As a medtech lawyer, my focus naturally gravitates to assessing “downstream” relationships and risk; that is, analysis of the legal arrangements between manufacturers, distribution agents, and health care providers that together bring medical technologies to the patient’s bedside. These relationships can be complex, as are the legal issues they raise. But ensuring ethical standards in these relationships is critical, because patients deserve the confidence of knowing that the medical technologies used in their care are based on clinical consideration of what is best for them, not financial considerations or other such factors.
Downstream arrangements in the medtech industry are governed by well-established authorities that are very familiar to health care lawyers, such as the anti-kickback statute, beneficiary inducement civil monetary penalty provisions, the foreign corrupt practices act, and in some cases distribution licensure. The law in this area is mature, and supplemented by extensive regulations, subregulatory guidance, and voluntary industry codes of ethics. When health care lawyers talk about “compliance,” they usually are referring to these downstream arrangements.
But “upstream” compliance – relating to the supply chain that supports the production of medical technologies – is also emerging as a focus for the medtech industry. As I have mentioned before, I am constantly awed by the pace of medtech innovation in bringing sophisticated technological solutions, cures and treatments to patients—from nanotechnology, to robotics, to diagnostics, digital and beyond. These technological innovations utilize a range of materials, with associated supply chains that can be complex and global, even for small companies.
Upstream ethics and compliance issues have been the subject of several important legal and policy developments. Here are a few trends–from other industrial sectors–that I’m watching:
Materials sourcing/conflict minerals: Atrocities in the Democratic Republic of Congo (DRC) and adjoining countries financed by mineral trade have spurred efforts in the US and globally to promote responsible sourcing of these minerals, some of which are used in medical devices and various electronics. In particular, Section 1502 of the Dodd-Frank Act requires companies to report on measures taken to exercise due diligence regarding the source and chain of custody of certain conflict minerals (tantalum, tin, gold or tungsten) necessary in manufacturing. The Organisation for Economic Co-operation and Development also has issued Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, and the European Union is developing supply chain due diligence requirements for conflict minerals.
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