There is a growing need in the current global economy to outsource with no foreseeable turning back. Medical Device and In Vitro Diagnostic Manufacturers in the United States are in constant need to tap in new markets (Europe with CE marking, Canada with CMDCAS and soon Japan, Brazil and Australia with MDSAP), increase ability to respond to opportunities/demand and concentrate their efforts on innovation. Without the concept of outsourcing supply chain links, the medical device market would be in slow motion and startups will struggle to exist.
With the ongoing buildup of regulatory and quality requirements for the Medical Device and In Vitro Diagnostic Device Industry; manufacturers outsourcing critical links of their supply chain no longer take it for granted that it can only be an advantage.
In the USA only, nearly 80% of the medical device companies have less than 50 employees. This percentage shyly tells us why the outsourcing market can reach 45 billion dollars in the next two years1.
1 Global industry analysis
Indeed, some of the many advantages of outsourcing include:
• Reduce costs of housing activities such as manufacturing or packaging, especially for small and medium-sized enterprises (SMEs) that cannot afford the initial investment.
• Reduce the time to go to market by relying on experienced supply chain links.
• Reduce the need for full time in-house workforce for the activities subcontracted.
• However, the above benefits can easily turn into a manufacturer’s worst nightmare if the critical supplier/subcontractor is not on top of its game when it comes to regulatory and quality requirements or if the subcontracting agreements are not designed to absorb the evolution of such requirements. For the purpose of this document the term “subcontractor” is used to designate both “subcontractor” and “supplier“.
Impact of Supplier/Subcontractor on the Legal Manufacturers’ Certification Process
|Time to market||
* Certification of QMS by a notified body or a CMDCAS registrar recognized by Health Canada in the framework of CMDCAS program
As you can see, advantages can quickly shift to disadvantage when Manufacturers don’t take the time to consider their third party ertification status when selecting their critical subcontractors. More importantly, errors in identifying and reporting which Subcontractor is critical or not can have severe consequences on the certification process timeline (CE Marking, MDSAP, and CMDCAS…,etc). In the next paragraph we will look into the definitions.
Regulations have taken their shot at defining the critical subcontractors. It can be confusing for some MD/IVD Manufacturers to manage the variances in definition. Not to worry though, as most definitions agree on one main concept; the subcontractors impact on the devices Safety and Performance is a main factor in defining its criticality.
The COMMISSION RECOMMENDATION of 24 September 2013mentions that the entity “in charge of processes which are essential for ensuring compliance with legal requirements (‘critical subcontractor’) or a supplier of crucial components or of the entire devices (both: ‘crucial supplier’)” and that “it is necessary to include in duly substantiated cases the most important subcontractors and suppliers in the conformity assessment procedures.”**
Per the NBOG’s Best Practice Guide 2010-1; a critical supplier is one that is delivering materials, components, or services that may influence the safety and performance of the device. The document also provides information on the criteria, objectives, reporting and examples of objective evidences Notified Bodies take into consideration when auditing critical suppliers (as part of the legal manufacturer’s certification process).
The GD210 identifies critical suppliers/subcontractors based on:
• Whether the supplier has a substantial involvement with the manufacture or design and manufacture of the medical device;
• Whether the supplier is undertaking the supply of a part, material or service, which may affect the conformity of the medical device with the Safety and Effectiveness requirements of the MDR;***
The GD211 refers to critical suppliers as “A supplier delivering materials, components, or services that may influence the safety and performance of the product”****
LNE/G-MED and Subcontractor audits
There is a systematic evaluation of the subcontractor when:
• The subcontractor takes an important part in the design or manufacture of the medical device;
• The subcontractor provides services or elements that have an influence on the compliance of the medical device with applicable regulatory requirements, as well as on the safety and performance of the medical device (e.g.: Sterilization).
This evaluation is performed by conducting an on-site audit of the subcontractor, in order to:
• Control that the manufacturer efficiently manages the subcontractor, ensuring that the purchased product or service complies with specified requirements;
• Evaluate the ability of the subcontractor to provide a product or service that systematically complies with requirements laid out by the manufacturer in the corresponding specifications, including requirements concerning its quality system.
Should the subcontractor possess a valid ISO 13485 certification which covers the subcontracted activity and was issued by a notified body or a CMDCAS registrar recognized by Health Canada in the framework of CMDCAS program, an on-site audit may not be necessary. The evaluation of the subcontractor is conducted during the audit of the manufacturer (while auditing the “Purchase” sub-process). However, the need for an on-site audit of the subcontractor may arise from results of the audit of the manufacturer.
Should the subcontractor not possess a certification of its quality system as described above, the need for an on-site audit of the subcontractor is assessed by taking into account:
• the criticality of the tasks performed by the subcontractor with regard to regulatory requirements, in particular concerning the compliance of medical devices with health and performance requirements;
• the complexity of the tasks performed by the subcontractor, in particular when they require a trained personnel and specific means;
• The means of control implemented by the manufacturer to manage its subcontractor.
These means include (but are not limited to):
• Defining requirements specific to the products or services provided by the subcontractor, including requirements regarding the applicable quality system and requirements regarding personnel competence;
• Performing incoming inspections;
• Conducting on-site audits of the subcontractor.
Impact on the legal manufacturers’ certification process
Auditing the Legal manufacturers’ critical subcontractor is becoming the new normal and it is no secret that the level of scrutiny is on the rise. During the course of certification, if one subcontractor falters, it can put a halt to the approvals (CE Marking, CMDCAS …etc), thus delaying the time to market. The burden on the Legal manufacturers can be financially and organizationally daunting, especially in the case of multiple and/or overseas subcontractor structure.
From the above, it can be determined that the cost effectiveness of critical subcontractor selection and demonstrating the Manufacturers control over the outsourced activity plays an essential role to reach the ongoing MD conformity and market approvals timelines and success. Keep in mind that the degree of control demonstrated should be proportionate to the significance of the outsourced product or service on the quality of the finished device, based on risk and answering to the essential requirements.
In a nutshell, the manufacturer needs to provide evidence of its critical subcontractor’s quality management system approvals or prepare the latter to be part of the onsite audits. The frequency and duration of these audits depends on the criticality of the activities and the level of control demonstrated. Without proof of an adequate QMS and/or no control, the certification process is destined to fail.
Your Role as Legal Manufacturer
The manufacture’s problem here boils down to identifying the partner(s) that can ensure a consistently positive impact on the supply chains quality and regulatory compliance, a partner with proven knowledge and scope of expertise that meets the devices intended use, safety and performance in a continuously evolving regulatory environment.
Other points to look into are:
• MANUFACTURERS might need to review their subcontractor agreements and possibly update them with unannounced audit requirements, procedures and roles/responsibilities.
• MANUFACTURERS need to research the impact of critical suppliers on your audit organization.
• MANUFACTURERS need to make sure that their supplier management process and selection procedures integrate the risk based approach within regulatory requirements.
• MANUFACTURERS need to inform their Notified body or CMDCAS registrar recognized by Health Canada (in the framework of CMDCAS program) of any changes in critical subcontractors to avoid unnecessary approval interruptions and certification process delays.
• MANUFACTURERS to make sure that their critical subcontractor’s QMS scope (certified or not) covers the outsourced activity.
How can LNE/G-MED assist you?
• Competitive solutions to certify critical subcontractors
• Local auditing resources for your global supply chain network
• Advanced verification of critical subcontractors
• Extension of Newsletter and Webinar program to our clients subcontractors (including client rates for training events)
G-MED North America keeps its clients abreast of any regulatory changes within its field of recognitions/accreditations, requirements and critical timelines that may impact your market approval process. To the extent allowed to Notified/Certification bodies.