, 2011 – Failure of management with executive responsibility to review the suitability and effectiveness of the quality system at defined intervals and with sufficient frequency according to established procedures to ensure that the quality system satisfies the requirements of 21 CFR 820 and the manufacturer established quality policy and objectives as required by 21 CFR 820.20(c). For example, your firm has not conducted any management reviews of your quality system.

October 1, 2010 – Failure of management with executive responsibility to review the suitability of the quality system at defined intervals and with sufficient frequency according to established procedures to ensure that the quality system satisfies the requirements of this part, as required by 21 CFR 820.20(c). For example, your firm failed to establish and implement written management review procedures. 

 November 24, 2010 – Failure of management with executive responsibility to review the suitability of the quality system at defined intervals and with sufficient frequency according to established procedures to ensure the quality system satisfies the requirements of 21 CFR 820, as required by 21 CFR 820.20(c). For example, according to your firm’s management, the firm does not conduct management reviews and has not established management review procedures.

*Failure to establish quality system procedures and instructions, as required by 21 CFR 820.20(e). For example, according to you, your firm does not have quality system procedures.

* Failure of management with executive responsibility to establish its policy objectives for, and commitment to, qualities required by 21 CFR 820.20(a). For example, according to you, your firm has not established a quality policy. 

Conclusion 

The preceding are just a few statements concerning Management With Executive Responsibility contained in FDA Warning Letters sent to medical device manufacturers. The full letters are much more extensive detailing other concerns specific to these companies. My point is that FDA’s Quality System Regulation (QSR) places significant emphasis on the responsibilities of top management. The issue concerns the health and safety of the American public. 

I want to repeat what was written in the first Blog. I have worked with numerous medical device companies where Management’s understanding of FDA’s Quality System Regulation ranged from intelligent to clueless. I find the latter condition to be scary because it usually is accompanied by that wonderful combination, “arrogance and ignorance.” This is especially true when the company is owned by a single individual and driven by his ego and self-perceived brilliance. Not a healthy combination or work environment. Consultants need to consider carefully which companies and management they choose to work with.

As noted at the conclusion of the first Blog, my focus on International Regulatory Compliance has always included both the requirements of regulatory authorities and the legal implications of compliance, non-compliance, documentation and sloppy attention to detail that could result in a lawsuit in a Federal or State courtroom. I also focus on product safety and the steps necessary to create a safe product. If you have questions concerning medical device litigation, you can contact me for a free preliminary consultation at my new e-mail address jameskolka@gmail.com.

FDA’s Quality System Regulation – Management With Executive Responsibility #1

Introduction 

Not too long after FDA’s Quality Management System became the new Current Good Manufacturing Practice (CGMP), a colleague and I were asked by a client of our consulting firm to conduct a GAP Analysis to determine what needed to be done for them to comply with the Regulation and also to determine what needed to be done for all of their manufacturing plants and products to comply with CE Marking Requirements for the EU’s Medical Devices Directives. Since the company was (and is today) a major medical device manufacturer, our GAP Analysis audit took us to plants and operations throughout the US and Mexico. 

When we reported back our findings and recommendations to the CEO, he smiled and asked if they needed to comply with FDA’s new QSR. My colleague also smiled when she replied, "yes unless you think you look good in stripes!"

Of course this exchange occurred in good humor because FDA made it clear that they intended to hold Management With Executive Responsibility fully accountable for the implementation of the new QSR. “Good stripes” for bad management was and is a real possibility.

Today 

Since that friendly but intelligent exchange, I have worked with numerous medical device companies where Management’s understanding of FDA’s Quality System Regulation has ranged from intelligent to clueless. I find the latter condition to be scary because it usually is accompanied by that dangerous combination, “arrogance and ignorance.” This is especially true when the company is owned by a single individual and driven by his ego and self-perceived brilliance. Not a healthy combination and work environment. I think it is timely to review FDA’s definition of Management With Executive Responsibility in the QSR.

21 CFR Part 820 – Medical Device Quality System Regulation

§ 820.20 Management responsibility

(a) Quality Policy. Management with executive responsibility shall establish its policy and objectives for, and commitment to, quality. Management with executive responsibility shall ensure that the quality policy is understood, implemented, and maintained at all levels of the organization.

(b) Organization. Each manufacturer shall establish and maintain an adequate organizational structure to ensure that devices are designed and produced in accordance with the responsibilities of this part.

(1) Responsibility and authority. Each manufacturer shall establish the appropriate responsibility, authority, and interlation of all personnel who manage, perform, and assess work affecting quality, and provide the independence and authority necessary to perform these tasks.

(2) Resources. Each manufacturer shall provide adequate resources, including the assignment of trained personnel, for management, performance of work, and assessment activities, including internal quality audits, to meet the requirements of this part.

(3) Management representative. Management with executive responsibility shall appoint, document such appointment of, a member of management who, irrespective of other responsibilities, shall have established authority over and responsibility for:

(i) Ensuring the quality system requirements are effectively established and effectively maintain in accordance with this part; and

(ii) Reporting on the performance of the quality system to management with executive responsibility for review.

(c) Management Review. Management with executive responsibility shall review the suitability and effectiveness of the quality system at defined intervals and with sufficient frequency according to established procedures to ensure the quality system satisfies the requirements of this part in the manufacturer’s established quality policy and objectives. The dates and results of quality system review shall be documented. 

Enforcement

Another way to see how FDA views Management With Executive Responsibility is to examine the Guide To Inspections of Quality Systems that is used by FDA field staff to assess a manufacturers compliance with the Quality System Regulation and related regulations. It is also known as (QSIT) Quality System inspection Technique. Management with Executive Responsibility will be questioned about the Quality System at the beginning and at the end of an on site inspection. Page 18 of QSIT states:

Management Controls

Inspectional Objectives 

1.Verify that a quality policy, management review and quality audit procedures, quality plan, and quality system procedures and instructions have been defined and documented.

2.Verify that a quality policy and objectives have been implemented. 

3.Review the firm’s established organizational structure to confirm that it includes provisions for responsibilities, authorities and necessary resources.

4.Confirm that a management representative has been appointed. Evaluate the purview of the management representative.

5.Verify that management reviews, including a review of the suitability and effectiveness of the quality system, are being conducted.

6.Verify that quality audits, including re-audits of deficient matters, of the quality system are being conducted.

 At the conclusion of the inspection….

7.Evaluate whether management with executive responsibility ensures that adequate and effective quality system has been established and maintained. 

FDA field staff are guided through these inspectional objectives by a series of questions that are asked concerning each objective. Examples of the questions are,

• “ To determine what the firm’s organizational structure is, start by asking the authority and responsibility questions that are the start of every FDA inspection.”

• “ Determine whether personnel involved in managing, performing or assessing work affecting quality have the necessary independence and authority to perform those tasks.”

• “ Determine whether the appointed management representative actually has the purported responsibility and authority granted to him/her by the firm’s procedures or organizational structure.”

• “ Verify that the management representative is reporting back to the management with executive responsibility on the performance of the quality system. These reports should either be the subject of management reviews or at least provide a framework for those reviews.”

• “ Determine whether corrective action by upper management is being taken. Auditors may be asked if they observed any of the ongoing Quality System Regulation deficiencies during their prior audits (ongoing Quality System Regulation deficiencies may also be identified by reviewing prior FDA 483’s).”

• “ At this point in QSIT, you stop your review of the management system. You continue your inspection by evaluating the other subsystems. While you evaluate the other subsystems, keep thinking about what you are finding and whether it indicates that management is appropriately carrying out its responsibilities for providing adequate resources and overseeing the quality system to detect problems and address them.” 

Conclusion 

This, as they say, is only the tip of the iceberg. The on-site inspections are rigorous and a significant objective is to determine if Management With Executive Responsibility is actively engaged in overseeing the operation of the company’s quality management system. Egocentric executives who feel themselves above the day-to-day operations will be discovered and written up in a FDA 483 Warning Letter. If the behavior is too egregious, penalties can be levied and in the most extreme case criminal sanctions can be imposed. Therefore, the management of medical device company affecting the health and safety of the public is not treated lightly, nor should it be.

In the second Blog on this topic, I will examine some of the management observations by a medical device insurance company following an in-depth review of their insureds' litigation history. We will also look at a few published FDA warning letters on this topic. Holding executive management responsible for the operation of medical device and manufacturers is a significant step forward in addressing issues of safety. It requires continual vigilance.

My focus on International Regulatory Compliance has always included both the requirements of regulatory authorities and the legal implications of compliance, non-compliance, documentation and sloppy attention to detail that could result in a lawsuit in a Federal or State courtroom. I also focus on product safety and the steps necessary to create a safe product. If you have questions concerning medical device litigation, you can contact me for a free preliminary consultation at my new e-mail address jameskolka@gmail.com.  

Don’t Listen To Anyone Who Says You Don’t Have to CE Mark Your Product For The EU!

 

Introduction

I don’t know how many times I have heard words from distributors, buyers, politicians, clinics, etc. in the EU anxious to sell or buy new products saying, not to worry you don’t have to CE Mark your products for the EU. The first time was several years ago when the Mayor of a small town in Portugal wanted to assure a Michigan machinery manufacturer that he would take care of the CE Marking issue. Of course, he could not. The Mayor was so excited that a large US manufacturer was going to locate a new plant near his town he didn’t want anything to interfere with the process. The Michigan manufacturer had an order to deliver a machinery assembly line to manufacture fuel injection systems for an automobile plant. They were aware that CE Marking was required for machines.

Not too long before another Michigan manufacturer had shipped a non CE Marked machine to a plant they owned in Northern Ireland. A workman spotted the machine and reported it to his foreman as required by the EU Workplace Safety Act who then reported it to the British Government.

When the company was informed of their transgression, they said that it was their machine built in their Michigan plant and it was to be installed in their Northern Ireland plant so they asserted it didn’t have to be CE Marked. British authorities reminded the company that their plant was on sovereign British soil subject to UK & EU law. They gave the plant manager a six month suspended sentence under the Criminal Code, fined the company, told them to remove the machine until it complied with the Machinery Directive and said never do it again.

Placing A Product On The EU Market

The operative words in all EU New Approach Directives are very clear. For Example, the new Toy Safety Directive 2009/48/EC of 18 June 2009 states:

Chapter I

General Provisions

Article 1

Subject Matter

This Directive lays down rues on the safety of toys and on their free movement in the Community.

Article 2

Scope

1. This Directive shall apply to products designed or intended, whether or not exclusively, for use in play by children 14 years of age (hereinafter referred to as toys).

Article 3

Definitions

For the purposes of the Directive, the following definitions shall apply:

1. ’making available on the market’ means any supply of a toy for distribution, consumption, or use on the Community market in the course of commercial activities, whether in return for payment or free of charge. (emphasis added in bold print)

2. ’placing on the market’ means the first making available of a toy on the Community market. (emphasis added in bold print)

The same language can be found in all of the CE Marking new approach Directives. Any product that requires CE Marking, whether for payment or free, must be CE Marked. The liability for failing to CE Mark a product falls on the manufacturer, not the buyer. 

In the new Toy Safety Directive 2009/48/EC, the EU has set forth:

• Article 7, Obligations of distributors

• Article 8, Cases in which obligations of manufacturers apply to importers and distributors

• Article 9, Identification of economic operators

While its nice to see the EU set forth legal expectations for Distributors, Importers and Economic Operators, this does not take the “monkey off the back” of manufacturers. If a manufacturer places a non-marked product on the EU market that should have a CE Mark, that manufacturer is legally liable. 

What is the Legal Liability for Failing to CE Mark a Product? 

The new Toy Safety Directive spells out several steps that can be taken for placing a toy on the market that should be CE Marked;

• Chapter VI sets forth the “Obligations And Powers Of Member States” 

• Article 39 establishes the “Precautionary Principle”

• Article 40 establishes the “General Obligation To Organize Market Surveillance” in accordance with Articles 15 to 29 of Regulation (EC) No 765/2008 of 9 July 2008 setting out the requirements for accreditation and market surveillance relating to the marketing of products and Repealing Regulation (EEC) No 339/93

• Article 41 sets forth “Instructions to the notified body”

• Article 42, Procedure for dealing with toys presenting a risk at national level

• Article 43, Community safeguard procedures

• Article 44, Exchange of information – Community Rapid Information Exchange System

Finally, Article 45 defines what is meant by Formal non-compliance:

1.Without prejudice to Article 42, where a Member State makes one of the following findings, it shall require the relevant economic operator to put an end to the non-compliance concerned:

(a) that the CE marking has been affixed in violation of Article 16 [General principles of the CE marking] or 17 [Rules and conditions for affixing the CE marking];

(b) that the CE marking has not been affixed;

(c) that the EC declaration of conformity has not been drawn up;

(d) that the EC declaration of conformity has not been drawn up correctly;

(e) that the technical documentation is either not available or complete.

2. Where the non-compliance referred in paragraph 1 persists, the Member State concerned shall take appropriate measures to restrict or prohibit the toy being made available on the market, or shall ensure that it is recalled or withdrawn from the market. (emphasis added in bold print)

Summary

The reason I chose the Toy Safety Directive was a question this week from a client with whom I am working to CE Mark their products who was told by two distributors that their toy didn’t have to be CE Marked for sale in the EU. Whether the two distributors were incredibly ignorant, previously lucky in evading the law or duplicitous is beside the point they still try to persuade manufacturers to sell them non CE Marked toys. Fortunately, my clients were suspicious and suspected that the distributors were not telling the truth.

Finally, take a close look at Article 45 above, Formal non-compliance. Those of you who have been reading my recent Blogs, especially the last three posted on July 30, August 15 and August 17 respectively should recognize that the manufacturer who manufactured the machine that killed a worker in the UK and maimed another worker for life in the US did not satisfy any of these requirements! The Machinery Directive has the very same requirements as the Toy Safety Directive. 

The EU has adopted excellent legislation on Market Surveillance, however, I am still concerned with the quality of implementation. I think these types of steps are essential for effective Market Surveillance for the EU new approach Directives As noted previously, I would like to work with the EU to enforce market surveillance so that consumers aren’t injured or killed. I also would like to work with European manufacturers concerning steps  for them to take to reduce their liability exposure in the US market. It seems to fit the European philosophical approach to product safety and would help EU firms concerned about the litigious nature of the US marketplace. If anyone is interested in exploring these topics further, please contact me at jameskolka@gmail.com or  jim@jameskolka.com. 

Market Surveillance #3 – To Be Or Not To Be – When, Is The Question

 

Continuation

I decided to add a third installment to my blog on Market Surveillance and the revised Machinery Directive 2006/42/EC. As noted several times the impetus for these comments has been driven by serving as legal expert in a lawsuit involving a CE Marked machine that has killed one worker and injured another worker who will need 24 hour care for the rest of his life. These accidents involved the same machine model in two separate incidents in two different countries.

While the Technical File was a junk file that did not comply with the requirements of the Machinery Directive, the contents of the file and the pathetic state of compliance was unknown until the first accident occurred and the file was turned over to the Health and Safety Executive (HSE) in the UK. In reality, the pathetic state of compliance is still unknown because, as noted in the previous blog, HSE investigates workplace accidents and BIS (Department for Business Innovation and Skills) the Competent UK Authority that oversees CE Marking for the Machinery Directive has not received the HSE investigation report. Meanwhile, the non-compliant machines are still on the market.

CE Marking Litigation And Its Future

I only reiterate these facts because in the past two weeks, I have received calls from two new clients involved in lawsuits in the US concerning CE Marking for the Machinery Directive. I anticipate more in the future. There are several reasons for this increased litigation activity, among them:

• CE Marking safety requirements and standards for machines have grown in number and sophistication since the Machinery Directive was first published on 14 June 1989.

• Following the Vienna and Dresden agreements between the EU Standards Bodies (CEN and CENELEC) with ISO and IEC respectively (to avoid duplicating standards writing efforts) these new international standards writing activities automatically include the participation of ANSI (American National Standards Institute) in drafting ISO & IEC standards resulting in EN ISO and EN IEC standards that are also American National Standards, recognized by US Courts of Law. In sum, EN standards are rapidly becoming American standards.

• US Federal Courts offer a litigation venue for product liability, Breach of Warranty and Breach of Contract lawsuits concerning CE Marking between US Citizens and US machinery manufacturers, US Citizens and EU machinery manufacturers and EU Citizens and US machinery manufacturers.

• The oft cited 2002 Minnesota case where a California Packaging Machinery Manufacturer sold a less safe machine in the US injuring a worker who will require 24 hour care for the rest of his life (it didn’t have a laser light curtain to turn off the machine when a worker entered the area of machinery activity), but sold safer CE Marked machines with laser light curtains in the EU for 6 years because of the Machinery Directive safety requirements, resulted in a $35 million punitive damages award (the manufacturer knew how to make a safer machine and chose not to do so). This means that US manufacturers who follow the same path of selling less safe machines in the US and safer machines in the EU and EU manufacturers who sell non CE Marked less safe machines in the US can expect a similar result in US Courts. It is a whole new area of litigation for American trial attorneys.

• Just as trial attorneys can ask for ISO 9001 records and documents that are relevant to a product liability lawsuit in the US and EU, they can now ask for Machinery Directive Technical File records and documents in discovery in Product Liability, Breach of Warranty and Breach of Contract lawsuits. The fact that these records and documents may belong to a European manufacturer is irrelevant. Whether the EU manufacturer is suing or being sued the cause of action arises from doing business in the US, making the litigants subject to US Courts and US rules of civil procedure.

These are a few of the legal nuances for US Courts of Law brought about by the evolution of the Machinery Directive and its supporting standards writing activities.

The Response of EU Competent Authorities 

In future blogs I will spend more time examining the substance of Decision No 768/2008/EC of the European Parliament and the Council of 9 July 2008 On a Common Framework For the Marketing Of Products and Repealing Council Decision 93/465/EEC. In the preceding two blogs (July 30 & August 15) and this blog, however, I have concentrated on administrative issues not touched on in Decision No 768/2008/EC that I believe are critical to the success of effective Market Surveillance as it relates to the Machinery Directive.

In the section titled “A View Thoughts” in the preceding August 15 blog, my Fifth recommendation was, “once a complaint or accident involving a CE Marked machine is recorded by a Competent Authority, a checklist protocol should be developed utilizing Annex VII of Machinery Directive 2006/42/EC to determine if all the elements of a Technical File contained in A. Points 1,2 & 3 are compliant. Listed below are those points

1. The technical files shall comprise the following:

  (a) a  construction file including:

-- a general description of the machinery,

-- the overall drawing of the machinery and drawings of the control circuits, as well as the pertinent descriptions and explanations necessary for understanding the operation of the machinery,

-- full detailed drawings, accompanied by any calculation notes, test results, certificates, etc., required to check the conformity of the machinery with the essential health and safety requirements,

-- the documentation on risk assessment demonstrating the procedure followed, including:

  (i) a list of the essential health and safety requirements which apply to the machinery,

  (ii) the description of the protective measures implemented to eliminate identified hazards or to reduce risks, when appropriate, the indication of the residual risks associated with machinery,

-- the standards and other technical specifications used, including the essential health and safety requirements covered by these standards,

-- any technical report giving the results of the tests carried out either by the manufacturer or by a body chosen by the manufacturer or his authorized representative,

-- a copy of the instructions for the machinery,

-- where appropriate, the declaration of incorporation for included partly completed machinery and the relevant assembly instructions for such machinery,

-- a copy of the EC declaration of conformity.

 (b) for series manufacture, the internal measures that will be implemented to ensure that the machinery remains in conformity with the provisions of the Directive.

The manufacturer must carry out necessary research and tests on components, fittings or the completed machinery to determine whether by its design or construction it is capable of being assembled and put into service safely. The relevant reports and results shall be included in the technical file.

2. The Technical file referred to in point 1 must be made available to the competent authorities of the Member States for at least 10 years following the date of manufacture of machinery or, in the case of series manufacture, for the last unit produced. (Emphasis added)

The technical file does not have to be located in the territory of the Community, nor does it have to be permanently available in material form. However, it must be capable of being assembled and made available within a period of time commensurate with its complexity by the person designated in the EC declaration of conformity. (I suggested 48 hours, similar to the Medical Devices Directives)

The Technical file does not have to include detailed plans or any other specific information as regards the subassemblies used for the manufacture of the machinery unless a knowledge of them is a central for verification of conformity with the essential health and safety requirements.

3. Failure to present the technical file in response to a duly reasoned request by the competent national authorities may constitute sufficient grounds for doubting the conformity of the machinery in question with the essential health and safety requirements. (Emphasis added)

Conclusion

As noted in the two previous blogs, I think these types of steps are essential for effective Market Surveillance for the revised Machinery Directive 2004/42/EC. I also noted previously that I would like to work with European manufacturers and companies on steps to reduce their liability exposure in the US market. It seems to fit the European philosophical approach to product safety and would help EU firms concerned about the litigious nature about the US marketplace. If anyone is interested in exploring these topics further, please contact me at jameskolka@gmail.com or jim@jameskolka.com. 

Market Surveillance #2 – To Be Or Not To Be – When, Is The Question

The Quandary

The preceding blog described some of the issues and concerns I have encountered working with companies CE Marking their products for the EU. Recently, however, my concern has been heightened by issues raised in an ongoing lawsuit in the US & EU regarding a machinery manufacturer whose machines have caused the death of one worker and a severe injury to another worker who will require 24 hour care for the rest of his life. 

While Decision No 768/2008/EC of the European Parliament and the Council of 9 July 2008 On a Common Framework For the Marketing Of Products and Repealing Council Decision 93/465/EEC presumably went into effect on 1 January 2010, the implementation details are evolving rather slowly.

The lawsuit underscores some of problems. In the UK, an industrial workplace accident is investigated by HSE (Health and Safety Executive). The fact that a machine is CE marked is of no immediate concern to HSE, their focus, as it should be, is on the accident. When they conclude their investigation, they will pass on their findings to BIS (Department for Business Innovation & Skills) the CE Marking Conformity Assessment Body in the UK. It is a nice linear progression, but it delays immediate action concerning the CE Mark of the machinery manufacturer and disadvantages the family of the worker who was killed in the accident and leaves similar machines in place throughout the EU to potentially cause more workplace injuries.

As noted in previous blogs, in my opinion the machine in question did not begin to satisfy CE Marking requirements of the Machinery Directive 93/37/EC at the time the machine in question was manufactured:

A Comparison – The Manufacturer vs. Annex V, paragraph 3

The requirements for the technical file can be found in Annex V, paragraph 3 of the Machinery Directive where it is identified as a, “technical construction file”:

“(a.) a technical construction file comprising:

-- an overall drawing of the machinery together with drawings of the control circuits,

-- full detailed drawings, accompanied by any calculation notes, test results, etc., required to check the conformity of the machinery with the essential health and safety requirements

-- a list of:

   -- the essential requirements of this Directive (a sample checklist and sample

      identification of relevant EN harmonized technical standards is attached) 

   -- standards, and

-- a description of methods adopted to eliminate hazards presented by the machinery,

-- if he so desires, any technical report or certificate obtained from a competent body or laboratory,

-- if he declares conformity with a harmonized standard which provides therefore, any technical report giving the results of tests carried out in his choice either by himself or by a competent body or laboratory

-- a copy of the instructions for the machinery;

(b.) for series manufacture, the internal measures that will be implemented to ensure that the machinery remains in conformity with the provisions of the Directive.

The manufacturer must carry out necessary research or tests on components, fittings or the completed machine to determine whether by its design or construction, the machine is capable of being erected and put into service safely.

Failure to present the documentation in response to a duly substantiated request by the competent national authorities may constitute sufficient grounds for doubting the presumption of conformity with the requirements of the directive."

While the language is quaint, it sets forth the substance of a technical file. The reference above in (b.) to series manufacture refers to the quality system.

As noted in previous blogs, in my opinion the machine in question did not begin to satisfy CE Marking requirements of the Machinery Directive:

• There was no coherent Technical File

• No Part A providing an index containing all of the elements in the file

• No Annex I Essential Health and Safety Requirements Checklist identifying which essential health and safety requirements the manufacturer applied to their Product Family Machines

• No complete listing of EN harmonized standards selected to demonstrate conformity to the relevant Essential and Safety Requirements of the Directive

• No listing of EMC standards

• No ISO 14121-1:1999 Risk Assessment, FMEA, FTA

• No identification of the manufacturer’s certification to ISO 9001: 2000

• No complete EC Declaration of Conformity

• No identification of an Authorized Representative on the Declaration of Conformity

From my perspective, the machinery manufacturer clearly failed to satisfy the safety requirements of the Machinery Directive. There is Prima Facie evidence that the machine is not compliant with the Machinery Directive. I believe that the manufacturer should have had his machines impounded until he could present documentation demonstrating compliance.

Annex V, paragraph 3 (b), final paragraph:

Failure to present the documentation in response to a duly substantiated request by the competent national authorities may constitute sufficient grounds for doubting the presumption of conformity with the requirements of the directive."

There is no reason that parallel investigations cannot proceed, each triggered by a machine that caused a fatal accident. I just received an e-mail from an engineer, “I am working on a project in Ireland and curious to know what penalty a manufacturer would face if they knowingly provided an EC Declaration of Conformity under the Machinery Directive for a machine that did not comply with the Essential Safety Requirements.” I suggested that he contact the Competent Authority in Ireland and the country where the machine was manufactured. I wish I had confidence that he would be listened to carefully and could expect action if he is correct in his assertion

Presently, I don’t know what will happen. While it may not be intended, the HSE handoff to BIS suggests a certain bureaucratic logical cleanliness in response. I don’t blame HSE because they are doing what OSHA (Occupational Safety and Health Administration) would do in the United States in the case of an accident. In the US, however, there is no BIS Competent Authority overseeing machinery safety. Perhaps a complaint could be lodged with the US Consumer Products Safety Commission and action might be taken. Unfortunately, the aversion of some Americans to any kind of regulation coupled with corporate distaste for all regulation make it difficult to create a regulatory response in the US akin to FDA oversight for drugs and medical devices.

The most effective response in the US comes through the court system via product liability, breach of warranty, breach of contract and other lawsuits challenging manufacturers in a court of law. At present, there is no equivalent legal response in the EU, so the oversight of Competent Authorities in the EU Member States is critical to the successful implementation of the Machinery Directive and related Directives. The issue then is how to go about this task to improve compliance.

A Few Thoughts

In my first “Market Surveillance” blog posted on 30 July 2011, I mentioned several issues and possible responses concerning self-certified machines:

• First, I believe it is critical that Part A of a Technical File should be a requirement of all machinery manufacturers (past and present) and it should be filed with a reliable entity, in my opinion a Competent Body, and it should be entered electronically in a shared European Commission Competent Body Database.

• Second, I also believe that an Annex I Essential Health and Safety Requirements Checklist identifying which essential requirements apply to the machine in question and which EN harmonized standards will be used to demonstrate conformity, linked to Part A of the Technical File should be filed with the same Competent Body entered into the same shared European Commission Competent Body Database.

• Third, as noted in my prior blog, I don’t think either Authorized Representatives or Notified Bodies should assume this task. In my personal experience, I have found both to be widely variable in behavior and capability and too anxious to make money in most everything they do.

• Fourth, a protocol should be developed to trigger a response to complaints about CE Marked products and potential investigation of reports of accidents involving CE Marked products, independent of workplace accident investigations conducted by agencies such as HSE. The two responses should be separate from one another. While accidents must be investigated, non-compliant CE Marked machines should be impounded or removed so that additional accidents don’t occur.

• Fifth, once a complaint or accident involving a CE Marked machine is recorded by a Competent Authority, a checklist protocol should be developed utilizing Annex VII of Directive 2006/42/EC to determine if all of the elements of a Technical File contained in A. Points 1, 2 & 3 are compliant. The same could be done for "B. Relevant technical documentation for partly completed machinery." Machinery manufacturers should be asked to provide this information within 48 hours of a request, similar to medical device manufacturers for the Medical Devices Directives.

• Sixth, all manufacturers of machines should be instructed to create the required documentation to comply with the Machinery Directive and Related Directives within a set time period and to make certain that all new machines and modified machines are compliant with the most recent revision of EN standards. (Last year I found three suppliers of Declarations of Incorporation had not updated their products to meet new standards.)

Conclusion

Presently there are tens of thousands of CE Marked machines in the EU market with Technical Files that range from full compliance to incomplete compliance to junk compliance to drivel. Finding out that compliance is a farce and records are a mess, as we discovered in the lawsuit, is unacceptable. I fully support self-certification, but I think it needs to have effective enforcement. As noted in my last blog, I would be happy to work with interested parties, including EU authorities, to improve the quality of EU oversight. I have developed some templates for Checklists and Part A of the Technical File which could be adapted to provide a measure of uniformity to the process that would make it easier for machinery manufacturers to understand compliance and Competent Authorities to determine compliance. 

As noted previously, I would like to work with European manufacturers and companies on steps that can be taken to reduce their liability exposure in the US market. It seems to fit the European philosophical approach to product safety and would help EU firms concerned about the litigious nature of the US marketplace. 

Also, as noted previously I enjoyed working with several colleagues on an Enterprise Risk Management Program for a US medical device manufacturer that had been acquired by a European parent corporation. It was an excellent approach to future planning that I greatly enjoyed. Which is to say, that I think my philosophical sensibilities and interests in risk management are European. If anyone is interested in exploring this topic further, please contact me at jameskolka@gmail.com or jim@jameskolka.com. 

Market Surveillance #1 – To Be Or Not To Be – When, Is The Question

Introduction

This is the first of two blogs about market surveillance in the EU. The first blog addresses some concerns evolving from my experience with self-certification with new approach Directives and possible ways to address those concerns. The second blog will address my experience with Member State response to accidents and fatalities in light of Decision No 768/2008.

I suppose it seems odd that an American is concerned about the issue of EU market surveillance, however, I have seen continued abuses and it irritates me. Those of you who have been reading my recent blogs are aware that I am serving as a legal expert in a lawsuit involving a non-compliant CE marked machine that has killed one person in the UK and so badly injured another that he will require 24 care for the rest of his life. What was put forth as a Technical File by the manufacturer could best be called a “junk file.” The manufacturers’ compliance with EN safety standards was a farce! Further, there was no Annex I Health and Safety Requirements Checklist indicating which Essential Requirements the manufacturer thought applied to all of the machines listed in their “Product Family Technical File.” And of course there was no meaningful Risk Assessment following EN ISO 14121-1: 2007.

One of the most troubling aspects of the case is the fact that the “junk file” and lack of serious compliance could only be discovered after the accident. It is a particular concern with new approach Directives when “self-certification” is an option. The new approach Directives and EN harmonized safety standards are a significant contribution to global product improvement and product safety. Unfortunately, all the potential gains are washed away if regulatory oversight is ineffective.

As a consultant, it is difficult to work with manufacturers who want to do as little as possible and whom I avoid as clients. I want my clients to fully comply with the requirements of the new approach safety Directives. Conversely, as an attorney it presents an opportunity to serve as a legal expert in product liability lawsuits against manufacturers who didn’t attempt to comply and whose machines have caused injury to persons and property. It is a perverse consultant/attorney dichotomy driven by a desire to improve product safety.

Decision No 768/2008/EC of the European Parliament and the Council of 9 July 2008 On a Common Framework For the Marketing Of Products and Repealing Council Decision 93/465/EEC

I wrote about this decision in a blog posted 30 October 2009. At the time it was exciting because it promised to address some of the issues concerning new approach directives and in particular improve market surveillance starting 1 January 2010. The machinery manufacturer lawsuit discussed in my recent blogs, however, brought home the problems inherent in self-certification where little regulatory discipline is exercised by Member State Competent Authorities over machines placed on the market in their countries. 

Unless an effort is made to require that Part A (the index) of a Technical File and an Annex I Checklist exist and are filed electronically with a member State Competent Authority, manufacturers will be able to play “fast and loose” with Directive requirements. While Part A of a Technical File and an Annex I Checklist don’t eliminate evasion and fraud, they do commit manufacturers to state which Essential Health and Safety Requirements apply to their products and which EN harmonized standards will be used to demonstrate conformity with those requirements.

Authorized Representatives

Hypothetically, Authorized Representatives also could hold Part A of a Technical File and an Annex I Checklist, but I have found Authorized Representatives to be a mixed bag. They range from manufacturers’ EU subsidiaries, to distributors, to an attorney’s post office box to professional Authorized Representatives, who range from modest to exorbitant in their fees.

In one instance I worked with a client who had been notified by their Authorized Representative that they would be reported to the Dutch Competent Authority if they didn’t produce their CE marking documents within eight days. Naturally, the company was panicked. Fortunately, they made a Class I non-sterile non-measuring medical device which meant that they could self-certify. Consequently, we were able to respond and the company was able to e-mail their documentation to the Authorized Representative and disaster was averted. 

I found it interesting that the Authorized Representative offered a “Dutch company” who could help my client meet these requirements. No doubt, it would have been expensive. It also raised the question of possible conflict of interest/collusion between the Authorized Representative and the “Dutch company.” Needless to say, I have become cynical about the business ethics of some of the professional Authorized Representatives.

Notified Bodies

EU Notified Bodies also could serve as Authorized Representatives, however, my concerns about their non-monetary ethical integrity is even greater than EU professional Authorized Representatives. I have worked with and have great respect for several Notified Bodies. Unfortunately, many others have not performed professionally. My concerns range from encountering outright malpractice to lax oversight to monetary ambitions that appear to dominate their behavior and quality of work. A few examples should suffice.

(1.) A few years ago I worked with a company that had requested a visit from a Dutch notified body to examine their Machinery Directive CE Marking Technical Files to see if they satisfied EU requirements to place two machines on the EU market. Representatives of the notified body flew to Atlanta from Amsterdam and spent time with the company going over their files. At the conclusion of their visit, they issued two EC Type Examination Certificates for two different machines and made extensive comments on the remaining machines not being ready for CE marking. The EC Type Examination Certificates were inappropriate because they could only be used for dangerous machines listed in Annex IV. Neither of these machines were listed in Annex IV.

My client assumed that the certificates that could be used in a court of law in the future. The notified body knew that the company was ignorant about the legal nature of their notification and the fact that they were acting as a consulting body and had no notified body status in this case. I first raised the question with the Department of Trade and Industry and the UK and they offered to contact the Dutch Competent Authority. After three months of no response, they suggested that I should try which I did for another three months, including e-mailing the head of the Competent Authority, again no response.

Finally I wrote to Commissioner Liikanen of the European Commission whose Directorate had oversight of the Machinery Directive as well as other Directives and received an e-mail letter three weeks later stating that I was correct in my concern, copying the Dutch Competent Authority and Dutch Notified Body of that fact.

(2.) In my last blog I described a weak surveillance audit by a German notified body of a California manufacturer of Class III medical devices. The company was concerned about how it might fare in a FDA plant inspection. They requested that I write an Executive Summary of the surveillance audit. Although the notified body audit made good observations, they did not issue any major or minor nonconformities calling for improvement. As a consequence, the surveillance audit was not helpful. I told the company that if they did not make significant improvements, they would fail an FDA plant inspection. I spelled out the weaknesses in the surveillance audit and what needed to be done to address those weaknesses.

I was aware from a colleague that the same notified body conducted a weak audit of another Class III Medical Device manufacturer in California. My colleague also was asked to address the quality of the manufacturer’s most recent surveillance audit. He said it was weak and inadequate. The Medical Device manufacturer then shared my colleague’s assessment with their notified body. The notified body in turn called the UK managers of our Training and Consulting firm and complained about his assessment. He stood by his assessment.

Shortly after my colleague’s visit, the company was cited for patient deaths from their devices. A few months later the Wall Street Journal announced that another medical device company dropped its acquisition offer for this company by $500,000 dollars. I don’t think the notified body ever realized how close they came to a lawsuit, if the acquisition had been aborted.

Summary

Previously, I have mentioned that I would be happy to work with interested parties to improve the quality of EU regulatory oversight. It doesn’t need a sledgehammer, but it does need strengthening to be effective. We have no such regulatory oversight in the US. Perhaps the best protection for the US market is product liability litigation. Recently, a congressman from New York suggested that the US Consumer Product Safety Commission should diminish its regulatory involvement with toy safety. (Swell bring back the lead paint and melamine!)

I also would like to work with European manufacturers and companies on steps that can be taken to reduce their liability exposure in the US market. It seems to fit the European philosophical approach to product safety and would help EU firms concerned about the litigious nature of the US marketplace.

In an earlier blog I describe working with several colleagues on an Enterprise Risk Management Program for a US medical device manufacturer that had been acquired by a European parent corporation. It was an excellent approach to future planning that I greatly enjoyed. Which is to say, that I think my philosophical sensibilities and interests in risk management are European. If anyone is interested in exploring this topic further, please contact me at jameskolka@gmail.com or jim@jameskolka.com. 

My Experience With Differences in FDA & EU Medical Device Regulatory Oversight – Not Equal Yet

Introduction

A few years ago I worked with a California Medical Device Company that made FDA and EU Class III medical devices. The company contacted their insurance company asking for help for their employees to better understand the similarities and differences between the two regulatory approaches. I conducted a GAP analysis that was used in training workshops at their two locations over two days in the Los Angeles Area. 

The company had encountered some difficulties in device labeling and wanted a complete review of their quality management system. They had recently been visited by their notified body and asked if I would read the notified body’s most recent surveillance audit and critique the findings. Among the questions they wanted addressed was whether they were ready for an FDA plant inspection. Consequently, the notified body surveillance audit provided a good recent snapshot of how well they were doing.

Notified Body Surveillance Audit

After reading the audit, I found it to be disconcerting both ethically and legally. The comments made were excellent, but they were not identified as major or minor nonconformities or even observations. Consequently, they may have been well-written but they carried no weight. My ethical concern was that if the comments had been given greater weight, it would have been helpful to the manufacturer in making needed changes to their quality management system. My legal concern was that a third-party conducting a surveillance audit of a Medical Devices Directive Class III Medical Device should be of equal rigor to an FDA plant inspection. It was not.

The FDA would not have issued its finding in such a low-key manner. Most likely, FDA would have issued a number of findings on a 483. In my opinion, both FDA and notified body audits ought to have the same level of rigor so that medical device manufacturers can feel that they are receiving the same level and quality of scrutiny whether it be from FDA or an EU sanctioned notified body. Consequently, when a medical device manufacturer completes a notified body audit, they ought to feel that they are fully prepared to sustain an FDA inspection. 

The question being asked by the manufacturer was, “were they in good enough shape to sustain an FDA inspection?” The answer was no. I suggested that they examine FDA’s Guide to Inspections and Quality Systems contained in Quality System Inspection Technique (QSIT) so they can see the questions FDA would ask during an inspection. At present, the manufacturer faced the distinct possibility that FDA might shut them down.

Observations

The full list is too extensive for a blog. Following are a few of the notified body observations contained in the notified body surveillance audit broken into two categories; (1) EU Medical Devices Directive, and (2) ISO 13485 

Medical Devices Directive

• There needs to be a quality system procedure on how to write a Declaration of Conformity and each Declaration of Conformity should specify the specific models (the product family) for which the declaration is applicable. The same can be found in the GAP analysis. 

• There needs to be a defined and documented quality system procedure to support the translation of device instructions and labeling into Member state user languages. The same observation can be found in the GAP analysis.

• Risk analysis reports should be controlled documents with a record number, revision status, dated and signed.

• The observation that risks should be reassessed whenever product or manufacturing changes are made and information from the post-marketing surveillance system is received identifying problems about new risks is sound and should be implemented. This should be implemented at all three levels – design, production and post-production.

• The observation that the company’s procedure for CE marking and labeling should be included in Part A of the Technical File, but was not found in the technical file is valid. My biggest concern here is what I was able to see as a Technical File did not in my opinion constitute a Technical File.

• The requirement that a quality system procedures specify that Part A of the Technical File be sent to your EU authorized Representative is valid.

 Quality System

• The request the quality objectives be defined and reviewed annually is a good suggestion. More clearly defined objectives and metrics to better measure performance and ensure continued effectiveness and suitability of the quality system would be particularly appropriate at this time. 

• The observation that the contents of the most recent Management Review Meeting minutes did not fully represent agenda items listed within the company’s Management Review Procedure is significant. While FDA will not look at the minutes of the meetings, they will look at the procedure to determine if you are doing what you say you are going to do. If FDA discovers that procedures are not being followed, it would be taken seriously. 

• The observation that Device Master Records are not being clearly defined documented and linked to the requirements of the Quality Manual would be taken seriously by FDA. Device Master Records should exist for all products, both CE marked and non CE marked

• The requirement for a mandatory independent evaluation of the design and development of a product is new from a notified body (at that time), but parallel to the requirement by FDA to have independent input in the design review process. It is a good recommendation.

• Clarification of the design change process (major vs. minor) should be made clear in the design control procedures and specifically in the design change procedure.

• The observation that the company should maintain relevant procedures, available at entry, for gowning and egress from a controlled environment is a valid requirement that would be a significant concern for FDA. This should have been written as a minor conformity that would’ve required a quick response.

• The observation that the controlled environment Worker Training Manual should become a control document also should have been written as a minor nonconformity. It would have required a very simple response, but assured that the matter had been attended to quickly. This would be a concern for FDA.

• The request that advisory notices and product recalls be further defined is excellent. A procedure on advisory notices and recalls should specify the methods of communication to be used and the system for determining the disposition or return product. This too would be a concern for FDA.

• The observation that compliance with high-level requirements should be checked during internal quality audits is sound. The requests that the Auditor Training Module be comprehensive and support the qualification of auditors is good suggestion. I recommend that training be expanded to include FDA’s Quality System Regulation in addition to the EU requirements. The internal quality audit should be looking at both EU and FDA requirements during the same audits.

• Finally, the observation that training records are not current and do not reflect the revision status upon which the training is based is legitimate. In general, training should be reviewed to make certain that people have been trained, the training outcome has been effectively measured and the information is current in each employees training record. It is an area that FDA will look at closely.

Summary 

It would be helpful for people to review this Executive Overview, the GAP analysis and relevant FDA documents affecting their area of operation and responsibility at the company. Becoming familiarized with the FDA’s Quality System Regulation and FDA’s expectations represented in QSIT will provide major insight on what to anticipate during an FDA inspection. Concurrently, QSIT will provide clues on what FDA expects in quality systems of companies that manufacture medical devices.

One of the first questions I was asked is what is an SOP? In short it stands for Standard Operating Procedure. Further, FDA expects that every company has a Standard Operating Procedure to write SOPs. The question, however, tells you that you have a way to go with your employees before you are able to survive an FDA inspection.

Conclusion

Eight months later I received a call from the company telling me that they had just finished a full plant inspection by FDA and didn’t receive a single write up on a 483. Unfortunately, the notified body did not provide the quality of assistance that would have been helpful had they elevated their observations to minor nonconformities requiring a prompt response.

This is not the only time that I have observed notified bodies operating at a more lenient and less helpful level than FDA. They are not equal yet. If you have questions about EU and FDA medical device regulations, product liability lawsuits and preventive steps such as product safety/product liability audits to reduce product liability exposure, you can contact me at my e-mail address jameskolka@gmail.com.  

 

 

EU Machinery Directive & US Product Liability Lawsuits – A New Era Begins

Introduction

I have written several times about the US product liability implications of the EU Machinery Directive. What makes this blog different is the evolution of EN harmonized standards into ISO and IEC standards and by virtue of ANSI participation drafting ISO and IEC standards, the former EN standards are now also American standards. This fact will have significant implications for future litigation in the US. 

Back-story

In some earlier blogs I described working with an American corporation concerned about the increasing losses from product liability lawsuits and operator deaths in one of their Manufacturing Divisions, losses sufficiently large that they threatened to erase the profits of the division.

Since I had earlier helped another Division in the corporation CE Mark several large exploration and drilling machines, their corporate counsel, vice president and risk manager asked me to examine the litigation history of the Division and give them a report. Reading through their litigation history, it was clear that plaintiffs’ claims focused on allegations of design defects with 60% of claims on defective design, 30% of claims on defective design and manufacturing and 10% of claims on defective manufacturing. Plaintiffs’ attorneys also alleged failure to warn and inadequate instructions (which would come under design) and frequently asked questions about Product Analysis Files.

A review of the manufacturers’ machine design files revealed drawings, schematics, operator/maintenance manuals but no records of the steps that had been taken to design safe machines. Engineering change orders frequently had been made to accommodate customers, but no historical document records of the change orders existed. Operation and maintenance manuals were introduced with titles, “Safety Features” and “Safety Options,” without any realization of the liability exposure created by mentioning “Safety Options” that should never have been optional. In other words, it was a mess. If plaintiffs’ attorneys had any clue about the total lack of any design coherence and meaningful documentation, the litigation results would have been even more devastating. 

Since the manufacturer had CE Marked two machines for placing on the EU Market, I suggested that they use the EU model for all of their machines to address the issue of machinery safety. Corporate counsel and management resisted this approach because they thought it would price their machines out of the US market with their competitors. They asked if they could use US standards such as SAE (Society of Automotive Engineers), ASME (American Society of Mechanical Engineers) and a few industry association standards. In other words, use US standards for machines in the US market and EU standards for machines in the EU market.

I said that could be done, but there are some problems with the approach:

• First, US industry standards tend to be permissive in approach and EU EN harmonized standards are prescriptive in approach. In other words, tougher safety standards in the EU.

• Second, machines models headed to the EU would be meeting higher safety standards than for the US. To knowingly sell a safer machine in the EU and less safe machine in the US could result in significant punitive damages if someone was injured in the US by a less safe machine than was being sold in the EU and that fact was discovered by plaintiffs’ attorneys and the jury.

• Third, if a manufacturer is aware that a higher level of machine safety, the state-of-the-art in the marketplace, and competitors achieving that higher level of safety, a machinery manufacturer is basically is asking for a product liability lawsuit when the less safe machine causes an injury.  

After contemplating their approach to their product liability litigation problem, corporate counsel and management decided to sell the division. While unintentional, I had conducted due diligence. It was cheaper to sell the division rather than correct all of the problems and defend against new product liability lawsuits. Further, their insurance deductable for future lawsuits had just been raised to $2 million dollars per lawsuit.

Concerning the second problem, readers of previous blogs will recall a discussion of a 2002 Minnesota lawsuit where a California manufacturer of packaging machines deliberately omitted a laser light curtain safety device that was required of machines sold in the EU for six years. Consequently, a 28 year old young man working around one of their machines in St. Paul Minnesota walked into an area where the packaging machine was actively moving, was struck in the head and would require 24-hour care for the rest of his life. Had the light curtain been in place, the movement in the area would have been detected by the laser light curtain and shut down the machine. When the jury discovered that the company knew how to make safer machines and was selling them machine in Europe, but decided not to add the safety device to the machine in the United States, they awarded $34 million dollars in punitive damages.

EN ISO Safety Standards and Product Liability Exposure in the US Today

In three blogs posted on March 31, April 30 and May 18 I have related issues regarding a machine that killed a worker in the UK and maimed a worker for life in the US. One of the concerns of the trial attorneys has been the validity of the EN standards used to design and manufacture a machine in a US courtroom. While most of the standards involved in the case were also ISO or IEC standards, a few were EN standards. The possibility existed that defense attorneys might argue that EN standards have no validity in a US courtroom. As noted in my earlier blogs much more obfuscation existed in the “Technical Files” which could be better called “Junk Files.” Yet, the concern existed. Today everyone of the standards involved in that case is now an EN ISO or EN IEC standard. 

For those of you readers who say so what if it’s an ISO or IEC standard, what do International Standards mean in an American courtroom? Read the ANSI web site where you will discover that ANSI is the official US representative to and facilitates US participation in drafting ISO and IEC standards, thereby making them American Standards.

If you still ask so what, read Judge Lisle’s language in a 2000 class action lawsuit where defense attorneys argued that ISO 9001 had no standing in the case. The judge stated, “the Eighth Circuit has consistently held that compliance or noncompliance with ANSI standards is admissible in strict liability and/or negligence cases to prove a design defect.” It should be noted that the other US Circuit Courts Of Appeal have made similar decisions concerning ANSI standards.

Conclusion

The transition of EN Safety Standards is now pretty much complete. Very few safety standards remain that are only EN standards and those will transition to ISO and IEC standards in the near future. If you ask why, the answer is quite simple. All EN. ISO and IEC standards are reviewed approximately every 5 to 7 years to decide whether to retain, modify or eliminate the standard. The EU/European standards authorities CEN and CENELEC agreed to work with ISO and IEC to merge their efforts. ANSI is the American representative in these reviews. Expect to see more ISO, IEC, ANSI standards entering product liability litigation in the future. If you have questions about product liability lawsuits and preventive steps such as product safety/product liability audits to reduce product liability exposure in machinery design and manufacturing, you can contact me at my e-mail address jameskolka@gmail.com.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Until Medical Device Manufacturers Conduct Product Safety & Product Liability Audits, Risk Management Does Not Exist!

Background

Several times since I began this blog in February 2009, I have mentioned a private “in-depth” litigation study conducted by a medical device insurance company of its litigation history. Since virtually all of their lawsuits have been settled out of court, there is no public record of mistakes to guide other medical device manufacturers, thereby allowing them to repeat the same mistakes over and over.

Quality Management Systems such as FDA’s Quality System Regulation (QSR), the EU’s Medical Devices Directives combined with ISO 13485:2003 Medical Devices – Quality will management systems – Requirements for regulatory purposes and Canada’s application of ISO 13485:20032 medical devices must be understood from a legal perspective.  They contain Quality Manuals and Quality Procedures developed by each company to comply with governmental regulatory requirements to manufacture a medical device. The system must be documented and must identify the processes that will be used to manufacture medical devices.

Quality system documents and records contain a wealth of information that can be obtained during discovery to determine if a company is satisfying governmental regulatory requirements and if a company is satisfying its own quality management procedures. Failure to follow regulatory requirements and/or follow the company’s quality management system requirements can be used against a company in litigation. Depending upon the seriousness of the regulatory failure, it could provide vital information to plaintiffs’ attorneys. 

Quality Manuals and Quality System Documents are intended to guide the operation of a company’s Quality Management System. Quality system documents are neither intended nor constructed to provide evidence of a company’s concern for patient safety and product safety. If a company wants to prove that it cares about patient safety and make safe products, it will have to build documentation to prove that point. 

Litigation

The three major areas of product liability litigation – Design, Manufacturing, and Post Sale Surveillance are specifically addressed by clauses in each regulatory Quality Management System. For example, to design a medical device using FDA’s Quality System Regulation (QSR), a company that wants to manufacture a Class III, Class II and certain Class I medical devices must follow 21 CFR 820.30 Design Controls. This means that there should be documents and records describing the stages of design development: 820.30 (b) Design and development planning, (c) Design input, (d) Design output, (e) Design review, (f) Design verification, (g) Design validation, (h) Design transfer, (i) Design changes, (j) Design history file. This means that records should exist documenting each of those stages, including risk analyses where and as needed. If records don’t exist, the device was not designed in accordance with FDA regulations 

All of this design information is available to plaintiffs’ attorneys in product liability lawsuits. Manufacturing a medical device follows its own set of QSR regulatory clauses. To be effective and not be blindsided by plaintiff’s allegations citing quality system breakdowns, corporate counsel and defense attorneys must understand regulatory Quality Management Systems in depth.

Quality Management Systems are audited internally following an audit protocol that visits each department at least once annually, more often if problems are found. Problems identified as nonconformities must be addressed by Corrective and Preventive Action CAPA). Departments are asked to make corrections following a timeline.  Internal audits, nonconformities and corrective actions are reviewed at least once annually (generally more often) by top management.  Management review minutes are kept. Internal audit records, nonconformities, corrective and preventive actions and management review minutes constitute a rich source of information for plaintiffs’ motions to compel. Consequently, corporate counsel and defense attorneys must understand what type of information and records are generated and be prepared to address these issues with their manufacturers.

What does this mean for product liability litigation?

The medical device insurance companies litigation study revealed several concerns regarding weaknesses of medical device manufacturers in product liability lawsuits. Remember the old saying, the question isn’t “if you are sued, will you be prepared” rather “when you are sued, will you be prepared!” A few of the findings are listed below:

• Several medical device manufacturers constructed Quality Management Systems to satisfy FDA and EU medical device regulatory requirements, but contained no documented methods, processes or procedures for communicating product safety concerns and/or incorporating those concerns into their business processes, thereby demonstrating no commitment to product safety.

• The study found a lack of internal processes and procedures in companies Quality Management Systems for escalating product safety concerns and a review of those concerns as well as a lack of any kind of cross functional committee to deal with product safety issues. Plaintiffs’ attorneys alleged that this demonstrated a lack of due care and concern for product and patient safety.

• The study found several instances of biotech firms failing to protect their documentation by asserting that attorney-client privilege prevented plaintiffs’ from examining their documentation during discovery, which assertion was not accepted by the court.

• The study found misconceptions by management of medical device manufacturers that compliance with FDA’s Quality System Regulation was enough to prevent product liability claims.

• The study found that management frequently continued to underestimate the risk of product liability litigation to the success and/or survival of their business.

• The study found that design research documents and agreements often contain hidden product liability exposures – the agreements were not reviewed by legal counsel familiar with clinical research or by insurers or brokers reviewing coverage limits and indemnification clauses.

• The study found a lack of qualified in-house personnel available to integrate product liability avoidance principles into the firm’s quality management system and establish an infrastructure for product safety, resulting in product liability post-production legal defense problems.

• The study found that company postproduction corrective and preventive actions were deemed to be inadequate for the degree of risk presented by individual complaint investigations resulting in both FDA regulatory actions and product liability lawsuits. 

Summary

These are but a few of the problems uncovered by the litigation study. The actual list is quite long and quite disturbing. The lack of training for product liability exposure is extraordinary. Virtually no firms conduct product liability audits or product safety audits of their operations. The assumption appears to be that compliance with FDA and EU regulations is sufficient. From my experience, quality managers do not see legal issues as their responsibility and therefore will pass them off to regulatory managers, corporate counsel and management. In turn regulatory managers do not focus on product liability exposure.

The focus on product safety and patient safety is inadequate and will continue to cause trouble. The maintenance of records often is poor. The wording of documents pays no attention to the legal consequences of what is said. Consequently, it appears that product liability lawsuits will continue to plague medical device manufacturers. There are steps that can be taken training personnel to conduct product liability audits, product safety audits and learn how to write documents so that the words don’t become minefields for litigation.

My wife has often told me that people don’t like to read they prefer getting their information in little word bites and sound bites. I generally respond that attorneys have always liked to read and will analyze what is said how it is said and use it in a court of law. If you have questions about product liability lawsuits and preventive steps such as product safety/product liability audits to reduce product liability exposure, you can contact me at my e-mail address jameskolka@gmail.com.

 

FDA Levies $ Billion Dollar Fines For Off Label Marketing Of Drugs

Background

A week ago yesterday, the Wall Street Journal reported that FDA is seeking $1 billion dollars from Johnson & Johnson to resolve a long running probe into the company’s marketing of an antipsychotic drug Risperal. The settlement of $1 billion would be among the largest in a string of settlements related to off-label marketing of drugs in recent years.  Since 2004 the federal government has been investigating whether J&J’s Janssen pharmaceutical unit improperly promoted Risperal for unapproved uses. The company said it set aside an unspecified amount of money for a potential settlement and it would likely face civil and criminal litigation if it didn’t settle.

Officials at J&J said they were surprised at the size of the sum that prosecutors are seeking. Prosecutors have been citing a benchmark $1.4 billion dollar settlement that Eli Lilly & Co. reached in 2009 to resolve a probe into alleged improper marketing of its antipsychotic drug Zyprexa. Lilly’s alleged off label marketing took place over a longer period of time. Under federal law, companies cannot market medicines for uses other than those approved by the Food and Drug Administration, although doctors can prescribe drugs for unapproved uses.

Prosecutors argue that Medicaid and other government programs are wasting tens of millions of dollars paying for medicines that drug makers encourage physicians to prescribe for uses that FDA hasn’t determined are safe and effective.  In 2009, Pfizer Inc. paid the pharmaceutical industry’s biggest settlement agreeing to pay $2.3 billion dollars to resolve an investigation into the marketing of the painkiller Bextra, which now has been withdrawn.

Since 2001, drug makers have paid more than $11 billion dollars in off-label marketing and other whistleblower fraud cases. The J&J case, like many others started as a whistleblower case. Company insiders (whistleblowers) can receive a portion of the settlement, if the government recovers money. Industry officials are upset about the millions of dollars that whistleblowers can earn from a successful case and argue that these people are often disgruntled employees whose allegations are taken out of context.

A guilty verdict could mean that medicines, e.g. drugs could no longer receive reimbursement from Medicaid and other government programs. Further, an unsuccessful court challenge by drug companies could result in expensive litigation brought by patients and might provoke some states, that don’t participate in the settlement, to seek reimbursement. While the allegations that prosecutors in Philadelphia and Washington DC are pursuing in the J&J case haven’t been disclosed, the FDA has approved Risperdal for treatment of schizophrenia and bipolar disorder. The agency, however, has warned that the drug should not be given to dementia related psychosis including elderly patients.

Off-Label Marketing of Drugs and Medical Devices

Off-label marketing has been an ongoing concern for FDA. The amount of money that drug and device companies can make from off-label marketing can run in the billions of dollars. It also can result in serious to fatal consequences for patients. Since Medicaid pays substantial amounts of money for these off-label abuses, the Federal Government has a dual interest in this problem, as a consumer and prosecutor. 

As a consequence, FDA and federal prosecutors are seeking to levy settlements to discourage companies from directly and indirectly encouraging off-label uses. FDA also has decided to take aim at corporate executives to rein in Pharma abuses. FDA warned in November 2010 and that it was resurrecting a 1970s legal doctrine to bring criminal charges against top executives.

The goal, said Eric Blumberg, FDA deputy chief counsel for litigation, was to ”change the corporate culture” at firms that have shrugged off $1 billion dollar penalties. “It is clear that fines are not working here”, Blumberg told a food and drug Law Institute meeting in Philadelphia. “We need to put something else on a scale to make people think twice, three times.” Blumberg was talking about illegal drug marketing.

FDA’s weapon of choice is the Park Doctrine, based on a 1975 case against Acme Markets president John Park. FDA charged Park personally with sanitation violations following multiple warning notices. The US Supreme Court agreed that Park as company president was ultimately responsible for ensuring compliance.

In 2007, three executives of Purdue Frederick Co. pled guilty to charges of misbranding OxyContin. The three paid $634.5 million to the Virginia Medicaid Fraud Unit and were barred from federal health care programs for 12 years.   

In 2010, four executives of Synthes pled guilty for off-label promotion of a bone cement. The four face fines of up to $10,000 each and a year in federal prison.

Other recent targets include former GlaxcoSmithKline vice president Lauren Stevens, indicted for making false statements and obstructing an FDA investigation into illegal marketing of Wellbutrin SR (buproprian sustained release) and former KV Pharmaceutical CEO and Chairman of the Board Marc Hamertin barred from participating in federal healthcare programs for 20 years.

Protecting the Nations Health

It is a remarkable when there is a push in Congress to ease up on regulations in the healthcare industry with the logic that it stifles innovation and slows delivery of new medicines to the market. It is understandable that the delivery of new medicines should be expedited as soon as possible, but not at the expense of patient safety and product safety.

It is difficult not to be cynical when there is a push in congress to ease up on regulating healthcare abuses. It is reminiscent of the words of Gordon Gekko, the main antagonist in Oliver Stone’s 1986 film Wall Street, when he said, “Greed, for lack of a better word, is good!” Apparently, that sentiment is alive and well in portions of America’s Healthcare Industry.

We read of medical mistakes in hospitals and hasty decisions by doctors that cause 100,000+ deaths each year. Compounding these problems with corporate greed is sad and troubling for the nation’s healthcare system. Unfortunately, it is nothing new. Prosecuting these abuses with adequate civil and criminal penalties appears to be the only way to dampen the onslaught.

Reducing regulations, while wildly popular among a few who dislike government oversight, enriches the few and hurts the many. If you have questions about healthcare abuses, product liability lawsuits and preventive steps such as product safety/product liability audits to reduce product liability exposure, you can contact me at my e-mail address jameskolka@gmail.com.

FDA Compliance & Product Liability Exposure

Introduction

In several blogs I have discussed a private study conducted by a medical device insurance company examining their litigation history, successes and failures. I want to revisit some of the findings as they relate to life science firms (medical devices, biotech, pharmaceuticals). In particular, I want to examine the issue of Quality Management Systems – (FDA’s Quality System Regulation, ISO 13485, ISO 9001) regulatory compliance and product liability exposure.

As often happens in a corporate setting or for that matter any large organization, responsibilities are defined in a structure that discourages or punishes “thinking outside the box”. Consequently, if a quality manager raises the question about regulatory issues or potential liability exposures, the response to their suggestions often is “stay in your own box” legal issues are the responsibility of the legal department. Likewise, if a regulatory manager suggests examining product liability issues they too may be chastised for stepping outside of their job description.

I saw this happen to a quality manager in the very first medical device firm I worked with on CE Marking their medical devices. The Quality Manager learned very quickly – “if I mention legal issues my hands will be slapped.” Therefore, if I see something that might have legal implications I am not going to get involved. That is for the legal apartment to find out and solve by themselves.

Unfortunately, this sort of separation of responsibilities and jealousy if anyone moves into another person’s area of responsibility is all too common. It happens in every organization. It happens in the government. It happens in universities. It happens in the military. Efforts to break down these walls/silos are difficult and the inability to communicate across job responsibilities and/or disciplines is extremely difficult. It strangles effective cross disciplinary communication.

Medical Device Litigation Study And The Product Liability Consequences

The medical device litigation study conducted by the medical device insurance company found several areas where the inability to address product liability exposure resulted in litigation losses, in some cases substantial losses and increased insurance premiums. Listed below are a few of the more prominent institutional failures to address product liability exposure.

• The study noted a lack of internal processes and procedures including company quality management systems for escalating product safety concerns or review of those concerns as well as a lack of any kind of cross functional committee to deal with product safety issues. Plaintiffs’ attorneys noted this failure and alleged that the failing demonstrate a lack of due care and concern for safety resulting in an expensive out-of-court settlement.

• The study found that management continued to underestimate the risk of product liability litigation to this success and/or survival of their business.

• The study noted that life science firms often lack a clear understanding of the potential risks and product liability exposure resulting from misunderstood and poorly written safety documents and communications.

• The study recorded a lack of qualified in-house personnel available to integrate product liability avoidance principles into the firm’s quality management system and establish an infrastructure for product safety, resulting in product liability post-production legal defense problems.

• Often post-production complaint data was poorly managed and not escalated to the attention of senior management and/or was ignored by senior management resulting in regulatory sanctions and product liability lawsuits.

• The Study noted that life science firms often did not conduct post legal settlement reviews and analyses over claims in an effort to learn from their litigation experience. Consequently, where a case was settled and believed to be over and finished, the failure to learn from experience often resulted in a similar case arising a few months later.

• Often, documented critical safety information was found to be carelessly worded and/or prepared and used against the firm to support the allegation of a lack of attention to patient safety and product safety resulting in product liability lawsuits and expensive out-of-court settlements.

• Too often life science firms did not conduct diligent reviews of their Internet websites and advertising materials for misleading claims and ‘testimonials’ resulting in the use of these claims and testimonials against the firms in product liability lawsuits.

Conclusion

Quality Managers and Regulatory Managers are not trained to understand or think about product liability exposure. They don’t know how to conduct product safety or product liability audits of their processes, documents and regulatory quality management systems for potential areas of product liability exposure. Therefore, it isn’t surprising that the number of product liability lawsuits is increasing. The phrase, “the best offense is a good defense” is an axiom apparently without meaning in the life science regulatory world.

Product liability lawsuits are a continual threat to the financial success and prosperity of life science firms. Unfortunately, too often the threat isn’t taken seriously. In addition, life science firms are subject to regulatory action by FDA and its counterparts in the EU, Canada, Australia and Japan. Failure to abide by FDA and other country regulations could lead to regulatory sanctions that in turn provide fuel for trial lawyers and product liability lawsuits.

Corporate counsel and product liability litigation attorneys do not fully understand and appreciate the impact of documented regulatory Quality Management Systems (QMS) on product liability litigation. Plaintiffs’ attorneys are becoming increasingly effective in using these regulatory quality management systems against life science firms in product liability lawsuits. To date, plaintiffs have only scratched the surface and are just beginning to examine the internal structure, quality procedures and documents required to operate these systems. Broken or failed QMS systems are rich with data and potential that can be used in product liability lawsuits.

Therefore, it is critical for life science firms and their attorneys to better understand the regulatory and legal milieu in which they exist and take pro-active steps to improve their lot by better grasp the legal significance of their regulatory Quality Management Systems and by practicing product liability avoidance, known also as lost control and preventive law. If you have questions about Life Science Firms, product liability lawsuits and preventive steps such as product safety/product liability audits to reduce product liability exposure, you can contact me at my new e-mail address jameskolka@gmail.com.  

CE Marking Machinery & US Product Liability – The Lawsuits Begin #3

Introduction

This blog is a continuation of two blogs posted on February 25, 2011 and March 31, 2011 respectively. I noted in the second blog my frustration with EU Market Surveillance and the Machinery Directive. I have examined many manufacturers' Machinery Directive Technical Files, some well done and too many done badly.

In spite of early efforts by the European Commission to structure Technical Files into Part A (the index of the file) and Part B (the substance of the file in hardcopy, electronic copy,  samples, etc.) the concept appears never to have gained traction. The virtue of a Technical File divided into two parts with an index is the ability to look at Part A and see if a company attempted to fully comply with the requirements of the Machinery Directive and related Directives.

As a consequence, the mess I have described in the two previous blogs has materialized into a legal case in the UK & US. I have been examining a presumed Technical File that does not contain a comprehensive list of the Directives, Standards and elements required for compliance with the requirements of the Machinery Directive. If I were cynical, I could conclude that the company in question deliberately constructed a “junk file” to cover their tracks in the event of a lawsuit. Or, I might conclude that the personnel who constructed the file were sloppy, indifferent and incompetent. Either conclusion is plausible. 

The only section of the file constructed by the company that purports to resemble a type of index is their EC Declaration of Conformity which is incomplete and inaccurate, e.g. not all standards are cited and several cited are inaccurate, e.g., wrong date of publication, expired or missing. Unfortunately, this pathetic document came to light only after a worker had been killed and another severely injured. These documents should have been reviewed before the manufacturer placed these machines on the EU Market.

Some Ideas for Improving Market Surveillance of the Machinery Directive and Related Directives

While I believe that self-certification can work well and that notified body oversight isn’t necessary, save for exceptional circumstances, I think that there should be a requirement that every manufacturer that places a CE Marked Machine on the EU market should file a document with a member state competent authority that briefly provide the basic elements of the machine which also is shared electronically with the Competent Authorities of all 27 Member States and the European Commission Enterprise and Industry. Further, I think that document should be Part A of their Technical File.

I construct a Part A Technical File for every manufacturer I help to CE Mark their machines.For example, in a recent Part A Technical File developed for a client that recorded the following:

• Annex I Health and Safety Requirements Checklist identifying every essential requirement, the answer (Yes, No, N/A) and if Yes the EN Harmonized Standard(s) that will be used to demonstrate conformity with the requirement  
• EN ISO 14121–1:2007 Safety of machinery – Risk assessment (56 pages written and edited by me and the company’s engineering staff)
• A list of EU Directives – Machinery, Low Voltage, Electromagnetic Compatibility
• A list of 16 EN harmonized standards relevant to the manufacture of this machine
• The overall design, detail drawings and diagrams describing the machine
• Standards calculations
• Guide to the application of the Machinery Directive 2^nd Edition
• EU Compliance Protocol for the machine written by me for my client identifying all of the legal requirements and how they were satisfied
  
• A copy of the EC Declaration of Conformity
• Operating Manual
• Maintenance Manual
• Training Manual
• Sales Materials describing the machine
• Protocol for translating Manuals
• Instructions, Cautions and Warnings
• EC Declaration of Conformity for an electric motor manufactured by another company
• EC Declaration of Conformity for laser equipment manufactured by another company
• IEC System for Conformity Testing and Certification of Electrical Equipment provided by Underwriters Laboratories
• Certificate of Calibration for a machine component
• EC Declaration of Conformity for an Electromagnetic component. 

All of this information was contained in a two-page matrix of 20 items in Part A of a Technical File. Since this was a one-of-a-kind machine, no quality standard was cited. The manufacturer shared this information with their client in the EU as the machine was being constructed. I have provided this level of information for every client with whom I have worked and it is often shared with clients and occasionally member state Competent Authorities. In the case of three different machines being shipped to Turkey where CE Marking was stipulated, the company had to courier all of the CE documents for review by the client company and Turkish national authority for clearance before the ship could be docked and the machines unloaded. I thought this was a fair requirement.

Summary

The only other document that is required for machines to be shipped into the EU is an EC Declaration of Conformity, however it is prepared primarily for customs and, in my opinion, far too cryptic to be useful for the purpose described here. Further, customs officials are far too busy to scrutinize these documents for compliance with the Machinery Directive. In the case of the manufacturer of a deadly machine described in my first two blogs in this series, the only recognizable document in their “junk technical file” was an EC Declaration of Conformity, most notable for what required information wasn’t provided.

Recommendation

In order to exercise some control over the plethora of machines flooding the EU market, I recommend that that the concept of a Technical File with two parts (Part A & Part B) be revived. Further, I recommend that Part A be filed with a legal entity such as a Member State Competent Authority and digitally transmitted to all Member State Competent Authorities and the European Commission, Enterprise and Industry. Part A should include reference to all of the elements required to comply with the requirements of the Directive and related Directives (which will vary for each machine).

Further, I think some type of effort should be made to deal with all of the “junk technical files” for machines already on the market. This could be accomplished in part by citing Decision No. 768/2008/EC of the European Parliament and Of the Council of 9 July 2008 on a common framework for the marketing of products, and repealing Council Decision 93/465/ EEC and requiring every machine to submit Part A for existing machines as well as reminding manufacturers that starting 1 January 2010 they had to comply with revised Directives and revised EN standards.

I would be happy to help with this effort, if there is an interest. In my opinion, the EU Machinery Directive is the most significant contribution to the improvement of machinery safety that has been made. Its ripple effects extend globally to improve machine safety. If you have any questions about the EU machinery Directive and its US product liability implications, you can contact me for a free preliminary consultation at my new e-mail address at jameskolka@gmail.com.