MedTech: legal and regulatory outlook

July 2024

Foreword


Innovation continues to propel advancements in the MedTech industry, fostering a dynamic marketplace that continues to see the rapid development and supply of cutting-edge products and technologies across Europe. The capabilities of these products to transform patient care and outcomes continues to attract substantial funding from both the public and private sectors.

In October 2023, the UK government committed to investing £30 million in the MedTech sector to facilitate speedier diagnoses and deliver new and improved ways to treat patients. We also saw Horizon Europe award €8.9 million, one of the largest research and innovation grants made in recent history, to HoloSurge, a four year project that draws together a group of 14 European leaders in technology and healthcare with a common goal of reducing the risk of complications during planned surgery.

We expect to see MedTech businesses capitalise on this momentum, particularly as innovation, sustainability and long-term competitiveness are priority themes for the potentially new government administrations in the UK and EU.

Against this backdrop, we highlight the pivotal legal and regulatory developments that will impact the MedTech industry in 2024 and beyond.

UK medical device regulation

In January 2024, the Medicines Healthcare products Regulatory Agency (MHRA) published its roadmap for a new medical devices regulatory framework which aims to prioritise patient safety and facilitate quick access to new medical device technologies.

The core regulatory framework is intended to come into force in 2025. There will be a phased approach to implementation to support ‘system readiness’ and minimise the risk of supply chain disruption for UK patients. 

Over the coming months, stakeholders should have greater clarity as to the extent to which the UK’s new regime will be aligned with the EU framework. Whilst alignment with the EU framework was once the preferred approach, extensive delays arising from the transition to the new MDR and IVDR have led to a bottleneck of certification approvals and supply shortages. Notwithstanding the challenges caused by Brexit, the UK may become the preferred market of choice for medical device manufacturers, particularly start-ups, who might be more attracted to its streamlined framework and support for innovation. 

The roadmap is complemented by the MHRA’s draft proposal for a framework for international recognition of medical devices, including those from the EU, the US, Australia and Canada, to ensure that the UK remains an attractive market for innovators. The list of comparable regulator countries remains under the MHRA’s review.

The regulation of Artificial Intelligence (AI)

The EU Artificial Intelligence Act (AI Act)

The EU’s AI Act, which comes into force this year, introduces the world’s first set of comprehensive rules to manage and regulate the risks posed by AI. The Act aims to fill some of the gaps left by existing sector specific regulation, such as the EU Medical Device Regulation. It adopts a risk-based approach so that the ‘riskiest’ forms of AI, such as AI-enabled precision medicine tools, are subject to the most stringent obligations, including human oversight and continued maintenance. 

Alongside the AI Act sits a proposal for a fault-based liability regime for AI systems, known as the AI Liability Directive. If passed in its current form, it will enable consumers (including patients who are treated by or use AI-enabled medical technologies) who are harmed by AI to sue the providers for damages arising from AI failures or non-compliance with the AI Act. The MedTech industry could be disproportionately impacted by this new regime given the extent to which AI is utilised in products that will be classified as high risk. 

However, the outlook for the AILD is uncertain as the proposal remains under review since its publication in September 2022. 

UK’s ‘pro-innovation’ principles based framework

In contrast, the UK government has adopted a light touch, principle-based, “pro-innovation” approach to AI regulation, having established a principles based framework for regulators to interpret and apply within their sector-specific domains.

MHRA’s AI strategy

The MHRA’s AI strategy, published on 30 April 2024, addresses the risks and opportunities of AI from the MHRA’s perspective as:

  • a regulator of AI products (the MHRA notes that where AI is used for a medical purpose, it is very likely to come within the definition of a general medical device);
  • as a public organisation delivering time critical decisions; and
  • as an organisation that makes evidence-based decisions that impact on public and patient safety.

Artificial intelligence that is adopted for use as a medical device (AIaMD) must conform to the requirements of the UK Medical Device Regulations 2002 across the product’s lifecycle, mandating post-market surveillance and clinical feedback activities to mitigate risk and address the safety and performance of devices. The MHRA advocates a proportionate approach to AIaMD regulation and intends to adopt principles, supplemented by guidance (including on cybersecurity, due for publication by 2025) to safeguard innovation whilst ensuring patient safety.

Following the publication of its AI strategy and as foreshadowed in its roadmap, on 9 May 2024, the MHRA launched AI Airlock, a regulatory sandbox for AIaMD. The AI Airlock, which will initially involve the support of 4 - 6 real-world projects, will help the MHRA identify and address the challenges for regulating AIaMDs with a view to facilitating their safe development and deployment in the future.

Liability for defective products

The new EU Product Liability Directive, the law governing liability for defective products, will come into force this year. A key feature is the expanded definition of ‘product’, which will bring software, AI and digital manufacturing files within scope, increasing the litigation risk profile for MedTech products including 3D printers, smart healthcare devices and AI-enabled applications. UK policymakers are also considering a similar review of the UK’s product liability laws.

Corporate accountability across the supply chain

The EU’s landmark Corporate Sustainability Due Diligence Directive, which comes into force this year, will impose extensive mandatory obligations on large EU and non-EU companies (1000+ employees and a turnover of at least €450 million) to prevent human rights abuses and environmental harms across their supply chains. MedTech companies with longer and complex supply chains will need to undertake comprehensive due diligence measures and implement robust risk management frameworks to ensure compliance with the Directive.

Whilst the UK’s Modern Slavery Act 2015 provides for a degree of transparency in corporate activity through the provision of a slavery and human trafficking statement each financial year, the efficacy of its provisions relating to supply chains has been called into question. This issue is currently being considered by the House of Lords Committee, which published a call for written evidence for its inquiry into the impact and effectiveness of the Act.

Perfluoroalkyl and polyfluoroalkyl (PFAS) substances

Growing concerns about the potential environmental and health risks linked to perfluoroalkyl and polyfluoroalkyl (PFAS) substances has led to an increase in lawsuits globally, particularly in the US where thousands of PFAS-related civil lawsuits have been filed. Many medical device manufacturers use water insoluble PFAS type coatings, such as fluoropolymers, across a range of products and in packaging.

With five EU member states seeking to introduce an EU-wide ban on all chemicals in the PFAS group, and with the UK also looking at potential restrictions on the use of PFAS in certain products, such as firefighting foam, medical device manufacturers will need to start considering alternative, “greener” chemicals to use in their products.

Read other items in Commercial Brief - July 2024

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