Legal Manufacturer and Original Equipment Manufacturer in medical devices
In the context of medical devices, Legal Manufacturer-Original Equipment Manufacturer (LM-OEM) scheme has become a widely adopted model. It allows medical device companies to leverage the expertise and resources of specialized manufacturers while maintaining control over product oversight and compliance. This model streamlines production processes and facilitates quicker access to markets.
It’s important to clarify that, officially, the terms Legal Manufacturer and Original Equipment Manufacturer do not appear in the MDR or IVDR. These definitions are not formally recognized in the regulatory texts. However, they are widely used colloquially by professionals in the medical device industry.
What is the LM-OEM scheme?
In this scheme, the Legal Manufacturer is the entity responsible for ensuring that the medical device complies with regulatory requirements. The LM holds the regulatory responsibility for the device, which includes ensuring the device’s safety, performance, and conformity with MDR or IVDR. This entity is ultimately listed on the product’s packaging, documentation, and in regulatory submissions as the "manufacturer."
On the other hand, the Original Equipment Manufacturer is the company that physically manufactures the device or its components. The OEM typically produces the device according to the LM’s specifications and is not directly responsible for regulatory compliance. In many cases, the OEM may manufacture devices for multiple LMs.
Why is the LM-OEM scheme so popular
The LM-OEM arrangement allows companies to focus on their core competencies. The Legal Manufacturer can concentrate on regulatory strategy, product branding, and market access, while the Original Equipment Manufacturer focuses on the technical aspects of manufacturing. This division of labor ensures that both entities play to their strengths.
By outsourcing manufacturing to an OEM, Legal Manufacturers avoid the high costs associated with owning and operating manufacturing facilities. This can significantly reduce capital expenditure, especially for companies focused on research and development or those looking to scale production quickly.
With an OEM in place, Legal Manufacturers can leverage existing manufacturing expertise to speed up production. This is particularly important in the medical device industry, where time-to-market can make a crucial difference in competitiveness.
The LM-OEM model ensures that the Legal Manufacturer retains full responsibility for regulatory compliance. While the OEM provides the manufacturing capabilities, it is the LM that ensures the product meets all necessary regulatory standards. This clear delineation of roles helps in handling complex regulatory frameworks, such as those found in the EU MDR or IVDR.
Besides, the LM-OEM scheme allows companies to adjust their supply chain strategies more easily. They can switch OEMs if needed, without needing to overhaul their entire compliance or branding strategy, as the regulatory responsibility remains with the LM.
Challenges of the LM-OEM model
While the LM-OEM model offers many advantages, it also presents challenges. Effective communication and collaboration between the LM and OEM are essential to ensure product quality and regulatory compliance. The LM must maintain robust oversight of the OEM’s manufacturing processes, ensuring that the products produced align with the regulatory requirements and quality standards expected in the medical device industry.
Additionally, the LM is responsible for auditing and verifying the OEM’s compliance with quality standards. This requires a high level of coordination and due diligence to mitigate risks and ensure continuous regulatory compliance.
Responsibilities of Legal Manufacturer and Original Equipment Manufacturer
In the LM-OEM relationship, it is the Legal Manufacturer who holds full responsibility for the medical device, including regulatory compliance and product safety. The Original Equipment Manufacturer is only accountable to the LM as per the terms of their contract. While the OEM may handle production, the LM remains ultimately responsible for ensuring the device meets all regulatory and quality requirements.
This is why it is crucial for the Legal Manufacturer to thoroughly vet and audit the Original Equipment Manufacturer. Since the LM holds full regulatory responsibility for the device, it must ensure that the OEM complies with all relevant quality standards and regulatory requirements. Proper auditing allows the LM to verify that the OEM’s processes, materials, and quality management systems align with the regulatory framework. A thorough assessment helps identify potential risks early, ensuring the device meets safety and performance requirements, and protects the LM from non-compliance issues. Regular audits and close oversight are key to maintaining accountability and product integrity.
