Are you doing “Own Brand Labelling” (OBL) also referred to as “Private Labelling Manufacturer” (PLM) or Virtual Manufacturing?
Or maybe you are the “Original Equipment Manufacturer” (OEM) or also called “Original Equipment Supplier” (OES)?
If this is the case then you need to know what is coming on your way with the new Medical Device Regulation EU MDR 2017/745.
I know I provided you with too many acronyms. In the case you don’t know what OBL or OEM means, don’t quit, I will explain you everything.
I will also review with you the current and future regulation for both. You’ll see there are some surprises.
So if you are OBL or OEM, better to read this so you are prepared. And I also prepared for you a surprise with 2 podcast episodes with Stefan Bolleininger from Be-On-Quality where we will provide you the solution, so you can continue business with this model.
What is Own Brand Labelling (OBL)?
Own Brand Labelling or OBL is the action to buy a product that is already finished from another manufacturer and to put your own brand on it.
Imagine that I am putting surgical instruments on the market. In my portfolio, I don’t have scissors.
Instead of designing and manufacturing my scissors, I buy it already finished and I put my brand name on it. When I sell them to my customers, I act like this is manufactured by me when in reality not.
This helps you to acquire products and increase your portfolio without having to take care of all the design, engineering, manufacturing, packaging…
Who is an Original Equipment Manufacturer (OEM)?
This is the company that is manufacturing the products that are sold by the Own Brand Labeler.
The design, manufacturing, packaging is done by this company. And their business model is to sell these products to another manufacturer that will take care of the marketing.
There is a contact between the Own Brand Labeler and the Original Equipment Manufacturer to define roles and responsibilities.
How is this regulated with MDD 93/42/EC?
With the Medical Device Directive 93/42/EC, this was clear. The OEM is the manufacturer of the product and should have a CE certificate for its products coming from its own notified body.
The Own Brand Labeler, or Private Labeler who should appoint also a Notified Body, uses the OEM certificate to justify that the product is compliant with the European Regulation. And additionally, he should also create an abbreviated Technical File to be used by the Private Labeler.
The only condition is for the OBL to not modify the products coming from the OEM. The only change will be the label information with now the OBL trade name.
On the image below you can see that first the OEM should get a CE Certificate from his own Notified Body.
Then he will propose his products to some medical device companies call OBL. He can propose it to many of them.
The OBL companies will use the CE certificate of the OEM to get their own CE Certificate for the product. Then they can market it under their brand without mentioning to its customers that this product is in reality manufactured by an OEM.
Change to the OBL and OEM situation ?
On September 24th, 2013, a recommendation from the European Commission was published under the number 2013/473/EU.
There is a specific chapter called “General advice in case of outsourcing of the production via subcontractors or suppliers”
Below is an extract from this chapter where it clarifies the attitude of the Notified Bodies regarding products outsourced by critical subcontractors or crucial suppliers.
Notified bodies should note that manufacturers: […]
do not fulfill their obligation to have at their disposal the full technical documentation and/or of a quality system by referring to the technical documentation of a subcontractor or supplier and/or to their quality system; […]
To clarify this sentence, it means that the OBL cannot just claim that the Technical File is with the OEM.
This is a recommendation, so not all Notified Bodies are following this for now. But what will happen to the new Medical Device Regulation?
Within the MDD, UK government already decided.
Recently, a new vocabulary was introduced by the UK MHRA. OBL is replaced by Virtual Manufacturer. You can see here the guide that they published in April 2019.
Here is the definition they use.
A virtual manufacturer is an organisation that fully sources its own named product from
another company (sometimes known as the ‘original equipment manufacturer’), which has
designed and manufactured an identical CE marked product. By placing their own name
and address on the product, the virtual manufacturer takes on the legal responsibilities for
the medical device and is therefore regarded as the manufacturer in accordance with the
medical device regulations.
Note that in practice there is no difference in the regulatory requirements applying to a
manufacturer and a virtual manufacturer.
What is saying the EU MDR 2017/745 regarding Own Brand Labeling?
If you are Own Brand Labelling and want to see what says the EU MDR regarding the obligation of manufacturers you’ll have to look at Article 10(4) “General Obligations of manufacturers”.
Below is the extract:
Manufacturers of devices other than custom-made devices shall draw up and keep up to date technical documentation for those devices. The technical documentation shall be such as to allow the conformity of the device with the requirements of this Regulation to be assessed. The technical documentation shall include the elements set out in Annexes II and III.
So clearly, the manufacturer needs to have the full technical file for the product they put on the market. And this time it’s an obligation.
To summarise, we can say that for now, the OBL business is still alive but if by the 26 May 2020, there is no agreement between OBL and OEM to fully transfer the technical file to them then OBL business will not exist anymore.
Don’t forget also that all these products coming from the OEM will also need to be included in your Quality System as ISO 13485. You’ll need to track complaints, perform field actions, fill the PMS, register the UDI…
You’ll need also to appoint a Person Responsible for Regulatory Compliance (PRRC). And this person should be available within the organization. You can have all the details for its role and responsibility by reading Article 15 of the EU MDR 2017/745.
In the case you don’t have these processes on your current company, then it’s an additional cost.
Want to learn more about the EU MDR Transition? Read this article.
Technical Documentation Templates
- Template compliant to requirements of MDR 2017/745 Annex II and III.
- Formatted with the chapters already defined.
- Guidance provided to help you identify the content to include
- General Safety and Performance Requirements compliant to Annex I.
- Include guidance to prove evidence to the requirements.
The potential problem and solution
The OEM will have to change his point of view if he wants to continue to make business with the OBL.
This means that instead of being a manufacturer, he should become a solution provider.
The collaboration between the OEM and OBL will be key, so this model remains successful with the new EU MDR 2017/745 and EU IVDR 2017/746.
I suppose that many potential options are on the table. Let’s review some of them. And then let’s review also some creative proposals from industry organizations.
Option 1: Distribution
The OEM will act as the legal manufacturer and have its name on the product label. The OBL or PLM will act as the distributor and can also appear on the label.
A Distribution agreement should be signed between both OEM and OBL.
This is described on Article 16(1) of the EU MDR 2017/745. And Article 14 for distributor requirements.
One major disadvantage for OBL is the fact that the OEM name will be disclosed. So customers can buy the same exact product cheaper if they contact directly the OEM.
On the other side, the OEM doesn’t want to have the additional responsibility as Postmarket Surveillance, reporting to the authorities… He will also need to do the product registration in different countries. So the OEM should create a department for that.
This solution is not an advantage for both in case they are not ready to follow MDR requirements.
Option 2: Legal manufacturer change
And if the OEM becomes a supplier and gives the full control of the Technical Documentation to the OBL. The OBL becomes then the legal manufacturer of the product.
Legal Manufacturer definition
We are used to talk about Legal Manufacturer, but this definition doesn’t exist on the EU MDR. The real definition is the one of the Manufacturer.
MDR 2017/745 Article 1(30)
‘manufacturer’ means a natural or legal person who manufactures or fully refurbishes a device or has a device designed, manufactured or fully refurbished, and markets that device under its name or trademark;
A supplier agreement should be built between both organizations.
The main issue is the fact that the OEM doesn’t want to provide all the information about its product to the OBL.
Because the OBL can then can go to a cheaper manufacturer if he wants. He knows exactly how is manufactured the product and knows the raw material used…
But on the other side, the OBL needs also to build the capability to manage all the quality system part of the business. Change management, NC, CAPA…
So not ideal for the OEM and a potential problem for OBL if he doesn’t have the structure to manage Quality System topics.
Option 3: Collaboration
But after looking at those 2 models, that essentially means that companies are giving up, we can now see how the OBL and PLM can remain in business by collaborating.
The discussion that should happen between the OEM and OBL is simple.
How the OBL can still continue to sell medical devices without getting secret information from the OEM?
The only word that can help, is STED File. (Check my Technical Documentation Templates)
The OEM should build a STED File, with enough information for the OBL. The STED Format is a model that was first initiated by the GHTF and now IMDRF.
The OEM doesn’t need anymore his CE certificate. But he should still create a STED file for his OBL. The OBL will use the STED File to create a Technical File that he will submit to his Notified Body.
If you compare the previous image with MDD 93/42/EC, you can see that the all block with OEM Notified Body and Certificate is removed.
Before the OEM could hide behind his CE Certificate to claim compliance to MDD 93/42/EC but now he will need to help the OBL to obtain the CE Certificate. This is a different mindset.
On an episode of the Medical Device made Easy Podcast, I invited Stefan Bolleininger to help us understand how this collaboration between the OEM and OBL should be built. We will discuss the documentation to provide, the attitude during certification audits, the relationship that is now different between them.
So if you are an OEM or OBL, you need to listen to these episodes.
This is a 2 part episode that I will share with you here.
Video Episode 27 - OEM & OBL Model part 1
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Video Episode 28 - OEM & OBL Model Part 2
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Question to you
I have a question for you. Please let me know on the comments. I am really interested.
Medical Device expert. Monir founded Easy Medical Device to help Medical Device companies to place compliant products on the market. He proposes his consulting services so don’t hesitate to contact him at firstname.lastname@example.org or +41799036836
My objective is to share my knowledge and experience with the community of people working in the Medical Device field.