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Medical Device Outsourcing & the Role of Regulatory Compliance

MEDICAL DEVICE OUTSOURCING SOLUTIONS. Medical Device Outsourcing & the Role of Regulatory Compliance. Scott Pletzer President. Who Am I?. B.S. Mechanical Engineering, West Virginia University M.S. Bioengineering, Clemson University (Dr. Shalaby)

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Medical Device Outsourcing & the Role of Regulatory Compliance

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  1. MEDICAL DEVICE OUTSOURCING SOLUTIONS Medical Device Outsourcing & the Role of Regulatory Compliance Scott Pletzer President

  2. Who Am I? • B.S. Mechanical Engineering, West Virginia University • M.S. Bioengineering, Clemson University (Dr. Shalaby) • 13 yrs industry experience (Boston Scientific, Becton Dickinson, C.R. Bard, The Tech Group) • Founded CARZER Technologies 2003 • American Society for Quality (ASQ) • Residing in Arizona since 1998 2007 CARZER Technologies, LLC All Rights Reserved

  3. Who is CARZER? CARZER Technologies has over 20 years experience in the medical device industry. We provide solutions to organizations regulated by ISO standards and/or FDA regulations. 2007 CARZER Technologies, LLC All Rights Reserved

  4. CARZER’s Services • Quality management systems • Compliance  • Training & development • Contract engineering & manufacturing • Regulatory preparation & submission • Supply base management 2007 CARZER Technologies, LLC All Rights Reserved

  5. Outsourcing Reaches the Entire Biomedical Industry • Academia • Entrepreneurs • Biomedical organizations • Funding organizations • Legal counsel 2007 CARZER Technologies, LLC All Rights Reserved

  6. “The question for device makers is not whether to outsource--it's what to contract out, where to do it, and how to begin.” Source: MDDI-March, 2003

  7. Today’s Outsourcing …It’s about systems and infrastructure, training and awareness, design houses for prototyping, contract manufacturing, third party testing and clinical services, regulatory representation, experienced and skilled personnel, without permanent salaries. It’s more than consulting as we know it… 2007 CARZER Technologies, LLC All Rights Reserved

  8. Factors Driving Outsourcing • Cost effectiveness • Resources • Speed to market • Expertise • Competitive edge • Capacity 2007 CARZER Technologies, LLC All Rights Reserved

  9. Top Device Manufacturers • Johnson and Johnson ($20.3B) • GE Healthcare ($16.6B) • Medtronic ($11.3B) • Baxter International ($10.4B) • Siemens Medical Solutions ($10.1B) • Cardinal Health ($10B) • Tyco Healthcare ($9.6B) • Philips Medical Systems ($8.5B) • Boston Scientific ($7.8B) • Becton Dickinson ($5.8B) Source: MPO magazine, July/August-2007 2007 CARZER Technologies, LLC All Rights Reserved

  10. What Manufacturers Outsource Source: MDDI-March, 2007 2007 CARZER Technologies, LLC All Rights Reserved

  11. Contract Manufacturing Market Size Source: Medical device market size and gross profit from IBISWorld estimates. Contract manufacturing market size based on consensus among Frost and Sullivan, Millennium Research, MedTech Insight and Accellent estimates. 2007 CARZER Technologies, LLC All Rights Reserved

  12. Top Contract Manufacturers • Accellent Inc. (12%) • Symmetry Medical (6%) • Greatbatch (5%) • Heraeus, Avail (4% each) • The Tech Group, Lake Region, Fort Wayne Metals (3% each) • Orchid International, Doncasters Medical Technologies (2% each) • Source: MPO-July/August, 2007 2007 CARZER Technologies, LLC All Rights Reserved

  13. Geographical Opportunities • Idaho - Showing entrepreneurs the money • Arizona - Building more technology centers • Wisconsin - A partnership powerhouse • Ohio - Rich in research • South Carolina - Legislating life science success • Traditional - San Francisco, San Diego, Boston, Minneapolis Source: MPO-July/August, 2007 2007 CARZER Technologies, LLC All Rights Reserved

  14. Factors Driving Contract Manufacturing Source: MDDI-March, 2003 2007 CARZER Technologies, LLC All Rights Reserved

  15. What’s Important When Outsourcing? Source: MDDI-March, 2007 2007 CARZER Technologies, LLC All Rights Reserved

  16. What are the Challenges? Source: MDDI-March, 2007 2007 CARZER Technologies, LLC All Rights Reserved

  17. Achieving Contract Manufacturing Success Source: MDDI-March, 2003 2007 CARZER Technologies, LLC All Rights Reserved

  18. Outsourcing Partner Considerations • Identify the company’s specialty area • orthopedics, cardiology, interventional • Device classification (I, II, or III) • affects the development strategy, regulatory pathway, finances, product liability, etc. • Assess the gaps • engineering, supply base management, packaging, manufacturing 2007 CARZER Technologies, LLC All Rights Reserved

  19. Strategic Alliance Established Partnership Preferred Outsource Initial Contact Outsourcing Relationships 2007 CARZER Technologies, LLC All Rights Reserved

  20. Achieving Outsourcing Success • Begin early • Due diligence • Common objectives • Communicate • Trust and respect 2007 CARZER Technologies, LLC All Rights Reserved

  21. Regulatory ComplianceFDA & ISO 2007 CARZER Technologies, LLC All Rights Reserved

  22. Food & Drug Administration (FDA) • Motivated by public safety • Indifferent to company size or status • Enforces federal law • Authority over company premises and product • Applies to companies doing business in the United States 2007 CARZER Technologies, LLC All Rights Reserved

  23. International Organization for Standardization (ISO) • Business oriented • Promotes global harmonization • Regular standard reviews and revisions • Applicable internationally 2007 CARZER Technologies, LLC All Rights Reserved

  24. Compliance Deficiencies Company A Failure to adequately validate the manufacturing process with a high degree of assurance, approve, and document the results of the validation activities to ensure that product specifications can be consistently met, as required by 21 C.F.R. § 820.75(a). Source: FDA Warning Letter Dated 19Jan07 2007 CARZER Technologies, LLC All Rights Reserved

  25. Compliance Deficiencies Company A Failure to establish and maintain procedures for finished device acceptance to ensure that each production run, lot, or batch of finished devices meets acceptance criteria prior to releasing the devices for distribution, as required by 21 C.F.R. § 820.80(d), and failure to maintain acceptance records, as required by 21 C.F.R. § 820.80(e). Source: FDA Warning Letter Dated 19Jan07 2007 CARZER Technologies, LLC All Rights Reserved

  26. Compliance Deficiencies Company A Failure to establish and maintain procedures to control the design of the device in order to ensure that specified design requirements are met, as required by 21 C.F.R. § 820.30(a) through (j). Source: FDA Warning Letter Dated 19Jan07 2007 CARZER Technologies, LLC All Rights Reserved

  27. Compliance Deficiencies Company B A medical device manufacturer that ignored FDA regulations by selling unapproved medical devices to doctors treating children with heart problems agreed to plead guilty to four misdemeanor charges in federal court and pay $4.5 million in fines. Source: MPO-July/August, 2007 2007 CARZER Technologies, LLC All Rights Reserved

  28. Compliance Deficiencies Company B The plea agreement ends a three-year criminal investigation of XYZ Medical, Inc. of New York and its founder and president John Doe by the U.S. Attorney that began amid charges of improper conduct by doctors at Anytown Hospital for Children. Source: MPO-July/August, 2007 2007 CARZER Technologies, LLC All Rights Reserved

  29. Compliance Deficiencies Company C Failure to implement complaint handling procedures to ensure that all complaints are evaluated to determine whether the complaint represents an event that must be filed as a Medical Device Report under 21 CFR Part 803, as required by 21 CFR 820.198(a)(3). Source: FDA Warning Letter Dated 03Jul07 2007 CARZER Technologies, LLC All Rights Reserved

  30. Compliance Deficiencies Company C Failure to submit MDR reports within 30 days of receiving or otherwise becoming aware of information that reasonably suggests that a marketed device may have caused or contributed to a death or serious injury, as required by 21 CFR 803.50(a)(1). Source: FDA Warning Letter Dated 03Jul07 2007 CARZER Technologies, LLC All Rights Reserved

  31. Compliance Deficiencies Company C A correction or removal conducted to reduce a risk to health posed by a device was not reported in writing to FDA, as required by 21 CFR 806.10(a)(1). Source: FDA Warning Letter Dated 03Jul07 2007 CARZER Technologies, LLC All Rights Reserved

  32. Compliance Deficiencies Company D Failure of management with executive responsibility to review the suitability and effectiveness of the quality system at defined intervals and with sufficient frequency according to established procedures to ensure that the quality system satisfies the requirements of 21 CFR Part 820 and the firm's established quality policy and objectives, as required by 21 CFR 820.20(c). Source: FDA Warning Letter Dated 25Jan06 2007 CARZER Technologies, LLC All Rights Reserved

  33. Compliance Deficiencies Company D Failure to review, evaluate, and investigate any complaint involving the possible failure of a device to meet any of its specifications, as required by 21 CFR 820.198(c). Source: FDA Warning Letter Dated 25Jan06 2007 CARZER Technologies, LLC All Rights Reserved

  34. Compliance Deficiencies Company D Failure to establish and maintain procedures for receiving, reviewing, and evaluating complaints by a formally designated unit to ensure complaints are processed in a uniform and timely manner, as required by 21 CFR 820.198(a)(1). Source: FDA Warning Letter Dated 25Jan06 2007 CARZER Technologies, LLC All Rights Reserved

  35. Compliance Deficiencies Company D Failure to establish and maintain procedures to address the identification, documentation, evaluation, segregation, disposition and investigation of nonconforming product, as required by 21 CFR 820.90(a). Source: FDA Warning Letter Dated 25Jan06 2007 CARZER Technologies, LLC All Rights Reserved

  36. Violators Profiled • Company A • Startup in 2005 • Naïve and unaware of regulations • Company B • Doing business since 1982 • Self proclaimed worldwide leader in the field • Claimed device benefits outweighed violations • Companies C & D • Within top ten device manufacturers • When does naivety become deceit? 2007 CARZER Technologies, LLC All Rights Reserved

  37. Compliance Governs The Industry • 21CFR Part 820 • ISO 13485:2003 • Procedure driven • Results documented • Failures must be addressed • If it wasn’t written…it didn’t happen 2007 CARZER Technologies, LLC All Rights Reserved

  38. Give Me an “A” for Auditor • Expect to be part of audits • FDA • ISO • Customer • Internal • Be prepared to defend your work • Less is always better 2007 CARZER Technologies, LLC All Rights Reserved

  39. When Your Ethics Come Into Play • Always follow procedures and always tell the truth • Make your decisions based on data • Bring about resolution quickly, but correctly • You are accountable for your actions 2007 CARZER Technologies, LLC All Rights Reserved

  40. The Cost of Compliance • Compliance has a price • Non-compliance has a much greater price 2007 CARZER Technologies, LLC All Rights Reserved

  41. Additional Resources • fda.gov • iso.org • devicelink.com • mpo-mag.com • carzer.com • ISO 13485:2003 (ISO requirements) • 21CFR Part 820 (FDA regulations) • Medical Device & Diagnostic Industry (MD&DI) • Medical Design & Manufacturing (MD&M) 2007 CARZER Technologies, LLC All Rights Reserved

  42. MEDICAL DEVICE OUTSOURCING SOLUTIONS Questions 2007 CARZER Technologies, LLC All Rights Reserved

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