Europe's Evolving Environmental Regulatory Landscape

On the surface, industry has much to be wary of as the discussions on new or revised EU environmental legislation pick up pace. But as consultant Andrew Vaughan tells Ashley Yeo, the atmosphere between regulator and industry has been more positive of late.

The recast of the European Union’s Restriction on Hazardous Substances Directive (2002/95/EC) is currently under review by the EU legislative institutions. A European Commission proposal, issued on 3 December 2008, has reached the stage where the European Parliament is passing its comments.

The parliament’s rapporteur is UK MEP Jill Evans (Plaid Cymru/The Greens/EFA), who filed her draft report on 22 October 2009. Prior to this, the medtech industry had communicated a number of concerns to Ms Evans regarding the commission proposal. “It is encouraging that she took most of industry’s points on board. But in a few key areas, she was not convinced by the arguments,” says independent regulatory consultant Andrew Vaughan.

Firstly, industry was concerned about the proposed inclusion of new substances on the banned list. The list already includes six substances (lead, cadmium, mercury, hexavalent chromium, polybrominated biphenyls (PBB) and polybrominated diphenyl ethers (PBDE)).

The second area of concern was over exemptions in the RoHS Directive. The rapporteur supported the commission’s original proposal for a “sunset clause” for exemptions after four years, the idea being that all exemptions would need to be subject to regular rejustification.

But for Mr Vaughan, who specialises in medical technology environmental issues and who does work on behalf of EU medtech industry association Eucomed and the Association of British Healthcare Industries in the UK, this is tantamount to making work where it is not needed. “For some substances, you will never need to end the exemption, for example, lead in X-rays. So why the need to subject them to a renewal application?” he asks.

The rationale, as the European Parliament sees it, seems to be that, unless pressure is applied to manufacturers to move away from using hazardous materials, they will continue to use them for as long as they can. But for certain substances, says Mr Vaughan, “there will never be a substitute”. The proposal as it stands, therefore, “represents an administrative overhead we could do without”.

The rapporteur also wants to remove the proposed socio-economic justification for exemptions. Under Amendment 38, the draft report calls for socio-economic considerations to be used only in decisions about the duration of an exemption (ie not to justify an exemption in the first place).

But socio-economic exemptions tend to concern medical technology products much of the time. “We are about making people better, so this is an issue for us,” says Mr Vaughan. The proposed rule does not sit at all well with medical technology manufacturers, and industry is objecting, he adds.

Indeed, the whole exemptions debate threatens to stifle medical technology R&D. “If a medtech company cannot be sure of getting an exemption for a product under RoHS, it may well decide not to invest in research to develop the product in the first place.”

Such a scenario is surely to be avoided. What is certain is that the method of managing exemptions, as currently proposed, will make life difficult for devices companies, says Mr Vaughan.

Thirdly, Ms Evans’s report expands the scope of RoHS compliance to include consumables and accessories. This is another fairly major concern for the industry, with potentially all sorts of unwanted implications.

For instance, infusion pumps need infusion sets (the complete tubing system that connects the pump to the user and includes a subcutaneous cannula, adhesive mount, quick-disconnect apparatus and a pump cartridge connector). If the set is classified as consumable or an accessory, it will need to be RoHS-compliant.

But the issue here is that some devices use generic items that are not part of the product. “We don’t want those types of product having to become RoHS-compliant,” says Mr Vaughan. “It would take the scope of the legislation far beyond what was intended.”

Biggest impact for industry

The RoHS Directive is the piece of environmental legislation that potentially has the greatest impact on the devices industry. “RoHS will give us most grief, but we were expecting it,” says Mr Vaughan. “As an industry, we were exempt from the first wave, and it was only a matter of time before we got ‘sucked into it’.”

Nevertheless, although industry is intent on reversing some of what it sees as the more harmful elements of the recast, it has adopted a philosophical view about the impact of RoHS. This is encapsulated in Mr Vaughan’s view that: “Industry is not opposed, as long as it does not stop us making products.”

Benefits of RoHS compliance questioned

Why medical devices will need to become RoHS-compliant at all still perplexes the large body of industry observers who see any benefit as only minimal.

The reason for the inclusion of medical devices is likely to be merely political. Devices are highly visible features of everyday life and, says Mr Vaughan, the powers that be simply take the view that there is no reason for devices not to be compliant.

Medical devices are different and need a different approach, however, Mr Vaughan stresses – a message he finds he repeats in public fora fairly often. The point here is that hazardous product legislation that is drawn up to suit, say, consumer electronics, does not necessarily suit life-saving medical technology. One size, in this case, does not fit all.

Future legislative path

The legislation now passes to the parliament’s environmental committee (ENVI), which will take a position. From there, it will go into plenary session debate in June, before going back to the Council of Ministers, where industry is preparing to make further representations. It then returns to the parliament for the second reading, after which it is published.

The original aim was to have the directive available at the end of this year, but timings have slipped somewhat.

For the industry, the key issues revolve around the way the legislation seeks to deal with exemptions and the confusion over whether accessories are subject to RoHS legislation. “Solving these two issues would meet 70-80% of our concerns,” says Mr Vaughan.

Environment clause in MDD?

A related issue is how to get environmental considerations covered by the Medical Devices Directive (93/42/EC). “But that is a tougher call, and involves a lot of politics,” says Mr Vaughan. At the commission, medical device issues are now under the purview of DG SANCO (ie the department responsible for health and consumer policy) and DG Environment would probably not want to relinquish control of environmental matters to DG SANCO.

But the quality of the debate that the industry has been having over these issues with the EU regulators has shown that the polarised position-taking of yesteryear has subsided to a considerable extent.

“In practice, the commission – an evidence-based institution – is very open to suggestions from industry, provided we can back them up with evidence. This is understandable, as the EU doesn’t want poor legislation any more than we do,” Mr Vaughan says. “It is being recognised that we are not a ‘big bad industry’, and the level of maturity all round is on the rise.”

While relations with the commission are “constructive”, they can be challenging with the parliament at times, especially the Greens, although there has been an improvement in communications with MEPs of late.

Industry, however, gains plaudits from Mr Vaughan. “I’ve been pleasantly surprised about how constructive industry has been over all these issues, especially as they are ‘caught between a rock and a hard place’ – shareholders and employees.”

This maturity of approach, coupled with the quality of the resulting legislation, has meant that EU law is both admired and sometimes emulated internationally. The US state of California, for example, has more or less adopted the EU’s REACH regulation (1907/2006) on chemicals as it stands. The view is basically: “If the EU does it, it has to be OK,” says Mr Vaughan.

It was thought at one point that the US was moving towards an RoHS-equivalent. And it is known that China’s counterpart legislation was enacted simply to match the EU’s approach. “A lot of countries look to Europe as an example, taking the view that there is no need to ‘reinvent the wheel’.”

WEEE update

Many US states are also looking at adopting legislation that is similar to the EU’s directive on Waste Electrical and Electronic Equipment (2002/96/EC).

Like the RoHS, the WEEE is also undergoing its five-year routine review at present, but the process has been a little delayed. The parliament rapporteur, Karl-Heinz Florenz (CDU), has now, however, released his draft report.

The WEEE Directive review has less contentious implications for the EU medtech industry. This is because, firstly, medtech manufacturers are already affected by the directive, and secondly, they do very little business with the consumer sector. Most of the industry’s business is with hospitals and general practitioners.

The commission has proposed to implement waste equipment collection and recovery rates, but the industry views this more as an issue for recyclers than for manufacturers.

For these reasons, “the industry is fairly relaxed about the WEEE Directive. At present, there is little to be worried about”, says Mr Vaughan. There are concerns in certain quarters, however, about waste electronic equipment being shipped to China and parts of Africa for recycling, and the creation of more lead pollution in the process.

Packaging directive

As far as the Packaging and Packaging Waste Directive (94/62/EC) is concerned, the major issue for industry at present is sterile barrier systems. Industry has always argued that these systems are part of the product – not part of the packaging – because their purpose is to keep the product sterile.

But different EU member states have interpreted the directive in different ways. Sweden, for example, also takes the view that sterile barriers are not packaging. The situation creates confusion.

While the commission has been slow to address a problem that has been in existence for some considerable time, matters look set to change for the better soon.

“We now expect a decision within two to three months,” says Mr Vaughan. The commission has asked member states how they regulate this field. It looks at present as if sterile barrier systems are going to be classified as packaging.

“If that came to pass, I would have a problem with it. But on the plus side, industry will at least gain certainty, which is valuable. Regulatory decisions that are open to interpretation leave manufacturers with no solid foundations on which to base strategies.”

This is why the medical technology industry tends to favour the regulation over the directive as a regulatory tool.

“A regulation provides manufacturers with consistency. Ultimately, we don’t want any law that makes life difficult. Thus, industry is usually happier when an area is covered by a regulation rather than a directive. There is less scope for questions and different interpretations.”

Growing body of environmental legislation

Ever-increasing volumes of environmental legislation and initiatives can be expected in the coming years.

Green public procurement (GPP) is a recent initiative that is creeping up the agenda as the supply of “greener” products becomes more important. EU governments are responsible for 16% of total procurement in the EU member states, and they have realised that they can use that power to make suppliers think of sustainability. The commission has a list of product groups and has assembled a “tool-kit”, which government purchasers can use to select products that are environmentally responsible.

Tool-kits are already complete and available for ten product categories, in areas including photocopying, office IT, construction and transport.

An eleventh category – equipment to be used in the health sector – has been appended recently. Documents related to the category “will be published in due course”, says the commission’s website.

The commission has asked industry to develop a single set of criteria for these products. Industry’s reaction has been to point out that this is not possible for a manufacturing output range that spans products as diverse as tongue depressors and positron emission tomography-computed tomography installations.

The situation is that industry can devise a solution and, if it does not, the commission will devise its own set of criteria, and this will probably not be to the industry’s liking. “It is good from the point of view of giving industry the initiative, but devising criteria to satisfy all is not to be taken lightly, as there are likely to be a number of legislative implications to consider,” says Mr Vaughan.

Green agenda growing

Mr Vaughan believes that, ideally, it would be possible to link GPP with the EU’s eco-label initiative, a voluntary scheme that started in 1992 as a way of encouraging businesses to develop and market products that meet high-performance and environmental quality criteria.

Alongside this, EU standardisation committees CEN and Cenelec also seek to promote products that are more environmentally responsible. Elsewhere, industry is coming under pressure to come up with green product criteria for use in the Energy-using Products (EuP) Directive (2005/32/EC).

“We like to think that being green does not need to cost you; but realistically, there will be an as-yet undefined cost for companies that will apply across the board. Visionary companies may even seize the initiative and secure a competitive advantage in the short term,” says Mr Vaughan.

The bottom line is that industry can either take the bull by the horns and have some control or it can let the commission set all the rules. “If we come up with a decent proposal, we think the commission will go for it.”

Life on the environmental side will get very interesting in the next five to ten years, Mr Vaughan believes. So far, the RoHS, WEEE and EuP Directives mainly affect domestic appliances. Indeed, they represent 90-95% of the issue. But the effect on the devices industry is growing inexorably.

“In my opinion, a key step for the medtech sector would be to get environmental legislation introduced into the MDD. This would give the industry more legislative coherence. There has been much opposition to this idea in the past, but there is now a dawning realisation in some quarters that this might be the best way to go,” says Mr Vaughan. “I advocate that industry looks at the opportunities for this and does what it can to get ahead of the game. The one certainty is that increasing amounts of environmental legislation are going to come.”

Ashley Yeo is a principal analyst at Informa Business Information, the publisher of RAJ Devices.