1. Medical Device Outsourcing & the Role of Regulatory Compliance
Scott Pletzer
President
MEDICAL DEVICE OUTSOURCING SOLUTIONS

2. 2007 CARZER Technologies, LLC All Rights Reserved
Who Am I?
B.S. Mechanical Engineering, West Virginia University
M.S. Bioengineering, Clemson University (Dr. Shalaby)
13 yrs industry experience (Boston Scientific, Becton Dickinson, C.R. Bard, The Tech Group)
Founded CARZER Technologies 2003
American Society for Quality (ASQ)
Residing in Arizona since 1998
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Who is CARZER?
CARZER Technologies has over 20 years experience in the medical device industry. We provide solutions to organizations regulated by ISO standards and/or FDA regulations.
2007 CARZER Technologies, LLC All Rights Reserved

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CARZER’s Services
Quality management systems
Compliance 
Training & development
Contract engineering & manufacturing
Regulatory preparation & submission
Supply base management
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5. Outsourcing Reaches the Entire Biomedical Industry
Academia
Entrepreneurs
Biomedical organizations
Funding organizations
Legal counsel
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6. “The question for device makers is not whether to outsource--it's what to contract out, where to do it, and how to begin.”
Source: MDDI-March, 2003

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Today’s Outsourcing
…It’s about systems and infrastructure, training and awareness, design houses for prototyping, contract manufacturing, third party testing and clinical services, regulatory representation, experienced and skilled personnel, without permanent salaries. It’s more than consulting as we know it…
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8. Factors Driving Outsourcing
Cost effectiveness
Resources
Speed to market
Expertise
Competitive edge
Capacity
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9. Top Device Manufacturers
Johnson and Johnson ($20.3B)
GE Healthcare ($16.6B)
Medtronic ($11.3B)
Baxter International ($10.4B)
Siemens Medical Solutions ($10.1B)
Cardinal Health ($10B)
Tyco Healthcare ($9.6B)
Philips Medical Systems ($8.5B)
Boston Scientific ($7.8B)
Becton Dickinson ($5.8B)
Source: MPO magazine, July/August-2007
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10. What Manufacturers Outsource
Source: MDDI-March, 2007
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11. Contract Manufacturing Market Size
Source: Medical device market size and gross profit from IBISWorld estimates. Contract manufacturing market size based on consensus among Frost and Sullivan, Millennium Research, MedTech Insight and Accellent estimates.
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12. Top Contract Manufacturers
Accellent Inc. (12%)
Symmetry Medical (6%)
Greatbatch (5%)
Heraeus, Avail (4% each)
The Tech Group, Lake Region, Fort Wayne Metals (3% each)
Orchid International, Doncasters Medical Technologies (2% each)
Source: MPO-July/August, 2007
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13. Geographical Opportunities
Idaho - Showing entrepreneurs the money
Arizona - Building more technology centers
Wisconsin - A partnership powerhouse
Ohio - Rich in research
South Carolina - Legislating life science success
Traditional - San Francisco, San Diego, Boston, Minneapolis
Source: MPO-July/August, 2007
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14. Factors Driving Contract Manufacturing
Source: MDDI-March, 2003
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15. What’s Important When Outsourcing?
Source: MDDI-March, 2007
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16. What are the Challenges?
Source: MDDI-March, 2007
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17. Achieving Contract Manufacturing Success
Source: MDDI-March, 2003
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18. Outsourcing Partner Considerations
Identify the company’s specialty area
orthopedics, cardiology, interventional
Device classification (I, II, or III)
affects the development strategy, regulatory pathway, finances, product liability, etc.
Assess the gaps
engineering, supply base management, packaging, manufacturing
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19. Outsourcing Relationships
Preferred
Outsource
Established
Partnership
Strategic
Alliance
Initial
Contact
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20. Achieving Outsourcing Success
Begin early
Due diligence
Common objectives
Communicate
Trust and respect
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21. Regulatory Compliance FDA & ISO
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22. Food & Drug Administration (FDA)
Motivated by public safety
Indifferent to company size or status
Enforces federal law
Authority over company premises and product
Applies to companies doing business in the United States
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23. International Organization for Standardization (ISO)
Business oriented
Promotes global harmonization
Regular standard reviews and revisions
Applicable internationally
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24. Compliance Deficiencies Company A
Failure to adequately validate the manufacturing process with a high degree of assurance, approve, and document the results of the validation activities to ensure that product specifications can be consistently met, as required by 21 C.F.R. § (a).
Source: FDA Warning Letter Dated 19Jan07
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25. Compliance Deficiencies Company A
Failure to establish and maintain procedures for finished device acceptance to ensure that each production run, lot, or batch of finished devices meets acceptance criteria prior to releasing the devices for distribution, as required by 21 C.F.R. § (d), and failure to maintain acceptance records, as required by 21 C.F.R. § (e).
Source: FDA Warning Letter Dated 19Jan07
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26. Compliance Deficiencies Company A
Failure to establish and maintain procedures to control the design of the device in order to ensure that specified design requirements are met, as required by 21 C.F.R. § (a) through (j).
Source: FDA Warning Letter Dated 19Jan07
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27. Compliance Deficiencies Company B
A medical device manufacturer that ignored FDA regulations by selling unapproved medical devices to doctors treating children with heart problems agreed to plead guilty to four misdemeanor charges in federal court and pay $4.5 million in fines.
Source: MPO-July/August, 2007
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28. Compliance Deficiencies Company B
The plea agreement ends a three-year criminal investigation of XYZ Medical, Inc. of New York and its founder and president John Doe by the U.S. Attorney that began amid charges of improper conduct by doctors at Anytown Hospital for Children.
Source: MPO-July/August, 2007
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29. Compliance Deficiencies Company C
Failure to implement complaint handling procedures to ensure that all complaints are evaluated to determine whether the complaint represents an event that must be filed as a Medical Device Report under 21 CFR Part 803, as required by 21 CFR (a)(3).
Source: FDA Warning Letter Dated 03Jul07
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30. Compliance Deficiencies Company C
Failure to submit MDR reports within 30 days of receiving or otherwise becoming aware of information that reasonably suggests that a marketed device may have caused or contributed to a death or serious injury, as required by 21 CFR (a)(1).
Source: FDA Warning Letter Dated 03Jul07
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31. Compliance Deficiencies Company C
A correction or removal conducted to reduce a risk to health posed by a device was not reported in writing to FDA, as required by 21 CFR (a)(1).
Source: FDA Warning Letter Dated 03Jul07
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32. Compliance Deficiencies Company D
Failure of management with executive responsibility to review the suitability and effectiveness of the quality system at defined intervals and with sufficient frequency according to established procedures to ensure that the quality system satisfies the requirements of 21 CFR Part 820 and the firm's established quality policy and objectives, as required by 21 CFR (c).
Source: FDA Warning Letter Dated 25Jan06
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33. Compliance Deficiencies Company D
Failure to review, evaluate, and investigate any complaint involving the possible failure of a device to meet any of its specifications, as required by 21 CFR (c).
Source: FDA Warning Letter Dated 25Jan06
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34. Compliance Deficiencies Company D
Failure to establish and maintain procedures for receiving, reviewing, and evaluating complaints by a formally designated unit to ensure complaints are processed in a uniform and timely manner, as required by 21 CFR (a)(1).
Source: FDA Warning Letter Dated 25Jan06
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35. Compliance Deficiencies Company D
Failure to establish and maintain procedures to address the identification, documentation, evaluation, segregation, disposition and investigation of nonconforming product, as required by 21 CFR (a).
Source: FDA Warning Letter Dated 25Jan06
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Violators Profiled
Company A
Startup in 2005
Naïve and unaware of regulations
Company B
Doing business since 1982
Self proclaimed worldwide leader in the field
Claimed device benefits outweighed violations
Companies C & D
Within top ten device manufacturers
When does naivety become deceit?
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37. Compliance Governs The Industry
21CFR Part 820
ISO 13485:2003
Procedure driven
Results documented
Failures must be addressed
If it wasn’t written…it didn’t happen
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38. Give Me an “A” for Auditor
Expect to be part of audits
FDA
ISO
Customer
Internal
Be prepared to defend your work
Less is always better
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39. When Your Ethics Come Into Play
Always follow procedures and always tell the truth
Make your decisions based on data
Bring about resolution quickly, but correctly
You are accountable for your actions
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The Cost of Compliance
Compliance has a price
Non-compliance has a much greater price
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Additional Resources
fda.gov
iso.org
devicelink.com
mpo-mag.com
carzer.com
ISO 13485:2003 (ISO requirements)
21CFR Part 820 (FDA regulations)
Medical Device & Diagnostic Industry (MD&DI)
Medical Design & Manufacturing (MD&M)
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Questions
MEDICAL DEVICE OUTSOURCING SOLUTIONS
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