NEWS TRENDS

Regulatory professionals have a significant role to play when due diligence is being performed by a firm on a company it plans to acquire, learned attendees at the Regulatory Affairs Professionals Society annual conference in September.

Regulatory professionals should conduct research into a firm's history of regulatory compliance as well as into its current and planned submissions, advised Barry Sall, principal consultant of Parexel Consulting (Waltham, MA).

Compliance issues that need to be looked at include inspection history, compliance with the quality system regulation, complaint handling, medical device reporting compliance, design controls, and supplier performance, he said.

“Is there an underlying systematic problem in product development? Is there a major deficiency in the design history file? Is there anything else that could influence the value of this transaction? That's what you need to be able to find out,” Sall said.

Submissions issues to be investigated include history with the Office of Device Evaluation and foreign equivalents, appropriate clearances and approvals, change control issues, promotional material and “indication creep,” and the status of investigational products.

“You must get a sense of what the nature of [its] relationship is with the regulatory agencies, and whether the firm has a history of interacting with them,” Sall said.

However, he said, there is usually a very limited amount of time in which to conduct due diligence. Therefore, regulatory professionals must focus on the target's highest-value products, as issues with these are what might be potential deal breakers.

“Reviewers need to keep in mind that the due diligence effort has different goals from a quality audit,” he said. “There is not the same depth or detail. You are not trying to fix problems and identify solutions. Be aware of the ultimate goals and deal breakers, and stick to those.”

When performing due diligence, it is very important to be prepared and have the review team structured properly, explained Melissa Clark, senior manager of corporate regulatory affairs for Boston Scientific Corp. (Natick, MA).

The team should use templates to develop checklists for the required information, and it should develop a single document request list, she said. “It is very frustrating if there are multiple requests for the same document.”

Before embarking, she said, a regulatory professional should research the deal, the company, and the competition. And he or she should understand the major products involved and know their proposed marketing claims, to get a sense as to whether the data the firm is gathering are appropriate.

Likewise, she said, regulatory affairs personnel from the company to be acquired should investigate the deal and the acquiring company to get a better sense of what it will be looking for during due diligence.

The firm to be sold should designate subject-matter experts to answer questions that arise during due diligence, and be prepared to address the firm's weak points. They should not, however, engage in any lies or cover-ups, nor should they embellish facts, she added.

“The seller should treat it like a regulatory body audit,” she said. “Provide consistent answers; be honest; address risks and mitigation plans; record all documentation requests, questions asked, and responses given; and work as a team.”

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