A distribution agreement for medical devices looks like any other distribution agreement until something goes wrong: a complaint from a hospital, a recall, a distributor who stops buying but keeps the exclusivity. These five clauses decide how much those situations cost.
1. Territory and exclusivity
Define the territory precisely and say what exclusivity means: is the manufacturer itself excluded from selling there, and does exclusivity cover tenders and online sales?
Within the EU, competition law limits what you can agree. Under the Vertical Block Exemption Regulation (EU) 2022/720, a supplier may generally prevent distributors from actively selling into territories reserved for other exclusive distributors, but restrictions on passive sales, meaning sales to customers who approach the distributor on their own initiative, are in principle not allowed. A clause that ignores this may be unenforceable or worse.
2. Regulatory roles and obligations
Under the EU Medical Device Regulation (EU) 2017/745 (MDR), distributors have their own obligations: verifying CE marking and labelling, keeping proper storage and transport conditions, forwarding complaints and incident reports to the manufacturer, supporting traceability and cooperating in field safety corrective actions and recalls.
The agreement should spell out who does what, how fast and in which format. It should also say who handles national registrations where they are required, and what happens to them if the agreement ends.
Be careful with relabelling or selling under the distributor’s own name. Under the MDR, this can turn the distributor into the legal manufacturer, with all the obligations that come with it.
3. Minimum purchase and forecasts
Exclusivity is usually given in exchange for a commitment. Set minimum purchase volumes per year and a forecasting process, and define the consequence of missing them. Often the most practical consequence is not damages, but the right to end exclusivity or terminate the agreement.
4. Liability and insurance
Allocate product liability between manufacturer and distributor, decide who is responsible for damage caused by improper storage, installation or training, and require adequate insurance. Caps on liability should be checked against what is actually insurable.
5. Termination and what happens after
Most disputes start at the end of the relationship. The agreement should cover notice periods, buy-back of remaining stock, service of the installed base, transfer of registrations and customer information, and any post-termination restrictions.
Also check the law of the distributor’s country. In some countries, such as Germany, a distributor may under certain conditions claim compensation for the customer base it built, similar to a commercial agent.
In short
A good distribution agreement for medical devices is part commercial deal, part regulatory map. Getting both parts right at the start is much cheaper than renegotiating them during a recall or a termination dispute.
Practice area: MedTech Legal Advisory
All insights