GREY MARKET DENTAL DISTRIBUTORS POSITION PAPER
- Over 17 million Canadians visit their dentist twice a year i
- An estimated 50 grey market dental distributors in Canada are not complying with Canada’s Medical Device Regulations by selling dental devices that
- are not licensed by Health Canada and/or
- chain of custody (all shipping, storage and handling conditions back to the manufacturer) cannot be accounted for and/or
- cannot be effectively recalled for lack of proximate connection to the manufacturer and/or
- have been repackaged, defaced or otherwise altered and/or
- are counterfeit devices
- Grey market sales in Canada are estimated to be as high as $100 million.
- Unlicensed distributors and/or the sale of product not compliant with a distributor’s licence pose a safety risk to the health of Canadians, the degree to which cannot be established without an effective inspection program.
- Only licensed distributors are inspected by Health Canada for compliance and enforcement with Canada’s Medical Device Regulations (MDR).
- DIAC members experience long delays in having a trade complaint investigated by the Health Products and Food Branch Inspectorate (HPFBI) to locate non-compliant product and often don’t receive documentation to confirm their complaint was verified and what corrective action was taken with the alleged offender.
- Advance notification of a trade complaint investigation provides the opportunity for noncompliant product to be removed from a facility prior to inspection.
- The penalties associated with non-compliance are minimal and do not dissuade illegal grey market activity. The current fine for a first conviction offence is $500.
- Investigations to locate non-compliant dental devices need to be acknowledged and acted upon in a timely fashion to prevent possible harm to Canadians.
- Process to acknowledge a trade complaint should be automated in a similar fashion to the Adverse Event reporting system.
- The HPFBI needs to eliminate advance notice of a trade complaint investigation to locate non-compliant dental devices being sold in Canada.
- Companies reporting another company for an alleged violation need to receive confirmation that their complaint was verified and the specific corrective action taken with the offender.
- Any additional information, discovered during a trade complaint investigation should be shared by HPFBI with the complainant to assist in preventing any further occurrences.
- The HPFBI and Canada Border Services Agency should increase resource time allocated to investigating non-compliant dental devices being sold in Canada, investing in additional staff if required.
- Trade complaints data should be tracked in a similar fashion to how medical device licensing requests are tracked: # of requests, time to respond, time to complete, validated/non-validated complaints, # of repeat offenders, type of corrective action
- Trade complaint investigations should be treated as audits with an assigned risk classification to flag non-compliant companies sooner within Health Canada for more immediate attention.
- Penalties need to be increased for non-compliant companies, especially for repeat offenders, to dissuade illegal activity.
- HPFBI should create a working group that consists of stakeholders representing the dental community who can work together to review, understand and implement solutions to reduce grey market dental distributor activity.
- In 1998, Canada implemented updated Medical Device Regulations (MDR) to improve the safety of medical devices sold in Canada. Two important additions to the MDR were the creation of device classes and licensing requirements.
- A manufacturer must obtain a product license before importing, selling or advertising any Class II, III or IV device in Canada. A distributor or importer of medical devices cannot legally sell an unlicensed device.ii
- No person shall import or sell a medical device unless the person holds a medical device establishment license (MDEL). Manufacturers of Class, III or IV medical devices are exempt from needing an MDEL as are Class I manufacturers if they import or distribute solely through a person who holds an MDEL.
- In 2004, Health Canada implemented the Medical Device Inspection Program to proactively assess the compliance of medical device manufacturers, importers and distributors with the Medical Device Regulations.
- The Inspection Program applies to medical device manufacturers, importers and distributors subject to establishment licensing and manufacturers of Class I devices not subject to establishment licensing.
- Dental companies can submit a trade complaint to HPFBI to report non-compliant dental devices being sold in Canada.
- The complainant is to be advised whether the complaint was verified, and what, if any corrective action was taken. iii
- The current fines and penalties structure for non-compliance is over 50 years old and is significantly behind modern international regulatory authorities such as the United States, Europe, Australia and New Zealandiv
- Section 31 (a) For a first summary conviction offence, the fine is $500 and/or three months imprisonment.
- Section 31 (b) the maximum fine in Canada for a serious offence under the Food and Drugs Act is $5,000 and/or three years imprisonment.
The Dental Industry Association of Canada (DIAC) is a voluntary non-profit group of dental manufacturers, distributors, laboratories and service providers, committed to the highest standards of service to dental professionals in Canada.