Exemptions, Responsibilities, and Penalties (in Australia)

Mark Meer

Trusted Information Resource
#1
We have a request from an individual who would like to purchase one of our medical devices in Australia, despite the device not being ARTG registered.
Under the regulations (TG(MD)), there is allowance for exemptions of devices "to be used solely for experimental purposes in humans", and it appears that it is the trial sponsor's responsibility to apply for such an exemption.

Questions:
- What is our responsibility as a foreign manufacturer in such a scenario (unapproved device, experimental use exemption, direct-to-user shipping)? Is it sufficient to just request from the individual proof they received exemption approval, and we're good to ship?
- Are we exposing ourselves to any liabilities? From my (cursory) reading of regulations, penalties appear to be directed at sponsors/importers, but if there is anything non-conforming about the exemption, is there still a possibility that we may be liable for attempting to ship an unapproved device?

NOTE: While the subject of this thread deals specifically with Australia, for the sake of discussion it'd also be informative to know how such a scenario might be dealt with in other markets as well. Who is responsible for exemptions? What liabilities does the foreign-manufacturer expose themselves to?

Any input/discussion appreciated as always...
MM
 
Elsmar Forum Sponsor
#2
Hi MM,

We ran into an issue with one of our sponsors that caused me to explore the extent of our exposure under a typical ARTG MD importation arrangement. Essentially, our sponsor tried to throw us under the bus to the TGA so we had to step in directly to challenge some test results from the TGA labs.

From my review of the available materials regarding trial sponsors, it looks like the scope of their responsibility is far greater than a medical device sponsor (e.g. they must provide insurance and provisions for injuries caused to trial participants). Nevertheless, aside from the exemption from registration, the materials point out that the remainder of the regulations apply. As I recall from my research, while the sponsor bears primary responsibility, the manufacturer submits to the authority of the TGA (e.g. the TGA can ban a manufacturer from importing; can inspect, etc.). And nothing under a trial scenario seems to affect this.

In short, my reading is that the sponsor (whether MD or trial) practically provides a layer of protection but the TGA need not respect that layer and can go straight to the manufacturer.

Putting my legal cap on, I would want (as a wish list):

1. Indemnification agreement.
2. To be a named / additional insured on whatever relevant policies they have.
3. To review the agreements the participants sign and see what liability limits there are and whether they are valid and binding in order to assess risk.
4. Good and strong distribution agreement that preserves your rights to go directly to the TGA if there's a problem (e.g. they misuse your device and then blame your device for being defective).

I'm sure my paranoid brain can concoct other scenarios but hopefully that helps some.

EDIT: and just reread your post - there was/is also an personal importation provision - Personal Importation Subsection 18(1) Reg 12(1) Schedule 5 item 1 - is this what they're looking to do?

PDF warning, historical document warning, p. 9: https://www.tga.gov.au/sites/default/files/clinical-trials-guidelines.pdf
 

Mark Meer

Trusted Information Resource
#3
Hi supadrai,
Thanks for weighing in! What you describe is basically my concern.

Putting my legal cap on, I would want (as a wish list):
1. Indemnification agreement.
2. To be a named / additional insured on whatever relevant policies they have.
3. To review the agreements the participants sign and see what liability limits there are and whether they are valid and binding in order to assess risk.
4. Good and strong distribution agreement that preserves your rights to go directly to the TGA if there's a problem (e.g. they misuse your device and then blame your device for being defective).
I'm no legal expert, so will defer to your expertise: in your opinion this should be sufficient to protect the manufacturer? It's a shame there isn't more concrete guidance on this sort of thing...

EDIT: and just reread your post - there was/is also an personal importation provision - Personal Importation Subsection 18(1) Reg 12(1) Schedule 5 item 1 - is this what they're looking to do?
For the purposes of discussion, it doesn't really matter, I think. We could be talking about any exemption for which regulation give responsibility to a party other than the manufacturer (e.g. sponsor). To summarize the general scenario:
1. Local (Australian) party would access to an unapproved device.
2. They contact the foreign manufacturer, and claim an exemption for which they are responsible (as per regulations).
3. Manufacturer accepts their exemption claim (maybe requests documentation evidence), and proceeds to ship the device.
4. Something goes wrong. Examples: There is a problem with the exemption; the device fails causing harm; the device is used in a way that results in harm;...

In such a situation, is the manufacturer liable? What actions is the manufacturer expected to take (if any)?
 
#4
Hi MM,

Just back from the weekend. In terms of protecting the manufacturer, if it were our company, I think that getting that all in place, would be sufficient. Practically speaking, all of it will probably get rolled up into a distribution agreement. Interestingly, this is the flip side of what our distributors usually want from us. And as a necessary disclaimer: I'm not an Australian lawyer, you're not my client and am I'm not expressing a legal opinion here upon which you should rely. :)

PDF Warning - https://www.tga.gov.au/sites/default/files/devices-argmd-01.pdf - this document is under review but pages 265, et seq. and 288 et seq. should provide some useful information relevant to your situation.

In terms of civil/criminal liability of a manufacturer abroad, that gets into some thorny jurisdiction and fact-specific issues - so I don't think I can reasonably comment on it here.
 
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