addressing the challenge of the new european union medical device regulation

Addressing the challenge of the new European Union Medical Device RegulationTurning compliance into competitive advantage

2 | Addressing the challenge of the new EU Medical Device Regulation

• Many organizations tend to view legislation as a driver of complexity and costs for the business.

• Where companies seek to leverage the opportunity in adoption of legislation, the outcomes for the business can prove to be more positive:

• With the impending Medical Device Regulation (MDR) changes, cited opportunities among the manufacturers who are early adopters include:

• Brand enhancement: Many of the changes being proposed will enhance patient safety and provide greater assurances in product performance.

• Competitive landscape: It is likely that competitors will adopt different strategies in response to the new legislation, based on capability to respond, including both financial and nonfinancial resources required to undertake the potentially extensive changes. This may present market expansion opportunities and/or acquisition targets for the business.

• As the changes are assessed, it may be concluded that some products will be unable to meet the new regulatory criteria and/or the costs may be prohibitive.

• Portfolio rationalization: The opportunity to critically examine the product portfolio in terms of new, current and discontinued products is based on the assessment of which products will be implicated and to what extent they will require remediation.

• Strategic plan mitigations: Early communication to the commercial teams will enable them to revise marketing and sales plans to address potential revenue gaps due to product withdrawals, re-certification and supply continuity impacts.

The new medical devices legislation: a strategic opportunity for your business?

Addressing the challenge of the new EU Medical Device Regulation | 3

What are the current issues and drivers for the new European Union (EU) regulation on medical devices?

What are the current issues?• Existing EU rules date back to the 1990s and have

not kept pace with the enormous technical and scientific progress in the past 20 years.

• Patients, health care professionals and other parties do not have access to essential information on how medical devices have been assessed and what clinical evidence there is to show they are safe and effective. The need for greater transparency has been highlighted by recent scandals about faulty silicone breast implants and problems with some metal-on-metal hip replacements.

• It is not always possible to trace back medical devices to their suppliers. New rules on identification and traceability of devices are needed.

• EU countries interpret and implement the current rules in different ways.

Drivers for new regulation• Need for greater traceability• Need for greater transparency• Need for updated regulation that

reflects the latest technological and scientific advances

• Need for clarity to allow for common understanding and implementation among the EU countries

• Need for more robust clinical evidence

What is the new proposal?• The EU is proposing updated regulations on medical devices — from home-use items (e.g., contact lenses,

adhesive bandages, pregnancy tests, etc.) to X-ray machines, pacemakers, breast implants, hip replacements and HIV blood tests.

• The aim is to ensure these products are safe and can be freely and fairly traded throughout the EU.

What does it mean for medical device companies?

Timeline:

• New rules will gradually come into effect from 2016 to 2019.• Medical devices and diagnostic (MD&D) companies will need to comply with the New Directives by the

2019 deadline.


The new medical devices legislation is yet to be finalized; when should your business act?

Among the manufacturers we have spoken to, it is expected that most aspects of the proposed legislation will be adopted.

PatientsImproving patient care, increasing

patient trust, meeting medical need

ProductsImproved quality,

removal of restricted substances, supply

chain assurance, more evidence of safety and

efficacy

TransparencyMove away from the major incidents with devices in the past, assurance that the products are safe,

efficacious and high quality

Change driversPresent Near future

Current MDD20 articles, 60 pages

• Limited clinical evidence required, general acceptance of data from similar devices

• No regulatory authority involvement with submission approval

• Strong data protection

• Format of technical files not defined

• Vigilance reporting timelines similar to FDA (30 days)

• Limited traceability requirements in the supply chain

• Basic labeling requirements

• Labeling requirement for some hazardous substances

• Weak control of notified bodies (although this is rapidly changing already)

Proposed MD regulation100 articles, 200 pages

• Clinical trial data before CE marking for implants/high risk devices, similar to FDA

• FDA PMA type approval (scrutiny process) for high-risk/implantable devices

• Data transparency, including publication of clinical trial data and safety summaries

• Technical files content and structure defined in the law

• Vigilance reporting timelines possibly reduced to 15 days

• Implementation of UDI (similar to US), EU medical devices database, traceability obligation

• Specified, expanded content for DFU, required patient implant cards, medical device statement on labels

• Possible ban or phasing out of a large number of hazardous substances (phthalates, boric acid)

• Very strict requirements and control over notified bodies, small notified bodies will likely disappear


The new medical devices legislation will have a three-year implementation and transition window.

Page 1

Estimate timing of the new EU MDRThe Final Regulation will be a compromise between the Council, Commission and Parliament

Transition period of only three years to implement and validate all changes

Content of legislation can change until final adoption

Some details of the legislation will be defined after adoption in further legal acts that will require continuation of advocacy

Commission proposal

EU Parliament amendments

Council position Final adoption(estimated)

End of transition period

EU law is developed by

EU Commission

Sept 2012 April 2014 Q2 2015 H1 2016 H1 2019

EU Parliament proposes

amendments

EU Council proposes amendments

Final version of Regulation will be a compromise between the EU Commission, Parliament and Council version of the text

Who

When

What


How will the proposed EU MDR affect your business?The new medical devices legislation key changes: how will it impact your business and what actions can you take to comply?

If in-vitro diagnostics are part of your portfolio, a series of parallel changes are being made to the current IVD Directive. These changes may have a significant impact on that segment and should be reviewed with the same rigor.

Transparency

Products

Patients

EU MDR change Business implication

Revenue impact from loss in portfolio, redesign, consider pipeline

Tighten the use of restricted substances such as DEHP (PVC softener)

Develop and validate alternative materials

Current pipeline considerations, revenue impact due to increased time to market

Removal of use of equivalency claim for clinical data on implantable and high-risk

devices

GAP assessment and update of CER with clinical trial data where necessary for

existing and new devices

Increased time to marketEU Commission-level review of clinical evaluation

Compile sufficient clinical trial data —retrospective and prospective studies

Operating model impact, portfolio changes

Substantiation of single-use claim, comprise language likely in final text R&DDevelop single use justification

Tech files: new format and expanded content

Labelling: expanded requirements (patient implant cards, language specific

IFU/DFU)

Increased complexity in portfolio, supply continuity: operating model impact Update of all tech files

Transparency to safety records, performance and brand positioning

Trend reporting to authorities, annual PSURs for all devices, PMS plans

Increased vigilance reporting by patients, HCPs, etc.

UDI, European Database (Eudamed)

New processes to be defined to cover these challenges

Product marking

Develop database for all UDI-related data for all devices

Potential actions

PatientsImproving patient care, increasing

patient trust, meeting medical

need

ProductsImproved quality,

removal of restricted substances, supply chain assurance, more evidence of

safety and efficacy

TransparencyMove away from the major incidents with devices in the past, assurance that the products are safe,

efficacious and high quality


EPMO

Regulatoryrequirementassessment

Gap analysis

Implementationplan

Sustainability

ImplementationValidate,

report andcompliance

Are you sure your changes are compliant?

You need to design a solution tailor-made to your needs and implement it.

Our seven-step approach to compliance change

56

What gap do you currently have in view of regulatory requirements? Where are the key business impacts?

We have tools that help you to quickly analyze the current state across the portfolio and identify issues and gaps.

3

How do you conduct the change across the business?

4

We work with you to define how to get to the “end-game,” based on the balance between cost and business capabilities to meet future legislation timelines.

Using our methodologies and previous experience, we help you implement a compliant solution, including changes to people, process, data and technology. We assist you in working alongside partners to achieve a smooth implementation.

We verify the changes as part of post-project sign-off and/or as part of a regular independent review.

Can you leverage your investment to improve your current business insight?

We advise you how to make better business decisions and gain competitive intelligence based on the changes.

7

What is required to stay up to date with the changingregulatory landscape?

2

We have invested in tracking and understanding the changes to the regulatory landscape to provide you access to the latest information.

Do your enterprise-wide business projects in compliance need managing?

1

We put in place a program infrastructure that manages cross functional dependencies, creates executive visibility and proactively identifies risks, while managing the change impacts of the program.

Identify

Design

Diagnose

Our approach to tackle this complex matterEnabling rapid response to changes in regulatory requirements


EPMO


Gap analysis

Implementationplan

Sustainability






56



3


4






7


2



1


Identify

Design

Diagnose

EPMO


Gap analysis

Implementationplan

Sustainability






56



3


4






7


2



1


Identify

Design

Diagnose

EPMO


Gap analysis

Implementationplan

Sustainability






56



3


4






7


2



1


Identify

Design

Diagnose

EPMO


Gap analysis

Implementationplan

Sustainability






56



3


4






7


2



1


Identify

Design

Diagnose

EPMO


Gap analysis

Implementationplan

Sustainability






56



3


4






7


2



1


Identify

Design

Diagnose

EPMO


Gap analysis

Implementationplan

Sustainability






56



3


4






7


2



1


Identify

Design

Diagnose

EPMO


Gap analysis

Implementationplan

Sustainability






56



3


4






7


2



1


Identify

Design

Diagnose

Our approach: the EY — YourEncore team

We team with our alliance partner, YourEncore, to bring global breadth, relevant industry experience and deep technical skills to the program.

EY | Assurance | Tax | Transactions | Advisory

About EYEY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.

EY refers to the global organization and/or one or more of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.

For more information about our organization, please visit ey.com.

ey.com© 2015 Ernst & Young LLPAll rights reserved1510-1736890

ContactLucien De BusscherPrincipal — EY Advisory Life Sciences+32 (0)478 883 [email protected]

Jon L. LangePrincipal — Ernst & Young LLP (US)+1 215 448 [email protected]

Mark DiamondLife Science Consulting+1 215 272 [email protected]

Eithne LeeAssociate Partner — Advisory Life Sciences+44 121 535 [email protected]

YourEncore | Life Science | Consumer | Food

About YourEncoreSpecializing in experts with an average of 25 years of industry experience across regulatory, quality, drug safety, medical affairs and clinical development, YourEncore helps clients manage risk and then, out-think, out-pace and out-perform the competition.

Whether you need an immediate consultation with a technical expert, the wisdom of an executive-level strategist or a team on the ground tomorrow, YourEncore provides the right expertise, when and where you need it.

YourEncore Inc.© 2015 YourEncore Inc.All Rights Reserved.yourencore.com

► Enterprise strategy

► Global scale

► Best-in-class strategic consulting capabilities, methodologies and reputation

► Transformation and technology enablement

A go-to-market strategy combining world-class advisory with best-in-

class deep industry specializationto better enable clients to win in today’s complex, global

and volatile world

► Program implementation

► World-class communities of deep industry specialization, experience and practitioner execution capabilities

► In-market executions through pragmatic solutions

addressing the challenge of the new european union medical device regulation

Health & Medicine