Medical Devices: Necessary Update of the Agreement with the EU
Sustainability & Governance
Trade & Commerce
Health / Life Sciences
Trade / Logistics
Due to the total revision of medical device legislation in Switzerland and the EU as of May 26, 2021, an update of the MRA is necessary.
Through the Mutual Recognition Agreement (MRA) with the European Union (EU), Switzerland participates in EU's internal market for medical devices. Due to the total revision of medical device legislation in Switzerland and the EU as of May 26, 2021, an update of the MRA is necessary. The update was linked by the EU to progress on the institutional framework agreement (InstA) and could not be completed so far due to the breakdown of negotiations.
Without this update, significant problems will arise in the supply chains of medical devices between Switzerland and the EU. In addition, cooperation in market surveillance will be restricted and could ultimately weaken patient safety. Therefore, on May 19, 2021, the Federal Council decided on unilateral fallback measures to ensure both the supply of safe medical devices to Switzerland and the surveillance of the Swiss medical device market in the future.
I. Revision of the Medical Device Regulation
Since 2001, Switzerland has had a medical device regulation that corresponds to the Medical Device Regulation (MDR) of the EU. This ensures the supply of safe and efficient medical devices and guarantees Swiss manufacturers equivalent access to the EU market. Due to various incidents involving the use of these products, Switzerland and the EU tightened their medical device regulation as of May 26, 2021, with the aim of improving safety and monitoring of the market by the authorities.
II. Necessary Update of the MRA
In parallel to this revision, the chapter on medical devices in the MRA should also be completely updated. The MRA is an instrument for overcoming technical trade barriers for numerous industrial goods between Switzerland and the EU. Through the contractually regulated cooperation, the conformity of products is to be mutually recognized.
The necessary update of the medical devices chapter has not yet taken place. Based on a proposal from the EU Commission, Switzerland and the EU have therefore held intensive discussions on possible transitional provisions for the MRA. The talks have not yet led to an agreement.
The medical device industry in Switzerland as well as in the EU is strongly affected by the open outcome of these talks. Due to the discontinuation of the trade facilitation provisions of the MRA, the players will have to cope with significant additional expenses. Market surveillance has also been carried out in close cooperation with partner authorities in the EU, and Switzerland has been involved in the exchange of information. Without an update of the MRA, this cooperation will be limited and patient safety will be weakened.
III. Implications for the Swiss medical device industry
With the entry into force of the MDR on May 26, 2021, the Swiss medical device industry was downgraded to the status of a so-called "MDR third country" due to the failure of the negotiations on the framework agreement. On the same day, the new Medical Devices Ordinance (MedDO) came into force in Switzerland.
This downgrading as a third country has implications for the import and export of medical devices: Manufacturers must meet stricter requirements in each case in order to be allowed to import or export their medical devices. These include, above all, the designation of a competent person as European Authorized Representative by Swiss exporters and as Swiss Authorized Representative by European importers, and the labeling of the products with his or her information. In addition, certification of the products is now required.
The Swiss medical device industry will be hit disproportionately harder by this than those in the EU. This is because the EU imports only about 10% of its products from Switzerland and exports only about 5% of its products to Switzerland. In contrast, Switzerland sells almost 46% of its medical devices on the European market and imports as much as 54% from the EU.
Swiss MedTech, the Swiss medical technology association, estimates that the administrative burden of meeting the third country requirements will cost the domestic medical technology industry approximately CHF 114 million initially and then approximately CHF 75 million annually (i.e. 2% or 1.4% of the CHF 5.2 billion export volume from Switzerland to the EU).
IV. Unilateral Transitional Solution by Switzerland
In view of these far-reaching effects, the Federal Council adopted various measures at its meeting on May 19, 2021 to mitigate these negative consequences. The Federal Council's measures provide for transition periods that give the industry more time for implementation.
The Federal Council assumes that, due to the adopted amendments, equivalence of the Swiss provisions to those of the EU will be maintained, which means that a subsequent update of the MRA will still be possible.
The Swiss medical technology industry has lost its barrier-free access to the EU internal market. As a countermeasure and to avoid regulatory gaps, the Federal Council has indeed put the amending decree to the Medical Devices Ordinance into force at the same time as the totally revised Medical Devices Ordinance (MedDO), which was already adopted on July 1, 2020, as of May 26, 2021. However, it remains to be seen whether the EU will actually resume negotiations with Switzerland on updating the MRA. Until then, legal hurdles remain due to the third-country regulation and the medical device industry must prepare for significant additional costs. Our specialized healthcare law experts will be happy to help you through the new regulatory jungle.
See also the preceding article with an overview of the current revision of Swiss medical device law.