Several industries outside of healthcare but linked to healthcare are grappling with a regulatory solution to a long-time lingering challenge through “right-to-repair” laws that are igniting a flurry of lawsuits.
Essentially, these laws are designed to prevent original equipment manufacturers (OEMs) from refusing to license or sell their components and parts to independent service organizations (ISOs) so that the OEMs retain the maintenance and repair business of their products. Some argue that these measures suppress competition from third-party companies. Providers see ISOs as a less expensive alternative to the OEMs, but the OEMs counter with quality concerns among third-party repair companies that may affect the durability and performance of a device. To protect themselves, OEMs may void product warranties when customers opt for third-party ISOs to control costs.
Two industry experts offered their observations and takes on this controversial issue with reasonings designed to satisfy a single mission, if not reach some kind of middle ground.
Melinda Benedict, Director, Infection Prevention and Control, Olympus Corporation of the Americas
“First, let’s limit the discussion to surgical instruments. This removes medical equipment such as beds, pumps, monitors etc. For surgical instruments, they can be classified as general and complex. General instruments consist primarily of hand-held stainless-steel instruments, such as graspers, needle drivers, speculums, etc. These are most frequently serviced by ISOs either with or without authorization of the OEM. For these instruments most of the work involves polishing, sharpening and replacing small components such as springs, screws and carbide inserts. ISOs have been repairing and refurbishing general instruments for many years and have access to parts. For general instruments, part acquisition is not an issue as there are many sources available with most of the parts being made in Germany.
“For complex surgical instruments such as endoscopes, cameras, power tools and video equipment, parts for most of the major manufacturers are available either from parts suppliers, reverse engineering and in some cases from the OEM. Many ISOs have reverse-engineered components and make their own parts or they outsource the parts to other third parties. Parts typically are not a significant issue for devices that have been on the market for a few years. Parts for new technology are often an issue as the ISO has not had time or perhaps the technical skills necessary to reverse-engineer (copy) the component. Parts suppliers generally wait for demand before they invest in sourcing or reverse engineering components. The OEMs claim that they want and need to control the components to avoid unauthorized repair activities to their products.
Legal reality, responsibility
“The repair of medical instruments and devices is not regulated by the FDA. The manufacture of medical instruments is heavily regulated. However, when an OEM repairs its products, this is subject to FDA inspection and regulation. For ISOs, registration with the FDA as a repairer of medical devices is voluntary. Thus, OEMs have an extra burden and cost associated with their repair activities. Virtually anyone with a license to do business in a state can provide medical instrument repair. There are no requirements for quality or ability to repair the device back to the OEM specifications. When an ISO repairs a product, there is no requirement for the ISO to label or mark the product as being repaired by them. The OEM’s name and product information remain on the product, thus should failure of the product occur post-ISO repair, the customer likely will associate the product failure to the OEM and not the ISO.
Quality questions
“OEMs regularly find evidence of improper repair and repairs that do not meet their product specifications. In some cases, the improper repair could pose a risk to patient safety. As just one example, upon receiving a complaint from a hospital customer that a resectoscope used in ureteroscopy was failing because the electrode was being crushed when the surgeon tried to advance the electrode, the OEM was being blamed for poor quality. Upon investigation, it was discovered that an ISO had replaced the ceramic beak on the resectoscope. The ISO beak was not to the same specifications as the original OEM part. The ISO repair technician apparently was not aware of the critical nature of the part. Because the ISO beak was oversized, the electrode was catching on it and could not be advanced. The surgeon could not perform the procedure on the patient due to this. The patient was exposed to the OR environment for longer than necessary increasing their risk for [surgical site infection] (American College of Surgeons Risk Factors for SSI 2018).
“I have witnessed power tools (e.g., saws, drills etc.) where because the ISO did not have a control board for a newer model device, they substituted a control board from a previous model that did not provide the same functions to the user. The user hospital was not notified of this change by the ISO. One ISO reversed the cables on a flexible endoscope so that up was down and down was up.
Regulatory recommendations
“I believe that the FDA should classify instruments as general or complex. For complex instruments, the FDA should require full compliance from all companies that provide repair services. General instruments, due to the lower risk of improper repair, do not need to be regulated by the FDA. It should be up to the OEM whether it chooses to authorize and/or sell their components to an ISO. It should be the ISO’s sole responsibility to ensure that it meets OEM specifications for a repair, or it should notify the end user of the change they made. OEMs typically charge more for repair services versus an ISO; however, with the OEM the customer is assured of high quality and customer support on each repair. With an ISO, there is no guarantee that the repaired product meets the OEM specifications.”
Gregg Agoston, Vice President, Business Development, SPD Transformation Services, SpecialtyCare
