New rules for MDEL holders: Health Canada’s terms and conditions authority

Amendments to the Medical Devices Regulations affecting the regulatory framework for medical device establishment licences (MDEL) are now in effect. We summarize the key regulatory changes for manufacturers, distributors and importers below.

What you need to know

• Expanded compliance enforcement options: Health Canada now has the authority to impose terms and conditions on an MDEL holder for compliance issues at any time, instead of outright suspending all licensable activities. This mechanism will allow compliant aspects of a business to continue operating while specific areas of non-compliance are being addressed.
• Obligation to provide contact information and previous names: MDEL applicants and MDEL holders must provide their contact information and update it within 15 days of a change and at the time of application, and provide any other name under which the person previously conducted licensable activities. 

Expanded compliance enforcement

Health Canada may impose terms and conditions on an MDEL if it becomes aware of compliance concerns associated with the licensable activities occurring under the scope of the licence. A “term or condition” is an obligation that Health Canada may impose on a licence holder to provide additional oversight of potential risks and uncertainties related to the product or licensed activities. Decisions concerning terms and conditions applied to MDEL holders may be made public.

Terms and conditions could be imposed either at the time of the MDEL issuance or at any time throughout the lifecycle of the MDEL. Health Canada will consider the following factors before imposing or amending terms and conditions: 

• Risk Management: are there uncertainties relating to how an activity is or will be conducted?
• Existing Safeguards: are the requirements under the Food and Drugs Act sufficient to protect patients, users, or other persons from risks to health or safety? 
• Feasibility: is compliance with the terms and conditions feasible?
• Burden: are there less burdensome ways to meet the objectives of the terms and conditions?

How can MDEL holders engage in the process of imposing terms and conditions?

Before issuing new or amended terms and conditions, Health Canada will provide the MDEL holder with 15 business days to submit a written response. This response may include suggestions for modifying the proposed terms and conditions. 

Once in place, MDEL holders can request an amendment or removal of any terms and conditions. This can be done by providing new information that is relevant to the circumstances prompting the imposition of terms and conditions in the first place or, alternatively, MDEL holders who make progress or resolve the issues for which the terms and conditions were imposed may ask Health Canada to amend or remove the terms and conditions.

What is the purpose of these changes?

Previously, the enforcement action to address specific compliance concerns related to the importation or sale of medical devices could lead to a complete suspension of the MDEL by Health Canada. This approach potentially compromised access to needed medical devices. The introduction of terms and conditions provides the regulator with a more agile method to manage risks and provides licence holders the ability to address specific areas of non-compliance while the compliant aspects of their business continue. The following examples represent scenarios where Health Canada would consider the use of terms and conditions:

• If an MDEL holder lacks adequate storage and handling procedures for specific devices, terms and conditions could restrict the importation and distribution of these devices until the company demonstrates it has proper handling procedures in place.
• If an MDEL holder’s compliance history demonstrates an inability to consistently or effectively conduct recalls, terms and conditions could require that the MDEL holder provide Health Canada with sufficient evidence to demonstrate its ability to effectively conduct a recall.
• If there are concerns about the safety and effectiveness of a device, terms and conditions may require the MDEL holder to provide information to help trace the device through the supply chain (for example, shipping and receiving records, up-to-date distributor information, complaint records).

Further information can be found in Health Canada’s new policy for terms and conditions for MDEL (POL-0156). 

Obligation to update contact information and disclose prior names

MDEL applicants and MDEL holders must now also provide Health Canada with the name, title, and contact information (other than the telephone number) of the representative of the establishment to contact for information concerning the licence and to keep this information up to date and notify Health Canada of any changes within 15 days. 

During the application stage for an MDEL, applicants must also disclose any other name under which the applicant previously conducted licensable activities, any previous company identification number, and any previous MDEL numbers to facilitate Health Canada’s ability to examine the compliance history of an applicant. 

Health Canada has updated its guidance documents on medical device recalls and establishment licensing to reflect these changes.

The authors would like to thank Brandon Pierre, articling student, for his contribution to preparing this legal update.