Healthcare: Medical Devices 2023

International Overview

The risk profile for medical devices and consumer health products, in terms of product safety and product liability, is evolving rapidly.

Firstly, the range of products considered to fall within the scope of applicable consumer health product regulatory regimes is ever-expanding to cater for today’s consumer preferences for healthy, wellness-orientated, and more ethically produced products. We are seeing a new era in the consumer health products industry, which now represents a significant and growing market worldwide.

Additionally, the approach to the regulation of medical devices and consumer health products is diversifying and becoming more complex. These regimes are diverging globally, as countries consider bespoke schemes for the regulation of the new consumer health/quasi-medical product categories. Simultaneously, the concept of product safety is expanding across all product types and applicable product regulatory regimes, so as to accommodate innovations in technology and these cater for preferences as to methods of sale, inter alia, of the modern-day consumer. Moreover, there is an increasing focus on environmental and social governance product compliance obligations for companies involved in the sale of products generally. This is reflected in additional, specific regulation being created on these topics, or new obligations of this nature being embedded into mainstream product safety regulations as part of general product compliance requirements.

These product categories have also been in the spotlight due to their central role in the fight against the COVID-19 pandemic. The accelerated introduction of new technologies and the response of all stakeholders (including regulators) has been unprecedented, and hugely inspirational, during these extraordinary challenging times. Although the industry has historically been at the forefront of innovation, the pandemic has undoubtedly strengthened its appetite to build on the significant technological advancements it has made over these last couple of years.

The rapid and fundamental change outlined above is the consequence of years of focus by legislatures, but also of recent worldwide events, such as the global pandemic with its far-reaching consequences, Brexit and other geo-political events, and natural disasters. The COVID-19 pandemic in particular was a cause for reflection across industries – uncovering efficiencies as well as areas for apparent improvement in medical device and consumer health products across the globe. The long-term effect of this pandemic on industry as a whole is yet to be seen, but it is likely to result in increased liability profiles for these product categories for some time, particularly in light of a heightened focus on collective redress and class actions, globally. The events of Brexit, as well as other global political changes, have also resulted in reflection on the existing regimes and the consideration of opportunities for possible change and development.

All those involved in the sale and production of medical devices and consumer health products – from companies to regulators, third parties (including distributors/suppliers), governments, and insurers – are required to keep up to date with this evolving regulatory and liability framework and need to consider their risk mitigation strategies against this backdrop.

This global guide aims to assist those listed above in navigating the risks of these ever-changing product safety and liability regimes, by providing a country-by-country oversight of applicable legal frameworks, recent developments, and guidance regarding high-risk activities provided by the subject-specific sections.

Reading through the country-specific chapters in this guide, you will find similarities as well as marked differences in approaches to product regulation and liability in terms of medical devices and consumer health products. The future focus of these regimes seems likely to be more consistent globally – innovation, newer technologies, and large-scale product liability claims are now forecast in almost every region across the world.

Readers are encouraged to study and understand local positions taken by specific countries, but also to continue to appreciate the global nature of the industry and related risk profiles. This global approach, in our practical experience, is the one that will often mitigate risk exposure but is additionally likely to be the most cost-efficient and beneficial to companies overall.

Growing product category – consumer health products

The type and variety of products that fall within the remit of consumer health product safety regimes is growing. When considering the application of product safety regimes, companies in the cosmetics, supplements (sometimes called nutraceuticals), and biocides industries should bear in mind the potential application of complex product regulatory regimes, separate and distinct from general consumer product regimes. There are either “registration” or “authorisation” requirements for each of these types of product categories, alongside the normal requirements for safety assessments, that make regulatory compliance exercises for these products more complex and time-consuming and often call for the involvement of expert assistance.

The overlap between these above-mentioned product categories is clear, a fact highlighted by the COVID-19 pandemic which brought them into the spotlight, especially when regulators produced copious amounts of guidance determining the applicability of product regulatory regimes for products that could fall within the ambit of several regulatory regimes, so called “borderline products”. Careful, expert consideration and a case-by-case analysis therefore needs to be undertaken to determine the source of product safety obligations, in terms of the applicability of certain regimes to certain product categories and borderline products, at the outset.

Spotlight on industry, responses to COVID-19, and long-term liability consequences

The COVID-19 pandemic placed both increased pressure and heightened focus on the medical devices and consumer health product industries. Being a key participant in the fight against COVID-19, medical device and consumer health product companies were required either to increase production of certain product categories or quickly pivot their production into the alternative manufacture of highly regulated and often higher-risk-profile products with which they were unfamiliar. The ease of use, the efficacy, and more importantly the timeframes of product safety regulations in particular, were thus placed under the microscope. Regulators were required to respond quickly to assist industry navigation of this unique issue, so as to maintain high levels of product safety. At the same time as mobilising industry, regulators swiftly adopted novel approaches to regulation, to assist those with direct efforts in respect of the fight against COVID-19, and to alleviate pressure on companies not directly involved with the pandemic, but trying to maintain the status quo during the pandemic. Regulators’ responses varied greatly, from the granting of derogations and exemptions, to the provision of guidance and/or broader policy changes.

At the early stages of the pandemic, countries were often criticised for the insular nature of their responses. The emergency nature of the situation prompted governments and regulators – even those that usually worked in tandem across regions – to take a more individual approach. This was to accommodate the specific needs of their countries and peoples, but also to reflect the progression of the disease within each country, which varied greatly, even between closely neighbouring countries. The precarious nature of international supply chains was also highlighted.

As we moved further through the crisis, however, governments, companies, and regulators alike began to adopt a more joined-up approach – seeing the benefit in sharing resources, approaches, and policies across regions. Many of the international co-ordination efforts that were set up ostensibly to combat COVID-19 are likely to survive far beyond it on the basis of their perceived benefits. Companies were encouraged to consider and review their supply chains, and the locations of key providers in the context of any disruption to travel or the like, and have adapted accordingly.

The product liability profile for medical devices and consumer health products will be a key area of focus for the future. These product categories are likely to be the target of future legislation, based on their increased use and on users’ greater reliance on them at all stages of the COVID-19 pandemic, from prevention to treatment and protection against contraction of the disease. The notoriously difficult aspect of product liability cases, namely “causation”, is likely to present even more difficulties in light of the apparent near inevitability of contracting COVID-19 in many instances.

Against the backdrop of a generally heightened risk profile, the voluntary provision of indemnities and/or immunities by some national governments will further lead to a disparate profile of litigation risk in different areas across the globe. The impact of the emergency nature of the production of some products, and those products’ social utility, are also factors that might alter the context of litigation.

Against this backdrop, companies are encouraged to continue to review the application of temporary derogations and/or extensions, some of which may have now ceased, and review their packaging and general practices in light of the evolving framework, and in light of any changes regarding indemnities and/or immunities. We also encourage companies to map these issues both from a country-specific and a global point of view.

Divergence of global medical device and health product regimes and disparate product compliance requirements

Brexit has also significantly complicated the regulation of these product categories. Given the “copy and paste” approach taken by the UK to most of its EU-based sources of law, and the timing of the EU’s long-awaited overhaul of its medical devices product safety regulatory regime, medical devices is one area of law in which the EU and UK positions began to diverge almost immediately post-Brexit. Whilst the UK has retained an older version of the EU regime, the EU has moved on to an apparently improved version of that system. However, the UK is now taking steps to progress with the overhaul of its own system in light of both the opportunity to do so post-Brexit and in response to perceived deficiencies of the older EU regime.

Companies navigating this area of the law are currently required to comply with two separate and discrete sets of laws. Practical uncertainty still exists and comes up on an almost daily basis, even for companies attempting to be fully compliant, in light of (i) the unforeseen consequences of the operation of systems outside the EU context, and/or (ii) infrastructure which has not kept up with the pace of implementation of the new legislation, often due to distraction caused by the COVID-19 pandemic.

Evidently both the UK and EU regions now have the ability to change their laws still further, and member states retain, as always, the ability to implement their own enforcement and penalty systems for breach of those laws, such that continued divergence is likely. This area is one that should be monitored particularly closely, both for the immediate and practical effects of the divergence on these specific industries, but also as an area which may well forecast and predict areas of future development and change in Europe generally. This echoes the long-standing practice adopted by the medical devices and consumer health industries in leading product safety and liability policy developments in Europe, both in terms of amendments to regulatory regimes and because these product categories are the subject of the most significant product liability cases in Europe.

This divergence of approach is not unique to Europe. It is likely that as the EU- and UK-based systems, both often considered to be “gold-standard” and the bases for many other regimes around the world, continue to develop, other countries may adopt aspects of each system into their own systems in the event of further changes in Europe and globally.

Convergence of cross-sector laws

Whilst locally based laws are increasingly diverging in the areas of medical devices and consumer health products, as discussed above, there is otherwise, generally, a convergence of product safety laws across sectors throughout the world.

Cosmetics legislation, for example, is borrowing from food contact material legislation in considering best packaging practices. Medical device laws have for a long time borrowed from data privacy and cybersecurity laws. This applies more so now with the implementation of the new EU medical devices legislative suite, which has an increased focus on concepts such as IT security and related risks and emphasises the classification of medical devices software in some instances. General product safety legislation, including in the EU, is also being amended to include cybersecurity and privacy as mainstay requirements for a “safe” product, which is a fundamental shift in the concept of product safety and is likely to see increased interdisciplinary practice and issues going forward.

Modernisation of legislative regimes and technological advancements

The increased preference for “online selling” and increased reliance on modern technologies has resulted in a focus on these areas as a basis for legislative change in product safety generally, including the increased responsibility of online sellers and the requirement for locally based entities in the EU, to ensure that product safety requirements are fully complied with, notwithstanding the international location of the manufacturer or seller. Many of these general product safety rules will impact consumer health product categories.

There has also been specific regulatory change to account for and encourage use of new technologies. For example, the EU has taken the unprecedented action of laying down some rules for the use of artificial intelligence (AI) technology, which has direct application to medical devices and consumer health products. By contrast, the UK has published its own White Paper pledging to establish a “pro-innovation approach to regulating AI”, to drive responsible innovation and maintain public trust. The World Health Organisation (WHO) has also produced guidance on the ethical use of AI in health settings.

Following parliamentary delay due to changes in government leadership, the UK also unveiled its Data Protection and Digital Information (No 2) Bill, which seeks to simplify the country’s data protection laws that should make it easier for medical device manufacturers to innovate whilst maintaining a high standard of data protection and privacy.

The EU has also implemented draft legislation to streamline the assessment of new technologies, deploying a multidisciplinary review that includes cost implications for patients and insurers alike, which underlines the likely growing importance of newer technologies in the medical devices and consumer health products spaces going forward.

Environmental considerations, sustainability, and corporate social responsibility

Natural disasters, the perceived environmental benefits achieved by the cessation of travel during tight lockdowns caused by the recent pandemic, and the continuing global focus on climate change have also led to an increased focus on sustainability and environmental, social, and governance considerations, which are at the forefront of the agenda of many legislatures and regulators worldwide.

There is an increased focus on ensuring medical devices and consumer health products, amongst other product categories, properly comply with pre-existing obligations in this space – some of which are not readily apparent because they are often contained in separate pieces of legislation that are not necessarily directly linked to product safety.

The issue of so-called “greenwashing” (ie, the making of environmentally sustainable claims by manufacturers or suppliers, designed to induce consumer purchase decisions) is now the subject of greater focus by regulators across the world. Such practices are known to be particularly damaging to consumers who are also increasingly concerned about environmental considerations as they can easily be misled (if the eco-friendly claims turn out to be false). This is particularly the case with claims as to recyclability, for example, a subject of particular focus by multiple layers of regulators, including product safety and competition regulators, in recent years in the UK.

Furthermore, general practices that might amount to misleading statements are also the subject of scrutiny, including in particular in the cosmetics space in the EU and UK.

Collective redress and class actions

There are now more country-specific reforms in place which have opened up the possibility of large-scale legal action to consumers by continuing to allow mass tort claims to be made more easily, including across neighbouring jurisdictions. Accordingly, it is likely that medical device and consumer health products will be subject to collective redress or class action claims that use these mechanisms. Medical devices tend to lead the way in respect of mass tort claims across the globe, given the potentially devastating consequences should the products fail and also the generally more complex regimes that apply to regulate the products, such that the addition of these mechanisms for litigation will likely compound this pre-existing phenomenon.