DTA Regulatory Chairman, Napoleon (Nap) Monroe
Consultant, HENRY SCHEIN INC.
135 Duryea Rd.
Melville, NY 11747
Tel: (631) 414-8385   Email: nap.monroe@henryschein.com
DTA contact: Fred Freedman, DTA Regulatory Staff Liaison: fredfreedman@dentaltradealliance.org

Members: Please be sure to share this Regulatory E–Letter with your Regulatory Experts, International Group and any staff involved with government initiatives such as approval and promotion of products or legislation.

Topics
Update on Health Care Reform
Exporting to China
Update on Universal Accreditation to ISO13485
Future Activities to Complete ISO 1485 IAF MDCAS

Note! We suggest our Members become more engaged in shaping policy and become proactive on issues of regulatory interpretation. Let us know how we can be most effective for you. Your commitment of time and effort to support the Regulatory Committee is always greatly appreciated. Please provide new information that is of interest to other Members, to Fred Freedman, DTA Staff Liaison for Regulatory Affairs or to me.

The Regulatory E-Letter and comments are intended to call members' attention to possibilities and stimulate responses. Please remember what is published in DTA E-Letters or on the Regulatory tab of the DTA website, and whatever individuals submit, are personal not corporate or DTA positions unless specifically identified as such. Each Member’s regulatory professionals should provide guidance specific to their situation. DTA takes no responsibility that these occasional comments are complete or accurate. When the DTA takes a formal position, it is only with approval of the Regulatory Committee, C.E.O. and the DTA Board of Directors.

UPDATE ON HEALTHCARE REFORM

On Saturday, November 7th, 2009 – the 111th Congress (U.S. House of Representatives) passed a new US Health Care Bill – H.R. 3962, known as the "Affordable Health Care for America Act". Currently, this bill is not law.

To read the entire bill passed by the U.S. House of Representatives, see www.opencongress.org/bill/111-h3962/.

DTA is opposed to the tax provisions proposed in HR3962. (Pages 339 through 345 of the bill). We are working with leaders in the House and the Senate to clarify the proposed tax provisions and how they might affect dental manufacturers and distributors. Here's a large (3.4MB) annotated PDF of HR3962 of October 29, 2009.

SEC. 552. EXCISE TAX ON MEDICAL DEVICES.
8 SEC. 552. EXCISE TAX ON MEDICAL DEVICES.
9    (a) IN GENERAL.—Chapter 31 of the Internal Rev-
10 enue Code of 1986 is amended by adding at the end the
11 following new subchapter:
12    "Subchapter D—Medical Devices
    ‘‘Sec. 4061. Medical devices.
13 ‘‘SEC. 4061. MEDICAL DEVICES.
14     ‘‘(a) IN GENERAL.—There is hereby imposed on the
15 first taxable sale of any medical device a tax equal to 2.5
16 percent of the price for which so sold.
17 ‘‘(b) FIRST TAXABLE SALE.—For purposes of this
18 section—
19       "(1) IN GENERAL.—The term ‘first taxable
20   sale’ means the first sale, for a purpose other than
21   for resale, after production, manufacture, or impor-
22   tation.

Parts of HR 3962 speak to training more oral healthcare professionals, outreach programs for children and underserved populations, and other matters. Search "dental" and "dentist" for some paragraphs of interest.

Note: Within H.R. 3962, there is language directed toward oral health care. Specifically on page 111:

REPORT REGARDING INCLUSION OF ORAL
2 HEALTH CARE IN ESSENTIAL BENEFITS PACKAGE. - Not
3 later than 1 year after the date of the enactment of this Act,
4 the Secretary of Health and Human Services shall
5 submit to Congress a report containing the results of a
6 study determining the need and cost of providing acces
7 sible and affordable oral health care to adults as part of
8 the essential benefits package.

The United States Senate has not passed any health care bill to date. Chairman Baucus’ proposed bill includes provisions which could impact the DTA Members. Senate action is not expected until December 2009 or possibly January 2010. The Senate draft language proposes to exempt Class I Medical Devices from a new device excise tax.

When the Senate passes any Health Care Bill, the language in the Senate bill will then have to be reconciled with the bill (HR 3962) passed by the House of Representatives. Only after the two bills have been reconciled, will a bill be sent forward to the President, to be signed into law.

EXPORTING TO CHINA

Recent US-China agreements on trade policies in medical devices and other products have improved the prospects for trade. The negotiations on October 28th are summarized in the following excerpts from the US Department of Commerce: “From the US – China Joint Commission on Commerce and Trade, Office of the US Trade Representative – Office of the President of the United States:
Medical Devices

• China committed that product recall regulations will not be duplicative or redundant and the Ministry of Health and the State Food and Drug Administration will be the relevant authorities for medical device recalls.
• China will adopt a risk-based approach that will not automatically lead to clinical trials for medical devices in a given class, and consider the use of results from a clinical trial conducted outside of China to support a local clinical trial exemption.
• China will accept a prior approval document of a medical device issued by a foreign country regardless of its exporting origin, country of manufacture or legal manufacture to satisfy any prior approval registration requirement.
• China will consider an exemption of requiring product samples to be tested in Chinese test labs prior to approval if the manufacturer demonstrates compliance with international standards and provides sound scientific evidence.
• China will strive to implement regulations, rules, and notices that are consistent with guidance documents for medical devices issued by the Global Harmonization Task Force and the Asia Harmonization Working Party.

According to industry, China's prior approval requirement could have impacted over $350 million in U.S. products. The clinical trials outcome will save U.S. companies hundreds of millions of dollars.

• China will continue to strengthen its oversight and enforcement of active pharmaceutical ingredients (APIs) and counterfeit pharmaceuticals by undertaking initiatives such as the establishment of a Drug Master File system, enforcement of record-keeping requirements for companies that manufacture and sell APIs, and regulation of unregistered Chinese companies advertising and marketing APIs at foreign trade shows and on the Internet.
• China identified SFDA as its single point of contact for the Interagency Coordination Conference for Fighting the Production and Sales of Counterfeit Drugs.
• China agrees to share information with the U.S. Food and Drug Administration on the activities of the Interagency Coordination Conference.
• China and the United States agree to continue the dialogue on pharmaceutical data protection.

The U.S. pharmaceutical industry loses billions of dollars of annual revenues due to counterfeit medicines. The average reported value of counterfeit medicines seized in 2008 was over $5 million. "

These are positive developments. However, it is important that DTA and the Membership continue to inform legislators and administrative agencies of our interests. Christian Brutzer and Donna Hartnett of Ivoclar Vivadent prepared the text below. DTA will be using this to inform interested parties. We suggest that Members do likewise.

Dental Trade Alliance Draft Position

Advances by medical device companies have facilitated both earlier disease detection and better long term healthcare. Productivity, however, within the medical device industry has been stunted by the complexity of the international health and safety regulations - and the costs required to comply with the associated regulatory approval processes. The Regulatory process in China has been the topic of recent discussion by the US- China Joint Commission on Commerce and Trade. These discussions are scheduled to continue into 2010. The purpose of this paper is to provide additional information from the Dental Industry to urge changes to the system so as to remove what we consider to be burdensome barriers to trade. In general, dental materials (not including pharmaceuticals, implants, or dental surgical devices) traditionally are low risk. This is because the materials are not implanted into the body, and because they have a very long history of favorable performance. However, the Chinese regulatory process seems to disregard the history of the devices and treats all applications as if the devices have not been sold before in the world. In the dental industry, we have experienced several instances where the Chinese regulations appear to be barriers to trade, and serve no benefit to the Chinese people for assuring safety and effectiveness.

For instance:

• Repetitive and very costly biological testing is required for devices which (a) have already been tested by reputable and certified testing facilities; and/or (b) have been on the market for decades without incident. This gives the appearance of a “funding directive” to Chinese testing laboratories, rather than providing a true benefit to the Technical Review. In addition, this causes significant delay as certain tests take weeks/months to complete. A review of the International Harmonized Standard ISO 10993 does not require testing to take place in all cases and provides for a risk based approach to testing.
• Clinical studies are being requested for products which have been on the market around the world for many years.
• Long delays in processing applications. In our experience, almost every class II or class III product needs at least 14-18 months for approval. In the USA, for Class II dental devices, this review takes only 90 days.
• Lack of consistent application review. In our experience, almost every application needs supplemental documents once, twice, even three times during the technical review. In addition, last minute requirements are imposed with short deadlines. For each application, the rules appear to change. Published guidance from the SFDA could give us a detailed list about all of the required documents for registration of each product group, so that we could know what they need in advance before starting the registration.
• Lack of mutual recognition of other country approvals and/or third party certifications to recognized international standards.
• Lack of a “grandfather rule” when the old regulatory system was replaced by the current SFDA procedure resulted in a huge backlog that has still not been cleared completely. Here, a rule that would allow registration for products that have (for example) USA FDA or CE Compliance and have been sold in the international markets for more than 5 years in a simplified paper registration process would clear the backlog and streamline market access without increasing risk for Chinese patients.
• Change of name or identical product registration.

Due to a certain market environment it might be necessary from time to time to change a name of a registered product or to register the identical product with two different names. In its current practice the SFDA requires in both cases almost identical administrative efforts and costs to be spend by the manufacturer as for a complete new registration. In case of identical composition, in an uncharted process the reviewer might ask for proof by full testing that the product is truly identical as the reviewer does not want to believe in certified documents submitted by the manufacturer. It might also be impossible to register the same product with two different names – which might be necessary to fulfill market needs.

The foregoing are only a mention of the particular issues we have encountered in our efforts to bring high quality, safe and effective dental products to market in China. The Chinese people are being denied low risk dental products that have been on the market in other parts of the world for many years due to the current regulatory structure.

The Dental Trade Alliance supports all efforts on behalf of the Joint Commission to urge China’s harmonization of performance and product standard to the International standards. The International committees are composed of the experts in the various fields and provide a high level of confidence that the devices will be safe and effective for their intended use.

We also support a move toward the following:

• Mutual recognition agreements in regulatory questions
• The use of the same classifications and groupings of dental / medical devices
• A user pays system for regulatory processing -- without unnecessary or over burdensome tests and costs
• A faster approval process to make new products available faster to the Chinese public
• A more predictable regulatory process, more precise procedures for applications and reviews and equal treatment under the regulations for all (not depending on individuals being able to erect unnecessary new tests or requirements or using their own interpretation of regulations to move applications)

In conclusion, we appreciate the sincere desire of the Chinese Government to safeguard its people. We understand this is a difficult and ever changing task. We also appreciate the progress already made by SFDA and are confident it will take all stakeholders' opinions into consideration.

UNIVERSAL ACCREDITATION TO ISO 13485

DTA is soliciting help from Members to continue Dental Industry leadership in International Medical Device Trade

Prior to recent mergers, it had been said that 80% of medical device industry was made up of small businesses. Nowhere was that more true than within the dental products segment of the industry. Dental industry concerns about small manufacturers being regulated out of international markets led to the work discussed below.

The dental professions are still highly dependent on small manufacturers. Neither small nor large companies are can cope with a proliferation of individual country quality requirements. Although dental products are generally lower risk than many other medical devices, they are medical devices and are subject to the same regulations. While few dental devices carry risks similar to artificial kidneys, neonatal respirators, and defibrillators, manufacturers of dental products have to conform to the same quality management systems requirements as companies making high risk devices.

The Dental industry represented by the Dental Trade Alliance (DTA) has led and continues to lead in one of the most important international trade issues facing medical device industry worldwide. The DTA is working to help develop a unique and feasible program to avoid duplicative and unduly burdensome medical device audits.

Regulators of the medical device industry worldwide are moving toward adopting ISO 13485. The Global Harmonization Task Force (GHTF) advocates that regulators use ISO 13485 and many countries that are developing their own harmonized medical device regulations are looking to the GHTF for guidance. The FDA will likely move for acceptance of ISO 13485 in the next few years. Unless industry proposes a plan, many (perhaps most) countries will want their own Quality Management System (QMS) certification program for ISO 13485. Unless presented with a credible system, regulators will introduce their own QMS regulations so they have access to audit information, control over the competency of the auditors, and can ensure that some additional national requirements are assessed during the audit. The solution is creating a credible and transparent certification process that covers what regulators need. This is where accreditation activities can save the medical device industry money.

Accreditation is an independent and authoritative attestation of the competence, impartiality and integrity of conformity assessment bodies and in turn the value and credibility of the corresponding attestations of conformity – underpins trust in the global market. The International Accreditation Forum (IAF) is an international cooperation of accreditation bodies comprised of representatives from more than 50 countries. These Accreditation Bodies cooperate to create impartial and more credible certification programs. The IAF vision statement of "Certified once, accepted everywhere" is based on the principle, that a credible certification is what makes mutual acceptance possible.

To avoid a multiplicity of QMS requirements and still insure that patients are well protected, there should be one credible certificate accepted everywhere. To accomplish this goal there must be an international accreditation program. Such a program can also help avoid the issuance of bogus certificates.

Prior to DTA involvement, the medical device industry had not pursued the role of accreditation, or the role of the IAF as a resource for resolving one of biggest threats to medical device trade.

The DTA, in the person of Grant Ramaley, now holds the Convener (the top industry position) in an IAF Working Group. The Working Group is creating a new worldwide accredited QMS certificate under ISO 13485. This is called the ISO 13485 IAF Medical Device Conformity Assessment System (MDCAS). ISO 13485 IAF MDCAS will create the first certificate than can be reasonably accepted everywhere.

DTA and the Japanese Accreditation Board co-chair the IAF Working Group for the ISO 13485 IAF MDCAS program. BSI, UL, TUV, Intertek and LNE/GMED are represented alongside national accreditation bodies from Japan, China, Australia, Canada, United States, Egypt, Germany and many others participate in the Working Group. Regulators from the GHTF have been participating as observers from Australia’s TGA, and United States FDA.

On October 18, 2009, the Working Group finalized the proposal for IAF MDCAS, shown below. Additionally, the Working Group created an ISO 13485 IAF MDCAS Handbook, which explains how the program works, and should be introduced into national medical device regulations. The proposal is now in the hands of the Technical Committee. Comments on these drafts will be reviewed and drafts modified until they are ready for vote and acceptance by the 50 to 60 participating member countries of the IAF. The Working Group will meet in Rio in May 2010 to address comments and plan strategy.

Assuming adoption of ISO 13485 IAF MDCAS, regulators will have a credible and transparent ISO 13485 QMS certificate they can use, in place of creating their own. Certified once, accepted benefits every manufacturer who is subject to a regulation where ISO 13485 is required. It is essential to improving healthcare worldwide, and essential to world medical device trade.


Photo from IAF Meeting
Vancouver, B.C.
October 2009

INDUSTRY BENEFITS
Most companies sell to a large number of countries. Each country market often amounts to a very small portion of any company’s overall sales. When a country creates a new QMS regulation, the administrative burden and costs can be prohibitive. If industry cannot justify the cost of compliance, they must exit the market.

Industry benefits from ISO 13485 IAF MDCAS, because the audit for ISO 13485 does not change. There are no add-on audit requirements for medical device industry under the IAF MDCAS accredited certification system. ISO 13485 IAF MDCAS certification audits only changes when the ISO 13485 standard changes. Medical Device industry only has to focus on ISO 13485. Keep in mind that ISO 13485 always requires manufactures to consider the regulations of the markets they are selling their products to.

ISO 13485 IAF MDCAS is the most credible, harmonized and transparent certification system ever made available to industry and regulators.

Countries could still impose registration fees. They would not be wound into unmanageable ISO 13485 QMS audit programs. Decision making becomes more manageable.

SOME CURRENT AND COMING PROBLEMS
Canada does recognize ISO 13485 certificates, but only if issued under their CMCDAS program. Japan and Europe already utilize ISO 13485 audit criteria, but have add-on requirements from their own regulation and require that only their auditors be used. More and more countries are following the example of requiring a country or region-specific 13485 audit. This is leading to a bigger problem for the medical device trade and the healthcare systems. The situation threatens the legal extinction of devices used to treat patients.

Some 140 countries of 192 countries worldwide have not developed or harmonized medical device regulations. If they chose to create a harmonized, but “national” QMS regulation, the medical device industry will be adversely affected. Industry has to pay more for each “add-on” country during their annual audit, or in some cases pay for a completely new audit. Each new audit can lead to different interpretations. Each interpretation can be inconsistent with others. Manufacturers have higher costs and higher administrative burdens. Healthcare practitioners are now caught in the middle, along with the industry that supplies them. Industry has to make tough decisions as to which markets it can afford to stay in, and which countries it will not be able to legally supply. With as many as 140 countries still without fully developed medical device regulations, and the GHTF suggesting use of ISO 13485, how many countries will develop their own national regulation to the ISO 13485 Quality Management System standard?

FUTURE ACTIVITIES TO COMPLETE ISO 13485 IAF MDCAS

DTA has funded the IAF activities for several years. It is clear that there has been great progress. It is also likely, that attendance at two more international conferences will be required to see this effort through. The individuals who have worked the program have indicated that they plan to continue to provide their time pro bono. Given the restrictions on DTA’s budgets, DTA is soliciting Member and outside support for these efforts. If your Company has an interest in finding out what is involved to support these efforts, please contact either Fred Freedman or myself.

Thank you,
On behalf of DTA,
Napoleon Monroe