Establishment Registration: Keeping Pace with an Evolving Industry

Medical Device & Diagnostic Industry Magazine
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Originally Published March 2001

Robert Drummond

In general, the topic of establishment registration doesn't usually generate much concern among medical device manufacturers. The basic process is simple enough—a company intending to manufacture and market medical devices in the United States must inform FDA of its facility location, and must list its product with the agency for monitoring purposes. But in today's industry—where mergers and acquisitions seem to occur every day and it is not uncommon for an OEM to outsource multiple phases of a project—manufacturers are becoming less certain of their responsibilities when it comes to registering their establishments and listing their products.

Judging from the number of incorrect registration and listing forms CDRH receives every year, manufacturers are in need of added guidance in this arena. And to make matters more difficult, the agency is working on a proposed rule that will rewrite the existing regulations.

THE PROCESS

For start-up companies, establishment registration as it stands now is fairly straightforward: before a company begins to distribute its product in the United States, it must complete the appropriate forms to let FDA know its manufacturing location and to list the product it intends to market; FDA then provides the manufacturer with an ID number and enters it into the establishment registration database (see "The Registration Process" below).

The confusion arises when companies purchase one another, change production locations, or outsource to contract manufacturers. They can end up with a situation where two or more companies have worked equally on a product, and all parties lose track of who is responsible for what.

Bonnie Norman, founder of the Taregon Group (Boulder, CO), regularly consults with companies to help them identify registration requirements for their outsourcing activities. "This is a growing problem I see a lot," Norman says. "When an OEM outsources design of a device to one company, and then outsources manufacturing to another, who needs to be registered? Who's responsible for listing the product?"

The answer, Norman says, isn't always clear. "A lot of companies assume the contract manufacturer is supposed to take care of the listing," she says, "but they're not, so you end up with a gap." In this case, the OEM needs to be registered and to list the product; the contract design company does not need to register—since it presumably designed to specifications set by the OEM; and the contract manufacturer needs to be registered, but doesn't need to list.

Another common question involves the required timing of registering and listing—when to register, and when to list the product. The simple answer is that manufacturers need to register their establishment before they begin distributing their product. And they must list their product at the same time; any registration that is submitted without a product listing is subject to immediate rejection.

"One question I get a lot is, 'We're going into manufacturing, do we need to be registered right away, or can we wait until we're ready to submit for approval?'" The answer, Norman says, is that a firm must register at the latest within 30 days of beginning commercial distribution.

But Norman is quick to warn manufacturers who intend to wait to register until they have a finished product that design controls must be in place long before then: "They better have been compliant well before they submit," she says. "The agency's expectation is that a product will have been developed under design controls, even though they will not audit until it's clear the product is going into commercial distribution."

Jim Sandberg, director of regulatory affairs and compliance engineering at Welch Allyn Protocol Inc. (Beaverton, OR), agrees. "If you're a new company planning on getting your 510(k) at some point, you really have to have your design controls in place from the beginning." Sandberg encourages new firms to institute design controls at the earliest stages of development for that very reason. "If you go to submit your 510(k) or PMA," he says, "you're going to have to demonstrate to FDA that the product was developed under design controls."

Sandberg also believes that it's wise for companies to keep communication lines open with the agency when it comes to registration and listing issues. "When you're first getting started, it's good to let the agency know when you're planning to go into production, when you'll be ready for an audit, and so on." In light of the regulation changes on the horizon, keeping communication lines open with CDRH is good advice for any manufacturer.

PROPOSED RULE

In a move that may alleviate some industry confusion—or possibly make it worse—the agency is drafting a proposed rule that will completely rewrite the existing regulatory requirements. But to say that the proposed rule is looming might be a stretch, since it has been in the pipeline for some time, and the agency gives no indication that it will be published any time soon. But when it is released, CDRH maintains that it will include significant changes.

Portions of the draft regulation have been discussed at open industry meetings, where FDA has expressed hope that the new rule will enable CDRH to gather different levels of information based on premarket submission requirements. CDRH would like to collect more information on products that require 510(k)s and PMAs than it does for devices exempt from premarket clearance or approval.

Discussion has also involved the concept of collecting information that links all related establishments under an umbrella corporation or parent company. In other words, CDRH would like to know all the companies owned or operated by the same parent company—information that is not well-organized or readily accessible under the current system.

The centerpiece of the proposed rule, however, will be the transformation from a paper-based system to an electronic submission process for registration and product listing. This change is designed to make it easier for manufacturers to register their medical device establishments and list their devices. And, perhaps more importantly from the agency's viewpoint, it will make it easier for the accuracy of this information to be maintained once it's been submitted and becomes accessible on the registration database.

REGISTRATION DATABASE

The paperless system is designed to address ongoing problems with the establishment registration and product listing database. By all accounts—including FDA's—the database is long overdue for a clean-up effort. In August of 2000, CDRH began doing just that, implementing a comprehensive plan to improve the accuracy of the data contained there. The reasons for doing so are many. The agency relies on the database for a host of tasks, including planning and conducting inspections and performing postmarket surveillance.

For many device manufacturers, the first clue that the agency was undertaking a clean-up effort came in the form of a letter requiring them to update their product listings.

According to Bob Spencer, counsel for Hogan & Hartson LLP (Washington, DC), a law firm that represents many medical manufacturers, the letters generated concern among companies worried that the agency was singling them out. His firm began receiving concerned calls about the time the mailings began. "In the past," Spencer explains, keeping manufacturers' product listings up to date "has not been high on the agency's radar screen."

The agency's official policy has been that if an establishment registration form comes in without an accompanying product listing, the form is automatically rejected. "However," Spencer says, "they haven't vigorously enforced that requirement." In other words, in the cases of companies that have been registered for years, Spencer says that CDRH has not put a lot of effort into ensuring that all product listings are accurate and up to date.

As it turns out, the companies were on a list of medical device manufacturers that were part of a mass-mailing by the agency to remind firms of their registration and listing responsibilities and, at the same time, to improve the database accuracy. The mailing was an effort to reach firms that have been in the database for a long time—many for as long as the requirement has been in place, when the process wasn't as controlled as it is now.

Beginning in August and September of 2000, CDRH mailed letters to nearly 10,000 registered domestic and foreign establishments, reminding the firms of their obligation to maintain the accuracy of their device listing information. The letter included a printout of the data currently on file with CDRH, and manufacturers were asked to review and correct it. By January 2001, CDRH had received just under 6000 responses.

Also in August, CDRH mailed the same letter to 2500 registered firms whose status was listed as "tentatively out of business" in the database. As of January, the agency had received responses from only 340 firms, indicating that there is still a good deal of information to gather.

Currently, CDRH is in the process of mailing letters to nearly 4000 establishments that have been registered, but do not have any device listing records in the registration and listing database at all. The purpose of this mailing is to make these establishments aware of their obligation to submit device listing forms for the devices they currently distribute commercially.

But problems with the database do not lie with delinquent manufacturers alone. Reports of flaws in the database and in the information-gathering systems are widespread throughout industry.

Norman believes that database improvements would be welcomed by anyone in industry. As things are now, she explains, it can take months for the changes to be reflected in the database when a company has registered and listed. "You might file in January," Norman says, "and it could be August before you get your updated registration." This can cause panic throughout an organization: "Suddenly you've got senior management worrying because they think you don't have a current registration," she says. "But the fact is that you're current as soon as you send in the forms."

If the initiative to clean-up the database works as the agency hopes, the effect should be smoother, more-efficient data collection and improved industry/FDA relations.

FOREIGN ESTABLISHMENTS

For domestic firms that have been registered for years, the step-up in listing-regulations enforcement is not particularly burdensome. It will likely have no practical effect on a company's operations except to force it to be more prompt with its reports to FDA. The case with foreign manufacturers, however, is different. Even before the FDA Modernization Act (FDAMA), foreign manufacturers who wished to import their products into the United States for distribution were required to list their products with the agency.

According to Spencer, the agency's enforcement of product-listing requirements can mean the difference of several months for foreign manufacturers trying to get a product to market. "One of the first things customs and FDA look for is to see if the device is listed," he says. "If they can't find the listing, they'll just detain the device until the issue is resolved." FDA will then require the importer to make sure the foreign manufacturer has listed the device. "By the time that's completed," he says, "there will have been a significant delay in getting the product into the United States."

Post-FDAMA regulation has also created some confusion regarding the responsibility of foreign manufacturers to register their establishments with FDA. "We get a lot of questions from foreign manufacturers as to whether or not they're required to register," Spencer says. The reason, he explains, is that before FDAMA foreign establishments were only required to list their products: "They were encouraged to register, but only required to list."

But one of FDAMA's provisions was that foreign manufacturers be required to register their establishments, in addition to listing their products. The confusion, then, involves enforcement. "It's our understanding that FDA is not enforcing the registration requirements for foreign establishments," Spencer says, "pending the finalization of the revision to the establishment registration regulations."

So the short answer is that foreign manufacturers are not yet required to register their establishments. FDAMA did in fact amend the Food, Drug, and Cosmetic Act to require foreign establishments to register with the agency and to designate a U.S. agent. But shortly after FDAMA was enacted, the agency issued a proposed rule saying that it would not enforce this statutory change until a regulation was in place.

Not surprisingly, the final rule has yet to be published; it is currently stalled at the Office of Management and Budget undergoing its second review. As a result, foreign manufacturers do not need to register and designate a U.S. agent until the final rule is published. Until such time, however, CDRH will use its own "enforcement discretion" when dealing with foreign establishments.

CONCLUSION

The seemingly straightforward establishment registration requirements—with all their fine points and exceptions—are deceptively simple. Even Norman, whose job it is to advise companies in this area, confesses the occasional need to seek clarification on a sticky point. "I'm usually pretty clear," she says, "and then a situation will happen where I'll think, 'You know, that one's just right on the line.'"

The coming changes to the regulation will only heighten the need for manufacturers to keep communication lines open with FDA, and to manage their own data effectively. Whatever the results of the new requirements, manufacturers involved in any aspect of medical device manufacturing are wise to understand not only their own establishment registration responsibilities, but those of the contractors and distributors with whom they conduct business.

Robert Drummond is managing editor of MD&DI.

Illustration by Marco Aguilera

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