Obligations of a company going out of business

Weeder

Involved In Discussions
#1
If a manufacturer of a Class II medical device decides to stop operation, or goes bankrupt, what are its obligations concerning maintaining the devices in the market?

Will the company still have to maintain a Quality System?

How does the lifetime of a product come into play?

Will appreciate any guidance on this matter.
 
Elsmar Forum Sponsor

Wes Bucey

Prophet of Profit
#2
If a manufacturer of a Class II medical device decides to stop operation, or goes bankrupt, what are its obligations concerning maintaining the devices in the market?

Will the company still have to maintain a Quality System?

How does the lifetime of a product come into play?

Will appreciate any guidance on this matter.
You posit two entirely different situations. Actually, three, if you consider there are two broad types of bankruptcy - (1) REORGANIZATION AND (2) LIQUIDATION.

If an organization decides to stop making ANY product (for any reason which may be a whim or a financial reorganization), but continues to do business, then it faces statutory and contractual hurdles in whether it provides for a successor, safety stock, recall, fire sale, whatever. A lot depends on whether the product is a proprietary one or a commodity.

A company that ceases doing business (liquidation) has no legal obligation in regard to disposition of inventory (finished goods or work in process), designs, process equipment, or personnel. Consider the analogy (a poor one) of some man made or natural disaster completely obliterating the organization, its premises, its designs, its intellectual property, its personnel. The dead folks (personnel and executives) of the organization are literally just as dead in a liquidation, so they can no longer be held responsible for anything.

If you have a specific question or fear, it is probably best to take it up with an attorney familiar with you or with the organization and who has access to information about contracts and statutory obligations.

On a more cynical note, unless you are in the top tier of managers of an organization undergoing such change, your primary worry should be "What happens to me?" not, "What do we owe the customer?" because the ramifications for the customers will rarely affect you as a regular worker.

Added in edit: If you ARE in the top tier of managers in an organization contemplating this change, consider hiring a qualified consultant to help you sort through all this with the least amount of personal grief to yourself and family.
 
#3
If a manufacturer of a Class II medical device decides to stop operation, or goes bankrupt, what are its obligations concerning maintaining the devices in the market?

Will the company still have to maintain a Quality System?

How does the lifetime of a product come into play?

Will appreciate any guidance on this matter.
Simple. FDA gives the guidance ~~~
See where you belong 10, 11 or 12 below...
10. What if someone else buys my business?

If you go out of business and a new person or entity acquires the right to manufacture or distribute the tracked devices, then these other persons or entities become responsible for continuing the tracking responsibilities.

11. What if I just stop distributing tracked devices but stay in business?

If you stop distribution of a tracked device but continue to do other business, then you remain responsible for the tracking of devices that you previously distributed.

12. What if I go out of business completely and no one takes ownership of my manufacturing rights?

A manufacturer or distributor that goes out of business is required to notify FDA at the same time that it notifies of the business shutdown to any government agency, court, or supplier. With the notification to FDA, the manufacturer or distributor must provide FDA with a complete set of its tracking records and information.
This is from HERE the Medical Device Tracking - Guidance for Industry and Food and Drug Administration Staff.

This is a question about US FDA requirements. There may be other business and legal stuff that needs different attention.
 
#6
No, you don't have to maintain the quality system, but you have to keep your quality documentation and records for the period specified in your record retention procedure.

The manufacturer remains legally responsible for any devices made available to the market and used as intended for the lifetime of those devices.
 
Thread starter Similar threads Forum Replies Date
C Obligations of a company going out of business. CE mark product EU Medical Device Regulations 2
EricHeyworth Retailer obligations as distributor UK Medical Device Regulations 3
R General Obligations of Importers under EU MDR EU Medical Device Regulations 3
S OBL obligations for PMS EU Medical Device Regulations 5
W 6.1.3 Compliance obligations b) - problem with understanding ISO 14001:2015 Specific Discussions 0
K Compliance Obligations 6.1.3 of ISO 14001 ISO 14001:2015 Specific Discussions 3
N OBL under the MDR. Which are the obligations of the OEM? EU Medical Device Regulations 0
U Distributor obligations under MDR EU Medical Device Regulations 5
Cats Clause ISO 14001:2015 6.1.3 Compliance Obligations - Legal requirements monitoring ISO 14001:2015 Specific Discussions 0
K Importer in EU, but not distribute in the EU - MDR obligations EU Medical Device Regulations 0
M FULFILMENT of compliance obligation versus COMPLY with compliance obligations ISO 14001:2015 Specific Discussions 2
H Obligations as a contract manufacturer during an MDSAP audit ISO 13485:2016 - Medical Device Quality Management Systems 11
armani Environmental Compliance obligations and risks (ISO 14001:2015 6.1.3) ISO 14001:2015 Specific Discussions 3
G ISO 14001 - 6.1.3 Compliance Obligations ISO 14001:2015 Specific Discussions 1
A Refusal to discuss ISO 9001 obligations... what to do? ISO 9000, ISO 9001, and ISO 9004 Quality Management Systems Standards 8
M Informational TGA – Medical device annual reporting – Sponsor obligations Medical Device and FDA Regulations and Standards News 0
S Legal Manufacturer FDA Reporting Obligations for Using New Contract Sterilization Site Other Medical Device Regulations World-Wide 0
W Compliance Obligations - legislative, regulative and others Miscellaneous Environmental Standards and EMS Related Discussions 4
A Pharmaceutical Manufacturer's obligations - Laboratory Test instruments General Measurement Device and Calibration Topics 0
armani Compliance Obligations - Implementing 6.1.1 and 6.1.3 NOTE - Determine risks and... ISO 14001:2015 Specific Discussions 1
S Manufacturers Obligations for Medical Device Servicing and/or Repair EU Medical Device Regulations 10
R Medical Device Relabeler Obligations Other US Medical Device Regulations 14
E Obligations of Foreign Distributors of US Medical Devices US Food and Drug Administration (FDA) 1
D FDA MDDS - Listing Obligations for a Generic Data Interface US Food and Drug Administration (FDA) 3
N Consultant Obligations, CFR 803 and Sterility Quality Manager and Management Related Issues 4
M CE Marking Process - Obligations of an Authorized Representative CE Marking (Conformité Européene) / CB Scheme 1
M Does any one know if company is allowed to submit appeal for rejected registration file Other Medical Device Related Standards 0
T Company AS9100D External Audit Preparation AS9100, IAQG, NADCAP and Aerospace related Standards and Requirements 17
E Device compatibility with other company's devices US Food and Drug Administration (FDA) 0
M An interesting question about import company Other Medical Device Regulations World-Wide 5
T ISO9001:2015 for Work-from-home company ISO 9000, ISO 9001, and ISO 9004 Quality Management Systems Standards 48
M Role of Quality Manager in a manufacturing company AS9100, IAQG, NADCAP and Aerospace related Standards and Requirements 7
R How many process maps are adequate for a company for IATF 16949? Process Maps, Process Mapping and Turtle Diagrams 17
M Questions concerning QMS and/or company specific nonconformance Customer Complaints 2
Aliken Recommendation for the ISO 13485 certification company ISO 13485:2016 - Medical Device Quality Management Systems 7
C ISO Cert and Parent Company is not Certified ISO 9000, ISO 9001, and ISO 9004 Quality Management Systems Standards 8
H Product Safety & Conformity Representative (PSCR) Training Company IATF 16949 - Automotive Quality Systems Standard 0
Q Training Machinists on Company Processes Training - Internal, External, Online and Distance Learning 6
C Regulatory Affairs in a start-up medical device company Career and Occupation Discussions 1
Q Approving distributors as suppliers for automotive company Supplier Quality Assurance and other Supplier Issues 1
P How to keep a ISO 9001:2015 certification when a company is sold ? ISO 9000, ISO 9001, and ISO 9004 Quality Management Systems Standards 7
cgaro62 Does FDA apply to a non-medical 13485 certified custom manufacturing company? ISO 13485:2016 - Medical Device Quality Management Systems 11
M New Daughter company - ISO 9000, ISO 9001, and ISO 9004 Quality Management Systems Standards 7
T Accreditations as part of 9001 - Quality checks on your company ISO 9000, ISO 9001, and ISO 9004 Quality Management Systems Standards 5
L BlipSnip is it Legit Company? ISO 9000, ISO 9001, and ISO 9004 Quality Management Systems Standards 10
M Seeking Consultant for Orthopedic Start Up company Other Medical Device and Orthopedic Related Topics 1
R Can PLM be in the OEM position for another company? EU Medical Device Regulations 1
L Acquiring software from 3rd party company IEC 62304 - Medical Device Software Life Cycle Processes 8
T Does marketing company require CE mark if manufacturer has CE mark on product? EU Medical Device Regulations 5
H Starting my own 3rd party inspection company Service Industry Specific Topics 6

Similar threads

Top Bottom