The medical devices industry, already one of the most heavily regulated industries in the U.S., is confronting yet another complex rule – Section 1502 of the Dodd-Frank Act, which requires SEC-listed companies to disclose the use of conflict minerals in their products. As companies gear up to meet the first compliance-reporting deadline in May 2014, here's how the rule is impacting the industry.
New Regulations, New Challenges
Navigating the regulatory landscape in the health care and life sciences industry in general, and the medical devices industry in particular, can be long, cumbersome, and costly. A plethora of FDA and cGMP requirements govern almost every stage of the supply chain, be it manufacturing, assembling, or even delivery of the end product. This makes it increasingly challenging for companies to sustain profits while simultaneously managing compliance.
Meanwhile, operational costs are steadily rising, as companies strive to be competitive by offering higher value products at lower prices, as demanded by their major customers.
Against this backdrop, the conflict minerals rule introduces a series of new complexities. Companies are required to trace the source of conflict minerals down an intricate chain of suppliers, distributors, and smelters far removed from them – a task that can be demanding even for the most vigilant and socially responsible companies.
Exempting oneself from compliance is not a viable option, as 3TG metals (tantalum, tin, tungsten, and gold) are used in just about every major medical device. Tantalum, for instance, is integral to hearing aids, pacemakers, suture clips, skull plates, surgical instruments, prosthetic devices, and more. Finding a suitable alternative will not be easy.