Medical device distributors operate in a unique realm between the customers and manufacturers of medical devices. Living in that nexus and aided by the vast array of products they manage, they can quickly identify trends in the marketplace and needs that aren’t being met by the manufacturers themselves. Because of this, many distributors choose to expand their operations to private labeling. This enables them to tailor products to specific market segments or customer needs, offering customization and product differentiation. This can be particularly advantageous in niche markets or specialized healthcare sectors where customers are looking for convenience kits, specific packaging or just a custom bundle of goods and services.
If you’re a distributor looking to delve into private labeling there are some key questions to consider before making the leap: What are the regulatory requirements to make this transition? How does the FDA’s view of my establishment change? What systems and procedures do I need to implement my strategy? What are some pitfalls I’ll need to avoid? This article delves into some of the big questions about private labeling.
Determine Your Private Labeling Strategy
First and foremost, you’ll want to consider the scope and strategy for private labeling. To what extent will you be labeling the device? Will the original device labeling remain intact with only your brand added? Will the labeling be re-formatted or changed substantially? Will the device be completely re-packaged and no trace of the original manufacturer remain? Is this a joint partnership with the manufacturer or will you be acting independently? The answers to these questions will determine the level of depth you’ll have to dive into the sea of regulatory requirements.
In its simplest form, private labeling in which you simply add your firm’s name to an approved label of a premarket exempt device through an agreement with the manufacturer would mean that your firm would remain a private label distributor and would not need to register your establishment with the FDA or list the device. This may be the least costly and burdensome choice but could also provide the least amount of business benefit and control. On the other end of the spectrum you make choose to re-brand the device with your firm’s name or produce a new kit of devices. In that case you would have to register your establishment as a specification developer, re-labeler or even as a manufacturer depending on the detailed operation. While this approach provides the greatest business benefit and control, you won’t want to ignore added cost in time and money to manage this transition. These factors should all impact your overall strategy.
The Device’s Classification and Origin will have an Impact
A second but equally important consideration is the classification of the device – is it Class I or Class II, and does it qualify for a 510(k) exemption? A device with a pre-market submission requirement has more regulatory requirements. Certain changes to the packaging, labeling or marketing could trigger the need to submit for FDA for market clearance. If you’re wanting to leap into the world of kitting multiple medical devices into a single package, you’ll have to determine if this package actually constitutes a convenience kit according to FDA guidance and how to follow it.
Consider also the origin of the device. In many instances, distributors find an economical device manufactured outside of the US and wish to private label the device under their own brand. If the device will need to be imported you will need to act as the Initial Importer or find a firm to act as such. This responsibility would trigger the need to register your establishment and list the device. This in turn could impact your private labeling strategy. Perhaps your strategy at the onset was to limit the modifications to the device label to prevent having to register and list, but with an imported device you may now choose to more fully brand and label the device as your own. Also, now that you’ve taken on greater risk and have larger costs you may want to seek exclusivity from your supplier. Crafting a comprehensive distribution and quality agreement that delineates roles and responsibilities will foster stronger partnerships with the manufacturer and could present a business benefit. It should be clear who will be responsible for the execution of recalls. And while you’ll writing these agreements, be careful to not leave out liability. Does your supplier have liability insurance indemnifying your firm? You would never want to pay the price for your suppliers manufacturing mistakes.
The Added Costs
Assume you’ve done the leg-work to identify a foreign supplier, complete regulatory review, craft a private label strategy, draft distribution agreements, and complete your registration and listing. Are you ready to begin distribution? Not quite. If you’ve crossed the threshold from a distributor or private label distributor into a repackager/relabeler or manufacturer you’ll need to take a look at your quality system. Does your quality system have complaint handling procedures? If you’re the label owner, do you have a design control procedure to manage changes and have appropriate review? Have you finalized your UDI and activated a GUDID account? Have you established organizational capability to record lot distribution records? In the event of a recall your firm should be able to identify where your device was distributed. While you may not need a full 13485 compliant Quality Management System, you will need to verify you have all of the necessary components. Ensuring you understand the added costs in both time and money with this transition will allow your firm to make the best strategic decision while implementing your private labeling strategy.
In Summary
Make a checklist for getting your Private Label device ready for distribution. It could look something like this:
Confirm Device Classification and Regulatory Status: Determine the device's classification and regulatory status to guide compliance efforts effectively.
Evaluate Importer Obligations: Assess the risks and benefits of assuming the role of the initial importer, considering negotiation for exclusivity where feasible.
Establish Labeling Control: Decide on the approach to labeling, ensuring compliance with regulatory standards to maintain brand integrity.
Develop a Tailored Quality System: Establish a comprehensive quality system focusing on complaint handling and regulatory adherence.
Draft Comprehensive Distribution Agreements: Define roles, responsibilities, and liabilities in distribution agreements to mitigate risks and strengthen partnerships.
Verify Supplier Liability Insurance: Ensure supplier liability insurance adequacy and secure additional insured status for enhanced risk protection.
Lastly, remember that the sooner you consider the quality and regulatory implications of your business strategy, the better the outcome will be. If you wish to private label a device remember there are many important decisions to make before signing the contract with the manufacturer. Keeping your QA/RA personnel up to speed in business discussions and plans will allow you to get immediate feedback into the potential pitfalls of a particular strategy. If your organization doesn’t have senior-level QA/RA personnel you may choose to partner with a competent consultant vs hiring a full-time QA/RA manager. At Apsis Consulting Group we offer fractional QA/RA manager services and unlimited advisory retainers to right-size the level of help start-ups and small medical device companies need. These retainers allow you to have access to a senior QA/RA professional for to answer questions, concerns or discuss strategy. Contact us to discuss your needs and we can offer an engagement model that works best for your firm. Whatever your approach be sure to implement a strong strategy at the onset of your private label journey to prevent regulatory issues down the road.
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