Non-medical companies filling medical equipment voids

Blog Post

Necessity breeds innovation. While faced with a worldwide shortage of medical equipment and personal protective equipment (PPE), many business owners are implementing drastic changes to their operations to step up and help fill the gaps.

A shortage of surgical masks inspired many manufacturers, including luxury fashion houses Prada, Balenciaga, and Yves Saint Laurent, sportswear manufacturer FitUSA Manufacturing, Japanese TV producer Sharp, and Washington state furniture maker Kaas Tailored to change gears and begin production of surgical masks.

Cleveland liquor makers Western Reserve Distillers and Cleveland Whiskey are contributing to the shortages by converting their facilities to produce hand sanitizer. In Chicago, CH Distillery announced it would begin making Malört brand hand sanitizer for donation to local hospitals and clinics. These conversions followed luxury goods conglomerate LVMH’s decision to halt production of perfume and begin production of hand sanitizer in response to France’s rapid depletion of sanitizers.

Several auto companies are in the midst of collaboration with ventilator and respirator manufacturers to convert auto plants into ventilator and respirator manufacturing sites. Currently, Ford is working with 3M, General Electric, and labor union UAW to expedite production of respirators and ventilators. Similarly, General Motors is partnering with Ventec Life Systems to advance production of medical devices in hopes of saving more lives during this pandemic.

These, among many other factory conversions, are supplementing a grave shortage of life-saving medical equipment while keeping factories running that would otherwise be temporarily closed if classified as “non-essential” businesses.

Legal considerations

While these factory conversions and collaborations are noble and provide work to employees that may be otherwise unemployed, business owners must be vigilant and cognizant of various legal implications when venturing outside their typical field of business.

With respect to intellectual property, it is critical that business owners do their research to ensure they are not infringing technology subject to patent protection. Intellectual property laws are not relaxed in times of crisis or public health emergency. Ventec Life Systems, the company General Motors is partnering with to manufacture medical devices, owns a patent covering a valve used in ventilators to control the flow of patient-exhaled gases. Similarly, GE owns over 100 patents related to ventilator technology. These are just a few examples of patented technology implicated by the coronavirus pandemic.

While utility patent infringement may be the most obvious concern related to intellectual property, businesses should take precautions to avoid using a brand name protected by trademark law and steer clear of unintentionally copying designs or packaging protected by trade dress, design patents, or copyrights. For example, Prestige Ameritech, LTD., a manufacturer of disposable medical devices including masks, owns several utility and design patents covering medical masks and shields. Further, Prestige is currently battling trademark infringement related to the unauthorized use of their trademarks in association with surgical masks and N95 respirators.

In many cases, a joint venture may be the most cost-effective and efficient course of action when considering manufacturing goods in the medical field. A joint venture affords the opportunity to share know-how, access and utilize information protected by intellectual property law, including trade secrets, and is financially superior to litigating a patent infringement lawsuit. In other situations, a licensing agreement may by sufficient to address intellectual property concerns.

Another critical consideration when manufacturing medical equipment is ensuring compliance with FDA policies and procedures. FDA has issued several temporary policies and guidances addressing public health concerns raised by the coronavirus pandemic, intended to increase availability of PPEs and drug-products by easing the regulatory burden on manufacturers. In view of significant supply disruptions and increased demand for alcohol-based hand sanitizers, FDA has issued a Temporary Policy for Preparation of Certain Alcohol-Based Hand Sanitizer Products During the Public Health Emergency (COVID-19). Pursuant to this policy, the agency does not intend to take action[1] against manufacturing firms that prepare alcohol-based hand sanitizers, provided that they adhere to certain requirements. Notably, firms must register their facility and list its products in the FDA Drug Registration and Listing System (DRLS). Additionally, the hand sanitizer product must be manufactured using only certain United States Pharmacopoeia (USP) grade ingredients, in certain required concentrations, including alcohol (ethanol) (80%, volume/volume (v/v)) or Isopropyl Alcohol (75%, v/v), and use an accurate measure of analysis to verify the alcohol content before any batch is released for distribution. The hand sanitizer must also be prepared under sanitary conditions with equipment that is well maintained and fit for this purpose, and must be labeled consistent with one of four exemplary labels provided in the guidance.

The FDA has also taken significant action to help increase the availability of ventilators and accessories, as well as other respiratory devices, during the COVID-19 pandemic to support patients with respiratory failure or difficulty breathing. In its Enforcement Policy for Ventilators and Accessories and Other Respiratory Devices During the Coronavirus Disease 2019 (COVID-19) Public Health Emergency, FDA expressed its intention to exercise enforcement discretion for certain modifications to these FDA-cleared devices, such as modifications to cleared indications, claims, or functionality which would ordinarily trigger a new FDA premarket review. The guidance also helps manufacturers ramp up their manufacturing by adding production lines or alternative sites, for instance, using non-medical device manufacturers such as automobile manufacturers, to start manufacturing ventilator parts. Manufacturers, whether foreign or domestic, are encouraged to talk to FDA about pursuing an emergency use authorization (EUA), which would allow them to distribute their ventilators in the United States. The FDA encourages these manufacturers to specifically track and record any changes implemented to existing manufacturing equipment when converting over to manufacture non-FDA cleared ventilator components. The guidance also encourages the use of specific labels that inform end users on any distinction in functionality between the comparable FDA cleared devices and those that are not cleared.

FDA also provides guidance to hospitals and health care professionals for the use of ventilators intended for other environments. For example, the guidance notes hospitals that could repurpose ventilators normally used for transporting patients in an ambulance into the hospital setting for long-term use. On March 2, the FDA granted an Emergency Use Authorization to allow National Institute for Occupational Safety and Health (NIOSH)-approved respirators typically used in industrial settings to be used in health care settings.

If you see an opportunity for your business to shift operations to contribute to the deficiencies of medical equipment and PPE, we encourage you to contact a member of the McDonald Hopkins team to assist you with that process.

[1] Specifically, FDA does not intend to take action against firms, for the duration of the public health emergency declared by the Secretary of HHS on January 31, 2020, for violations of sections 501(a)(2)(B), 502(f)(1), 505, or 582 of the FD&C Act (21 U.S.C. §§ 351(a)(2)(B), 352(f)(1), 355, and 360eee-1).

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