CMS acts for medical devices manufacturer who successfully overturns decision made by a Notified Body
Introduction
A Notified Body (NB) is an entity y that is vested with certain decision-making powers under EU/EEA rules, but whose amenability to judicial review is subject to national procedural rules. Our case concerns the Norwegian NB under the Medical Devices Regulation (MDR). In this case, CMS successfully appealed a decision adopted by the Norwegian NB to suspend the "EU passport" of a medical device used throughout Europe and obtained an interim injunction against the decision pending the appeal. The matter involved close cooperation between CMS’s life sciences team and the litigation team in Norway, as well as CMS in the UK, Germany and France.
Background
Medical devices sold in the EU/EEA must hold a CE-certificate and bear the CE-mark. This is a symbol that indicates that the equipment complies with the relevant standards in the MDR and confirms that the product has an underlying CE-certificate of conformity. A CE-certificate serves as an entry ticket to the EU/EEA market.
For medical devices, NBs assess, issue and surveil CE-certificates. NBs are private undertakings that have been granted public authority by the member state in which the NB is incorporated. Once issued, a CE-certificate is valid for the whole EU/EEA (i.e. it provides an EU passport for the product). The NBs thus act as gatekeepers for the entire EU market for medical devices, which is estimated to be worth approximately €150 billion in 2024.
Manufacturers are free to choose any legally designated NB, in any member state, to provide a CE-certificate. They then enter into a contract with their chosen NB for certification. This is different from the process for pharmaceuticals where there is a central procedure for authorisation.
The present case
The manufacturer in question was based in India (the Manufacturer) and had an established certification agreement with the Norwegian NB. The product in question was a cardiological stent (SUFC), a tiny mesh cylinder used to hold open narrowed blood vessels around the heart.
There is fierce competition between stent manufacturers. From around [2021], a rival manufacturer launched a pan-European disparagement campaign against the Manufacturer. The rival manufacturer instructed lawyers to lodge complaints with various EU national medical regulators regarding the stent. The substance of the complaints related to the thickness of the stent walls, which are measured in micrometers. At this width, accurate measurement is a science and can be done through various – sometimes conflicting – means.
As a result of the rival manufacturer’s actions, in January 2024 the Norwegian NB suspended the CE-certificate for SUFC. The suspension decision halted all further sales of SUFCs (although products already on the market could still be used). This had a significant impact on the medical industry with the affected product accounting for approximately 70% of our client's revenue and being used in approximately 8,000 surgeries per month throughout the EU.
In response, CMS applied for an interim injunction on behalf of the Manufacturer and, in parallel, submitted a formal administrative appeal against the NB’s decision. Central to the Manufacturer’s argument was that the Norwegian NB’s decision was vitiated by serious procedural errors. Both the case management prior to the decision and the grounds for the decision failed to comply with Norwegian administrative law principles and the procedural requirements set out in the MDR. As the case progressed, it became clear that the Norwegian NB had not fully understood that they were exercising public authority subject to review under administrative law.
This raises an important point since the amenability of the NB’s decision to judicial review was certain under Norwegian law. The Norwegian state had expressly delegated public authority to the NB to carry out its functions, which made it subject to the Norwegian Public Administration act when adopting decisions. Conversely, the legal position of NBs in other member states appears to be less clear. Challenging NBs’ decisions under administrative law is not a given, and affected parties may have to rely on contractual or tort claims. Such claims are more onerous than a clearcut administrative path. This lack of harmonisation is problematic since the procedural rights of a CE-certificate holder will vary across different NBs.
The main thrust of the Manufacturer’s legal argument was based on (i) the NB’s failure to state reasons and (ii) the EU law principle of “proportionality”. In relation to the second point, the Manufacturer drew on the demonstrable safety of the product and the fact that it is widely used and critically important in certain patient groups. Indeed, it is clear from the MDR that a NB must consider the proportionality of a measure when adopting a suspension decision.
The City Court granted an interim injunction to suspend the effects of the NB’s decision. The judge agreed with the Manufacturer’s argument that the suspension decision was invalid due to a lack of reasoning and held (our translation):
“In this situation, and where it is a product that does not pose a risk to patient safety (which is an overall purpose behind the directive), the stent wall thickness has complied with the requirements of the certification using another accepted measurement method, where the decision is invasive for [the client] and with potential negative effects also for hospitals and their patients, there is strengthened reason to require an assessment of proportionality before deciding to suspend the certificate. The court thus lacks an assessment in the decision of whether it was necessary to suspend the product at the present time, or whether the purpose could have been achieved in another way”.
In order to obtain an injunction, the Manufacturer also had to convince the court of the urgency and need for immediate relief. The court gave decisive weight to the interests of patients for whom the SUFC is the preferred device and whose lives may depend on the product:
“Given that there are approximately 8,000 operations per month where the product is used, the consequence of the decision could be that patients die in situations where [SUFC] is more suitable than other products on the market.”
Jurisdiction to hear the administrative appeal against the NB’s decision fell to the Norwegian Medicines Authority. The fact that the City court had already granted an injunction was no doubt helpful since it is de facto difficult for a government body at an intermediate level to disagree with a court's interpretation of the law. Not unexpectedly, the appeals body also concluded on the merits that the suspension decision was invalid. The suspension decision was thereby annulled with final effect.
Following the NB’s erroneous suspension decision, the Manufacturer decided to move its products to an alternative NB. The right to voluntary transfer from one NB to another is clearly set out in the MDR. Despite this, the Norwegian NB would only agree to approve the voluntary transfer if the Manufacturer made certain concessions. This demand for concessions from the Norwegian NB illustrates how NBs operate at the intersection of public-law prerogatives and private-law obligations and liabilities – a toxic mix, which is prone to confusion. This raises questions from an EU freedom-of-movement perspective, as well as from a more rudimentary administrative law angle.
