Quality assurance agreements with distributors of medical devices

Essentially, the obligations of distributors of medical devices (see Art. 14 MDR) include

• assessing whether the devices comply with the requirements of the MDR

• checking whether the formal requirements for labeling (UDI, instructions for use in the national language, reference to the manufacturer and, if applicable, authorized representative) have been met and

• whether the declaration of conformity has been issued and

• whether the storage and transportation conditions have been complied with.

Distributors play a key role in market surveillance and in particular in the implementation of corrective measures. The distributor must set up a vigilance system and, in certain cases, must report to the manufacturer, the authorized representative and the competent authorities. For example, they must keep a register of complaints, suspected incidents, non-compliant products, recalls and withdrawals. Under certain circumstances, the establishment and maintenance of a quality management system is mandatory for the distributor (see Art. 16 para. 3 MDR). However, even in cases where such a quality management system is not mandatory, it can be useful. This is because it helps to ensure compliance with the distributor's other obligations.

According to Art. 25 para. 1 MDR, distributors must cooperate with manufacturers or their authorized representatives to achieve an adequate level of product traceability. For a period of at least 10 years after the last device covered by the EU declaration of conformity was placed on the market, the distributor must be able to identify to the competent authority all economic operators from whom a device has been supplied and all economic operators, health institutions or healthcare professionals to whom a device has been supplied. For implantable devices, the period is even 15 years after the last device was placed on the market.

Manufacturers of medical devices are advised to include provisions on regulatory obligations in quality assurance agreements in addition to the commercial contracts with distributors. It is true that distributors are subject to the obligations arising from the MDR themselves, as the MDR, as a European regulation, is directly applicable law for all EU citizens. Nevertheless, a quality assurance agreement offers the opportunity to impose specific obligations on distributors with regard to their own products and, for example, to determine more precisely how the distributor implements its obligations (e.g. complies with transport and storage conditions, how and when complaints about the products are to be reported to the manufacturer, etc.). It should also be regulated how the appropriate level of traceability in accordance with Art. 25 MDR is to be established and maintained, as the legislator has left the economic operators room for maneuver here by using the undefined legal term, which can be regulated differently depending on the hazardousness of the products, sales channels, etc. in relation to the specific case.

The "balancing act" between the requirements of the MDR and the advisable drafting of distribution agreements under commercial law poses a particular challenge. Manufacturers are often inclined to impose the obligation to share all of their customer data with the manufacturer in the dealer agreement as an extension of the dealer's obligations. This may be desirable in order to ensure even better traceability of the products. However, there is a risk that this will create the basis for a post-contractual "authorized dealer compensation claim" owed to the dealer under certain conditions. This compensation claim is intended to compensate the retailer for the fact that the manufacturer knows the retailer's customers due to the disclosure of customer data and could continue to serve them directly after the end of the contract. It is therefore necessary to find solutions that meet the requirements of the MDR without triggering a corresponding claim by the dealer.