On October 18, 2013, Canada and the European Union concluded the negotiation of the Comprehensive Economic Trade Agreement (CETA). Although much of the focus in the life sciences industry has been on CETA's impact on pharmaceutical patents, CETA may also have a significant impact on Canadian medical device manufacturers who market products in the EU.
One of the major components of CETA is the reduction in non-tariff barriers to trade, including technical product regulations and various testing and certification requirements. Although regulatory measures are an important means of confirming the safety and efficacy of certain products, both Canada and the EU have recognized that overly burdensome or discriminatory requirements can inhibit the free flow of goods.
In relation to Medical Devices, CETA will address the issue of regulatory "red tape" in the following ways:
- Formal steps will be established allowing both Canada and the EU to request that a given technical regulation be recognized as equivalent to its counterpart regulation adopted by the other party. This mutual recognition is intended to reduce manufacturing costs as goods could be sold in both markets by meeting one common set of technical requirements.
- A new conformity assessment protocol will allow recognized bodies in Canada and the EU to accept each other's test results and product certifications. It is intended that this measure will reduce administrative costs and marketing delays for exporters.
- Standard setting bodies in Canada and the EU will be "encouraged" to cooperate more closely on joint priorities.
In the example provided in the Government of Canada's overview of CETA, a manufacturer of hearing-aid devices in Canada will be able to have all its device products tested and certified to EU standards by recognized Canadian bodies, resulting in cost savings and quicker time to market in the EU.
In addition to the reduction of technical barriers to trade, it is also expected that CETA will eliminate existing EU tariffs on an array of products, including electrical equipment and medical technologies.
Overall, it appears that CETA has the general support of medical device manufacturers in Canada, although precisely how these initiatives will be implemented is not yet known. The full text of the Agreement has not yet been released, and is not expected to be ratified for another 18 to 24 months.
In closely related news, on October 22, 2013, the European Parliament endorsed proposed amendments to the EU Medical Devices Directive designed to tighten the regulation of medical devices. Among other things, the amendments are expected to impose more restrictions on "notified bodies" (which assess conformance for the purpose of CE marking), increased post-market surveillance, new implant registration requirements, more disclosure of clinical data, new safety standards for the reprocessing of single use devices, and new safety standards for diagnostic devices. The final text of the amendments must be negotiated with EU member states, and it is expected that the new regulations will not come into force until 2015.
For Canadian device manufacturers that market products in Europe, the net result of increased regulation in the EU and the reduction in technical barriers to trade under CETA remains to be seen.