The EU’s new Market Surveillance Regulation[1] (MSR) will come into full force on 16 July 2021. The MSR applies to products that are subject to a wide list of EU product legislation specified in Annex I, save where that legislation contains more specific, equivalent provisions regulating market surveillance and enforcement. Annex I includes, but is not limited to, medical devices and in vitro diagnostic medical devices (IVDs). It also includes construction products, toys, machinery, cosmetics and electronic and electrical equipment. As noted in its recitals, the MSR is intended to “complement and strengthen” the existing EU product legislation.

Gaps in the current system

Many stakeholders have been vocal about gaps in the current market surveillance system. These concerns include in particular the rapidly increasing complexity of supply chains, which can lead to difficulties identifying those responsible for EU compliance, as well as difficulties arising from online sales direct to EU consumers from outside of the EU, which can evade product conformity and import inspections.

To close this gap, the MSR attributes a compliance role to all ‘economic operators’ in the supply chain, including obligations to cooperate with market surveillance authorities (MSAs). It also obliges Member States to enhance the powers of their respective MSAs to ensure an effective level of market surveillance for products sold offline and online.

Obligations on economic operators

General obligations

The MSR defines an “economic operator” broadly to mean “the manufacturer, the authorised representative, the importer, the distributor, the fulfilment service provider or any other natural or legal person who is subject to obligations in relation to the manufacture of products, making them available on the market or putting them into service in accordance with the relevant Union harmonisation legislation”. This definition should, therefore, be wide enough to capture all entities in the supply chain for products subject to the MSR (including medical devices and IVDs).

All economic operators are expressly obliged under the MSR to cooperate with MSAs regarding actions that could eliminate or mitigate risks presented by products they made available on the market. In the latter regard, the MSR also clarifies that products sold online or via distance sales are deemed to be made available on the EU market if the offer is targeted at end users in the EU. This will be the case if the relevant economic operator directs, by any means, its activities to a Member State.

In seeking to cooperate with MSAs, economic operators also need to bear in mind that the MSR requires enhanced enforcement powers for MSAs. For more information on these increased powers, see our article from July 2020.

Requirement for EU established economic operators

In addition to the above general obligations on all economic operators, Article 4 of the MSR prohibits 18 specific categories products from being placed on the market unless an economic operator established in the EU is identified. These categories include (but are not limited to) construction products, PPE, toys, measuring instruments, pressure equipment and certain electrical equipment.

Notably, an “economic operator” for the purposes of Article 4 is slightly narrower than the general definition detailed above, and only includes:

• The manufacturer
• The importer, in instances where the manufacturer is not established in the EU
• An authorised representative who has a written mandate from the manufacturer, or
• A fulfilment service provider, where none of the above are established in the EU. This is a person or company offering at least two of the following services commercially: warehousing, packaging, addressing and dispatching, without having ownership of the products involved. However, postal and parcel delivery companies are specifically excluded.

The relevant economic operator must ensure the availability of their technical and conformity documentation. They are also responsible for cooperating with MSAs in cases of non-compliance and informing authorities when they believe a product presents a risk. Importantly, their name and contact details must be indicated on the product or its packaging, parcel or accompanying document.

While the 18 product categories covered by Article 4 MSR do not include medical devices or IVDs, they do include, for example, products covered by Low Voltage Directive[2], the Radio Equipment Directive[3] and the RoHS Directive[4], which all can be relevant to digital health products. However, it remains to be seen how Article 4 MSR will interact with the existing obligations for economic operators under the Medical Device Regulation (MDR)[5], the IVD Directive (IVDD)[6] and IVD Regulation (IVDR)[7].

Conclusion

Digital health companies should be aware that medical devices and IVDs do fall within the scope of the MSR. Therefore, all operators within the supply chain for such devices need to be aware of the general obligations that will apply to them from 16 July 2021, and of the enhanced market surveillance powers being introduced. In the meantime, guidance is eagerly awaited to clarify how the obligations on economic operators under the MSR and under the MDR, IVDD and IVDR will interact.

For more information on the impact of incoming regulatory regimes on your business and its operations, contact a member of our Life Sciences or Product Regulation & Consumer Law teams.

The content of this article is provided for information purposes only and does not constitute legal or other advice.