In Vitro Diagnostic Medical Devices: Tasks and Liabilities of the Swiss Authorised Representative

Foreign manufacturers of in vitro diagnostic devices medical devices must designate an authorised representative (CH-REP) to place their products on the Swiss market. To act on the manufacturer's behalf, the representative must perform various tasks and duties, including acting as the contact person for Swiss authorities and being jointly and severally liable with the manufacturer for damages caused by defective products. The following article is an overview of the tasks, duties and liabilities of the Swiss authorised representative of in vitro diagnostic medical devices.

A Swiss authorised representative is required to place foreign in vitro diagnostic medical devices on the market in Switzerland. This requirement applies to all medical devices of manufacturers not established in Switzerland and regardless of whether the manufacturer is domiciled in the EU or in a third country such as the US, China, or Japan. A Swiss authorised representative is also required if an authorised representative is already established in the EU (EU-REP). For the implementation of this obligation, transitional periods differentiated according to risk classes apply until 31 July 2023 at the latest.

If the products are imported directly by end users, no authorised representative is required. In contrast to EU law, in Switzerland healthcare professionals are permitted to import in vitro diagnostic products from abroad for their own use. The products must be used within the same organisation and may not be sold to third parties.

Tasks and duties of an authorised representative

The authorised representative is the agent of the foreign manufacturer in dealings with the Swiss authorities. The representative is "responsible for the formal and safety-related matters" of foreign in vitro diagnostic medical devices that are placed on the Swiss market. In accordance with this obligation, the authorised representative must have its registered office in Switzerland and can be a sole enterprise or a one-man corporation. The authorised representative must have sufficient financial coverage for damages caused by defective products. It should be noted that the possibility of insurance coverage is limited (as discussed in detail below).

The authorised representative may or may not be the importer or distributor of the products in Switzerland and thus may not necessarily be involved in the flow of goods. The authorised representative, however, must register with the competent authority, Swissmedic, and will be assigned a unique identification number (CHRN). Products placed on the Swiss market must be labeled with the name and address of the Swiss authorised representative.

To fulfill legal duties, the authorised representative must have the necessary technical expertise. This requires that the representative assign at least one person with sufficient technical knowledge to be permanently and continuously at its disposal. This person is also referred to as the "Person for Regulatory Compliance" (PRRC) who does not necessarily have to be a resident in Switzerland. Alternatively, if such a person is not available within the organisation, the authorised representative may assign this task to a third party. Swissmedic also accepts employees of the foreign manufacturer to fulfill PRRC duties for the Swiss authorised representative. It should be noted, however, that EU-notified bodies may recognise a conflict of interest in situations where the same person acts as the PRRC for the manufacturer and the authorised representative.

The tasks and duties of the authorised representative are to be set out in a written contract, also referred to as a Mandate Agreement. This agreement must specify the reporting duties, the obligation to maintain confidentiality, and the procedure to be followed in the event of complaints or product defects.

Reduction of liability risks and risk management

The authorised representative is jointly and severally liable with the manufacturer. The legislator assumed that the authorised representative should always be held liable if the manufacturer is held liable. This liability is not limited to product defects, but also includes consequential damage caused by the defect (e.g. if a patient suffers permanent bodily harm as a result of a defective product).

The liability is not limited to a breach of duty of care that is attributable to the authorised representative. Like the manufacturer, the authorised representative is liable for all products that have been placed on the market in Switzerland regardless of whether they were placed on the market by the authorised representative or by an authorised importer or dealer. The authorised representative is also liable for products that were imported without the representative's knowledge. Parallel trade, therefore, increases the liability risk of authorised representatives. Depending on the terms of the Mandate Agreement, the authorised representative may have recourse against the manufacturer if the representative did not cause the damage.

The possibility of insuring the activities of the authorised representative in Switzerland are limited. The standard policies for commercial liability insurance in Switzerland exclude the activities of the authorised representative. In contrast, EU-liability insurances provide the possibility to insure the activity of an authorised representative, but only for activities within the EU. It is therefore unlikely that the activities of a Swiss authorised representative can be included in the EU-manufacturer's commercial liability insurance.

In view of latent liability risks, the contractual arrangement between the manufacturer and the authorised representative is of vital importance. Depending on the terms of the mandate agreement, the authorised representative can request reimbursement from the manufacturer or even intervention in the lawsuit. Since the representative's liability is strict, the authorised representative must have recourse against the manufacturer regardless of fault. When structuring the right of recourse, care must be taken to ensure that the recourse is in fact enforceable.

Legal protection insurance can also reduce the legal risks of the authorised representative. The high costs of a legal dispute make it difficult to seek recourse with the party causing the damage. Particularly in the case of smaller amounts in disputes, it is often not worthwhile to take legal action. However, even with legal protection insurance, a careful evaluation must be carried out and it must be checked whether the recourse to the party causing the damage is fully insured also for the Swiss authorised representative.

What should be considered when designating an authorised representative in Switzerland?

1. Consider the distribution channel: Does the distribution channel require a Swiss authorised representative at all? A Swiss authorised representative is not required in all situations. If the Swiss market is served from abroad and the products are not sold or otherwise placed on the market in Switzerland, Swiss law does not require that the manufacturer designate an authorised representative in Switzerland. This is particularly the case when healthcare professionals import the products for their own use. This applies also to the purchase departments of hospitals, medicinal laboratories, or outpatient clinics.
2. Conclude a Mandate Agreement and define the tasks and duties of the authorised representative contractually. Swissmedic periodically inspects the terms of mandate agreements.
3. Address the liability and the right of recourse in the Mandate Agreement. In this context, the option of including the liability of the Swiss authorised representative within the framework of the commercial liability insurance of the foreign manufacturer should also be evaluated.

For more information on the role of a representative of in vitro medical products in Switzerland and associated liability issues, contact your CMS client partner or local CMS experts: