FDA asks medical device developers for feedback on new draft guidance
“Recall” or “product enhancement” – the distinction between the two terms can be tricky, especially for medical device manufacturers aiming to comply with current industry codes and regulations. In the case of a recall, developers face serious financial and reputational damage; product enhancements, on the other hand, rarely cause bad publicity and tend to only involve improvements made to a product.
The U.S. Food and Drug Administration (FDA) recently issued draft guidance to help clarify when a change to a product constitutes a recall or a product enhancement, and the difference between the two. The FDA has asked companies to review the draft guidance and submit feedback by May 23, 2013.
The FDA has strict reporting requirements that manufacturers must follow if a product is recalled; the agency states in the draft guidance that if a change addresses a violation of the Food, Drug and Cosmetic Act (or if the product must be removed or corrected and is subject to legal action) then it is considered a recall. If however, the change is only made to improve the performance or quality of a product but has not violated any of the FD&C Act, it is considered a product enhancement. The guidance also defines what constitutes a violation and provides examples of violative devices. Furthermore, it makes clear that only products that have entered the market are subject to recall. (More details provided by our friends at Nixon Peabody here)
Regardless of whether the product is enhanced or recalled, companies must submit a report to the FDA whenever a change in the device is made to reduce a health risk. This includes product enhancements that may improve the safety of a device, such as upgraded software programs that help speed up response times in medical situations. The FDA has also further clarified factors that determine what actually constitutes a health risk, and the factors considered when evaluating a company’s evaluation of the risk of health consequences associated with the recall.
From an insurance perspective, it is important to consult with your broker, in particular in the event of a product recall. The broker can provide advice as to whether or not 1) there is potential coverage for recall expenses and/or 2) an obligation to provide notice to the insurer(s) of a claim or potential claim.
About the Author
Michael Kearney is an Executive Vice President at WGA and co-leader of the Life Sciences Practice in WGA’s Property and Casualty Group . He specializes in working with life sciences and high technology companies, with a new emphasis on green companies, such as biofuel manufactures and clean technology.