medical device regulatory compliance

UDI Costs: Long-Term Expenditures May Not Be Obvious

jon money UDI Costs: Long Term Expenditures May Not Be Obvious Our author says to expect UDI costs to be as much as 1%+ of annual sales. Ongoing costs and post-market surveillance factors are also discussed. This new regulation is not without its costs. Some are significant, especially to small medical device labelers. There are the obvious implementation costs and ongoing maintenance. There are also “Post-market Surveillance Factors,” which may be a cost or benefit, but Post-Market Surveillance Factors certainly have long-term implications for your company.

UDI Costs to Industry

“The [UDI] final rule may have a significant economic impact on a substantial number of small entities that label medical devices.” (Federal Register – Cost and Benefits) Eastern Research Group, Inc. (ERG), under contract to FDA, “…estimated present value of the costs to domestic labelers is $620.4 million using a 7 percent discount rate and $713.2 million using a 3 percent rate…” over 10 years. Over the same time period, the annualized costs for domestic labelers are estimated to be $82.6 million at a 7 percent discount rate and $81.2 million at 3 percent. Medical device labelers will incur most of these costs. Labelers include manufacturers, reprocessors, specification developers, repackagers, and re-labelers that induce a label to be affixed to a medical device. ERG estimated costs would not eclipse 1% of revenues annually, except for a small percentage of companies required to mark specific devices directly. Some multi-use device manufacturers required to direct mark their Class I devices could benefit from reduced total costs if all of their device labels only need static barcodes, rather than more costly variable barcodes (DI +PI).  ERG also estimated 32 firms out of 5,234 domestic medical device labelers (5,010 are small businesses) will bear costs greater than 1% of revenues, due to needing costly laser direct marking equipment. Interestingly, all 32 firms are all considered small businesses.

Implementation Costs

Most of the costs associated with UDI are related to implementation. The following is a list of examples:

  • planning and integration of UDI throughout information systems
  • creation, review, and approval of labeling changes
  • digital printers to print the new barcodes and date formats
  • increased printing due to variable barcodes
  • joining issuing agency and obtaining labeler ID
  • requesting Global Medical Device Nomenclature (GMDN) Preferred Term (PT) codes
  • registering new barcodes
  • laser-etching of UDI barcodes on devices for direct marketing
  • compliance with the FDA’s UDI data uploading requirements
  • review and approval of procedure changes

The first item on the above list, planning, and integration, will be the highest cost of UDI implementation. The price of planning and integration includes installation, testing, and validation of barcode printing software. You will also need to retrain almost every department to understand how UDI is being integrated with existing processes. You may also need to temporarily increase your workforce to help ensure timely implementation to ensure compliance with the data attributes required for each device entered into the Global UDI Database (GUDID).

Ongoing Costs

The highest annual ongoing cost includes labor, operating, and maintenance associated with equipment for printing labels, and labor related to software maintenance and training needed to maintain the GUDID system. Other ongoing costs include paying initial and annual fees to the Issuing Agencies and/or the  GMDN agency ( for ongoing maintenance of the system. You will need to have additional personnel in most cases to manage these other requirements.

Post-market Surveillance Factors

Post-market Surveillance Factors are either a cost or benefit to the labeler, and are directly related to the Patient Safety and transparency aspects of the UDI Regulation. The goals of the FDA in enacting the UDI Regulation are:

  • reduce medical errors
  • simplify assimilation of device use information into database systems (such as Electronic Health Records and Personal Health Records)
  • provide for quicker identification of medical device adverse events; improve the speed of the development of solutions to reported problems
  • hasten and improve the efficient closure of device recalls
  • more focused and effective FDA Safety Communications
  • allow professionals and end-users access to additional product information via GUDID

In my opinion, there are other factors just as important which companies should pay attention to as they complete UDI requirements, including the ability to:

  • develop complete safety and effectiveness profiles for devices
  • reduce waste by helping to eliminate duplicate inventory at healthcare facilities
  • identify new uses for devices, which will help increase value for shareholders, customers, and end-users

Today, the identity of labelers is hidden from users and patients. Tomorrow, when the FDA’s goals are realized, labelers will be faced with increased transparency. You will need to address increased transparency by acting quickly to product performance trends. In today’s world of instant communication, you cannot afford to ignore safety issues brought to light by post-market surveillance factors. Anyone who does does so at their peril.

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Stage 2 Audit – How to Prepare (Part 1 of 2)

This blog teaches you how to prepare for a stage 2 audit on your pathway to ISO 13485 certification, and this blog is part 1 of 2.last prep Stage 2 Audit   How to Prepare (Part 1 of 2)

Stage 2 Audit

If you are not sure what ISO 13485 is, please consider our 2-part training webinar on the topic. Health Canada requires ISO 13485 certification as a requirement for all Medical Device License Applications, and most companies choose ISO 13485 certification as their method for demonstrating conformity to the requirements of the European Medical Device Regulations (MDR)–instead of a special MDD audit.

To achieve ISO 13485 certification, you must successfully complete a Stage 1 and Stage 2 certification audit with your chosen certification body. If you are interested in an overview of this certification process, you can download Medical Device Academy’s white paper on this topic, or you can watch a webinar we recorded recently on 6 steps to ISO 13485 Certification.

Management Processes are covered during the Stage 1 and Stage 2 audit

The Stage 1 audit is typically a one-day audit where the auditor is evaluating your readiness for the Stage 2 audit. The auditor will review your Quality Manual, and your procedures (19 are required) to ensure compliance with ISO 13485. Also, the auditor will sample records from critical processes to assess your readiness for the Stage 2 audit. Typically, these processes will be:

  1. Management Review
  2. CAPA
  3. Internal Auditing

After you complete the Stage 1 audit, you may have a few nonconformities identified by the auditor. Responding to these nonconformities is the first step in preparing for your Stage 2 certification audit. You need to initiate a CAPA for each of the auditor’s findings and begin implementation before the Stage 2 audit. Typically, you will have about six weeks to implement these actions. This is not usually enough time to complete your CAPAs because you need more time before you can verify the effectiveness of corrective actions.

Preparing CAPA Records is critical for your Stage 2 audit

In preparation for your Stage 2 audit, prepare for the auditor to review any CAPAs that you completed since the Stage 1 audit–especially if you have evidence of completing an effectiveness check. You may think this is unnecessary because the auditor previously reviewed CAPAs during Stage 1. However, you probably received a nonconformity related to your CAPA process (almost everyone does), and you should expect auditors to review your CAPA process during every audit.

CAPA Effectiveness Graph 300x218 Stage 2 Audit   How to Prepare (Part 1 of 2)Each CAPA record you present should be provided in a separate folder as a paper, hardcopy. The paper, hardcopy makes it easier for the auditor to review. The folder should include documentation of the investigation, a concise statement of the root cause, and copies of records for all corrections and corrective actions implemented. Corrective actions include procedure revisions and training records. If there is a quantitative measurement of effectiveness, include a graph of current progress with the record. Ideally, the graph will be one of your quality objectives. The graph to the right is an example.

Production Process Controls will get the auditor out of the conference room 

Every company has at least some production and process controls implemented before the Stage 2 certification audit. Most auditors and inspectors spend too much time in conference rooms reviewing paperwork and too little time interviewing people that are performing work. However, many companies also outsource production activities. Therefore, unless you have a software product, you can expect your auditor to review incoming inspection activities. The auditor is also likely to review the finished device inspection, storage, and distribution. If the auditor is thorough, they will also follow the trail from inspection activities to calibration activities, nonconforming materials, and data analysis.

Design Controls

If your company is a contract manufacturer, then you probably are excluding design controls (ISO 13485, Section 7.3) from the scope of your Quality System. However, if you are a manufacturer that performs design and development, then it is an element of the quality system that warrants special attention. During the Stage 1 certification audit, the auditor reviewed only your Design Control procedure. During Stage 2, the auditor will look for evidence of implementing design controls. Therefore, even if your company has not completed your first design project, the auditor will still want to see some evidence of implementation. The auditor will expect at least one design plan to be written, and at least one design review should be completed.

If you are familiar with the FDA Quality System Inspection Technique (QSIT) process for inspection, you might have noticed that this blog is divided into the same subsections identified in the QSIT Manual.

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