Nov 23, 2010

If your company has ever tried to sell a new product in international markets such as Europe, then you may have considered outsourcing. For small or newly formed companies, dedicating an employee exclusively to quality and regulatory issues may not be feasible or cost-effective. However, careful adherence to regulatory affairs is critical and should never be treated as an afterthought. Outsourcing might be the solution. Even for larger companies with regulatory personnel, entering a new market or navigating unfamiliar regulations may prove difficult. For any company using critical suppliers or contract manufacturers, outsourcing might be the solution. In this article, we'll look at the advantages and disadvantages of outsourcing some or large portions of your regulatory affairs or quality assurance tasks.

Let's back up...what is outsourcing, exactly?

"Outsourcing" literally means hiring someone outside the company to work on certain projects. In the regulatory field, you might hire an outside consultant because he has unique expertise in a certain area. For example, when implementing a quality system, you might hire a consultant to assist in implementation and/or to conduct your internal audits. Once implemented, you might hire someone who is familiar with new requirements to maintain and update your system.

How do I know if I should outsource my regulatory responsibilities?

In many cases, companies choose to outsource for two reasons: cost and availability of resources. Salary alone for regulatory affairs specialist, assuming you sell in more than one market and/or need to adhere to more than one set of regulations, could be upwards of $100,000/year. Even with a Quality Assurance or Regulatory Affairs employee on staff, you may encounter a regulatory requirement that they are too busy or otherwise unprepared to handle. The cost of training them or the potential risk to the company if anything goes wrong may be higher than outsourcing that particular task.

Think of outsourcing as extending your existing manpower. Your company's size, the time personnel can dedicate to regulatory issues, and the stress daily operations puts on existing human and material resources are important considerations. Keeping abreast of ever-changing regulatory requirements can be challenging, and should not be taken on by someone who has a full workload beyond regulatory affairs or quality assurance, a common occurance in smaller organizations.

How do I know if I should hire someone full-time?

Begin by weighing the above factors: cost and availability of resources. Consider how fast your company is growing, and whether you plan to introduce new products or enter new markets in the near future. If you anticipate new or more complicated requirements, decide whether you can dedicate existing personnel and/or hire someone new. In general, if your company employs more than 50 people, you may want to consider hiring regulatory affairs personnel. However, remember that regulatory requirements are less stringent for lower-risk devices, and plan your personnel choices accordingly.

If I decide to outsource, what should I look for in a consultant?

First, make sure you know exactly what services your firm needs. Are you marketing a new device? Entering new markets? Implementing a quality system? There are many consultants that specialize in quality systems only, for example. Others place their focus primarily on regulatory compliance. Just because a consultant knows ISO 9001 does NOT mean they are proficient in ISO 13485. Even a consultant with experience implementing ISO 13485 may not have the regulatory knowledge to ensure that the applicable European requirements are embedded in the system. Of course, the consultant should also be intimately familiar with FDA Good Manufacturing Practices (GMP) as well since most US companies sell domestically.

Look for consultants who have both breadth and depth. Your consultant should be familiar with as many requirements (European, American, Japanese...) as you need. Requirements for Europe are particularly complex and involve special procedures for Technical Files, Risk Management and Post-Market Surveillance including Vigilance. Again, do your homework. Ask for referrals from colleagues in the industry. Once you have narrowed the field, invite each consultant to relate their experiences working with companies your size. How many medical device clients have they worked with on European compliance? Ask a few specific questions regarding the Medical Device Directive (CE Marking). Ensure that the consultant has the appopriate credentials. Ask for references, and check them.

Don't underestimate the importance of personality. This person's work may become vitally important to your company's success, and they must work effectively with you and your personnel. An outside consultant often helps build camaraderie and "team spirit" among your staff; but they can create tension if employees view them as autocratic enforcers. Diplomacy is a key skill and that's something you can determine when you call references.

Remember your goals. Some consultants may try to sell you more services than you need. Be wary of consultants who say they prefer to serve one client at a time. This may be a red flag. Consultants without much work have a tendency to stretch out projects and add work that, although sometimes beneficial, may be extraneous to your goals and costly. A consultant always adds value and should never become part of the furniture.

Consultants are based countrywide and you may be fortunate to find one nearby. However, this is not the most important consideration since travel costs are typically a small portion of projects. Evaluate based on quality not solely on price. While you may incur extra costs for travel and incidentals, the merits of having the right person for the right job should outweigh geography.

Any other advantages or disadvantages to outsourcing?

Yes, hiring a person on staff gives you more flexibility to respond to issues quickly and that person will become intimately familiar with your organization and products over time. However, maintain staff is also costly and unless you have significant quality and regulatory issues ongoing, the cost of hiring an employee may not make financial sense. Also, many smaller companies often allocate the regulatory responsibilities to someone whose primary job is in manufacturing, marketing or operations. That's a risk since things change in the regulatory world and a small oversight can be incredibly costly down the road. Keeping abreast of those changes is critical on requires ongoing training.

In summary, regulatory compliance should not be taken lightly. Outsourcing for smaller companies (under 50 employees) often makes sense until they reach a point where the costs of hiring regulatory expertise outside eclipse the costs of hiring an employee. Considering the evolving nature of regulatory affairs, outsourcing certain elements of your quality or regulatory responsibilities (e.g. auditing, 510(k) submissions, technical file compilation) may make sense regardless of company size. Make sure to select the right partner


  • Kate Jablonski