Originally Published MDDI May 2001
The U.S.-EU Recognition Agreement: Its Implications for the U.S. Medical Device Industry
Its supporters say that the MRA has the potential to improve patient access to safe and effective technologies, accelerate regulatory approvals, and make it easier and cheaper for U.S. and European companies to enter each other's markets.
In May of 1998, President Clinton and European Union (EU) President Santer launched a new "Transatlantic Economic Partnership" (TEP) to strengthen the existing relationship between the United States and the EU, which was known as the New Transatlantic Agenda (NTA). These U.S.-EU initiatives were established to expand and deepen cooperation on economic issues by taking concrete steps to strengthen the multilateral trading system and enhance the transatlantic economic relationship.
It was under the auspices of NTA that the mutual recognition agreement (MRA) between the United States and the EU was concluded. This important agreement was signed by the United States and the EU in May 1998, and became effective in December of that year. The MRA consists of a framework agreement and six sectoral annexes covering electromagnetic compatibility, medical devices, telecommunications equipment, electrical safety, recreational craft, and pharmaceuticals. This article reviews and assesses the MRA and its medical device annex (hereinafter referred to as the medical device MRA), and explores what they will mean for the U.S. medical device industry.
The discussion begins with a comparison of the device regulatory approval systems of the United States and the EU, highlighting the problems that differences between the systems cause for medical device exporters. The MRA and medical device annex are then described, with an examination of U.S. industry representatives' and government officials' views concerning the MRA's likely effectiveness. The article concludes by evaluating the implications of the MRA for the U.S. medical device industry.
U.S. AND EU MEDICAL DEVICE REGULATION COMPARED
An overview of the regulatory systems of the United States and the EU—focusing on how each governs product evaluations and quality system inspections of medical device manufacturers—provides a context for an account of how the U.S.-EU MRA streamlines these procedures for both signatories.
The U.S. Regulatory System. In the United States, FDA, which is part of the Department of Health and Human Services, is the federal regulatory body responsible for ensuring the safety and effectiveness of medical devices sold in the U.S. market. FDA has the authority to require that manufacturers and importers follow certain regulatory procedures in order to market a new product. Which procedures are required depends on the potential for harm to consumers and whether similar products are already in the U.S. market.
FDA classifies medical devices into three categories based on the level of potential device risk. Class I devices pose the least risk. They include such products as tongue depressors and crutches. Class II devices generally pose an intermediate degree of risk; Class III devices are those considered to carry the highest risk potential. A device implanted in the body for life-supporting purposes would be a Class III device. Because the amount of regulatory control over a product is based on the degree of risk, only a few regulatory requirements may apply to a Class I device, while Class III devices are under strict FDA control.
Anyone wishing to market Class I, Class II, or certain Class III devices intended for human use in the United States must submit a 510(k) notification to FDA at least 90 days prior to marketing, unless the device is exempt from 510(k) requirements. A 510(k) is a premarketing submission made to FDA to demonstrate that the device to be marketed is substantially equivalent to, or as safe and effective as, a legally marketed device (predicate device) that is not subject to premarket approval (PMA). Applicants must compare their 510(k) device to one or more similar devices currently on the U.S. market and make and support substantial equivalency claims.
A legally marketed device is defined as one of three things: a device that was legally marketed prior to May 28, 1976; a device that has been reclassified from Class III to Class II or I, or a device that has been found to be substantially equivalent to such a device through the 510(k) process; or a device established through an Evaluation of Automatic Class III Definition. A device is substantially equivalent if, in comparison to a legally marketed device, it has the same intended use as a predicate device, and it has the same technological characteristics as the predicate device.
Substantial equivalence can also be established if it has the same intended use and different technological characteristics as a predicate device. This is provided the information submitted to FDA does not raise new questions of safety and effectiveness while still demonstrating that the device is as safe and effective as the legally marketed device.
A manufacturer may place a device into U.S. commerce after FDA determines the device to be substantially equivalent and the company receives a marketing clearance letter from the agency.This process applies to both domestic and foreign-made devices.
The PMA process is the most stringent product review required by FDA. In this process, a PMA application must be submitted to the agency requesting approval to market a Class III medical device. Although some Class III devices are eligible to receive clearance for marketing through the 510(k) process, most require premarket approval. Agency approval is based on a determination by FDA that the PMA application contains sufficient valid scientific evidence, including data developed in clinical trials, to provide reasonable assurance that the device is safe and effective for its intended use or uses. The medical device MRA does not cover any Class III devices.
Quality System Requirements. All medical device manufacturers are subject to good manufacturing practice (GMP) regulations promulgated pursuant to section 520(f) of the Federal Food, Drug, and Cosmetic Act (21 CFR 360(j)). Some Class I devices, however, are covered only by the GMP requirements concerning recordkeeping in 21 CFR 820.180 and complaint handling in 21 CFR 820.198. The quality system regulation (QSR; 21 CFR 820) requires that domestic and foreign manufacturers have quality systems in place for the design, manufacture, packaging, labeling, storage, installation, and servicing of finished medical devices intended for commercial distribution in the United States. Specifically, the QSR requires the following:
The QSR helps ensure that medical devices are manufactured reliably and consistently. FDA monitors device problem data and inspects the operations and records of both domestic and foreign manufacturers to determine their compliance with the QSR.
The QSR has broad requirements intended to cover the design and distribution of all medical devices, from simple surgical hand tools to complex computerized scanners. For the regulation to specify details of quality system elements for such a wide variety of medical devices and device manufacturing technologies would be impractical, says FDA. Instead, the QSR defines general objectives—the use of trained employees, design reviews, design validation, calibrated equipment, process controls, etc.—rather than methods, because a specific method would not be appropriate for all operations.
Whereas the EU medical device directives refer to ISO 9000 as the series of quality management standards to be followed, FDA asserts that its QSR is harmonized with ISO 9000 (specifically, ISO 9001: 1996) and ISO 13485:1997 ("Quality Systems—Medical Devices—Particular Requirements for the Application of ISO 9001"). In a few areas, FDA has added requirements that differ slightly from the ISO standards.
Although a quality system can help firms optimize operations in their factories and administrative areas, such a system does not actually assess product quality. Nevertheless, having a quality system in place is likely to result in efficient operations and production consistency, and consequently in higher-quality products. Thus, compliance with the FDA QSR can improve the quality of the medical devices being manufactured.
Some device company executives suggest that the long establishment of quality management systems at certain U.S. firms ought to be taken into account when evaluating the discrepancies between the QSR and other regulatory systems, including ISO 9000. Otherwise, when these firms export to the EU—where the medical regulatory system has relied on ISO 9000 more than that of the United States—they would need to duplicate certain efforts.
The EU Regulatory System. Historically, medical device regulation within the EU was the responsibility of the health ministries of individual member states. This made it difficult for both U.S. and European manufacturers to obtain approval to market their products in Europe. Medical device producers had to adapt their products to the requirements of separate European countries. U.S. firms were greatly inconvenienced by the variations among EU member states in the technical and administrative procedures for inspecting and authorizing the sale of medical devices. Differences in regulatory approval procedures fragmented the European market and made selling in more than one member state costly. Manufacturers had to modify their products for each country and subject them to a variety of national testing procedures.
As part of the EU single-market program known as EC92, a "new approach" was adopted for dealing with some highly regulated products, including medical devices. Harmonization legislation mandated only general requirements, such as product safety and protection of health and the environment. The program also relieved manufacturers of the burden of demonstrating compliance with individual member state technical regulations by requiring them to demonstrate compliance in only a single EU country. Once approved, a medical device could be sold in any EU member state. Although both U.S. and EU manufacturers were subject to the same testing and certification procedures, however, U.S. device providers would be forced to have their products tested in Europe by approved notified bodies—third-party testing and certification organizations.
CABs. Notified bodies are independent testing houses or laboratories authorized by EU member states to perform conformity assessment tasks. They may be private organizations or public entities. Notified bodies are known as conformity assessment bodies (CABs) under the U.S.-EU MRA. A notified body is responsible for determining and certifying that a firm has met the minimum technical requirements established by customers or other interested parties, including government regulators. It conducts inspections, completes tests, and certifies whether firms meet the minimum regulatory requirements. Examples of notified bodies are Underwriters Laboratories and the British Standards Institute.
In the early 1990s, the United States pressed the EU to allow notified bodies to be recognized in the United States. The EU responded that this could not be done except through a mutual recognition agreement that would enable European manufacturers to receive similar treatment in the U.S. market. The result was the 1998 U.S.-EU MRA.
For regulatory purposes, the EU classifies medical devices into four categories: I, IIa, IIb, and III. Products that pose the greater risk if used incorrectly belong to the higher classes. For these devices, assessment of compliance with the applicable EU directive must involve a notified body. As in the United States, the higher the classification category, the more extensive the participation of the notified body. The applicable EU directives for purposes of the medical device MRA are those for active implantable medical devices (Council Directive 90/385/ EEC; June 20, 1990) and medical devices (Council Directive 93/42/EEC; June 14, 1993).
The manufacturer of a Class I device may self-declare that the product fulfills the essential requirements of the applicable directive. With regard to the other device classes, the manufacturer is provided with options for demonstrating how a device fulfills the essential requirements of the applicable directive. For example, with Class IIa or IIb devices, the manufacturer can get around the testing requirements of a notified body used to determine compliance. This is done by allowing the notified body to assess and approve the manufacturer's total quality system.
Under the pre-MRA-EU system for assessing medical devices, a U.S. exporter was required to have its product, quality system, or both examined or tested by a notified body. This presented difficulties because only notified bodies located in Europe had been authorized to grant final approvals of regulated products. Although some of the required procedures could be completed in the United States on a contractual basis, exporters were still forced to travel to Europe. This necessity was especially hard on small exporting companies.
In recent conversations, U.S. medical device industry representatives told U.S. International Trade Commission (USITC) staff that prior to the EU single-market initiative, efforts to harmonize conflicting EU standards and establish a single European regulatory approval process were very slow. They also said that the subsequent harmonization of the various mandatory requirements and conformance procedures has enabled U.S. medical device suppliers to reduce costs associated with establishing regulatory compliance, to benefit from economies of scale, and to increase productivity. Nevertheless, the representatives pointed out, U.S. manufacturers could have avoided costs if their products' approval in the United States had been transferable to Europe. As it stood, they incurred the cost of having products approved by notified bodies in the EU before entering the market.
The Global Harmonization Task Force. Government regulatory bodies in the United States, Canada, Europe, Japan, and Australia have been working together in the Global Harmonization Task Force (GHTF) since 1992 to make their diverse regulatory regimes relate more efficiently. Members from industry also participate in the work. The purpose of the task force is to encourage convergence in regulatory practices related to ensuring the safety, effectiveness, performance adequacy, and quality of devices and thus to promote technological innovation and facilitate international trade. The primary way the task force accomplishes this is through the publication and dissemination of harmonized guidance documents on basic regulatory practices. These documents, which are developed by four GHTF study groups, are intended for adoption and implementation by national regulatory authorities.
According to GHTF proponents, increased harmonization is beneficial not only to public health and government efficiency, but also in terms of lower healthcare costs. Through the task force's development of agreements on standards, good manufacturing practices, quality assurance, and premarket approval records, companies and sponsors will not have to contend with different requirements from different governments in order to participate in the global economy. International harmonization contributes to the rapid entry of medical technology into healthcare facilities throughout the world.
Many of the U.S. and EU public- and private-sector representatives to the GHTF have also been important participants in meetings related to the medical device annex of the U.S.-EU MRA. Consequently, much GHTF work and cooperation in connection with the harmonization and equivalency of medical device standards has enhanced the work done on the MRA. European and U.S. industry representatives say that the ultimate goal of the task force should be to establish reciprocity of approval among its members. To accomplish that, GHTF efforts must lead to various medical device regulatory systems achieving the same level of patient safety assurance.
MECHANISMS OF THE MRA
The framework of the MRA agreement was signed by the United States and the EU on May 18, 1998. It covers general aspects of implementing the MRA along with the requirements governing the conformity assessment bodies responsible for the approval of medical devices. The MRA specifies the conditions under which each party will recognize the results of conformity assessments performed by the other party's CABs. Each exporting party is required to inspect medical device manufacturers to assess their conformance with the importing party's requirements; they must also conduct premarket reviews of select low- to medium-risk devices according to the importing party's requirements. The MRA also specifies that EU CABs be trained to perform assessments with respect to FDA regulations. Similarly, CABs in the United States are required to evaluate products and to conduct inspections to meet EU requirements.
The National Institute of Standards and Technology (NIST) of the U.S. Department of Commerce has an important role in the CAB selection process: it recommends qualified U.S. CABs to FDA. NIST reviewed potential U.S. CABs and nominated 10. The selections were forwarded to FDA, which has final jurisdiction in designation of the bodies. Since then, two U.S. CABs have withdrawn from participation in the provisional period of the U.S.-EU MRA. The eight remaining organizations are British Standards Institution Inc. (Reston, VA), Entela Inc. (Grand Rapids, MI), Intertek Services Corp. (Cortland, NY), KEMA Inc. (Chalfont, PA), Orion Registrar Inc. (Arvada, CO), TÜV Product Service (New Brighton, MN), TUV Rheinland of North America Inc. (Newtown, CT), and Underwriters Laboratories (Northbrook, IL).
The existence of the MRA does not mean that FDA-approved products will necessarily be accepted in the EU or that EU-approved (that is, CE-marked) products will be automatically recognized in the United States. The agreement does not harmonize regulatory systems but rather maintains independent systems for regulating medical devices in the United States and in the EU. An EU CAB assessing EU-manufactured medical devices for export to the United States can only recommend that FDA approve the devices. Similarly, a U.S. CAB assessing U.S.-made medical devices can only recommend that European notified bodies accept the U.S. product. With respect to quality inspections and device evaluations, both the United States and the EU member states retain full responsibility for products marketed within their own domains and can take actions necessary to protect the public health.
The MRA's sectoral annex for medical devices covers product evaluation reports for certain listed low- to medium-risk devices (see Table I) and quality system inspection reports for all medical device firms. The medical device annex is nearing the end of a three-year transition period measured from the date of entry into force of the MRA, which was December 1, 1998.
|Esophageal stethoscope||Breathing mouthpiece|
|Medicinal nonventilatory nebulizer (atomizer)||Rebreathing device|
|Nonpowered oxygen tent||Tracheobronchial suction catheter|
|Karaya and sodium borate with or without acacia denture adhesive
|Dental handpieces and accessories||Dental operative unit|
|Short increment sensitivity index (SISI) adapter||Gustometer|
|Air or water caloric stimulator||Toynbee diagnostic tube|
|Hearing aid||Epistaxis balloon|
|ENT examination and treatment unit||Powered nasal irrigator|
|Antistammering device||Urological clamps for males|
|Enema kit||Urine collector and accessories|
|Neonatal eye pad||Pressure infuser for IV bag|
|Pediatric position holder||Patient examination glove|
|Patient lubricant||Protective restraint|
|Ataxiagraph||Electroencephalogram (EEG) signal spectrum analyzer|
|Ventricular cannula||Shunt system implantation instrument|
|Neurosurgical suture needle||Skull punch|
|Powered corneal burr||Keratome|
|Sunglasses (nonprescription)||Ac-powered goniometer|
|Calipers for clinical use||Mechanical wheelchair|
|Manual patient rotation bed||Hot or cold disposable pack|
|Scintillation gamma camera||Positron camera|
|Nuclear rectilineal scanner||Nuclear uptake probe|
|Nuclear whole-body scanner
||Nuclear electrocardiograph synchronizer|
|Radiographic-film illuminator||Radiographic grid|
|Radiographic intensifying screen||Radiographic ECG/respirator synchronizer|
|Manual radionuclide applicator system||Introduction/drainage catheter and accessories|
|Removable skin clip||Surgeons' gloves|
|Nonpowered, single-patient, portable suction apparatus||Removable skin staple|
|Ac-powered, battery-powered, and pneumatically powered surgical instrument motor||Air- or Ac-powered operating table and air- or Ac-powered operating chair and accessories|
|Source: Sectoral Annex on Medical Devices to the Agreement on Mutual Recognition between the United States of America and the European Community, May 18, 1998.|
|Table I. Class I products that require premarket evaluations in the United States. These products are included in the scope of product coverage at the beginning of the MRA transition period.|
Under the MRA, in order to sell a device in the EU a U.S. medical device manufacturer must submit an application to a CAB in the United States. The U.S. CAB may then recommend approval to an EU CAB. Only when the product is approved by the European CAB can it be sold within the EU. The process works in reverse for a European manufacturer who wants to sell medical products to the United States, beginning with submission of an application to an EU CAB for review based on U.S. requirements.
Both FDA and EU notified bodies conduct hundreds of quality system inspections in overseas facilities that export to the opposite market. Under the MRA, CABs of each party will inspect domestic production facilities to assess their compliance with the regulations of the overseas party. FDA and the EU notified bodies will continue to conduct joint inspections and monitoring activities in each other's markets for confidence-building purposes; however, as more confidence is gained, these efforts should diminish.
Regulators and CABs have been engaged in confidence-building activities in order to obtain evidence to determine whether U.S. CABs perform quality system and product evaluations to EU requirements, and vice versa. During the MRA transition period, the United States and the EU were to conduct joint inspections, provide training and auditing, and set up a market surveillance system; this would enable each entity to notify the other's regulatory authority when there is any immediate danger to public health.
In the final six months of the transition period, the parties are scheduled to assess jointly the equivalence of the CABs that participated in the confidence-building activities. Those determined to be equivalent—and thus allowed to function as CABs under the MRA—will be listed in an appendix of the agreement, with any specifications or limitations. The operational period of the medical device annex is scheduled to begin when the transition period ends, in December 2001. This will be after the United States and EU have developed the list of CABs found to be equivalent. Regardless of whether CABs are able to demonstrate equivalence by the end of the transition period, FDA has expressed willingness to continue to work with EU CABs not yet demonstrating competence to perform assessments to FDA requirements. Other qualified conformity assessment bodies will have the opportunity to be listed as MRA CABs in the future.
SUPPORT FOR THE MRA
Industry and government in the United States and European Union have been generally supportive of the MRA. Much of the criticism expressed stems from two primary concerns: the product coverage is too limited, and two, the U.S. regulatory approval of medical devices does not automatically confer approval in the EU, or vice versa. Assessment of the agreement's impact must be tentative, however, until the transition period ends and it becomes fully operational.
The MRA will certainly have a significant influence on world trade in medical technology. The United States is the global leader in the manufacture of medical devices and supplies that are potentially affected by the agreement (products listed in Table II). It accounted for about 40% of the estimated $138 billion worth of medical devices produced in the world in 1999 (see Figure 1). The European Union was the second-leading producer, making about 25% of devices by value that year. The United States and the EU are also each other's most important trading partner in the medical market. The EU accounted for 45% of U.S. medical device exports in 1999 (see Table III) and almost 42% of U.S. imports (see Table IV). The U.S. trade surplus with the EU increased from $1.8 billion in 1995 to $2.7 billion in 1997, before declining to $2.4 billion in 1999.
|Figure 1. World production of medical goods in 1999.|
Many U.S. medical device manufacturers and associations support the MRA. In interviews with USITC staff, industry representatives said that the agreement has the potential to improve patient access to safe and effective technologies, reduce unnecessary regulatory redundancies, ease the approach of U.S. and European companies to each other's markets, conserve the resources of both companies and regulators, and set the stage for further regulatory cooperation and harmonization. Some larger U.S.-based companies with extensive European operations will likely continue to conduct product evaluations and factory quality reviews in the EU rather than in the United States; the MRA simply gives them more flexibility in choosing where the evaluations occur. Small and medium-sized firms should benefit the most from the MRA.
|Nonfetal ultrasonic monitor||Ultrasonic pulsed Doppler imaging system|
|Ultrasonic pulsed echo imaging system||Diagnostic ultrasonic transducer|
|Angiographic x-ray system||Image-intensified fluoroscopic x-ray system|
|Stationary x-ray system||Mobile x-ray system|
|Tomographic x-ray system||Computed tomography x-ray system|
|Electrocardiograph||Electrocardiograph lead switching adapter|
|Electrocardiograph electrode||Electrocardiograph surface electrode tester|
|Electroencephalograph||Infusion pump (external only)|
|Ac-powered slip-lamp biomicroscope||Vitreous aspiration and cutting instrument|
|Phacofragmentation system||Surgical lamp|
|Transcutaneous electrical nerve stimulator for pain relief||Blood pressure cuff|
|Noninvasive blood pressure measurement system (except nonoscillometric)||Steam sterilizer (greater than 2 cu ft)|
|Clinical electronic thermometer (except tympanic or pacifier)||Nebulizer|
|Powered emergency ventilator||Hypodermic single-lumen needle|
|Piston syringe||Intramedullary fixation rod|
|Single- and multiple-component metallic bone fixation appliances and accessories
||Smooth or threaded metallic bone fixation fastener|
|Gold-based alloys and precious metal alloys for clinical use||Resin tooth-bonding agent|
|Tooth shade resin material||Base-metal alloy|
|Source: Sectoral Annex on Medical Devices to the Agreement on Mutual Recognition between the United States of America and the European Community, May 18, 1998.|
|Table II. Class II medical devices included in the scope of product coverage at the beginning of the MRA transition period.|
According to medical device manufacturers, a major advantage of the MRA is that they will be able to work with a CAB in their own country and language. Moreover, industry experts indicate that the agreement will benefit manufacturers even more by providing a consistent approval system for all trading countries. But the medical device MRA does not harmonize regulatory systems; it maintains independent systems for regulating medical devices.
Some industry analysts assert that as equivalence between the U.S. and EU regulatory systems is achieved, many governmental responsibilities can be transferred to the private sector. They say that the importing countries will have less need to engage in resource-intensive foreign facility inspections of imported products when the goods come from countries with equivalent systems. This could expedite approvals of safe and effective products and ensure more comprehensive and effective surveillance of quality systems. In addition, during the MRA transition period collaborative confidence-building activities involving FDA, EU member state authorities, and CABs could lead to harmonization of requirements at a high level of consumer protection.
Value ($ thousands)
|Note: Because of rounding, figures may not add to the totals shown.
Source: Compiled from official statistics of the U.S. Department of Commerce.
|Table III. U.S. exports of medical devices by principal markets, 1995–1999.|
U.S. government trade and regulatory officials, on the other hand, assert that the MRA is not based on equivalence. Rather, it is an agreement to let entities operating in the jurisdiction of the exporting country to establish conformity with the requirements of the importing countries. At no time will regulatory officials try to find that the U.S. and EU systems for regulating medical devices are equivalent.
The Transatlantic Business Dialogue (TABD), an informal process whereby United States and European companies and business associations develop joint U.S.-EU trade policy recommendations, has indicated that it regards the MRA as an important first step toward the harmonization of technical regulations and standards. The TABD encourages governments to use the Transatlantic Economic Partnership to expand the scope of the MRA—both toward harmonizing regulations and ensuring the primacy of international standards.
Value ($ thousands)
|Note: Because of rounding, figures may not add to the totals shown.
Source: Compiled from official statistics of the U.S. Department of Commerce.
|Table IV. U.S. imports of medical devices by principal sources, 1995–1999.|
One of the most significant aspects of the MRA for the United States is the use of private third-party reviewers as the CABs. Historically, FDA has been responsible for all 510(k) evaluations and quality inspections. The Food and Drug Administration Modernization Act of 1997 (FDAMA) provided FDA with authority to begin a third-party premarket review program for selected low- to moderate-risk medical devices. Because the premarket review program to be conducted by EU CABs under the MRA is similar to FDAMA's third-party review program, the existence of the domestic program should facilitate the use of third-party testing bodies under the MRA.
In May 1999, the FDA Office of Device Evaluation reported that the median review time of its pilot third-party review program for selected low- and moderate-risk devices was 29 days faster than the median review time for its standard 510(k) product reviews. Total elapsed time from the date of a third party's receipt of a 510(k) to the date of the final FDA decision was a median of 54 days (and a mean of 78 days), while the median review time for in-house 510(k)s was 83 days. Many industry representatives believe that these results show that both U.S. and EU medical device manufacturers should be able to get their products to market more quickly under the medical device MRA.
FDA is interested in the MRA because it believes that public health protection can be better assured through enhanced regulatory cooperation. The agency agrees that industry and government regulatory authorities can realize cost savings through a reduction in the number of unnecessarily duplicative inspections; it also recognizes additional benefits to be gained from the MRA that make the endeavor worthwhile.
For example, both U.S. and EU regulatory bodies will likely save resources, partly because of decreasing foreign travel time and expense. But CABs will have to engage in rigorous joint activities to show their proficiency in conducting FDA and EU evaluations. Based on such proficiency displays, both FDA and the EU are expected to endorse most product evaluations conducted by the other party; at the same time, however, each will reserve the final decision for itself and maintain the right to conduct its own evaluations if significant deficiencies are discovered.
According to FDA, the equivalence of quality systems and other conformity assessment evaluations among FDA, EU member state authorities, and CABs can be relied upon to help ensure the safety, quality, and effectiveness of products exported to the United States. It will also reduce the regulatory burden on manufacturers. As EU CABs conduct more inspections for FDA, the MRA may allow the agency to redirect some of its inspection-related resources toward other countries that need regulatory oversight.
FDA and EU regulatory bodies now conduct hundreds of overseas inspections each year. The MRA might afford FDA the opportunity to redirect some of the limited resources that are currently devoted to foreign inspections and imports.
CRITICISM OF THE MRA
Despite general support from U.S. manufacturers and regulatory officials, reservations about certain aspects of the MRA have been expressed. Several global-scale medical device manufacturers, for instance, have indicated in conversation with USITC staff that, while they had hoped the MRA would remove redundancies in U.S. and EU medical device approvals, the agreement in fact combines both regions' requirements, thereby resulting in greater complexity.
A spokesperson for the Medical Device Manufacturers Association (MDMA) did not want to judge the success of the MRA before it became fully operational. The representative believed the structure of the agreement was good, but wanted to see more devices become eligible for conformity assessment eventually. (The United States and the EU are now amending product coverage in the medical device annex.) MDMA points out that the MRA does not currently represent global harmonization; each side is merely conducting conformity assessment to the other party's rules.
The National Electrical Manufacturers Association (NEMA) agrees with MDMA. NEMA told USITC staff that, in order to be effective, the MRA would have to be conceptually different; FDA would accept a device approved in the EU, and the EU would accept a device approved in the United States, without further evaluation. U.S. trade and regulatory officials doubt that such mutual acceptance will ever happen. Currently, NEMA says, the MRA is simply an exercise in accrediting test houses in Europe and the United States, and as such is no great advantage over the previous situation. U.S. manufacturers are already accustomed to going through EU notified bodies.
NEMA representatives did acknowledge that one advantage to U.S. firms using third-party CABs would be the increased speed of 510(k) conformity assessments. This could occur immediately, because third-party assessments are covered in the current transitional period. But NEMA claims that the U.S. medical device industry has been unaware that firms could have their products for the EU market evaluated through private third-party testing bodies in the United States. The association claimed that if the CABs did a better job of promoting themselves to U.S. medical device manufacturers, more manufacturers could get 510(k) applications approved as quickly as EU approvals. If CABs do not promote themselves better, manufacturers will be reluctant to change their practices.
Some medical device firms would like the MRA to cover more products than are currently listed in the sectoral annex. A major obstacle to such expansion is the U.S. insistence on maintaining the priority of safety and effectiveness information over the safety and performance criteria required by the EU. Besides the safety question, FDA is interested in the effectiveness of a medical device in treating patients. The EU is more interested in device performance; it would allow the market to determine how well the device operates according to the manufacturer's claim.
FDA has proposed to the EU a significant expansion of the list of devices eligible for 510(k) review under the MRA and expects the EU to accept the proposal. The agency would suggest additional devices for 510(k) review when it expands the list of devices eligible for review under its domestic Accredited Persons Program. This expansion is anticipated to be initiated this year.
The U.S. device industry has expressed concern that some EU member states have enacted their own regulatory requirements in addition to—even in conflict with—EU requirements. Medical device manufacturers who obtain marketing approval in one country should be permitted to sell in any EU member state, but they often face member-state demands beyond the requirements laid out in EU directives. Even though member states are required to inform the European Commission (EC) of draft regulations in order to prevent the generation of new trade barriers, some have allegedly failed to do so. Because the requirements in these national regulations can far exceed those in EU directives, both U.S. and European device manufacturers worry that the EU single market is being thwarted. Not only do such measures impede the effective and efficient function of the single market, they say, but they also can undermine the MRA.
For example, a major sticking point that concerns both U.S. and EU medical device manufacturers is the French government's belief that other EU members' technical regulations are insufficient to guarantee product safety. The French propose to institute a separate approval process for certain high-risk medical devices manufactured by both domestic and foreign companies. U.S. and European trade associations are working with France and the EC to resolve the situation so U.S. and other EU device manufacturers can take full advantage of the long-anticipated European single market.
Most U.S. medical device manufacturers seem to regard the MRA not as a solution but as a starting point. They look to the ultimate goal of an MRA whereby, if a firm obtains approval for a product in either the EU or the United States, that product will automatically be approved by the other party. They also believe that as FDA gains experience working with both U.S. and EU CABs, it should have greater confidence in third parties.
U.S. industry representatives hope that when FDA has confidence in EU CABs and the EU has confidence in U.S. CABs, CE-marked medical devices will be considered equally as acceptable as FDA-approved devices, and vice versa. But U.S. trade and regulatory officials are doubtful that such a scenario can come about without significant policy, legislative, and regulatory changes occurring first.
Even though U.S. industry and government officials generally support the present agreement with the EU, they are not enthusiastic about negotiating MRAs with other trading partners. Negotiation of the U.S.-EU MRA was time and resource intensive. Trade, regulatory, and technical experts for each of the sectors covered by the MRA had to meet frequently to exchange information, hold workshops, and hammer out terms of the agreement. Also, say the officials, the multiple-sector approach of the U.S.-EU MRA produced complexities difficult to address. Another problem was that the EU refused to finalize the MRA framework until work was completed on all six product sectors. To avoid delays in completing other agreements (recent MRA successes in the tele-communications equipment industry are hopeful signs), future trade and regulatory MRA negotiations should be conducted for one industry sector at a time, officials say.
Private—and public—sector officials agree that the United States should not seek MRAs with other countries now because its limited regulatory resources are required to ensure the success of this MRA. In any event, separate MRAs between developed countries would result in an unwieldy and unmanageable arrangement. This would not be the case with one global system agreed to by all developed countries.
U.S. government officials recommend that MRAs be established in the future only when other, less stringent and resource-intensive means, such as unilateral recognition or supplier's (or manufacturer's) declarations, are not feasible.
Although the World Trade Organization (WTO) Agreement on Technical Barriers to Trade (TBT) encourages the use of MRAs when appropriate, a 1998 report of the WTO TBT committee recognized that MRAs are not the only response to technical trade barriers ("Report of the First Triennial Review of the Operation and Implementation of the Agreement on Technical Barriers to Trade," November 8, 1998). In the report, a WTO review of the operation of the TBT agreement highlights a vital member obligation: to ensure that conformity assessment procedures are not applied too strictly. This will give importing states confidence that incoming products conform with relevant technical regulations and standards. Specifically, article 6.1 of the TBT agreement encourages unilateral recognition by stating that "Members shall ensure, whenever possible, that results of conformity assessment procedures in other Members are accepted, even when those procedures differ from their own, provided they are satisfied that those procedures offer an assurance of conformity with applicable technical regulations or standards equivalent to their own procedures."
Further, article 2.7: "Members shall give positive consideration to accept as equivalent technical regulations of other Members even if these regulations differ from their own, provided they are satisfied that these regulations adequately fulfill the objectives of their own regulations."
Thus, in instances where one party's technical regulations meet the other country's regulatory objectives—even though the regulations are not identical—approval of the product in one country can be recognized by the other party. Such recognition precludes the need to conclude mutual recognition agreements.
Christopher Johnson, MBA, is an international trade analyst in the Office of Industries, U.S. International Trade Commission (Washington, DC). The commission is an independent government agency that is responsible for providing technical advice to the president and Congress. The views presented here, however, are the author's and do not necessarily reflect those of the commission.
Dedrick,Victoria Ann. European Medical Devices Industry Group. Plenary meeting, Global Harmonization Task Force, June 29, 1999.
Egan, Michelle. "Mutual Recognition and Standard-Setting: Public and Private Strategies for Regulating Transatlantic Markets." American Institute for Contemporary German Studies Policy Paper No. 10., Washington, DC: Johns Hopkins University, 2000.
Food and Drug Administration. Guidance for Staff, Industry, and Third Parties: Implementation of Third Party Programs under the FDA Modernization Act of 1997. Rockville, MD: FDA, 1998.
Food and Drug Administration. Guidance for Staff, Industry and Third Parties: Third Party Programs under the Sectoral Annex on Medical Devices to the Agreement on Mutual Recognition between the United States of America and the European Community. Rockville, MD: FDA, 1999.
Food and Drug Administration. Plan That Establishes a Framework for Achieving Mutual Recognition of Good Manufacturing Practice Inspections. Rockville, MD: FDA, 1998.
National Institute of Standards and Technology. "Standards Setting in the European Union." NIST Special Pub. 891 Edition, NIST, 1997.
U.S.-EU Medical Device MRA Update, U.S. Department of Commerce, Washington, DC: March 19, 1999.
World Trade Organization, Committee on Technical Barriers to Trade. Report of the First Triennial Review of the Operation and Implementation of the Agreement on Technical Barriers to Trade. Geneva, Switzerland: World Trade Organization, 1998.
Illustration by Ivan Lee Sanford
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