3 Steps medical device Merger and acquisition compliance review.

1. 3 Steps medical device Merger and acquisition compliance review. Merger and Acquisition is now commonly heard news every day. This started with many multinational companies. Sometimes it is merger of two big companies with emergence of new company or sometime a big company acquires business of some other company which is Acquisition. Objective is mostly strengthening business but when merger and acquisition happens it is not just business is acquired but all systems and whole part of that unit is acquired. Most of the time this is not the choice hence integration of all departments like HR, Marketing and sales, Procurement, are also acquired along with production, QA, RA and development. In this blog we will restrict the acquisition of medical device business where merger and acquisition shall need focus on compliance part too. Just imagine company acquires business of the company who were selling product with compliance issues causing complaint and couple of recall. This type of issues not only harm the business but also have impact on regular compliant product sell because now these products with issues are part of new company. There are various aspects to be considered while integrating two business, like integration of various soft systems used. Data integration, it may turnout that now company has to maintain both systems which may involve large resource involvement. It is therefore particularly important that such aspects must be considered while doing due diligence. Please note that quality system, RA are important system for all healthcare industry including medical device industry. It is general view that if company has CE certified product and US FDA audited company, then it must be good. This assumption is not always true so due diligence must cover in detail all documentation of observation during audit and their compliance status as of now. CE certification is done by Notified body on chargeable basis on documentation submitted and sample audit and performance check of product. This body is also selected by company. (However, with new strict requirement of MDR, notified bodies are reducing as couple of them cannot maintain compliance as per MDR’s new requirement) As against that in USA only US FDA decides the approval. Judgement based on these titles are therefore risky. Three stepprocess advocated by many experienced people in this field.

2. Step 1. Due diligence: This is a quite common step where most of business acquisition would adopt where scope will consider various area as per need and risk anticipated. What it should cover apart from other business area where experts will cover all aspectswhat is needed to be covered in medical device industry.Expert QA and RA people from medical device industry should do this part. 1.Check various certification company has which will also determine further scope and help in SWOT analysis. Do not accept the results as given but behave like auditor and go into the depth like these regulators have gone. Please note that Quality system is similar for all types of companies, but RA aspect will differ strongly with product profile. For example, pacemaker company acquiring x-ray machine manufacturing company. 2.If you are viewing the acquisition company by certification, go deep in it couple of time some certificates might have expired and company did not renew them. If you are focussing the company due to some products, pay special attention on those products and look at their technical files, 510 K or PMA, clinical evaluation, product complaint history and resolution status, CAPA documentation. 3.Do not make adverse judgement by looking at large number of complaints or CAPA but the system efficiency of addressing all such issues. It is quite likely that mishandled product caused large number of complaints. Such complaints should be discussed with the concerned person to more details. This should be done in the beginning itself as these people may leave and may not be available anymore. 4.Examine the packaging material and IFU, printing material and compliance part which should be adhered properly. 5.Review product classification and its detailed documentation. Like class I product may not have rigorous review, but class III product will need thorough review. Sometime the product is sold as medical device but one of the ingredients in the product is active pharmaceutical then product may go into pharmaceutical grade. 6.Gather lot of information during tour without considering what you are told or read about the plant. Keep your mind and vision unbiased. 7.Observe whether what is written and what is being practiced, Sign boards, information display are stating some meaningful data, are they fresh or made just show of your visit. Are procedures found at workplace? Do people follow the same, do they look at them? Whether Quality Policy is displayed at various places and are remarkably visible. 8.Data integration will be one of the important aspects of Merger so look at them. It is not necessary that acquiring company should convert all data to their own system but may find the other system better, adopt them. Please note that systems are running in both companies. They are validated too. It is the expert’s decision to decide what to adopt, what to change and what to modify but they all will be part of change control. After consolidation of all data, if merger or acquisition decision is made final, then all information with pros and cons are available and further steps can be part of the next plan of phase II after merger and acquisition. Integration: Earlier phase was of acquiring information and review of the same while this phase is execution phase. It is recommended to treat this this as a project and function as per laid out plan. Exclusive team of experts should be included in this team. Many actions may arise and some of them related to regulatory area. 1.Data Transfer 2.Product Re-registration 3.Transfer from one notified body to another.

3. 4.Labelling update. For successful QMS, if parent company has data governance system, then it becomes easy to adopt. Data quality is main part of success of any system. Same way principal elements of QMS like CAPA system, Handling nonconformities, Training, document and data control, complaint handling, need to be integrated well. One particularly important aspect is on people side. All needs to be done by people only. It is the general impression carried by mother company people that they are masters and joining company people are slaves. This attitude kills all efforts. Top management should give clear message that joining company is also quite big, reputed and people of that company are big assets so must be managed with all due respect. They should be part of new project team with acceptable position and responsibility. Evaluate your M&A: All said, planned and done as per project plan but how will you judge the completion and success. Test must be designed and executed to check. 1.Whether people are now ready (of both side) to answer all questions related to regulatory? Whether they have now basic knowledge of all products, original and acquired. 2.Training is adequate that they can talk to auditors with confidence. 3.Few people should be expert enough to know where to get an information. 4.If any risk arises which is not envisaged, whether there are people to solve this issue. 5.Whether new team has enough resource to sustain compliance on regular basis. 6.Check all the actions noted during project planning are executed or in the process with right review and people to own them. Final check: 1.Can we get certification as new entity without any issue? 2.Shall we be able to manage external audit. Audit readiness must be checked by internal audit or Mock audit through external expert. 3.How much team is prepared to manage Recall if it happens, or regulatory asks us to stop shipment due to some grave issue with product compliance. M&A is major action for any company and must be managed with due care and planning and if needed external support of consultants may be taken, as impact of failure or managing of some serious issues may cost company very heavily. Why to Choose IZiel? At IZiel, our team has upgraded thousands of documents for various acquisition integration projects of Class I, II & III medical device companies. Our Outcome Based & Onshore-Offshore Delivery Model has worked effectively to complete the Post-Merger Integration with significant reduction in timelines and budgets.