Invacare 2012 Annual Report Download - page 26

Additionally, the company is required to obtain pre-marketing clearances to market modifications to the
company’s existing products or market its existing products for new indications. The FDA requires device
manufacturers themselves to make and document a determination as to whether or not a modification requires a
new clearance; however, the FDA can review and disagree with a manufacturer’s decision. The company has
applied for, and received, a number of such clearances in the past. The company may not be successful in
receiving clearances in the future or the FDA may not agree with the company’s decisions not to seek clearances
for any particular device modification. The FDA may require a clearance for any past or future modification or a
new indication for the company’s existing products. Such submissions may require the submission of additional
data and may be time consuming and costly, and ultimately may not be cleared by the FDA.
If the FDA requires the company to obtain pre-marketing clearances for any modification to a previously
cleared device, the company may be required to cease manufacturing and marketing the modified device or to
recall the modified device until the company obtains FDA clearance and the company may be subject to
significant regulatory fines or penalties. In addition, the FDA may not clear these submissions in a timely
manner, if at all. The FDA also may change its policies, adopt additional regulations or revise existing
regulations, each of which could prevent or delay pre-market clearance of the company’s devices, or could
impact the company’s ability to market a device that was previously cleared. Any of the foregoing could
adversely affect the company’s business.
The company’s failure to comply with the regulatory requirements of the FDA and other applicable
U.S. regulatory requirements may subject the company to administrative or judicially imposed sanctions. These
sanctions include warning letters, civil penalties, criminal penalties, injunctions, consent decrees, product seizure
or detention, product recalls and total or partial suspension of production.
As part of its regulatory function, the FDA routinely inspects the sites of medical device companies, and in
2010 and 2011, the FDA inspected certain of the company’s facilities. In December 2012, the company and the
FDA agreed to a consent decree of injunction affecting the company’s corporate facility and its Taylor Street
manufacturing facility in Elyria, Ohio. See the previous Risk Factor regarding the FDA consent decree. In
addition, in December 2010, the company received a warning letter from the FDA related to quality system
processes and procedures at the company’s Sanford, Florida facility. The company is taking the issues related to
the warning letter very seriously and has added resources to ensure it is addressing all of the FDA’s concerns in a
timely manner. However, the results of regulatory claims, proceedings, investigations, or litigation are difficult to
predict. An unfavorable resolution or outcome of the FDA warning letter, or any other matter that may arise out
of any routine FDA inspection of the company’s sites, could materially and adversely affect the company’s
business, financial condition and results of operations.
In many of the foreign countries in which the company markets its products, the company is subject to
extensive medical device regulations that are similar to those of the FDA, including those in Europe. The
regulation of the company’s products in Europe falls primarily within the European Economic Area, which
consists of the 27 member states of the European Union, as well as Iceland, Liechtenstein and Norway. Only
medical devices that comply with certain conformity requirements of the Medical Device Directive are allowed
to be marketed within the European Economic Area. In addition, the national health or social security
organizations of certain foreign countries, including those outside Europe, require the company’s products to be
qualified before they can be marketed in those countries. Failure to receive or delays in the receipt of, relevant
foreign qualifications in the European Economic Area or other foreign countries could have a material adverse
effect on the company’s business.
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