FDA Drafts Guidance on Mobile Medical Apps

In an effort to keep up with advancing technology, the Food and Drug Administration (FDA) has proposed new regulations to monitor medical smartphone applications (apps). The draft proposal states that any mobile app that is intended for use in performing a medical device function meets the definition of a medical device under the Federal Food, Drug, and Cosmetic Act. Specifically, these mobile medical apps must be either used as an accessory to a regulated medical device, or transform a mobile platform into a regulated medical device.

To further clarify what apps will be regulated, the document notes that a mobile app is a device “when the intended use of a mobile app is for the diagnosis of disease or other conditions, or the cure, mitigation, treatment, or prevention of disease, or is intended to affect the structure or any function of the body of man.” The guidance document explains how the intended use of mobile apps can be shown by labeling claims, advertising materials, or oral or written statements by manufacturers or their representatives.

The goal of the regulations is to protect patient safety, though to date there have been no adverse events reported to the FDA. The proposal seems to be forward looking in creating a framework for mobile app manufacturers. According to the Associated Press, there are already more than 17,000 medical applications currently available.

Physicians can use mobile phones to calculate prescription dosages, review disease treatment guidelines, and explain diagnoses and procedures to patients. The FDA expects that by 2015, 500 million smartphone users will rely on health care apps.

Two medical apps have already received FDA approval for use by physicians. The first is a prenatal care app called AirStrip OB. Cleared in 2009, the app allows obstetricians to use their phones to remotely access real-time data for mothers and babies. The second app, approved earlier this year, is Mobile MIM. This app allows hospitals and doctors offices to send images to physicians’ mobile devices. The FDA noted that the software should not be used to replace radiology workstations as the primary way to view medical images, but is useful when a physician has limited access.

Opinions from within the industry vary on the new guidelines. Some feel that the regulation is both necessary and welcome. By regulating the medical app industry, the FDA is offering market players clear guidelines for continued development. Others argue that the regulations may be too far reaching. For example, medical apps to calculate prescription dosages for patients are not new and are based on accepted formulas. Smartphone apps that achieve the same goal increase efficiency and do not put patients at risk, and therefore do not merit differential treatment.

The proposed regulations raise two main concerns for patients and physicians. The first is a privacy concern, similar to the drawbacks considered for other forms of Electronic Health Records. Transferring data between hospital systems and physician smartphones will increase confidentiality and security concerns. Once patient data is accessed on a smartphone, privacy may be easily breached should the phone be used by another person, lost or stolen. The second concern is that these proposed rules could increase the purchase price for medical apps. App developers will likely have increased costs for filing applications and seeking legal counsel, and those costs will be passed to end users.

The draft proposal is currently in an open comment period, and the FDA will amend the regulations after the comment period closes.

The Ban on Off-Label Promotion after Sorrell v. IMS Health

In the wake of Sorrell v. IMS Health, in which the Supreme Court invalidated on First Amendment grounds a Vermont law barring drug companies from using physician-specific prescribing data to craft physician-specific sales pitches, lawyers on both sides of the case have weighed in on the opinion’s implications for the Food & Drug Administration’s ban on off-label promotion.  In doing so, they build upon an exchange between the dissent and the majority in Sorrell.  Writing in dissent, Justice Breyer argued that the fact that the Vermont ban is “speaker-based” (i.e., that it only applies to drug companies) should not mean that it is subject to heightened scrutiny, because in the regulatory context it is not unusual for rules to apply only to regulated entities.  By way of example, Justice Breyer cites the ban on off-label promotion, which limits what manufacturers but not others can say to doctors about unapproved uses.  In response, the majority suggests that the government “might defend” the ban on the ground that it “will prevent false or misleading speech.”  The majority then reiterates that Vermont’s interest in banning data mining “instead turns on nothing more than a difference of opinion” between the state and the companies about the truthful marketing messages to which doctors should be exposed.

In an article for BNA’s Pharmaceutical Law & Industry Report, Lisa Blatt and colleagues (who represented PhRMA, one of the respondents in the case) contend that: “Sorrell builds on prior Supreme Court precedent in establishing a strong foundation to argue that a pharmaceutical company’s truthful, non-misleading information about its products cannot be subjected to content-based and speaker-based restrictions.”  And they predict (correctly) that “[t]he implications of Sorrell for the FDA’s off-label promotion regulatory regime may be tested in litigation, as well as in new regulations, in the months ahead.”  On July 14, 2011, as reported here, the Second Circuit ordered supplemental briefing on the implications of Sorrell for its pending decision in United States v. Caronia, a criminal case in which a sales representative was convicted of conspiring to misbrand the sleep aid Xyrem by promoting it for a number of off-label uses.  On the regulatory front, on July 5, 2011, seven leading pharmaceutical companies filed a citizen petition asking “the Commissioner of Food and Drugs to clarify FDA regulations and policies with respect to manufacturer dissemination of information relating to new uses of marketed drugs and medical devices.”

In a very provocative blog post at The Incidental Economist, Kevin Outterson (who wrote an amicus brief on the side of the petitioner in Sorrell on behalf of, among others, the New England Journal of Medicine) appears to concur with Blatt that “[i]n the wake of Sorrell … we can expect the FDA to relax rules against off-label promotion.”  Professor Outterson characterizes the Supreme Court’s decision as a radical adjustment of the regulatory balance between the FDA and the companies it regulates.  Under our current system, data on the safety and efficacy of drugs is largely generated privately, as a condition of marketing approval.  The ban on off-label promotion is a key component of the system, because it provides manufacturers with a powerful push to continue to study their products after they are initially approved for sale.  Without it (or, even more radically, without any requirement that a manufacturer establish that a drug is efficacious before marketing it), we’ll either need to find other ways to incentivize private sector research or spend more public money on the study of drugs, both easier said than done.  Professor Outterson suggests a third way, that: “the US could simply free ride off the studies produced to satisfy Europe’s Phase III approval process.”  As he points out, however, “[t]hat would work only so long as the EU didn’t make the same changes.”

Perhaps naively, I am hopeful that the ban on off-label promotion will survive the coming wave of legal challenges largely intact.  In addition to its role in incentivizing research (a neutral function which distinguishes it from the data mining law at issue in Sorrell), I think that the ban serves as an important prophylactic against false and misleading product promotion.  (I elaborate on this argument here.)  This preventive role further distinguishes the ban on off-label promotion from the law invalidated in Sorrell.

FDA Taking Baby Steps Towards Regulating Nanotechnology

FDA Taking Baby Steps towards Regulating Nanotechnology

Jordan Paradise, J.D.[1]

[Ed. Note: HRW is pleased to welcome Seton Hall Law Professor Jordan Paradise, who researches and publishes on the legal, ethical, and societal implications of emerging science and technologies such as genetics and nanotechnology. She teaches Food & Drug Law, Administrative Law and Advanced Seminars in the field of Health & Technology. Professor Paradise has an article forthcoming in Volume 56 of St. Louis University Law Journal on the topic of FDA regulation of nanotechnology entitled Reassessing 'Safety' for Nanotechnology Combination Products: What Do 'Biosimilars' Add to Regulatory Challenges for the FDA? Her research and publications, including her forthcoming article, can be found at SSRN -- http://ssrn.com/author=512260]

On June 9, 2011, the Food and Drug Administration (FDA) released draft guidance for industry laying out the agency’s “current thinking on whether FDA-regulated products contain nanomaterials or otherwise involve the application of nanotechnology.”[2] The guidance urges that the document does not establish legally enforceable obligations, but should be viewed only as recommendations for industry.  It “does not establish regulatory definitions” or “address the regulatory status of products,” but does state that future additional guidance may be issued for specific product or classes of products.  Published concurrently with an announcement on policy principles for nanotechnology regulation from the Office of Science and Technology Policy,[3] the draft guidance exemplifies the ongoing battle by federal administrative agencies to quantify, categorize, and regulate nanotechnology.

Framed as two general “Points to Consider” applicable to both new products and any manufacturing changes to FDA-approved and cleared products, the draft guidance provides both a dimensional aspect — “whether an engineered material or end product has at least one dimension in the nanoscale range (approximately 1nm to 100 nm)” — and a behavioral aspect — “whether an engineered material or end product exhibits properties or phenomena, including psychical or chemical properties or biological effects, that are attributable to its dimensions, even if these dimensions fall outside the nanoscale range, up to one micrometer.”  Notably, the second point expands the first dimensional aspect beyond the 100 nm range if the properties exhibited are tied directly to its dimensions up to one micrometer (also called a micron).  (One nanometer is equal to 10^-9 meters (a sheet of paper is about 100,000 nanometers thick)); one micrometer/micron is equal to 10^-6 meters.)

Supporting its two points, the guidance also provides the agency’s “Rationale for Elements within the Points to Consider.”  These largely recite the current state of knowledge of nanoscale properties and phenomena as the underpinnings of the two points.   Specifically, the FDA distinguishes the “deliberate manipulation and control of particle size” of an engineered material or end product from the natural functioning at the nanoscale, identifies the traditional bounds of the nanoscale encompassing 1nm to 100nm as serving merely as “a first dimensional reference point” for industry, highlights the relationship between size and physical and chemical properties as important for questions of safety and efficacy, and explains the broadening of dimensions of “nanoscale” up to one micrometer as linking to the use of agglomerates and aggregates that may coat or functionalize a product.

While couched as a “first step” by the FDA, the draft guidance reflects an incremental and coordinated effort among various FDA Centers, including the Center for Drug Evaluation and Research (CDER), the Center for Biologics Research and Evaluation, the Center for Devices and Radiological Health, and the Center for Food Safety and Nutrition on issues with nanotechnology products.  Nearly four years ago, the FDA’s multi-center Nanotechnology Task Force[4] published a report[5] acknowledging that future advancements in nanotechnology may pose challenges for the existing FDA oversight structure.  Rapidly developing nanoscale[6] applications were identified as integrating mechanical, chemical, electrical, and optical properties in novel and dynamic ways:

The very nature of nanoscale materials — their dynamic quality as the size of nanoscale features change, for example, and their potential for diverse applications — may permit the development of highly integrated combinations of drugs, biological products, and/or devices, having multiple types of uses, such as combined diagnostic and therapeutic intended uses.  As a consequence, the adequacy of the current paradigm for selecting regulatory pathways for “combination products” may need to be assessed to ensure predictable determinations of the most appropriate pathway for such highly integrated combination products.[7]

Infused with public and private investments, nanotechnology-based research and development is now burgeoning.  The cumulative federal investment in nanoscale science and engineering research and development through the National Nanotechnology Initiative (NNI) over the last decade has reached nearly $14 billion;[8] the 2011 NNI budget provides $1.76 billion spread across 15 federal agencies.[9] The unique and far-ranging properties of nanostructures and nanotechnology have particularly facilitated breakthroughs in the pharmaceutical and medical device realms.  The interface of nanotechnology and biotechnology have increased bioavailability, introduced more targeted drug delivery and release, decreased adverse side effects, and enabled cutting-edge cancer treatments.  Current projections place the “nanomedicine” market at $53 billion in 2011.[10]

Following its 2007 report, the FDA has taken a number of internal steps aimed at nanotechnology in addition to the recent guidance.  FDA’s CDER and the Research Office of Pharmaceutical Science issued an internal Manual of Policies and Procedures (MaPP) in May 2010 that instructs drug reviewers to capture “relevant information about nanomaterial-containing drugs” that will be entered into a nanotechnology database.[11] The MaPP states that “in order to develop guidance for industry, CDER needs to organize all the data submitted in support of nanotechnology-based drug applications,”[12] gather all “relevant information about nanomaterial-containing drugs” and enter them into a nanotechnology database maintained by the agency.[13] While imposing no additional requirements on drug applicants, it signals recognition from the FDA of the nascent state of understanding of the complex scientific implications in human drugs.

FDA has also held several public meetings to gather nano-specific information: in October 2006 to aid  the Task Force Report;[14] in September 2008 to assist the agency in implementing recommendations  laid out in the Task Force Report;[15] and in September 2010 to solicit data and information on biocompatibility assessment of diagnostics and devices that include nanomaterials.[16] The FDA also maintains materials for the public on its webpage regarding nanotechnology.[17]

FDA is also partnering with the National Cancer Institute’s Nanotechnology Characterization Laboratory and the National Institute of Standards and Technology to conduct “preclinical efficacy and toxicity testing of nanoparticles” in an effort to identify appropriate standards for molecular-sized cancer drugs.[18] The FDA has identified risk characterization based on physical and chemical properties, in vitro and in vivo models to assist in predictions of human response to exposure, quantification methods, measures of adsorption and transport, and relationships between nanomaterial properties and the human body in terms of uptake via the skin, lungs, and gastrointestinal tract as specific areas of interest.[19]

Although moving slowly, the FDA is moving forward on issues of nanotechnology.  Stay tuned…

---

[1] Prof. Paradise has an article forthcoming in Volume 56 of St. Louis University Law Journal on the topic of FDA regulation of nanotechnology entitled Reassessing ‘Safety’ for Nanotechnology Combination Products: What Do ‘Biosimilars’ Add to Regulatory Challenges for the FDA? Her research and publications, including her forthcoming article, can be found at SSRN — http://ssrn.com/author=512260

[2] FDA Draft Guidance for Industry, Considering Whether an FDA-Regulated Product Involves the Application of Nanotechnology, June 9, 2011, available at http://www.fda.gov/RegulatoryInformation/Guidances/ucm257698.htm For more information, see also FDA Draft Guidance Questions and Answers, June 9, 2011, available at http://www.fda.gov/ScienceResearch/SpecialTopics/Nanotechnology/ucm258391.htm; Jeffrey Ventura, FDA Press Release, FDA takes ‘first step’ toward greater regulatory certainty around nanotechnology, June 9, 2011, available at http://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm258377.htm

[3] Office of Science and Technology Policy, Office of Management and Budget, and the United States Trade Representative, Policy Principles for the U.S. Decision-making Concerning Regulation and Oversight of Applications of Nanotechnology and Nanomaterials, June 9, 2011, available at http://www.whitehouse.gov/sites/default/files/omb/inforeg/for-agencies/nanotechnology-regulation-and-oversight-principles.pdf

[4] Press Release, Food and Drug Administration, FDA Forms Internal Nanotechnology Task Force (Aug. 9, 2006), available at http://www.fda.gov/ohrms/dockets/ac/06/briefing/2006-4241B1-02-33-FDA-Nano%20FDA%20News%20release.pdf.

[5] Food and Drug Administration Nanotechnology Task Force, Nanotechnology: A Report of the U.S. Food and Drug Administration Nanotechnology Task Force (2007), p. 20-21, available at http://www.fda.gov/nanotechnology/taskforce/report2007.pdf.

[6] The nanoscale is traditionally measured as under 100nm (or 10^-9m, or one billionth of a meter).   The National Nanotechnology Initiative (NNI) defines “nanotechnology” as involving three inter-related (and inseparable) aspects: “1) [r]esearch and technology development at the atomic, molecular or macromolecular levels, in the length scale of approximately 1-100 nanometer range; 2) creating and using structures, devices and systems that have novel properties and functions because of their small and/ or intermediate size; and 3) ability to control or manipulate at the atomic scale.”  Environmental Protection Agency, Nanotechnology: An EPA Research Perspective (June 2007), http://nepis.epa.gov/Adobe/PDF/P1003H7X.PDF

[7] Id.

[8] Office of Science and Technology Policy, NNI Strategic Plan 2010; Request for Information, 75 Fed. Reg. 38,850-53, 38,850 (2010).

[9] National Nanotechnology Initiative, About the NNI — Funding, http://www.nano.gov/initiatives

[10] Raj Bawa & Summer Johnson, The Ethical Dimensions of Nanomedicine, 91 Med. Clinics N. Am. 881-87, 882 (2007), citing Nanotechnology in Healthcare (Cleveland: Freedonia Group 2007).

[11] Food and Drug Administration, Center for Drug Evaluation and Research, Office of Pharmaceutical Science, MaPP 5015.9 Reporting Format for Nanotechnology-Related Information in CMC Review (effective date June 3, 2010), available at http://www.fda.gov/downloads/AboutFDA/CentersOffices/CDER/ManualofPoliciesProcedures/UCM214304.pdf.

[12] Id. at 2.

[13] Id.

[14] Planning of Public Meeting, Regulated Products Containing Nanotechnology Materials, 71 Fed. Reg. 155, 46,232-33 (Aug. 11, 2006).

[15] Public Meeting, Consideration of FDA-Regulated Products That May Contain Nanoscale Materials, 73 Fed. Reg. 153, 46,022-24 (Aug. 7, 2008).

[16] Public Workshop on Medical Devices and Nanotechnology: Manufacturing, Characterization, and Biocompatibility Considerations, 75 Fed. Reg. 162 (Aug. 23, 2010).

[17] Food and Drug Administration, Nanotechnology, http://www.fda.gov/ScienceResearch/SpecialTopics/Nanotechnology/default.htm

[18] See National Cancer Institute, Nanotechnology Characterization Lab, http://ncl.cancer.gov/

[19] Food and Drug Administration, 2010 FDA Research Project Categories, http://www.fda.gov/ScienceResearch/SpecialTopics/Nanotechnology/ucm196697.htm

Functional Foods: What Happens When Advertising Misleads Consumers?

An article recently published in the New York Times focuses on the complexities of modern-day food labeling. It seems that almost every product in the grocery store touts a label boasting of some health benefits, from supporting heart health to lowering cholesterol levels. These items are referred to as functional foods or nutraceuticals, and they are foods that claim to provide health benefits beyond the traditional nutrients they contain. Functional foods are one of the fastest growing areas in the food industry.

While companies cannot claim that functional foods actually prevent or cure diseases, they can market foods with having health-promoting or wellness-maintaining properties. The article explains how economists refer to items like functional foods as credence goods. For these foods, most consumers are unable to assess the utility of health claims and therefore rely on advertisements to be true. Misleading marketing and advertising can leave consumers confused about what they are buying and about just how helpful some products are in maintaining overall health.

The Federal Trade Commission (FTC) oversees food advertising and has filed recent complaints of deceptive marketing against Kellogg and Dannon. Frosted Mini-Wheats can no longer claim that they are clinically shown to improve children’s attentiveness by nearly 20 percent, and boxes of Rice Krispies are no longer emblazoned with a claim that they support children’s immunity. Dannon was forced to remove claims that its Activia yogurt improves intestinal transit time, as the FTC found no scientific proof for such a claim.

The Food and Drug Administration (FDA), which oversees food labeling, has also noted the problems with false or misleading claims on functional foods. Commissioner Margaret Hamburg wrote an open letter to the industry urging them to examine product labels to avoid violating established labeling standards. But the issue seems too complicated for an open letter to solve. As the FDA’s deputy commissioner for foods Michael Taylor wrote last year,

“Going after [misleading marketers] one-by-one with the legal and resource restraints we work under is a little like playing Whac-a-Mole, with one hand tied behind your back.”

The Deputy Commissioner appears to be right, and not all food companies are willing to give up false or misleading claims or labeling without a fight. In 2010, the FDA found that the makers of POM Wonderful pomegranate juice had violated the Federal Food, Drug, and Cosmetic Act by making therapeutic claims that “establish that the product is a drug because it is intended for use in the cure, mitigation, treatment, or prevention of disease.” When POM did not retract its claims, the FTC filed a complaint against the maker for deceptive advertising based on unsubstantiated scientific claims. POM was initially defiant (calling the FTC complaint unwarranted), but eventually settled and changed their advertising.

The company did, however, file a federal lawsuit against the FTC for acting outside its authority and violating the right to free commercial speech. As NYU Professor Marion Nestle pointed out in an article, POM’s suit is being brought “not because they are claiming they have science on their side, but because they think their health claims, believable or not, are protected by the First Amendment.”

There are other ways to confront misleading ‘healthy’ claims before they are printed on products and sold to consumers. The article notes the approach of the European Food Safety Authority, an independent panel of experts to whom food makers submit applications of scientific evidence backing their desired claims. The panel reviews each case and issues an opinion on the evidence, and will create a list of approved health claims for companies to use in the future.

The FDA’s approach is focused on the other end of the product line, and encourages consumers to learn to read nutrition labels and make wise purchasing decisions. This includes updating the Nutrition Facts Panel printed on the back of food packages, adding calorie counts to restaurant menus, and pushing the Let’s Move initiative to combat childhood obesity. A smarter consumer is an admirable and essential goal, but with the amount of money put into advertising on a global scale, the FDA must issue stricter guidelines for food companies. Hopefully, the outcome of the POM lawsuit will help empower the FDA to do just that.

…After the Horse Has Already Left the Barn: FDA Continues to Postpone Conflicts Review Until Studies Are Complete

On Tuesday, the Food and Drug Administration released a draft guidance on financial disclosure by clinical investigators, targeted at the investigators themselves, at drug and device companies and others who sponsor clinical trials, and at the agency staff who review the disclosures.  In the draft guidance, which updates an earlier one, the FDA briefly reviews the financial disclosure regulations, which have not changed, and then provides heavily revised and expanded answers to frequently asked questions.

The draft guidance is a response to a January 2009 report by the Department of Health and Human Services’ Office of the Inspector General (OIG) which recommended that the FDA (1) “ensure that sponsors submit complete financial information for all clinical investigators[,]” (2) “ensure that reviewers consistently review financial information and take action in response to disclosed financial interests[,]” and (3) “require that sponsors submit financial information for clinical investigators as part of the pretrial application process.”  The draft guidance addresses the first two recommendations but, unfortunately, FDA has still not taken action on the third.

The draft guidance responds to the OIG’s first recommendation in a number of ways, including in its response to the question “What does the FDA mean by due diligence?” which has grown from three sentences in the earlier guidance to four paragraphs in this one.  The draft guidance sets forth in detail what those applying for marketing approval must do to obtain financial information from every investigator who worked on every clinical trial submitted in support of the application.  For example, when an applicant is missing an investigator’s financial information because it cannot find him or her, it must try to locate the investigator by making at least two phone calls, sending at least two certified letters, and requesting new contact information from the investigator’s previous institutions.  From there, the search might progress to contacting professional associations and conducting internet searches.  The draft guidance’s recommendations, if followed, should drastically reduce the number of applications that rely on the due diligence exemption to excuse missing financial information.

With regard to the OIG’s second recommendation, the draft guidance adds and answers the following question: “What will FDA’s reviewers consider when evaluating the financial disclosure information?”  In its answer, the FDA explains that “outcome payments (that is, payment that is dependent on the outcome of the study) elicit the highest concern, followed by proprietary interests (such as patents, royalties, etc.); but these are rarely seen.”  More typical are equity interests and significant payments of other sorts, in which case the agency takes into consideration the amount and nature of the payment as well as other factors such as the total number of investigators and subjects in the study, whether and how the study is blinded, controlled, and randomized, and whether the study endpoints were objective or subjective.  While the agency elsewhere rejects the idea that the financial disclosure requirements be waived for “efficacy studies that include large numbers of investigators and multiple sites[,]” it would appear to agree that the likelihood of a single investigator biasing such a study’s results is low.

The FDA has not taken action on the OIG’s third recommendation, that investigators’ financial information be submitted to the agency as part of the investigational new drug applications (IND) and investigational device exemptions (IDE) applications that are filed before studies in humans are initiated.  The draft guidance does exhort sponsors to consult the FDA early and often to minimize potential bias.  The draft guidance explains that “[b]y collecting the information prior to the study start, the sponsor will be aware of any potential problems, can consult with the agency early on, and can take steps to minimize any possibility for bias.”

When sponsors do choose “to consult the FDA early”, the draft guidance provides that agency staff should “focus on the protection of research subjects and the minimization of bias from all sources.”  The suggestion that agency staff play a role in protecting research subjects is interesting.  It is not mentioned in the regulations or anywhere else in the draft guidance and it is only possible where sponsors voluntarily seek the FDA’s input.  By the time an applicant is required to turn over investigators’ financial information, as part of an application for marketing approval, the horse has left the barn.  The clinical trials are complete and it is too late to protect participant’s rights and interests.  Bias, by contrast, can sometimes be addressed retroactively.  The draft guidance notes that the FDA’s “[r]eviewers might … compare results from more than one investigator, re-analyze the data excluding the investigator’s results, analyz[e] the data in multiple ways, and/or determin[e] if results can be replicated over multiple studies.”  Even bias is better dealt with prospectively, though, not least because agency staff are aware of and sensitive to the expense associated with conducting clinical trials and are likely to be highly reluctant to disregard a trial’s results.

Because prospective review of investigators’ financial information would allow the FDA to “focus on the protection of research subjects and the minimization of bias” across the universe of studies, not just those in which the sponsor chooses “to consult the FDA early,” the financial disclosure regulations should be revised per the OIG’s recommendations to require that financial information be submitted as part of the pretrial application process.

Comments on the draft guidance are due by July 25, 2011.

Ag-Gag: A Black-Boxed Food Supply

I recently discussed the OIRA’s contribution to some terrible incidents in egg safety. Denis Sterns has written a challenging article on the bigger picture, explaining “Why Food in the United States May Never be Safe:”

This article . . . interrogates the idea of food safety by opening the question of whether a rational economic actor in a free market for food can reasonably be expected to invest in improving the safety of the food products he makes and sells. It is precisely the lack of (cr)edibility in the market – i.e., the absence of reliable quality signals, the lack of traceability, the high degree of anonymity, and the destruction of trust – that creates the structural impediments and powerful disincentive for improving the quality and safety of food. . . . Recall the huge public uproar, and swift policy changes, that followed the release of video of “downer” cattle being abused at a California meat plant. To obtain the video, the Humane Society had to sneak someone inside the plant to secretly record the offending conduct.

The secrecy of some food suppliers is very troubling. Stearns proposes constant surveillance of their actions: “With video cameras always in place . . . one can only expect that most of the shocking conditions that are found after the fact of an outbreak would be less likely to occur in the first place.” Stearns also criticizes FDA’s “wholly voluntary and largely ineffective” traceback regulations, which would make it easier to find the source of contaminated food. (Maybe the FDA is too busy chasing down raw milk co-ops.)

Unfortunately, Big Meat appears all too eager to hide their actions from both concerned citizens and animal rights activists. Consider the rash of legislation designed to deter actions like the Humane Society’s:

The animal advocacy group Mercy for Animals sent an undercover investigator to E6 Cattle Company in Texas, where he filmed calf abuse over a two-week period. To prevent such whistleblowing, several states have passed so-called “Ag-gag” laws that would make it illegal to clandestinely film inside slaughterhouses, sparking what animal rights activists fear will be a nationwide trend. . . . “They’re trying to criminalize someone being an eyewitness to a crime,” Jeff Kerr, [PETA]’s general counsel, said.

One of Chinese dissident Ai WeiWei’s biggest “offenses” against the Chinese government was trying to publicize the names of the children killed when shoddy schools collapsed after an earthquake. Criminalization of exposes of contamination and animal abuse in America’s heartland could be one more step toward the convergence of Chinese and US politico-economic structures.

X-Posted: Concurring Opinions.

The FDA’s Move to Combat Prescription Drug Abuse: Educating Patients and Physicians

The Food and Drug Administration (FDA) announced a new risk-reduction program this month to help curb abuse of prescription painkillers. The program, called the Risk Evaluation and Mitigation Strategy (REMS), is targeted at manufacturers of long-acting and extended-release opioids. It requires that these manufacturers develop new medication guides for patients and educational materials for prescribing physicians. Each company has 120 days to submit materials to the FDA for review.

According to the FDA, the focus of the REMS plan is to educate doctors about proper pain management and patient selection, and to improve patient awareness about how to use these drugs safely. The medication guides for patients should include consumer friendly language that explains safe use and disposal. The drugs targeted by the REMS plan include oxycodone, methadone and morphine.

As the plan stands now, physicians are not required to review the educational materials. To help generate interest, the FDA plans to offer continuing education credits for physicians who receive the education. The ultimate goal is to make this training mandatory through congressional approval that would link the training to licensing for physicians who prescribe controlled substances.

The FDA hopes that REMS education will cut down the misuse of prescription painkillers without restricting access. There are an estimated one million emergency room visits a year as a result of prescription drug abuse, and the FDA estimates that more than 33 million Americans misused opioids during 2007. That same year, deaths from drug overdose were second only to motor vehicle crashes among leading causes of unintentional injury death in the U.S.

Encouraging safe disposal of medications is key. Over half of all nonmedical painkiller users get their pills “from a friend or relative for free.” Doctors have also been found to prescribe more doses of painkillers than patients actually use, and patients don’t always dispose of unused medications properly.

What can you do to help combat prescription drug abuse? The Drug Enforcement Administration is sponsoring the second National Prescription Drug Take-Back Day this Saturday. You can find a collection site near you by clicking here. Last year, more than 121 tons of prescription drugs were collected at nearly 4,100 locations. It’s a good reason to extend that spring cleaning to your medicine cabinet!

FDA Recalls and Selective Analysis

Researchers at the National Research Center for Women & Families and the Cleveland Clinic published a controversial report in the Archives of Internal Medicine in February.   The research team, led by Diana Zuckerman, analyzed high-risk medical device recalls from 2005 to 2009.  The report concludes that “reform of the [510(k)] regulatory process is needed to ensure the safety of medical devices.”

510(k) Process: Cause for Concern?

Zuckerman’s team determined that of the 113 recalls from 2005 through 2009, eighty (71%) medical devices — or the vast majority of those recalled — passed through the 510(k) process.  Twenty-one (19%) medical devices had passed through the more rigorous premarket approval process and eight (7%) were exempted from review.

Consumer advocates and the study authors argue that the disproportionate number of medical devices recalled after being reviewed under the 510(k) process demonstrates the need to reform the review process.   But do these statistics demonstrate a flaw in the 510(k) process?

Advanced Medical Technology Association (AdvaMed), an industry lobbying group says no.  It calls the study flawed.  Why?  The vast majority of devices (~90%) are cleared through the 510(k) process.   Therefore, it would be expected that more recalls are for 510(k) cleared devices.  A 2010 AdvaMed report, analyzed the recall rates for the PMA approval and 510(k) clearance processes.  The report demonstrated that the overall recall rate was very low for both — less than 1% and that PMA approved devices were more likely to be recalled.

In fact, during the Zuckerman study period, 19,000 devices were cleared through the 510(k) process, making the overall recall rate for 510(k) cleared devices approximately 0.4%.

When NPR asked Zuckerman to compare her study with the AdvaMed study, she agreed that most devices had not been recalled. “But I’m taking the public health perspective. How many people have been harmed by these products? We know that 112.6 million devices have been recalled in the last five years. That’s a lot of products. We know thousands of people have died. And those are deaths that did not have to happen.”

But what about all the lives saved?  Mark Adelman, MD, of the NYU Langone Medical Center in New York City, counters, “While some lives have been lost by expedited approval, many lives have been saved by getting better devices to market quickly. How many lives have been saved by the 510(k) fast track?”  Public health advocates, like Zuckerman, would offer a more complete analysis if they took account of both the risks and the benefits in their evaluation of the FDA approval processes.

Misclassification and Proper Review Path?

What if the processes are adequate, but some devices get thrown in the wrong review bucket?  Physicians Rita Redberg and Sanket Dhruva of USC San Francisco wrote in the invited commentary that “Zuckerman and colleagues demonstrate the dangers to patient safety posed by these innumerable device misclassifications.”  The Zuckerman report focused on “high-risk” recalls, or “those that could cause serious health problems or death.”

The report states that “[o]f the recalled devices cleared for market through the 510(k) process, 12% were marketed for risky or life sustaining Class III indications, which are required by law to undergo a full PMA regulatory review.”  In an email to MedPage Today, study author Steven Nissen, MD, of the Cleveland Clinic, elaborated:

There should be NO recalls for ’serious injuries or death’ amongst 510(k) approved devices. The FDA is supposed to require a PMA for Class III devices, those used to sustain life or preserve health. If a PMA is required for devices used to support or sustain life, why were so many of the devices recalled for ’serious injury or death’ originally approved using 510(k)?

Unfortunately, Nissen conflates risk of injury with the life-sustaining capacity of the device.  Although the failure of a Class III device will more likely result in serious injury or death, medical devices in all three Classes may cause serious injury or death if improperly designed or manufactured.  But maybe there is something to this.

Strengthening 510(k) process

What about the steps the FDA has already taken to improve the process?  In late 2009, the FDA began a review of its 510(k) process.  Last August, 55 recommendations were issued by two working groups.  In January, the FDA announced the adoption of 25 changes to the 410(k) process to take place this year.

According to Dr. Jerry Avorn, a professor of medicine at Harvard Medical School in Boston, “The current FDA leadership has been trying to improve the carefulness of device review, and that is very good for patients. But those attempts have been met by self-serving complaints from the device industry that better review and surveillance will somehow stifle innovation, which is not the case.”  Avorn suggests that both industry innovation and consumer safety can be achieved.

Meanwhile, the Institute of Medicine is working on a comprehensive report, commissioned by the FDA, on what’s wrong with medical device regulation. That’s due later this year.

Left to Our Own Devices?

Lucia Burgos sued Satiety, Inc. after an experimental stomach stapling device perforated her esophagus.  Her first complaint was dismissed on preemption grounds, but she was given permission to “replead her claims as state-law parallel claims.”  So called “state-law parallel claims” are state law tort claims where the duty that the defendant manufacturer is alleged to have violated stems from the Food Drug & Cosmetic Act or its implementing regulations.  Such claims are not preempted because they do not impose additional duties on defendants, beyond those imposed by Congress and the Food & Drug Administration.

Ms. Burgos amended her complaint to state two new claims, including a state law negligence cause of action founded on Satiety’s alleged failure to manufacture the device in conformance with the requirements of its investigational device exemption (IDE).  Ms. Burgos believes that it was the device (as opposed to human error) that caused her injury because of an incident report filed by her treatment team, but, because the documentation supporting the FDA’s grant of an IDE is confidential, her complaint does not specify how the device deviated from the IDE.  On April 5, 2011, Judge John Gleeson of the Eastern District of New York held that Ms. Burgos had stated a claim for negligence and that, despite the lack of specifics, her suit could proceed “to a brief and strictly-cabined period of discovery in order to determine the terms of Satiety’s IDE, and to explore whether or not the specific device used in her procedure was manufactured in accordance with the IDE.”

The Burgos case is of interest to civil procedure buffs because of what the BNA Medical Research Law & Policy Report characterized as Judge Gleeson’s “liberal approach” to the pleading of parallel claims, but it is important to the rest of us, too, because of what it tells us about the state of the products liability backstop to FDA’s oversight of medical devices.  In the words of Ms. Burgos’ attorney, there is only a “narrow window” for parallel claims.

The limited recourse that those injured by medical devices have in court makes the FDA’s pre-market clearance and approval processes and its post-market surveillance and recall oversight efforts that much more important.  Testimony given earlier this month by Marcia Crosse, Health Care Director at the Government Accountability Office, before the Senate’s Special Committee on Aging suggests that there is cause for concern.  As Ms. Crosse explained, in January 2009 the GAO issued a report in which it “found that a significant number of high-risk devices-including device types that FDA has identified as implantable; life sustaining; or posing a significant risk to the health, safety, or welfare of a patient-were cleared for the U.S. market through FDA’s less stringent 510(k) review process.”  Section 510(k) of the FD&C Act allows for streamlined review and clearance of devices that are shown to be substantially equivalent to devices already on the market.  Data from clinical trials is typically not required to make this showing.

The FDA agreed with the GAO’s 2009 recommendations.  If the devices at issue did not actually belong in the highest-risk class, Class III, they should be re-classified.  On the other hand, if they did belong in Class III, they should be subject to the more stringent premarket approval process, which typically requires clinical data in support of an agency determination that a device is safe and effective for its intended use.  In her testimony, Ms. Crosse noted that, to date, the FDA has issued a final rule reclassifying one device — a blood test for herpes — from Class III to Class II.  Rules regarding the classification of another five devices are pending.  “There are still 26 types of high-risk devices, including, for example, automated external defibrillators and implantable hip joints, that can enter the market via 510(k).”  Moreover, since January 2009, “FDA cleared at least 67 individual submissions that fall within 12 of these class III device types through the 510(k) process.”

While the GAO has not completed its review of the FDA’s post-market activities, Ms. Crosse testified that their “preliminary findings suggest that shortcomings in FDA’s oversight of the medical device recall process may limit the agency’s ability to ensure that the highest-risk recalls are being implemented in an effective and timely manner. These shortcomings span the entire range of the agency’s oversight activities-from the lack of a broad-based program to systematically assess trends in recalls, to inconsistencies in the way FDA ensures the effective completion of individual recalls.”

After Makena: Could a Risk Corridors Approach Balance Incentives and Access?

The past few weeks have been worrying ones for expectant mothers who wanted a hormonal treatment designed to stop preterm births. As Rob Stein of the WaPo explains,

A form of progesterone known as 17P was used for years to reduce the risk of preterm birth. . . Because no companies marketed the drug, women obtained it cheaply from “compounding” pharmacies, which produced individual batches for them [at about $20 each]. Doctors and regulators had long worried about the purity and consistency of the drug and were pleased when KV won FDA’s imprimatur for a well-studied version, which the company is selling as Makena.

The list price for the drug, Makena, turned out to be a stunning $1,500 per dose. That’s for a drug that must be injected every week for about 20 weeks, meaning it will cost about $30,000 per at-risk pregnancy. . . . The approval of Makena gave the company seven years of exclusive rights, and KV immediately fired off letters to compounding pharmacies, warning that they could no longer sell their versions of drug.

A day after Stein’s article appeared, the FDA made it clear that it “does not intend to take enforcement action against pharmacies that compound” 17P, “in order to support access to this important drug, at this time and under this unique situation.”

This is a fascinating, and in some ways, troubling response to the accusations of price-gouging by KV. Compounding pharmacists had already averred that “many of [KV's] assertions that the compounding of an FDA approved product is prohibited are not supported by the legal citations it references.” Though the FDA’s letter preserves access to 17P for now, that access could be revoked at any time. As the FDA states on its website:

FDA understands that the manufacturer of Makena, KV Pharmaceuticals, has sent letters to pharmacists indicating that FDA will no longer exercise enforcement discretion with regard to compounded versions of Makena. This is not correct. In order to support access to this important drug, at this time and under this unique situation, FDA does not intend to take enforcement action against pharmacies that compound hydroxyprogesterone caproate based on a valid prescription for an individually identified patient unless the compounded products are unsafe, of substandard quality, or are not being compounded in accordance with appropriate standards for compounding sterile products. As always, FDA may at any time revisit a decision to exercise enforcement discretion.

Moreover, the problem persists for at least one other drug, colchicine. As Arthur Allen explains at Slate,

The colchicine and [17P] stories have their roots in the FDA’s historically complex relationship with the drug industry. Since 1962, the agency has required that all new drugs be proven safe and efficacious before hitting the market. Many drugs marketed before 1962, however, remain on sale without having been formally approved by the FDA and are technically illegal. In 2006, the FDA launched the Unapproved Drugs Initiative, aimed at getting rid of as many of these drugs as possible. . . .

The FDA campaign has two approaches. In some cases, the agency simply warns companies to stop producing and shipping unlicensed drugs by a given date. In other cases the FDA warns a group of companies producing a particular class of drug, notifying them that it plans to crack down on their unapproved substances. The idea here is to give the companies an opportunity to submit their drugs to the rigorous testing required for FDA approval. This is what happened with . . . at least 86 newly approved drugs. The problem is that after submitting such drugs to expensive testing, drug makers typically jack up the prices, in a position to do so under congressional patent incentives aimed at producing innovative drug research. The FDA has no say in how a drug is priced.

As the Post notes, KV says it “is spending more than $200 million to develop the drug and conduct follow-up studies that the Food and Drug Administration demands.” Had it kept its pricing power, it was estimated that Makena would cost the US health care system $4 billion per year. Assuming that 3/4 of that would be revenue to Makena, and it lasted for the full 7 years of exclusivity, that would be a $21 billion return on a $0.2 billion investment. That seems excessive, especially given that KV didn’t develop the drug. On the other hand, if the Makena price were to be reduced one hundredfold, that’s a $0.21 billion return on a $0.2 billion investment. Unless we hit some serious deflation, that doesn’t cover the time value of the money invested in studies and development.

Are there any better models here? Stein’s story says that “experts said the FTC could sue KV if it concludes the company is illegally impairing competition,” but I don’t see the theory there. The FTC has lamented post-merger price hikes for life sustaining drugs (see FTC v. Lundbeck), but has precious little authority over price hikes here. Perhaps liberal constitutional law professors could fuse the “medical self-defense” theory of Eugene Volokh with the expansive Yoo/Vermeule/Posner theories of executive power, and find inherent executive authority here to save preemies? Probably not; the current Supreme Court is only receptive to creative con law from one side of the political spectrum.

Another idea is for legislation to create “risk corridors” for researchers who engage in the FDA’s Unapproved Drugs program, as CMS has for prescription drug insurance plans in Medicare Part D. As Kip Piper explains,

Using a system of risk corridors that compares actual incurred drug benefit costs to estimated costs submitted in bids, Medicare limits the profits and losses of Part D drug plans. Specifically, if a Medicare drug plan’s actual benefit costs exceed expected (bid) levels by a sufficient degree, the plan will receive an additional federal payment to cover a portion of the loss. However, if a drug plan’s actual spending falls sufficiently below projections, the plan must share some of the profit with the feds. Risk corridors apply to actual and expected drug benefits costs but exclude plan administrative costs and federal reinsurance payments.

Unfortunately, estimates of the value of testing unapproved drugs vary widely. The FDA’s director of the FDA’s Office of New Drugs and Labeling Compliance insists on the importance of these programs. But, looking specifically at colchicine, an Austin rheumatologist said “Doing one trial in patients and a few drug interaction studies doesn’t justify marketing exclusivity and a 50-fold increase in price.” As Allen puts it, we need “legislative remedies to improve the drug supply without costing the public an arm and a leg.”

In health care finance, the “cost-shift” hydraulic is a familiar model. When policymakers cut reimbursements for, say, Medicare or Medicaid, providers still have the same income target, and respond by raising prices for the privately insured. One scholar estimated that the privately insured pay over 120% of costs, while Medicare payments are between 95 and 99%. We might think of pharmaceutical patents as another manifestation of “cost-shifting,” from the future (which will enjoy drugs in the public domain) to the present (which must pay the monopolist’s price). Other forms of exclusivity can also lead to that type of cost-shift, as the Makena controversy makes clear. Perhaps the people most benefited by a regime of pharmacovigilance and evidence-based medicine should be asked to pay something for that new reassurance. But they shouldn’t be price gouged. A risk corridors approach might better balance patients’ interests in research on, and reasonable prices for, unapproved drugs.

Report Raises Questions About ‘Fast Track’ FDA Device Approvals

A report was published last month that seriously calls into question the effectiveness of the FDA’s regulation of medical devices. Authored by Diana Zuckerman Ph.D. et al., in the Archives of Internal Medicine, the report investigates the two-pronged process that governs medical device regulation under the FDA.

The first prong, known as the premarket approval (PMA) pathway, requires a device company to prove that its medical device is safe and effective. PMA applies to Class III devices which are defined by regulation to include those devices that support or sustain human life, are of substantial importance in preventing impairment of human health, or which present a potential, unreasonable risk of illness or injury. Class III devices include heart valves, pacemakers, and artificial hips.

The second (and less stringent) prong is what is known as the 510(k) pathway. As the FDA states:

A 510(k) is a premarket submission made to FDA to demonstrate that the device to be marketed is at least as safe and effective, that is, substantially equivalent, to a legally marketed device . . . A legally marketed device . . . is a device that was legally marketed prior to May 28, 1976 (preamendments device), for which a PMA is not required . . . or a device which has been found [substantially equivalent] through the 510(k) process.

The upshot is that as long as the device manufacturer can demonstrate that their device is “substantially equivalent” to a “predicate device” that has presumably passed the more stringent PMA process, they are subject to far less exacting standards. Most notable is the fact that these iterations of devices approved through the 510(k) pathway do not require specific evidence of clinical safety and effectiveness; they can bootstrap off of the predicate.

Zuckerman’s study examined the recalls of medical devices and whether those devices were approved under the PMA or 510(k) process. The authors found that:

There were 113 recalls from 2005 through 2009 that the FDA determined could cause serious health problems or death. Only 21 of the 113 devices had been approved through the PMA process (19%). Eighty were cleared through the 510(k) process (71%), and an additional 8 were exempt from any FDA regulation (7%). Cardiovascular devices comprised the largest recall category, with 35 of the high-risk recalls (31%); two-thirds were cleared by the 510(k) process (66%; n = 23). Fifty-one percent of the high-risk recalls were in 5 other device categories: general hospital, anesthesiology, clinical chemistry,neurology, or ophthalmology.

The authors conclude that:

Most medical devices recalled for life-threatening or very serious hazards were originally cleared for market using the less stringent 510(k) process or were considered so low risk that they were exempt from review (78%). These findings suggest that reform of the regulatory process is needed to ensure the safety of medical devices.

Not surprisingly, the medical device industry doesn’t  agree with Zuckerman’s findings. Stephen J. Ubl, the CEO of the Advanced Medical Technology Association, has pointed to “three recent studies [that] have all found that the 510(k) process has a remarkable safety record with extremely low recall rates–one study reported a rate of less than two-tenths of one percent.”

Aside from the issue of whether 510(k)-approved devices pose a greater risk of recall, health care professionals have underscored a more systemic problem relating to the paucity of evidence-based medicine supporting medical devices.  Orthopedic surgeon Dr. Andrew Pearle told ABC News in a recent report that,  ”[s]ince patients are exposed to new products through direct-to-patient marketing, they assume these products have been time-tested and well-established. But often there is little clinical data to support the marketing claims.”

The FDA believes there is enough of an issue to warrant a reevaluation of the 510(k) process. This past January the FDA announced that it will be revisiting the 510(k) process. A press release describes the key actions to include:

• Streamlining the “de novo” review process for certain innovative, lower-risk medical devices,
• Clarifying when clinical data should be submitted in a premarket submission, guidance that will increase the efficiency and transparency of the review process,
• Establishing a new Center Science Council of senior FDA experts to assure timely and consistent science-based decision making.

Meanwhile, individuals with recalled artificial hips manufactured by DePuy Orthopaedics are determining whether to undergo a new operation to replace the recalled equipment. Somewhat ironically, DePuy just unveiled a new line of artificial hips last month that also received approval through the fast-tracked 510(k) pathway.

Professor Emeritus Margaret Gilhooley: “Drug User Fees, Health Priorities, Politics, the Deficit and Reform Directions”

Professor Emeritus Margaret Gilhooley of Seton Hall Law has posted “Drug User Fees, Health Priorities, Politics, the Deficit and Reform Directions” to SSRN. The paper examines the FDA’s funding mechanism in relationship to industry and raises questions as to the appropriateness of the arrangement as presently configured. The abstract alone is telling:

Abstract:
The Food and Drug Administration now depends on user fees paid by drug companies to support more than half the salaries of the medical reviewers who advise the agency on the appropriateness of approving a drug. The funding creates a substantial risk of “capture” of the agency by the industry. Under the program, which started in 1992, drug companies pay a fee that permits the agency to hire additional reviewers to make more timely reviews on whether a drug can be approved. Under the law, the agency seeks to meet performance goals for the timing of reviews, giving the program the appearance of having a fee-for-service basis.

The legislative authorization for the fees expires every five years, and the agency and the industry negotiate behind closed doors on the renewal and the performance goals for the reviews. The need for renewal creates an opportunity for the passage of laws that might not have been enacted separately. Some believe the Administration may accept measures of debatable merit to avoid having to layoff needed reviewers. Limiting the user fee support to half the Government appropriation for the program, and making the program permanent can alleviate the capture and linkage problems.

This paper maintains that reforms and changes in the policy rationale for the program are needed before locking-in a permanent funding commitment at a time of debate about growing budget shortfalls. Instead of a fee-for-service rationale, the program should be based on a health review rationale. A study is needed to identify better priority rankings and goals for drug reviews, rather than the simple categories and negotiations that now exist. To avoid the risk of capture, the revenues from the fees should not exceed the Government funding for the program. Making the fee program permanent would address the linkage problem but providing permanent funding can undercut Congress’ responsibility to determine important budget allocations in a time of concern about deficits. If the program is made permanent, the law should make clear that Congress can reduce the funding level for the fees to deal equitably with funding cutbacks in other programs made in light deficit considerations. Congress should also have to approve any major increases in the fee levels. The significance of the user fee program and the reforms needed, before it is made permanent, warrant wide attention.

Guidant Defibrillator Enforcement Reaches a Conclusion

On January 12, the U.S. District Court for the District of Minnesota convicted and sentenced Guidant LLC for criminal violations of the Federal Food, Drug, and Cosmetic Act, nearly a year after charges were filed.  The Court ordered Guidant to submit to three years probation, against the recommendation of the prosecution, and to pay more than $296 million in fines and forfeitures included within the plea agreement.

The Charges

On February 25, 2010, the Department of Justice (DOJ) brought charges against the Boston Scientific Corp. subsidiary and medical device manufacturer for “its mishandling of short-circuiting failures of three models of its implantable cardioverter defibrillators” (according to a recent press release).

After a four-year investigation, the DOJ concluded that Guidant became aware of design defects which rendered its products inoperative in 2002 and 2004.  Guidant was charged with “making materially false and misleading statements on report(s) required to be filed” with the Food and Drug Administration (FDA) on Aug. 19, 2003, when it informed the FDA that a design change to correct the flaw did not affect the safety and effectiveness of device.  Guidant was also charged with “failing to promptly notify” the FDA of a device “correction” which was made to “reduce a risk of health posed by the device.”  In 2005, Guidant recalled the ICD devices.

The Court Rejects the Plea Agreement

On March 11, 2010 — within a month of the indictment — Guidant and the Department of Justice submitted a plea agreement in which Guidant agreed to plead guilty to both counts, to pay a criminal fine in the amount of $253,962,251, and to pay a criminal forfeiture of $42,079,576.  On April 5, 2010, Guidant pled guilty and FDA Commissioner Margaret A. Hamburg, M.D. declared that the “entry of a guilty plea by Guidant LLC and the proposed resolution would represent the largest criminal penalty ever imposed on a device manufacturer for violating the Food Drug and Cosmetic Act.”

However, on April 27, 2010, District Judge Donovan W. Frank rejected the plea agreement.  He found that “after careful deliberation,” it was “not in the best interests of justice and [did] not serve the public’s interests.”  In his opinion, Judge Frank cited arguments raised by a class of “consumers of Guidant products at issue” regarding restitution and the absence of a probation provision among the reasons for his delayed decision.  He concluded that restitution was inappropriate because there were “no victims directly and proximately harmed by Guidant’s criminal conduct.”

The absence of a provision requiring probation proved fatal to the agreement.  Specifically, Judge Frank stated that Guidant “could be ordered to perform community service designed to repair the harm caused by its offenses…” or to establish or expand a compliance and ethics program.  Furthermore, the presentence investigation report would enable “the Court to consider the feasibility of any of these suggestions or of additional conditions of probation.”

The Sentencing Hearing

On January 4, 2011, both parties submitted further information in anticipation of the January 12 sentencing hearing.  Guidant provided summary information regarding its continued and expanded compliance activities, including its five-year Corporate Integrity Agreement with HHS-OIG, and its charitable and community service activities.  The government stood by its original plea agreement and did not advocate for probation.

On January 12, the Court signed the plea agreement with modification.  In addition to Guidant’s payment of the fines and forfeitures outlined in the agreement, Guidant will submit to probationary period of three years.  According to the DOJ, “Guidant is required to make quarterly reports to the Probation Office and to submit to regular, unannounced inspections of its records by the Probation Office.   The court also required Guidant to notify its employees and shareholders of its criminal conviction.”

Looking Ahead

Having been hailed the “largest criminal penalty ever imposed on a device manufacturer for violating the Food Drug and Cosmetic Act,” it is noteworthy that the Court did not accept the sentencing recommendations offered in the plea agreement.  Despite evidence of compliance changes and a five-year Corporate Integrity Agreement with the HHS-OIG, the Court felt it necessary to add probation to Guidant’s sentence.

In a time when individuals face exclusions from federal health programs even absent criminal sanctions, health-related corporations should likewise keep an eye on the resolution of future criminal cases.  Is this a single “victory for one federal judge who put his foot down… until he got what he thought was a fair deal,” as Law.com reports, or the start of a trend?

A complete record of the filings can be found here.

Office of the Inspector General Releases 2011 Work Plan

On October 1, the Office of the Inspector General (”OIG”) of the U.S. Dept. of Health & Human Services (”HHS”) released its Work Plan for Fiscal Year 2011 (”Work Plan”).  Each year, the OIG briefly outlines activities that OIG “plans to initiate or continue with respect to the programs and operations” of HHS.  Various offices within OIG conduct audit, evaluation, investigation, enforcement, and compliance activities.

Continuing Work Within OIG

Many of the topics outlined in the Work Plan were included in last year’s plan.  Although the repeated inclusion of these areas of focus makes compliance easier for facilities, audits should still be conducted in the following areas:

• Provider-based status
• Observation services (as part of an outpatient visit)
• Part A hospital capital payment
• Critical access hospitals
• Medicare disproportionate share payments
• Duplicate graduate medical education payments
• Hospital readmissions
• Hospital admissions with conditions coded present-on-admission
• Inpatient rehabilitation facility transmission of patient assessment instruments
• Medicare excessive payments

New Issues to be Targeted

“What we’re really looking at are four or five really brand new issues,” said Stephen Miller, JD, chief compliance and privacy officer for Trenton, NJ-based Capital Health System, Inc. for HealthLeadersMedia.com.

• Brachytherapy reimbursement
• Replacement of devices received at no cost or reduced cost
  • According to Debbie Mackaman, RHIA, CHCO, regulatory specialist for HCPro, Inc., in Marblehead, MA, “Since the medical devices replacement issue can be a difficult billing procedure to comply with, facilities should certainly do an in-depth process audit in this area.”
• Safety and quality of intensity-modulated radiation therapy (IMRT) and image-guided radiation therapy (IGRT)
  • Indicates a responsiveness on the part of OIG to headlines regarding quality concerns.  In March, the Nuclear Regulatory Commission fined Philadelphia Veterans Affairs Medical Center $227,500, its second largest fine ever against a medical institution, after “unprecedented number” of radiation errors in treating prostate cancer patients.
• Hospitals’ application of the “three-day rule” and “one-day rule” under the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010
  • Many hospitals have had difficulty in billing under the new rules, which redefined what services are related to the admission, and therefore not eligible for Medicare payment within the defined window.  According to Mackaman, “IPPS facilities should be vigilant about reviewing the current three-day rule, and the non-IPPS hospitals should review the addition of the one-day rule.”  CMS guidance on this topic can be found here.

OIG Review of FDA Administration

As HealthReformWatch previously reported, nine Food & Drug Administration (”FDA”) scientists from the Center for Devices and Radiological Health (”CDRH”) sent a letter to President Obama stating, in relevant part, that:

the scientific review process for medical devices at the FDA has been corrupted and distorted by current FDA managers, thereby placing the American people at risk. Managers with incompatible, discordant and irrelevant scientific and clinical expertise in devices…have ignored serious safety and effectiveness concerns of FDA experts. Managers have ordered, intimidated and coerced FDA experts to modify scientific evaluations, conclusions and recommendations in violation of the laws, rules and regulations, and to accept clinical and technical data that is not scientifically valid.

These scientists also wrote to Congress in 2008, accusing the top FDA officials of “serious misconduct” in ignoring scientist concerns and “approving for sale unsafe or ineffective medical devices,” according to the N.Y. Times.

According to Washington G-2 Reports, OIG also stated on September 29 that “it would re-examine the concerns of those FDA reviewers, and broaden the scope of its inquiry.”

This coming year, OIG intends to investigate CDRH “policies and procedures for resolving scientific disputes about approval of devices.”  The Work Plan states that OIG will:

review a sample of administrative files for disputed device decisions and assess the extent to which regulations, policies, and procedures were followed during the dispute resolution process. We will also assess whether CDRH managers and staff are aware of and trained on policies and procedures for resolving scientific disputes.

Additionally, OIG will continue to review FDA oversight of investigational new drug applications, the process for device approval, and oversight of postmarketing surveillance studies of medical devices.

FDA and CMS Propose Parallel Review of Medical Products

On September 17, the Centers for Medicare and Medicaid Services (CMS) and Food and Drug Administration (FDA) announced their consideration of a parallel review “process for overlapping evaluations of premarket, FDA-regulated medical products,” and their intention to create a pilot program for parallel review of medical devices.

According to the request for comments published in the Federal Register, the new process would be initiated when “the product sponsor and both agencies agree to such parallel review.”  This collaboration is among the first fruits of a June memorandum of understanding between both departments of Health and Human Services (HHS),which is intended to “promote initiatives related to the review and use of FDA-regulated drugs, biologics, medical devices, and foods, including dietary supplements.”

Among the goals set out by the agreement, the FDA and CMS sought to “[b]uild infrastructure and processes that meet the common needs for evaluating the safety, efficacy, utilization, coverage, payment, and clinical benefit of drugs, biologics and medical devices.”  The proposed parallel review process would do just that.

The proposed process is intended to reduce the time delay between “FDA marketing approval or clearance decisions and CMS national coverage determinations.”  Currently, medical products are first reviewed by the FDA for safety and effectiveness; then, CMS begins the process of making its coverage determination and payment rate, which can take up to a year.  Although CMS is only one of many third-party payors, many others follow CMS’ lead in making their own coverage decisions.  A reduction in the approval-to-payment time by CMS will positively impact the rate at which all coverage decisions are made.

The parallel process will potentially benefit patients and sponsors.  A parallel process that reduces the “approval-to-payment” time will produce savings for sponsors and lead to timely patient access to new products.   Furthermore, by reducing the time to return on investment, the parallel process may be an incentive for increased investment in innovation.

Hurdles to a Parallel Process

There are significant differences between FDA and CMS review that must be overcome.  The FDA generally reviews safety and effectiveness through various application processes (premarket approval, premarket notification, etc.).  CMS, on the other hand, must make multiple decisions regarding a medical product under the “reasonable and necessary” standard, including: “what items and services it can and should pay for; how it should accomplish the payment; and how much to pay.”

Because the FDA and CMS apply different standards in their review processes, a clinical study that demonstrates the FDA requirements of safety and effectiveness may neglect to address CMS’ “questions concerning the impact of the technology on Medicare beneficiary health outcomes.”  Ideally, the parallel process will guide sponsors to design clinical studies that simultaneously address both FDA and CMS questions.

Moving from a serial to parallel process must be carefully staged in order to preserve agency resources.  There is the potential for CMS waste if coverage decisions are begun (or even worse, completed) for products that are subsequently denied approval or clearance by the FDA.

The Call for Comments

The FDA has asked the public to comment on seventeen different issues, including:

• How parallel review should be implemented and when in the FDA review process it should start
• Whether anyone other than the product sponsor should be able to initiate a request for parallel review
• Which classes of products would benefit most from parallel review
• Whether there exist regulatory, legal or scientific barriers to review, and how they may be overcome.
• The criteria for granting a parallel review request

The FDA and CMS will publish their decisions regarding the proposed parallel review process after December 16, when the comment period closes.

Next Page »