The world of offshore outsourcing

By Nelson Rego, CDT

For more on this topic, go to www.dentaleconomics.com and search using the following key words: restorations, offshore outsourcing, dental labs, disclosure, Nelson Rego, CDT.

Imported dental restorations (and those manufactured domestically) are considered medical devices. Finished and unfinished restorations that are imported must meet U.S. Food and Drug Administration requirements. This includes registration of establishment, listing of devices, manufacturing in accordance with the quality system regulation, medical device reporting of adverse events, and Premarket Notification 510(k) or Premarket Approval, if applicable. Foreign laboratories, like domestic laboratories, are required to follow good manufacturing practices and quality systems.

U.S. Customs and Border Protection, the governmental agency tasked with inspecting goods imported into the United States, cannot scrutinize the contents of every shipment reaching our shores. While companies importing goods into the U.S. are required to meet the requirements, compliance isn’t 100% and safety can become a concern. Examples of things going wrong include cases of adulterated toothpaste, lead in an Ohio woman’s restoration, and lead found in children’s toys.

The American Dental Association determined that the lead found in a dental restoration did not pose a significant health risk to the patient. The FDA can inspect foreign and domestic laboratories to ensure restorations are meeting mandated requirements.

Importers and relabelers of dental products and restorations must disclose the point of origin (i.e., where they were manufactured) if done out of the country. So you should know if the laboratory you are using is outsourcing all or part of the work to an offshore laboratory. Ironically, 20% of respondents to a recent ADA survey said they did not know if their laboratory outsourced internationally.

In addition to the federal law, 10 states have legislation or administrative rule changes in the works to require disclosure on point of origin and materials. These states are Alabama, Minnesota, New York, Pennsylvania, New Jersey, Maine, Kansas, North Carolina, Ohio, and Texas.

What the federal law doesn’t mandate is material disclosure. Only South Carolina and Florida require material disclosure to dentists; however, other states have legislation or administrative rules pending to add the requirement.

The National Association of Dental Laboratories and ADA have supported material disclosure to dentists.

In addition, according to a 2009 survey by the NADL and National Board for Certification in Dental Laboratory Technology, 45% of dental laboratory owners and certified dental technicians think dentists and patients should be made aware of what materials were used to manufacture their restorations and where the restorations were manufactured.

Nearly 45% of respondents to a 2008 ADA survey released recently said their patients requested material content information for a dental prosthesis or inquired about the materials that comprise a prosthesis.

Since 2004, the NADL has been meeting with the FDA and other federal representatives while testifying before Congressional staffers and dental organizations, as well as conducting their research and listening to members to find out what direction to take in regard to offshore outsourcing.

The association has no official policy either for or against using offshore dental laboratories; however, it has made seven recommendations to the FDA about what should happen next. These seven recommendations include:

1. FDA interpretation of qualifying to place a product on the market related to laboratory work should include a reference to the CDT designation. In this sense, the best practice would be to have one CDT in each laboratory. This is in line with NADL’s model bill for state legislation.

2. The FDA should remove the exemption of U.S. dentists from having to comply with quality system/good manufacturing process (QS/GMP) regulations, which include labeling and disclosure. There are U.S. dentists and dental schools that are directly purchasing dental laboratory work from foreign dental laboratories. There is no current requirement for these foreign dental labs to comply with the same requirements that a U.S. dental laboratory must in the same scenario. This scenario leaves a void in transparency and traceability for product recalls.

3. The FDA should grant approval of the Dental Appliance Manufacturers Audit Scheme (DAMAS) to be an approved third-party verification/inspection mechanism as it relates to FDA inspection. This would allow DAMAS-accredited dental laboratories to be exempt from FDA inspection.

4. The FDA should review the voluntary material content disclosure program for dental devices, Identalloy and IdentCeram, for compliance for labeling.

5. The FDA should consider requiring all dental laboratories – foreign and domestic – to register either with the FDA or encourage such requirement of registration through appropriate agencies at the individual state level in state dental practice acts. These acts generally would be with a state department of health.

6. The point of origin of manufacture of where a dental restoration was created, and the material content, should be accessible to the patient. It is a consumer’s right to know where a dental device was manufactured and what materials are in his or her mouth.

7. Dentists should be required to include the registration number of their contracting dental laboratory on the prescription that is kept in a patient’s record. Such registration information could be the FDA registration number or state specific registration number (in those states where required) for the dental laboratory.

Think answers

Ultimately, it’s up to you whether you prescribe directly to a foreign dental laboratory, use a domestic laboratory that outsources offshore, or place only restorations that are made in the U.S. No matter the decision, the ADA recommends asking the laboratories you use several questions, such as:

• Do you outsource any part of my work to other laboratories?
• If yes, specifically what work of mine is outsourced?
• Do you outsource any part of my work to a foreign laboratory?
• If yes, will you provide me with the FDA registration number of the foreign laboratory doing my work?
• Will you also provide me with your registration number with the FDA as an initial importer, repackager, or relabeler?
• Have you actually visited the foreign laboratory to which you are outsourcing my work?
• Will you provide me with documentation that the materials used in the work you outsource are FDA-approved and compliant with ANSI and ISO standards?
• Will you fill my detailed laboratory prescription as written, regardless of where my work is fabricated?
• Will you provide me with a document detailing the materials used in my work?
• Will you provide me with a written indemnification and assume all liability arising from claims for injuries allegedly caused by dental restorations coming from your lab that may contain adulterated or toxic materials?

The answers to these questions will prove enlightening, no matter what laboratory you use and where your restorations are manufactured.

The world market for dental laboratories is projected to exceed $14.5 billion by the year 2015, according to Global Industry Analysts. The majority of that market centers in the U.S.

If you decide that your piece of the pie is going to go directly to an offshore dental laboratory, the NADL recommends you complete due diligence on selection of the laboratory and monitoring of activities, processes, and material controls of any foreign partner.

You need to be able to reassure patients of the type of documentation you can provide about materials and share your monitoring activities of foreign outsource partners. This includes if you inspect and visit the facility on a regular basis.

So what’s the takeaway here? Health-care providers need to educate themselves about the domestic and offshore opportunities available. Providers need to make decisions not just on price but also on quality, convenience, customer service, remakes, communication options, and relationships.

Whether or not dentists go the offshore route, being more aware of the global marketplace will help them to better meet patients’ needs, promote the best interests of dentistry, and ensure that businesses stay competitive and successful.

Nelson Rego, CDT, owns and operates Smile Designs by Rego, a progressive dental laboratory that specializes in ceramics in Santa Fe Springs, Calif. Rego is an Accredited member of the American Academy of Cosmetic Dentistry. Reach him by e-mail at [email protected].