Top three issues of SB 605: Medical Device Right to Repair Act
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For the 2021-2022 Legislative Session, Senator Susan Eggman (D-Stockton) introduced SB 605, the Medical Device Right to Repair Act, which would allow health care facilities to contract out repairs for medical devices to third parties other than those under a contractual obligation with the manufacturers. While this policy proposal is problematic for various reasons, CLS chose to focus on three specific issues which showcase the serious implications of the bill: patient safety, liability, and intellectual property rights.
Patient Safety. Medical technology servicing and repair by original equipment manufacturers (OEM) is highly regulated by the FDA. Servicing of these devices is sensitive as it relates to patient safety, device system cybersecurity, and patient privacy issues. Medical technology manufacturers maintain their own devices or provide repair information to authorized repair providers for device servicing under contract. Medical technology companies are generally supportive of voluntary contractual agreements with third-party servicers and repair entities, provided they follow consistent quality, safety, and regulatory requirements.
A perfect example of why oversight and regulations are necessary is Tenacore LLC. Tenacore is a California-based independent repair provider (IRP) who had access to the approved parts and materials needed to properly repair these infusion pumps. Instead, they did what independent repair providers frequently do, and second-guessed the FDA, using cheap substitute parts resulting in a dangerous malfunction.
This is precisely what the use of the authorized repair provider (ARP) system is intended to prevent. OEMs contractually obligate IRPs to follow FDA regulations and follow specific instructions for repair, including use of approved methods and parts. SB 605 would create an environment where OEMs have no ability to require contracts anymore, effectively eliminating the only regulated entity from the repair equation. IRPs mistakenly believe they can safely operate outside of the FDA’s oversight, but as example above shows, it puts patients at serious risk.
Liability. SB 605 could inadvertently change the rules and turn hospitals into providers of medical equipment, subjecting them to strict products liability. Existing California law states that hospitals are providers of medical services, not providers of medical equipment. Unlike retailers, hospitals are not subject to strict products liability unlike their manufacturer/distributor suppliers. But as facilities and IRPs push further and further to eliminate OEM involvement and move repair work “in-house” they run the risk of blurring the lines between repair and remanufacturing. Moving all repairs “in-house” will likely turn hospitals into “providers of medical equipment” subjecting them to strict products liability – a risk that MICRA, and other liability protections, like insurance policies, may not cover, potentially exposing them to billions of dollars in new liability.
Intellectual Property Rights. SB 605 would eviscerate intellectual property protections and encourage “open sourcing” of proprietary documentation—including documents related to cybersecurity. Medical device companies invest billions in research and development to bring to market the devices and equipment our health care system benefits from today.
Section 11611.5 of the bill states that manufacturers must disclose information only “as necessary to provide documentation, parts, tools, and training courses and materials on fair and reasonable terms.” Such disclosure is simply inappropriate from an intellectual property standpoint. In many cases, a trade secret would be required to provide documentation, service access methods, and training materials thus placing it in conflict with the trade secret protection. Some process, methods, and designs are wholly proprietary and by allowing them to be disclosed in such manner will encourage piracy and discourage investment in these products in the future. Additionally, SB 605 would create a cascade of wasteful litigation over intellectual property with no end in sight.
Fortunately, because of CLS’s efforts, SB 605 was prevented from advancing further along the legislative process. The bill was held in the Senate Committee on Appropriations and cannot move forward for the remainder of the legislative session; however, CLS could not have achieved this without the help of its membership. The combined advocacy efforts proved effective and successful, and places CLS in a better position to defeat this bill again should it be reintroduced next year.