Solicitor, Alison Newstead, explains why compliance is crucial to the continued success of your business and how failings can lead to fines and even a prison sentence.

Medical device companies are only too aware that both pre- and post-market compliance activities are essential to ensuring a continued, successful business. Failure to take heed of a potential compliance issue and act on it promptly can lead to matters quickly escalating, resulting in significant, and more complex, legal and commercial challenges.
Early and thorough investigations, actively engaging in any dialogue with the UK regulator, the MHRA, and taking prompt action are all steps which are likely lead to more favorouble outcomes for device companies and those using their products.
Experience has shown that failure to actively manage issues at the outset can lead to a range of increased risks for device companies and considerably less desirable outcomes for the various stakeholders involved. These include:

Increased risk of enforcement action – If the MHRA considers that there is a compliance issue, it generally reaches out directly to request cooperation with any investigations and provide advice as to how to bring products into line with regulatory requirements. By following any such advice, companies usually avoid being faced with enforcement action. However, failure to act on MHRA advice and continuing to place a non-compliant product on the market could see the MHRA making use of its enforcement powers. These are wide ranging and could result in the issuance of a compliance notice or a restriction notice. Ultimately, there is an increased risk of prosecution – with offences attracting an unlimited fine and/or up to 6 months in prison.

Increased risk of a greater number of civil claims – If steps need to be taken to address a compliance issue (such as changes in the Instructions For Use or the withdrawal or recall of a product), then the sooner this action is taken, the better. The larger the number of non-compliant products that are on the market, the larger the potential pool of individuals who may be harmed. By acting quickly and reducing the number of products on the market that could cause harm, the number of potential claims against the company is also reduced.

Increased risk of insurance coverage challenges – Failure to act promptly and reasonably on information about a potential non-compliance can lead insurers to question whether the company has adequately mitigated risk. If appropriate steps were not taken – and more claims were lodged as a result – the company could face a challenge on coverage from its insurer and potentially have to meet the costs of any claims.

Increased risk of more extensive corrective action – If a compliance issue is spotted and acted on early, it may be that the nature of the corrective action taken can be minimised. For example, where a non-compliant product is still only within the commercial distribution chain, withdrawal of a product will be limited to that commercial chain. There will be no need to recall from consumers, as the product has yet to reach them. This is not always the case, and in some circumstances, corrective action can have significant and wide-ranging implications, including in terms of costs and potential damage to brand.

Increased risk of adverse media coverage – The media frequently take an interest in matters which involve products which may cause injury. This interest is often heightened when there is a suggestion that a company has not acted quickly enough, or has not taken adequate steps to protect its own customers. Managing the media can become increasingly difficult if criticism is levied at the timing and scope of any company action.

Overall, the message is clear: Do not delay investigating and taking action in respect of any potential product non-compliance. Taking action early can significantly reduce the risk of adverse outcomes.