© 2001, 1998, Deeth Williams Wall LLP. All Rights Reserved . By: Gordon Jepson [First published in the October 1998 issue of Regulatory Affairs Focus: Regulatory Corner
"Focus" is a Magazine for Regulatory Affairs Professionals, published by the Regulatory Affairs Professionals Society]

On July 1, 1998, new medical device regulations came into force in Canada. The introduction of these regulations represents a substantial change for the medical device regulatory environment in Canada, while simultaneously introducing a risk-based classification system, and imposing on both manufacturers and importers new licensing, reporting, and fee requirements. The change is driven by both a perceived need to rationalize the current system and by Canadian government policy requiring that costs for services provided to industry be recovered from that industry, and not paid for from general government revenues.

Background

Canada's old system did not require premarket approval for medical devices, but required instead that manufacturers provide "notification" after sales or importation had begun. Filing of the notifications was not accompanied by a fee. Certain devices, including devices intended to be implanted for more than 30 days, required premarket approval. However, those devices accounted for less than 5% of devices in the Canadian market. This system had been in place since the establishment of the Bureau of Medical Devices (BMD) in the 1970s.

Risk-Based Classification System

The new regulations establish a risk-based classification system for medical devices, with Class I being the lowest risk and Class IV being the highest. The classification of a device is to be determined by the manufacturer in accordance with the regulations. The classification system is not identical to the system in place in the European Community or the US, but is broadly similar.

As the risk level of the device increases, more data is required to show safety and efficacy. When the rules classify a device into two or more classifications, the higher classification applies. BMD has provided a comprehensive set of rules for determining the classification of a device, and, ultimately, the responsibility of classification lies with the manufacturer or importer. BMD has also provided a database of common devices and their risk classifications for reference. In addition, BMD will assist manufacturers or importers in determining the classification of a device in advance of any filing, if so requested.

Device Licenses

Device licenses are the basis of the new system, and confer a right on the manufacturer or importer to sell the device. Devices that are Class II, III and IV are required to have a device license. Class I devices are not so required. Device licenses must be obtained before the sale of the device, thereby creating a premarket approval regime for these categories. Licenses must be renewed annually, for a fee of approximately $100.1 Device license application fees range from $200 to $12,000, depending on the device class and the information to be reviewed.

Certain types of devices can be grouped for the purposes of a device license. For instance, devices that vary only in shape, colour, flavour or size can constitute a "medical device family." A group of devices sold together, such as a procedure pack or tray, may constitute a "medical device family." A group of devices sold together, such as a procedure pack or tray, may constitute a "medical device group." This may help to control costs for many companies.

The necessary forms and guides for making device license applications have been made available on BMD's Web site.

Establishment Licenses

Under the new regulations, importers, distributors and manufacturers of Class I devices only, need an establishment license, while manufacturers of Class II, III and IV devices do not. For manufacturers of Class I devices only the establishment license requirement replaces the need to hold a device license. As with the device licenses, the forms for applying for the establishment license along with instructions, are available on BMD's Web site.2

Quality System Requirements

The new regulations will eventually require that Class II devices be manufactured in accordance with ISO 9002 (ISO 13488 for medical devices), and that Class III and IV devices be manufactured in accordance with ISO 9001 (ISO 13485 for medical devices). Proof of compliance will be in the form of an attestation from an officer of the manufacturer. This requirement, however, will not be in force until January 1, 2003.

Investigational Testing and Special Access (Compassionate Release)

Investigational testing provisions under the new regulations are similar to those under the old system. However, the new regulations do provide a slightly modified format for an investigational testing submission, and for the manufacturer's and investigator's undertakings. There is no longer any charge for the review of an investigational testing submission.

"Special access" devices are available on a limited basis to practitioners for specific patients (custom devices) and on a compassionate basis where a device is not approved or is no longer approved in Canada. The special access category may prove useful for discontinued devices for which it is not economically feasible to maintain device licensure.

Implementation

The new regulations came into force, with some exceptions, on July 1, 1998.

Devices being sold under the old regulations as of July 1, 1998, are grandfathered. They are deemed to have met the premarket informational requirements for a device license. Nonetheless, an application, without the supporting premarket material, must still be submitted.

Fees

The medical devices fee regulations, specifying the government fees for submissions, are available on the BMD's Web site.

The first application for a device license for grandfathered devices, and the first establishment license application for existing establishments, is granted without charge. After that, applications for device licenses for Class II devices cost about $200, those for Class III devices about $2,000 and those for Class IV devices about $10,000 to $12,000. Annual renewal fees for device licenses are about $100 per license. There are fee reduction provisions for eligible device license applications and annual renewal.3

Fees for establishment licenses are around $2,530; fees for annual renewals of establishment licenses are around $2,120. No fee reduction provisions are currently anticipated for the establishment license fees.

Under the new regulations, there will be no fee for investigational testing submissions. However, when a device is ready to be sold, the manufacturer must apply for a device license. The aforementioned fees are then payable (although, by then, BMD will have reviewed most of the submission).

Canada/European Community Mutual Recognition Agreement

Although not specifically related to the new regulations, the long-anticipated mutual recognition agreement (MRA) between Canada and the European Community for medical devices was signed on May 18,1998. This agreement should eventually provide for reciprocal recognition of quality systems.

The agreement provides for an 18-month confidence-building period during which time Canada's BMD and the corresponding European authorities will exchange data. This is entirely an internal process.

On July 10, 2001, Canada and Switzerland completed the 18 month confidence building exercise

Conclusion

These changes have had a substantial impact on both Canadian medical device manufacturers and US companies that operate in Canada (or sell through a distributor). However, the need for both device and establishment licenses may be onerous for some companies.

Endnotes

  1. All amounts are in Canadian dollars.
  2. See http://www.hc-sc.gc.ca/hpb-dgps/therapeut/htmleng/
  3. Reduction applies where the cost of the device license and renewal would exceed a certain percentage of the anticipated annual sales of the device (5% of the next two years' sales).
Contact Gervas Wall or Gord Jepson for more information on Medical Devices in Canada.