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In June 1999, the Food and Drug Administration (FDA) initiated an assessment of preparations by manufacturers of essential medical supplies to address the Year 2000 date problem and to assure the continued availability after January 1, 2000, of products vital to the delivery of healthcare. The FDA sought information on the status of preparations by manufacturers of essential medical supplies to assure that all of their mission-critical systems, such as automated manufacturing systems and business management systems, would continue to function through the transition into the Year 2000. This information was needed to provide assurance of the continued availability of these supplies, including consumable and disposable devices, and to determine whether action was needed by the FDA to address any vulnerable segments of this market. This report describes the process used to conduct this assessment and the results and conclusions drawn.

Many medical devices use computer systems and software applications, including embedded microprocessors. On or around January 1, 2000, these medical devices may experience problems processing dates or date-related data due to their use of two-digit fields to represent the year. This has become known as the "Y2K date problem." In addition to adversely affecting the functioning of some devices, the Y2K problem could also affect computer-controlled design or manufacturing processes, or other systems critical to the production and distribution of essential products that are not themselves computerized. The Y2K Readiness Survey focussed not on the vulnerability of specific computerized products, but rather, on preparations by manufacturers of essential medical supplies to assure uninterrupted business operations.

Through its regulatory oversight, FDA’s Center for Devices and Radiological Health (CDRH) is responsible for helping assure the safety and effectiveness of medical devices and radiation-emitting electronic products in the U.S. CDRH is working with the medical device industry, the healthcare community, and other government agencies to minimize any effect of the Y2K date problem on the functioning of medical devices and the delivery of healthcare.

In order to provide medical device users with important information regarding the Y2K status of products, the Federal Year 2000 Biomedical Equipment Clearinghouse was created. The Clearinghouse contains information or manufacturer web-site links for Y2K non-compliant products and information on specific product models that are Y2K compliant. The Clearinghouse is located on the World Wide Web at http://www.fda.gov/cdrh/yr2000/year2000.html. Other information regarding CDRH activities to address the Y2K date problem is also provided on the CDRH web site.

The survey focussed on those manufacturers that produce essential medical supplies. These were defined as devices that are used and consumed on a recurring basis during the delivery of essential healthcare services and whose immediate availability is critical to the uninterrupted delivery of healthcare and patient welfare.

Devices were identified as essential supplies using the five-tier classification of the Canadian Year 2000 National Clearinghouse for Health (CYNCH) for medical supplies. Those devices found to meet criteria #1 (critical life-support or resuscitation devices - serious harm if unavailable for immediate use) or criteria #2 (devices with significant impact on patients - unavailability does not pose immediate harm to patients but could within hours/days) of the CYNCH classification were designated essential medical supplies. Types of medical devices meeting these criteria were identified by product specialists in the CDRH Office of Device Evaluation and compiled into a draft list of types of essential medical supplies.

This list of essential medical supplies was provided to the Veterans Health Administration of the Department of Veterans Affairs, the American Hospital Association, and the Health Industry Manufacturers Association. These organizations were asked to review the list of essential medical supplies and to provide comments on its accuracy and completeness. Based on the comments and suggestions received, the list was revised.

Manufacturers of essential medical devices were identified from the Medical Device Registration and Listing System, which contains names of medical device manufacturing establishments and the types of devices they produce. From this system, 3,070 manufacturers were identified as producers of one or more types of essential medical supplies.

An assessment of the industry was made in two phases. The first phase consisted of surveying the manufacturers of essential medical supplies to develop an overall picture of readiness. The second phase consisted of an audit program. The audit program was intended to verify the information provided by manufacturers in the written survey responses obtained in the first phase. Both programs were voluntary on the part of those surveyed. However, several steps were taken to obtain a response rate high enough to be representative of the industry.

The Agency designated much of the information related to a particular company gathered under the survey and the audit programs as confidential under Section 4(f) of the Year 2000 Information and Readiness Disclosure Act. However, aggregate data that do not identify individual respondents may be disclosed.

A survey was developed to determine the overall readiness of the industry (Attachment A). The survey was designed to be brief enough to ensure a high completion rate and yet be comprehensive enough to ensure the collection of meaningful information. Question 1 of the survey was developed as the primary question of readiness (i.e., "Has your company developed a comprehensive plan and are you taking the appropriate steps, within your control, to assure that the information technology and automated systems used to produce products and distribute products in the United States will be Y2K compliant and therefore continue to function as intended after December 31, 1999?") Other questions were developed to reinforce and confirm the answer to Question 1.

On June 18, 1999, the survey was distributed to 3,070 medical device manufacturing establishments identified as producing essential medical supplies with a cover letter from the Commissioner of Food and Drugs requesting the voluntary participation of the industry. The survey requested a reply within 15 days following receipt.

FDA contracted for the services of Booz-Allen & Hamilton Inc. to assist with the production and mailing of the survey and to receive and compile written responses from manufacturers. They provided further assistance by following-up incomplete responses and soliciting participation from those high priority firms described below that did not respond to the initial survey request.

Of the 3,070 manufacturers of essential medical supplies, 225 manufacturers of products for which there are three or fewer manufacturers were initially identified (referred to as "few-source manufacturers"). Of the 225 few-source manufacturers, we also identified 57 manufacturers of products for which there is only a single manufacturer (referred to as "single-source manufacturers"). Priority attention has been given to these manufacturers in the audit program and in the evaluation of the criticality of products.

Several actions were taken to communicate with manufacturers in order to maximize the response rate:

• On June 18, 1999, a copy of the survey and cover letter were sent to three medical device trade organizations (Health Industry Manufacturers Association, National Electrical Manufacturers Association, and Medical Device Manufacturers Association) for further dissemination to their membership.

• On July 23, 1999, a reminder notice, with another copy of the survey, was sent to 2,082 domestic and foreign nonrespondants (Attachment B).

The second phase of the assessment program involved the audit program. This was intended to provide a validation of the written survey results through extensive telephone interviews and site visits for a sample of those firms that responded to the survey request. An August 6, 1999 letter from the CDRH Director describing the audit program was sent to these 279 firms (Attachment C).

FDA contracted with the Battelle Memorial Institute to coordinate the audits of manufacturers’ responses. Battelle Memorial Institute subcontracted with Unisys Corporation for the actual conduct of the audits. Information technology experts familiar with the software development processes, Year 2000 assessment, remediation, and contingency planning for manufacturing systems conducted the interviews and site visits. FDA’s contractors interviewed the individuals in the company who were familiar with the company’s Y2K efforts. A structured interview format was used to assure consistency, to verify the survey responses, and to provide further information on the industry’s readiness for the Year 2000 (see Attachment D).

279 manufacturers were initially selected for the audit program. The sampling included all 53 single-source manufacturers (four of the 57 manufacturers originally identified reported that they did not manufacture essential medical supplies), a sampling (109) of few-source manufacturers who responded to the survey, and a random sampling of 117 non-priority firms.

Single-source and few-source manufacturers who indicated on their readiness surveys that they would not be ready for the Year 2000 until after October 31, 1999 were selected for site visits; the remaining single-source and few-source firms were selected for telephone interviews. Non-priority firms selected for audit were randomly subdivided into two subsamples; one for site visits and the other for telephone audits.

If a few-source or single-source manufacturer declined to participate after initial contacts from the contractor, several attempts were then made by FDA staff to encourage voluntary participation. Only 19 firms of the 279 selected for audits declined to participate in the audit process of either an extensive telephone interview (16 firms) or an on-site visit (3 firms).

As of November 5, 1999, a total of 212 of the initial goal of 279 audits (76%) had been completed. Based on the favorable results obtained to date, the delays encountered in scheduling the audits with some firms, and the need to complete the study and announce the results, a decision was made to conclude the audit program as of November 5, 1999 for the purposes of completing this report. FDA will continue to review those single-source or few-source manufacturers that have not responded to the survey or declined to participate in the audits. Follow-up actions will be taken to clarify the Y2K status for any manufacturer whose products are determined to be unique and critical to continued delivery of patient care.

During the telephone and on-site visits, the interviewer assessed the status and completeness of the firms’ activities in the following areas:

1. Project Management – Master Project Plan
2. Inventory Collection Process
3. Assessment Phase
4. Remediation, Repair, Replace, Retire Phase
5. Year 2000 Application Testing
6. Integration Testing
7. Contingency Planning

In each of these areas, the interviewer assigned a rating and an overall impression of the status and completeness of the firms’ activities. These were subjective judgements based on the results of the structured interview and the responses from the company. The interviewers provided to FDA the individual ratings and the overall assessment for each firm assessed. The interviewers also compared information obtained from the interview to the written survey response.

At the conclusion of the telephone interview or site visit by the contractor, the interviewer assigned a rating to each of the areas of preparation and an overall rating to the firm’s Y2K preparation effort. The rating categories listed below were used:

• Green: Item on track, issues known and appropriate actions planned (with Caution: Minor Issues);

• Watch: Potential major issues (no known problems, but there may be trouble lurking);

• Yellow: Critical issue impacting success (trouble identified); and

• Red: Item is behind, out of control, or well over budget (serious difficulty that will likely prohibit success).

The final interview/site visit report was sent to the manufacturer to ensure that there was no misrepresentation of information.

Table 1 – Y2K Readiness Survey Response Information
As of November 5, 1999

Attachment E contains the detailed results of the survey. The survey results summarized in Tables 1 and 2 are also presented in Attachment E, Tables E1, E3, E5.

The initial mailing list was developed from the Medical Device Registration and Listing System. This system is dependent on the industry to provide updated information (e.g., new addresses, change in status of business, change in status of product line). Thus, a small percentage of surveys were returned in the mail. In addition, another small percentage of manufacturers indicated that they do not manufacture essential medical supplies. This was not unexpected, as the product codes used with the Registration and Listing System to identify products were general in nature and not necessarily specific. Another small percentage of surveys could not be analyzed because of missing information or because conflicting information was reported in the survey. These have not been resolved to date and are not included in this analysis.

A high response rate was obtained for few-source manufacturers; 88.2 percent of the firms answered the survey questions or indicated that they do not manufacture essential medical supplies.

A high response rate was also obtained for the single-source manufacturers; 87.5 percent of the firms answered the survey questions or indicated that they do not manufacture essential medical supplies.

Question 1 of the survey was developed as the primary question regarding readiness – "Has your company developed a comprehensive plan and are you taking the appropriate steps, within your control, to assure that the information technology and automated systems used to produce products and distribute products in the United States will be Y2K compliant and therefore continue to function as intended after December 31, 1999?" Table 2 summarizes the response to Question 1.

Overall, 98.3 percent of firms submitting completed surveys indicate that they have comprehensive plans in place to address Year 2000 issues and are taking appropriate steps to assure continued operations. Only nine firms indicate that they have no plan in place and five firms did not respond to this question. The remaining 11 firms described partial plans or activities, but not a comprehensive plan.

96.9 percent of few-source manufacturers and 95.2 percent of single-source manufacturers indicate that they have comprehensive plans in place to address Year 2000 issues and are taking appropriate steps to assure continued operation.

Table 2 - Y2K Readiness Survey Results
As of November 5, 1999

Question 1 also asked when manufacturers planned to be finished with their Y2K program phases. These phases include: awareness and assessment; renovation or development of alternative solutions; testing and validation of renovations, new systems, or alternative sources; implementation of new systems, renovated systems, or alternative solutions; and development of contingency plans. Tables 3 and 4 summarize completion dates for all respondents and for the few-source and single-source manufacturers.

Table 3 – All Manufacturers’ Responses Regarding Completion
of Their Y2K Program
As of November 5, 1999

Of 158 few-source manufacturers with plans, 140 (88.6%) indicated that their Y2K program would be completed, and they would be ready for the Year 2000 by November 30, 1999. Of 40 single-source manufacturers with plans, 34 (85.0%) indicated that their Y2K program would be completed, and they would be ready for the Year 2000 by November 30, 1999.

Table 4 - Few-Source and Single-Source Manufacturers’ Responses Regarding Completion of their Y2K Program
As of November 5, 1999

Table 5 – Comparison of Survey Results
As of November 5, 1999

Table 5 compares survey responses for all responding manufacturers, the few-source manufacturers, and the single-source manufacturers.

The second question in the survey was intended to gauge the thoroughness and quality of manufacturers’ Y2K preparations by requesting information on the use of an independent organization to review all or portions of the Y2K preparation activities. Of the 1,298 responses to this question, only 29 percent indicated the use of third party review. As shown in Attachment E, the proportion of few-source and single-source manufacturers describing the use of independent review was slightly higher. In retrospect, this question may have been unclear and open to interpretation as to the meaning of "independent" and some respondents may have incorrectly interpreted it to mean a group outside the corporate structure of the responding firm. It is also probable that many of the smaller firms represented in the sample did not consider independent review necessary due to the lack of complexity in their required preparations.

The third question of the survey attempted to develop information regarding the dependence of the manufacturers of essential medical supplies on foreign sources of essential materials or components. Approximately 55 percent of the respondents indicated dependence on foreign sources. Of these 801 firms, almost 92 percent have consulted with their foreign suppliers regarding Y2K readiness. Of those firms that had not contacted their foreign suppliers at the time of the survey, 90 percent plan to complete this activity by December 1, 1999.

The status of contingency planning, the testing of contingency plans and consideration of business partners and foreign suppliers in contingency planning was the focus of the fourth question in the survey. Of the 1,197 firms responding to this question, about 49 percent reported that they have contingency plans that have been developed and tested. More than 89 percent will have contingency plans developed and tested by December 1999.

The fifth and last question in the survey explored the ability of firms to either expand production to meet an unexpected demand for products or to increase production in anticipation of increased demand. More than 90 percent of the firms report the ability to increase production if necessary, while slightly more than 40 percent are planning increased production. These responses provide a general impression that many firms could respond to increased demands. However, a product-by-product analysis was not feasible due to the 30 percent of manufacturers of essential supplies that did not respond to the survey.

More detailed results of the survey program are shown in Attachment E.

As described above, the audit phase of the survey was designed to provide an independent verification of the survey responses and a detailed assessment of the preparations for a sample of the firms responding to the written survey.

After conducting several pilot telephone interviews, the audit phase was initiated on August 17, 1999. Manufacturers of essential medical supplies were also cooperative in participating in this program.

Telephone interviews or site visits were planned with all of the 53 single-source manufacturers, a sample of 109 of the few-source manufacturers, and 117 non-priority firms. As of November 5, 1999, 212 assessments have been completed. Results to date are positive and have confirmed the survey results and our expectation that the industry has taken necessary steps to prepare for the Year 2000. Of those audits that have been completed and rated by the contractor, 90.6% rated green, 6.1% rated green with caution, 2.4% rated watch, 0% rated yellow, and 0.5% rated red.

Results of the audit program are shown in Attachment F.

The results of the audits indicate that a high level of confidence can be placed in the written survey responses. Based on the 212 assessments, we can conclude from the written survey results that manufacturers of essential medical supplies are taking appropriate steps to assure the continued availability of their products. The audits reveal a small number of firms with some minor areas of concern as described by the contractor in the individual assessment reports provided to the FDA. These concerns were communicated to the firms following the interview. FDA does not consider them serious enough to warrant further action by FDA. The only firm with a high level of concern regarding the Year 2000 preparations, as indicated from the audits, is a small, non-priority firm that produces a product which upon review was determined not to be an essential medical supply.

This FDA survey strongly confirms the conclusions reached at the June 7, 1999 Roundtable Meeting of government agencies, medical device industry representatives and healthcare organizations to discuss the readiness of the medical and surgical supply system for the Year 2000 date change. The June 7^th meeting prompted an Open Letter to the Healthcare Community (August 13, 1999) signed jointly by the Chair of the President’s Council on Year 2000 Conversion and the Deputy Secretary of the Department of Health and Human Services, in which they express confidence that the medical device industry was working cooperatively and diligently to prepare for the Year 2000 transition. The letter, available at the Council on Year 2000 Conversion web site at http://www.y2k.gov/docs/081399PRLS.htm, suggested that purchasers of medical supplies should continue to purchase in normal quantities in anticipation of an available and continuing supply of essential medical supplies.

Attachment B – July 23, 1999 Reminder Letter

Attachment C – Letter to Manufacturers Regarding the Audit Program