News from the European Union
Years of negotiation concerning the medical device regulation are expected to be concluded soon. The Council of the European Union is finalising its position on the revision of legislation. All devices will have to undergo more thorough assessment of safety and performance before they can be sold on the European market. In other news, the European Commission has approved the proposed acquisition of dental equipment supplier Sirona by DENTSPLY, subject to conditions.
Ongoing discussion in EU Council concerning medical device regulation
Years of negotiation are expected to be concluded under the current Dutch presidency (January – June 2016). The Council of the European Union is finalising its position on the revision of legislation concerning medical devices. Essentially, according to the proposal, all devices will have to undergo more thorough assessment of safety and performance before they can be sold on the European market. Control processes are to be radically reinforced, aimed at giving European patients and consumers rapid access to innovative, cost-effective devices. According to the European Commission, manufacturers shall benefit from clearer rules, easier trading between EU countries and an equal competitive environment that excludes those who do not comply with the legislation. The draft regulations take particular account of the specific needs of the many small and medium-sized manufacturers in this segment.
The main elements of the draft law include wider and clearer scope for EU legislation. According to the proposal, software, instruments, apparatus, appliances and implants would all qualify as medical devices and be subject to the new safety and performance requirements. This is aimed at establishing a higher standard of quality control. Other elements include stronger supervision of independent assessment bodies by national authorities, greater power and obligations for assessment bodies to ensure thorough testing and regular checks of manufacturers, including unannounced factory inspections and sample testing. In addition, the proposed regulations are intended to establish clearer rights and responsibilities for manufacturers, importers and distributors, which would apply also to diagnostic services and Internet sales; as well as better traceability of devices throughout the supply chain and stricter requirements for clinical evidence. A new expert group (the Medical Device Coordination Group) will have the power to review and comment on medical devices before they are placed on the market.
For dental dealers, the regulations might jeopardise existing agreements if manufacturers are unable to achieve the level of quality that the new body requires. Furthermore, dental organisations will be forced to cancel preferred supplier arrangements and look elsewhere for partners.
The new regulations would apply three years after entry into force.
Sirona and DENTSPLY have become Dentsply Sirona
Under the EC Merger Regulation, the European Commission has approved the proposed acquisition of dental equipment supplier Sirona by DENTSPLY, subject to conditions. In particular, the decision is conditional upon the extension of licensing agreements between Sirona and its current suppliers of CAD/CAM blocks used in its chairside CAD/CAM systems.
Based on its investigation of the companies’ main product areas, including CAD/CAM materials, small dental equipment, dental imaging systems and dental implant systems, the Commission concluded that the transaction, as initially notified, would potentially give the merged entity the ability and incentives to exclude competitors by closing Sirona’s chairside CAD/CAM system to other block providers in favour of its own blocks. Currently, DENTSPLY’s offering in chairside CAD/CAM blocks is limited, but the investigation showed that it could be expanded in the near future to replace the CAD/CAM blocks of other suppliers. The Commission thus cautioned that this could ultimately lead to higher prices for CAD/CAM blocks.
In order to address the Commission’s concerns, the companies consented to an extension of the existing licensing agreements with competing chairside CAD/CAM block suppliers until 1 March 2026, technical and legal safeguards for competing CAD/CAM block suppliers for the duration of their licensing agreements, and a fast-track arbitration procedure for dispute settlement.
The final decision by the Commission to approve the transaction is conditional upon full compliance with these commitments.