In my experience, I have seen significant liabilities inherited during company acquisitions due to unplanned regulatory compliance issues. Regulations are constantly changing. In Europe, the burden and cost of compliance has risen considerably over the years. Just because a product has been cleared, approved or certified, with a long history on the market is not an adequate rationale that no liability risk exists, or additional effort is required to maintain keeping these products on the market.
"Due diligence activities should cover all applicable regulatory requirements of the firm based on the company’s role and the type of medical devices on the market given the geographical region in which they are marketed. Diligence should include a review of the status of registrations, listings, licenses, and planned or pending submissions requiring regulatory agency involvement or approval. A review of product labeling and advertising to ensure all claims are consistent for the approved intended use to mitigate potential risks of misbranding and enforcement actions.
Assessment activities should include a review of established quality system procedures, staff training, design and production histories, critical suppliers, device and process validations, technical files, submissions, and status of certifications. A review of audits, disciplinary measures and corrective action plans provide insight into the effectiveness of the quality management system and commitment of the executive management team."
Potential areas of concern include ‘letters to file’ that should have required a regulatory submission or involvement of a regulatory body. Product issues in the field that were not handled properly as complaints, such as thorough investigations, impact/ risk assessments, corrections/ removals, and reporting to regulatory authorities. The lack of robust product technical files and design history file documentation is a common issue. Without solid supporting design documentation, it is extremely challenging to justify design changes, such as changes in materials, manufacturing processes, or the supplier base. If the acquisition of the company is being driven by a specific product portfolio, you should be prepared to do a deep dive into the technical files or 510K or PMA, the clinical evaluation, any critical contractors or suppliers, the type of complaints received, any CAPA’s that have opened, and issues that have been escalated.
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