Explanatory Memorandum to COM(2021)627 - Transitional provisions for certain in vitro diagnostic medical devices and deferred application of requirements for in-house devices

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1. CONTEXT OF THE PROPOSAL

Reasons for and objectives of the proposal

Regulation (EU) 2017/746 of the European Parliament and of the Council 1 establishes a new regulatory framework for in vitro diagnostic medical devices, such as HIV tests, pregnancy tests or SARS-CoV-2 tests. It is estimated that around 70% of clinical decisions are made using in vitro diagnostic medical devices 2 .

The new Regulation (EU) 2017/746 will replace the current Directive 98/79/EC on in vitro diagnostic medical devices 3 from 26 May 2022 and introduce substantial changes in the sector. The Regulation aims to ensure the smooth functioning of the internal market and a high level of protection of public health, patients and users, taking into account the high number of small and medium-sized enterprises (SMEs) active in this sector.

One of the main changes concerns the involvement of independent conformity assessment bodies (‘notified bodies’). Currently, only a relatively small number of high-risk devices (about 8% of all in vitro diagnostics on the market) is subject to notified body control under Directive 98/79/EC 4 . Under the Regulation, around 80% of in vitro diagnostic medical devices will be under the control of notified bodies, the vast majority of them for the first time 5 . That means that manufacturers will need to apply to a notified body and obtain one or more certificates after completion of the appropriate conformity assessment procedure, before being able to place their devices on the market. On average, a conformity assessment procedure takes around 1 year, after which additional time (around 6 months) is needed to produce the devices and prepare them for release on the market, according to information provided by the medical device industry 6 .

Article 110 of Regulation (EU) 2017/746 contains transitional provisions for devices with a certificate issued by a notified body in accordance with Directive 98/79/EC prior to 26 May 2022. Only devices that require a notified body certificate already under Directive 98/79/EC (around 8%) will benefit from these transitional provisions. This Commission proposal builds on those existing transitional provisions by extending their scope and timelines.

The COVID-19 pandemic has, on the one hand, confirmed the need for a robust regulatory framework for in vitro diagnostic medical devices in the EU. For instance, it has illustrated how essential it is for tests placed on the EU market to be accurate, reliable and safe when detecting the presence of viruses such as SARS-CoV-2.

On the other hand, the COVID-19 pandemic and the associated public health crisis have given rise to additional and unprecedented challenges for the implementation of Regulation (EU) 2017/746. These extraordinary circumstances have demanded substantial additional resources from Member States’ competent authorities, health institutions, notified bodies, manufacturers and other economic operators to increase the availability of vitally important medical diagnostics. This was due not only to a shift in priorities, new tasks and a significant workload, but also to induced travel restrictions and quarantine orders.

These extraordinary circumstances have had a significant impact on various areas covered by Regulation (EU) 2017/746. Data on market readiness collected by the European Commission during the first half of 2021 7 show that Member States, health institutions, notified bodies and economic operators will not be in a position to ensure the proper implementation and application of the Regulation from 26 May 2022.

In particular, with only six notified bodies designated 8 so far under Regulation (EU) 2017/746, there is a grave shortage of notified body capacity, making it impossible for manufacturers to conduct the legally required conformity assessment procedures in time. As the currently designated notified bodies are established in only three countries (Germany, France and the Netherlands), the situation is particularly problematic for SMEs established in other Member States, which have a tendency to apply to notified bodies in their own or neighbouring Member States. In addition, due to COVID-19 travel restrictions, notified bodies were not able to carry out the required on-site audits at the manufacturers’ premises to verify the manufacturing and other relevant processes 9 . Travel restrictions are still in place in various regions of the EU and still significantly hamper the proper conduct of conformity assessment by notified bodies.

If not addressed, this situation would lead to a significant disruption in the supply of a multitude of in vitro diagnostic medical devices on the market both for health institutions and for the public.

The European Parliament, in a cross-party letter of 11 May 2021 signed by several political groups (EPP, S&D, Renew, ECR, GUE/NGL, Greens), and the Council of Health Ministers (EPSCO) of 15 June 2021 10 , called on the Commission to present an urgent legislative proposal to smooth the transition to the new regulatory framework and to ensure the availability of in vitro diagnostic medical devices on the EU market. Stakeholders representing the medical device industry, notified bodies, healthcare professionals and researchers in the field of clinical chemistry and laboratory medicine, and not-for-profit blood establishments also called for urgent action.

The Commission recognises the need to ensure both a high level of safety and performance of devices, and their availability on the EU market. The proposal therefore aims to extend the existing transitional period for devices covered by a certificate issued under Directive 98/79/EC and to introduce tailored transitional periods for devices that have to undergo a conformity assessment involving notified bodies for the first time under Regulation (EU) 2017/746. As, since its outbreak, many health institutions, in particular hospitals, have had to focus all their efforts on dealing with COVID-19, the Commission proposes to also introduce a transitional period for the requirements for devices manufactured and used within the same health institution (‘in-house devices’). This will give health institutions extra time to comply with the new requirements and ensure that in-house tests, which are often essential –especially for rare diseases, can continue to be developed in clinical laboratories 11 .

Consistency with existing policy provisions in the policy area

Regulation (EU) 2017/746 was adopted together with Regulation (EU) 2017/745 on medical devices 12 . In April 2020, due to the extraordinary circumstances caused by the COVID-19 pandemic and to prevent shortages or delays in the supply of medical devices needed for patients and healthcare professionals, the European Parliament and the Council adopted a Regulation 13 postponing the date of application of Regulation (EU) 2017/745 by 1 year until 26 May 2021, keeping the end date of the transitional period for the validity of certain EC declarations of conformity and notified body certificates issued under the repealed Directives 90/385/EEC and 93/42/EEC as 26 May 2024.

For Regulation (EU) 2017/746, postponing the date of application by 1 year would not resolve the challenges linked to its implementation. As the main challenge to market readiness is the limited notified body capacity, the number of devices that need to undergo a conformity assessment involving a notified body should be spread over a longer period, allowing for a gradual phase-in of the new Regulation’s requirements while prioritising high-risk in vitro diagnostics. This can be achieved by amending Article 110 of the Regulation on transitional provisions, providing a period for existing higher risk class devices that is shorter than the one for existing lower risk class devices. At the same time, the existing transitional period for devices covered by notified body certificates issued under Directive 98/79/EC should be extended by 1 year until 26 May 2025. This will avoid that the transitional periods under Regulation (EU) 2017/745 and Regulation (EU) 2017/746 end at the same time and lessen the strain on Member States’ competent authorities, notified bodies, manufacturers, health institutions and other actors who deal with both medical devices and in vitro diagnostics.

2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

Legal basis

The proposal is based on Articles 114 and 168(4)(c) of the Treaty on the Functioning of the European Union (TFEU).

Subsidiarity

According to the principle of subsidiarity, EU action may only be taken if the envisaged aims cannot be achieved by Member States alone. The legislation being amended was adopted at EU level in line with the subsidiarity principle and any amendment must be made through an act adopted by the EU legislators. In the case of the current proposal for an amendment, EU action is required to avoid any potential disruption in the supply of devices, to ensure the smooth functioning of the internal market, and to ensure a high level of health protection for patients and users.

Proportionality

The proposed EU action is necessary to ensure that all involved parties fully implement and apply Regulation (EU) 2017/746, taking into account the magnitude of the COVID-19 pandemic and the associated public health crisis. The proposed amendments aim to ensure that the intended purpose of Regulation (EU) 2017/746 can be attained. That purpose is to establish a robust, transparent, predictable and sustainable regulatory framework for in vitro diagnostic medical devices, which guarantees a high level of protection of public health and patient safety and the smooth functioning of the internal market for such devices.

The proposal maintains the objective of Regulation (EU) 2017/746 to ensure a high level of safety and performance of devices by enhancing their oversight by notified bodies and, in the case of in-house devices, by setting uniform requirements for health institutions. It only provides for the necessary additional time to achieve this objective. The proposal is proportionate in that it aims to address the main problem, i.e. that due to shortage of notified body capacity a large number of existing in vitro diagnostics may disappear from the market. Therefore, the proposed amendments are limited to allowing a gradual phase-in of the requirements, without altering the substance of Regulation (EU) 2017/746. They focus on existing devices that need notified body involvement and on in-house devices. The proposed amendments will not delay the application of the Regulation to CE marked in vitro diagnostic medical devices that do not require the involvement of a notified body (i.e. class A non-sterile devices which represent around 20% of the market 14 ) and to ‘new’ in vitro diagnostics (i.e. those not covered by a certificate or declaration of conformity issued under Directive 98/79/EC). Regulation (EU) 2017/746 is envisaged to apply in full to those devices from 26 May 2022.

The Commission proposes to differentiate between higher (i.e. class D and C devices) and lower (i.e. class B and A sterile devices) risk devices, with shorter transition periods for higher risk devices and longer periods for lower risk ones. This approach aims to balance the available notified body capacity with high level of public health protection.

It also takes into consideration the interest of notified bodies to continue receiving applications for certification, rewarding the investment they have made to be designated under Regulation (EU) 2017/746.

Choice of the instrument

The proposed act is a Regulation to be adopted by the European Parliament and the Council, given that the act to be be amended is a Regulation adopted by the European Parliament and the Council.

3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS

This proposal is not accompanied by a separate impact assessment, as an impact assessment was already carried out when preparing Regulation (EU) 2017/746. This proposal does not alter Regulation (EU) 2017/746 in substance and does not impose new obligations on the concerned parties. It primarily aims to amend the transitional provisions, allowing for a progressive rollout of the Regulation’s requirements, for exceptional reasons in the context of the COVID-19 pandemic.

The exceptional circumstances and the need to act quickly to ensure certainty ahead of the Regulation’s application date did not allow for a broad public consultation. The Commission therefore collected the necessary input from Member States and stakeholders through targeted exchanges.

In cooperation with the Medical Device Coordination Group (MDCG) 15 , the Commission’s Directorate-General for Health and Food Safety (DG SANTE) drew up a joint implementation plan 16 identifying essential and high-priority actions for the implementation of Regulation (EU) 2017/746. The plan includes monitoring activities and contingency planning to address potential bottlenecks and other transitional issues. The plan will be continuously implemented and updated, also after the adoption of the proposed amendment to Regulation (EU) 2017/746.

The market surveys conducted in 2021 demonstrated the need for legislative action. Data available to the Commission, provided by notified bodies and by the trade association MedTech Europe, covering around 90% of the in vitro diagnostic market revenue, showed the following situation:

Directive 98/79/ECRegulation (EU) 2017/746
around 40 000 different in vitro diagnostic medical devices available on the marketaround 31 000 different in vitro diagnostic medical devices expected to be available on the market (the industry expects that nearly 9 000 devices currently available on the market will not be CE marked under Regulation (EU) 2017/746, which would be a drop of 22%)
around 3 300 in vitro diagnostic medical devices needed the involvement of a notified body (i.e. about 8% of IVDs on the market)

·around 2 500 IVDs falling under Annex II to Directive 98/79/EC

·around 800 IVDs for self-testing
over 24 000 in vitro diagnostic medical devices will need the involvement of a notified body (i.e. about 78% of all IVDs expected to enter the market)

·around 1 200 class D IVDs (=4%)

·around 7 860 class C IVDs (=25%)

·around 14 890 class B IVDs (=49%)

·around 340 class A sterile IVDs (=0.01%)
1 545 certificates issued by notified bodies31 certificates issued by notified bodies covering roughly 1 300 devices (mainly class B and C devices; no certificates issued for class D devices) 17 ;

1.

around 520 applications for certification received by notified bodies covering roughly 9 600 devices (mainly class B and C devices);


for about 95% of IVDs requiring the involvement of a notified body certificates are yet to be issued, including for all class D devices

2.

(state of play 9.9.2021)

22 notified bodies designated (18 after UK’s withdrawal from the EU)6 notified bodies designated, 11 applications pending (September 2021)

On 28 January and 27 July 2021, DG SANTE organised meetings with the MDCG to discuss the joint implementation plan, in particular the challenges to implementing the Regulation and the most suitable approach to take for a legislative initiative.

In addition to the regular exchanges with stakeholders throughout the year, targeted discussions on a possible legislative initiative were held in September 2021 with representatives of notified bodies, the European medical device industry, health institutions, health professionals, laboratories, patients and consumers.

Comments received from all those involved have been considered and taken into account to the extent possible while balancing various interests at stake.

The Commission will continue to closely monitor the developments and the impact of the proposed amendments on the market. It will also consult with the MDCG and stakeholders about the need for complementary actions.

4. BUDGETARY IMPLICATIONS

The proposed action has no budgetary implications.