Subject:
DISTRIBUTORS and Quality Assurance Agreements (QAA).

Introduction:
In this newsletter we would like to continue the deep dive regarding the obligations of medical Distributors.
The terms “reseller” and “distributor” are often used interchangeably to describe entities that purchase goods or services from a manufacturer and then distribute or resell such goods or services to retailers and consumers. However, there are some key differences between a distributor and a reseller and important issues to consider in quality assurace agreements (QAA) with resellers and distributors.

Let´s have a closer look…
A distributor often acts as partner with the manufacturer, is generally first in line in the distribution channel, and is more closely associated with the manufacturer.
A distributor usually buys directly from the manufacturer, holds inventory of the product, provides after-sale services, and sells the product both to resellers and sometimes directly to end users. Because distributors generally take on marketing responsibilities for the product, or the obligation to obtain regulatory or government approvals for resale of the product, the manufacturer-distributor relationship might be an exclusive relationship. The exclusive distribution agreement must account for minimum sale thresholds or minimum royalties in order for the distributor to maintain its exclusivity.
Because a distributor may be a company’s first line of introduction into a new or existing market, it is important for manufacturer to find a distributor that will diligently market manufacturer’s products, have the right connections in new territories to obtain regulatory or government approvals for the products.
A reseller is generally less closely associated with the manufacturer, and sometimes does not have a direct relationship with the manufacturer as it generally buys products from distributors. Resellers usually do not keep inventory of product or provide after-sale services. Resellers generally only sell to end users or wholesalers.
If Distributor using a reseller and/or retailer is still responsible for ensuring that the reseller and/or retailer manages and controls their processes to ensure the quality of the product supplied.
The Distributor must transfer and subscribe to its dealers, all the requirements signed in the manufacturer-distributor-agreement.
For a manufacturer with an established and well-recognized product, a direct reseller relationship may be the most profitable because resellers are less invested in developing the market for the product and therefore provide higher profit margins for the manufacturer.

What are the main requirements to be consider in quality agreement…?
Since the implementation of the new medical device regulation (MDR) thedistributors have gained additional responsibilities.
Distributors may no longer blindly relay on the manufacturer and importers. They must exactly review whether the manufacturer has valid certificates, in particular in the transition period.
The MDR allows distributors to perform random testing in Article 14 paragraph 2. They should be able to review whether the products actually have a CE symbol, a declaration of conformity and a UDI.
The reviews required by the MDR for distributors also include some check points:
• Has the importer listed its name and address on the product, packaging or a document?
• Has the importer not covered the labels of the manufacturer with its own additional labels?
• Does the product appear to comply to the legal requirements?

As already describded in our previous Newsletter n.17, the MDR obligates the distributors to the following additional activities:
• Storage and transportation pursuant to manufacturer specifications
• Collecting complaints and incident reports and forwarding them to manufacturers and possibly importers. This also applies to products for which the distributor itself has doubts about the conformity.
• Keeping a “register” of non-conforming products, recalls and withdrawals
• Informing authorities about unsafe and falsified products and about corrective actions and provide information and documentation upon request.

Storage and transport conditions
While the product(s) are under its responsibility storage and transport conditions, distributor shall not jeopardise their compliance with the requirements of the MDR and shall comply with the conditions set by the manufacturer.
The distributor shall prepare and ensure the preservation of products in suitable places not exposed to light or heat, water, moisture, insects and polluting materials, such as to ensure the conformity of the product at all stages of preservation.
It is recommended to store the products and the subsequent withdrawal following the FIFO (First In First Out).
It is recommended to perform periodic inspections (monthly) of the expiry dates of the products packaged sterile.
The distributor is responsible to estabilish a system of appropriate packaging to ensure the integrity and preservation of the product during the transportation and handling. This is valid only if any of the following activities are carried:
• Provision of information for a product. This also applies to translations.
• Changes to the external packaging (changes to the outer packaging, pack size, repackaging, etc.)
This activities are no longer seen as a product change that has an effect on the conformity of the product. If distributor carries out any of these, shall indicate on the device or on its packaging or in a document accompanying the device its name, registered trade name or registered trade mark.
In our next Newsletter we will explore all possible solutions in terms of new simbols and additional nformation neccesary to be compliant with the new rules of MDR.
As indicated in article 16 (3)(4), the distributor in both cases, shall ensure to have in place a certified quality management system and notify “its” manufacturers 28 days before the provision of the product(s). The MDR mentions only “notification”, and not more “asking for approval”.
Naturally, distributor becomes the manufacturer if packaging that is necessary for maintaining the sterile condition is opened, damaged or otherwise negatively affected by the repackaging.
A very particular attention shall be applied to the logistics partners offers services as store and package products upon request, take over invoicing, etc. In terms of the MDR thay are also consider distributors.

Post Market Surveillance
If the distributor detects deviations or problems from technical specifications of medical devices, must report, in written form necessarily, each non-compliance to Manufacturer.

Both parties shall maintain processes, protocols or procedures to monitor patient/user feedback.
The distributor shall, at the manufacturer’s reasonable request, lend its full co-operation in post market surveillance activities.

Incident and Product Recall
Both parties shall communicate, without undue delay and ensure reporting to the relevant authorities.
Both sides shall carry out the market surveillance activities describded in MEDDEV Guidelines 2.12-1 (current revision) as well as the post-sale surveillance activities of the products covered by the QAA in order to communicate to each other the following:
• Accidents or incidents that could have caused or could cause death or serious deterioration in the health status of patients, users, and third parties in relation to distributed products;
• Suggestions for revisions and / or modifications to the operating instructions that could improve product safety.
• Manufacturer shall ensure investigation and determination actions to be taken because of any serious or potentially serious incident relating to the contractual products.

The distributor should have a recall procedure in place. This is to enable the swift and effective recall from the marketplace of defective and/or potentially harmful medical devices. In the event of a recall the responsibility of the distributor will depend on where in the supply chain they act for the medical device in question.

The Distributor shall have an efficient and effective method for identifying customers supplied with a medical device subject to a recall. The recall procedure should be regularly challenged (recommendation of at least once per year) to ensure that the process is effective and capable of tracing all customers and medical devices in a timely manner. This challenge may involve identifying a particular batch of a medical device and reconciling quantities received with those in stock and distributed to customers. A mock recall need not be carried out only where the company has participated in an actual recall during the previous year, which has utilised the same traceability system.

Traceability
So, it is very clear now that with the MDR, distributors become part of the post-market surveillance and reporting system. Dealers must actively cooperate in this, which requires that they be able to trace the products. This is explicitly described in the MDR in article 25.
The distributor must estabilish a system to ensure the complete traceability of the products sold to the end client.
The delivery note and the invoice must always have the batch number of the product(s).
The documents must be stored and kept for a period of not less than:
 15 yearsin case of implantable devices
 10 years in all other medical devices cases
This documentation must be available to manufacturer at any time.

Product Labelling & Packaging
Distributor shall do not alter the packaging and labeling of the products, without prior verification and approval by the Manufacturer. It is also possible that the manufacturer markets the product in the distributor’s “design”. The manufacturer must, however, always be visible on the label.

Note, that as a distributor…
…the authorities require that you implement a complete QM system comparable to ISO 13485.
There is no obligation that the distributors have their QM system certified. The distributors are not obligated to register the products. This is the task of the manufacturers or importers.
The distributors also are not subject to the requirement of a “Person Responsible for Regulatory Compliance”.

Let´s recap shortly what a QAA should include:
• List of products or product groups
• Duration of validity of the agreement
• Contacts for both parties
• Form and deadline for feedback from the distributors to the manufacturer
• The right of the manufacturer to audit / inspect the distributor
• Obligation of the distributor to report to authorities
• Obligation of the distributor to trace products (“register”)
• Obligation of the distributor to not alter the labeling
• Obligation to only work with a certified translation agency
• List of distribution countries

This newsletter is part of our campaign to increase the sensitivity and the awareness of all our business partners, to bring more clarity around the MDR journey and challenges and opportunities around the MDR Art.22 “Systems and Procedure Packs”.
We are already today all dependent on an effective cooperation. For the MDR implementation, we require even a closer collaboration in order to ensure we all can deliver safe supply to hospitals and patients in the future.
We are confident we’ll be able to continue to supply health care competently on customized surgical procedure sets and small kits.
You want to know more about specific topics? Do you have any questions or comments?
Write us MDR2020@stsmedicalgroup.com
The next MDR Newsletter will be issued in November.We wish everybody pleasant days.

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