Congress Enacts Device Law and Confirms FDA Chief

Originally Published MDDI November 2002

WASHINGTON WRAP-UP

Once-reviled user fees become law, with exemptions for smaller companies. New Commissioner Mark McClellan offers a clean slate.

James G. Dickinson

FDA Told to Relax Grip on Industry Communications | FDA Field Offices Will No Longer Issue Warning Letters | Baxter Dialyzers OK Despite Deaths | FDA Dialysate Guidance

In a late-night flurry of activity on October 17, the Senate both passed a much-revised Medical Device User Fee and Modernization Act and confirmed FDA's new commissioner, physician-economist Mark McClellan.

Promised swift signing by the president, the new legislation will infuse FDA with $225 million in additional resources over the next five years. Originally passed in the House on October 9, the bill was amended and passed again eight days later by unanimous consent. Key provisions were revised to address Senate concerns on third-party inspections and the thresholds at which companies would be eligible for reduced user fees.

The amended bill raises the threshold for a small company from $10 million to $30 million or less in annual sales. Such small firms will be eligible for a fee waiver on the first PMA submitted and for reduced fees during fiscal years 2004 through 2007. The full PMA fee is set at $154,000 under the revised measure, while the reduced rate is $58,520. For 510(k)s, all companies will pay $2187 during the first year of the agreement. A reduced rate for eligible small companies after the first year is equal to 80% of the full 510(k) rate.

In addition to the establishment of user fees, the bill calls for the creation of a new FDA office devoted to combination products.

It also authorizes FDA to accredit third-party inspectors to audit medical device companies with a good record of compliance. It gives the agency the option of conducting its own inspection at a firm if the previous two inspections were conducted by outside parties. Within 180 days of the bill's signing, FDA is required to publish criteria for approving and denying accredited persons.

The bill codifies the PMA "modular review" program and extends the third-party review program for 510(k)s. Performance goals established in the bill set an average 25% improvement in review times for all types of premarket submissions, including PMAs, PMA supplements, 510(k)s, and CDRH-reviewed biologics license applications. Goals are established for each cycle of the FDA review process (including first actions, subsequent actions, and actions on final amendments in response to approvable letters), as well as the total FDA days to a review decision. Where no specific goal is stated, FDA is required to maintain its current performance. The bill also requires FDA to improve the timeliness of preapproval inspections for companies submitting PMAs.

The bill's performance goal for PMA reviews requires 80% of submissions to receive, by 2006, an FDA decision (approval, denial, approvable) within 320 days. This compares with the current performance of a decision for 90% of submissions within 409 days. For 510(k)s, whereas 75% of decisions are now rendered within 102 days, the bill sets a 2005 goal of 90 days.

Under the legislation, reprocessed Class III devices will require a new PMA-like submission from the reprocessing firm. The submission is required to include data on cleaning, sterilization, and functional performance (based on the number of times the device will be reprocessed). The submission must include all the data currently required for a PMA except that the manufacturing section will be modified to detail the methods and facilities used for reprocessing and packing the device.

For reprocessed devices requiring a 510(k) review, the bill grants FDA the authority to require reprocessors to provide validation data on cleaning, sterilization, and functional performance. These requirements will be retroactive to include 510(k)s that have already been cleared for reprocessed devices. FDA is also given the authority to remove an exemption from 510(k) for designated devices that are reprocessed. This revocation of 510(k) exemption applies only to the reprocessor and not to the original manufacturer.

For all reprocessed single-use devices, the bill requires reprocessors to label devices as "reprocessed device for single use." Additionally, the identity of the reprocessing company must be included in the labeling, so that any malfunctions or injuries can be reported under the reprocessor's name instead of the original manufacturer's.

As for Mark B. McClellan, MD, PhD, his confirmation gives FDA its first permanent commissioner in two years. The 39-year-old Texas-born physician, whose brother Scott is deputy White House press secretary, was previously a member of the White House Council of Economic Advisers. He had earlier served a brief stint as President Clinton's Deputy Assistant Secretary of the Treasury for Economic Policy. He came to Washington in 1998 from Stanford University, where he was an associate professor of economics specializing in health outcomes research.

While at Stanford, he listed his research interests as the estimation of treatment effects, determinants, and value of technological change in healthcare; effects of price incentives and other nonfinancial factors on healthcare production; health events and economic outcomes. He said his teaching interests were health economics, econometrics, and public economics.

A national fellow of the Hoover Institution at Stanford, and one of at least seven Hoover fellows to be part of the Bush White House, McClellan is probably the best-connected commissioner that FDA has had. Other Hoover fellows in the current administration include national security advisor Condoleezza Rice, Interior secretary Gale Norton, Treasury Department undersecretary John Taylor, Council of Economic Advisers member Anne Krueger, and U.S. Export-Import Bank president John Robson.

At his Senate confirmation hearing on October 7, McClellan made no reference to medical device issues, reflecting his "clean slate" background with respect to FDA. He came across as being generally favorable to market forces, such as direct-to-consumer advertising of prescription drugs (it has value because it informs patients, he said). But he also spoke strongly in favor of more staff resources to meet the challenge of bioterrorism and to maintain adequate surveillance of the marketplace.

FDA Told to Relax Grip on Industry Communications

Medical device companies may now legally disclose premarket approvals. Why won't FDA let them do the same for 510(k) product clearances? And why does the agency consider off-label information "inherently misleading" when distributed by the product's manufacturer, but acceptable when it comes from a third party?

These are just a few of the questions raised about FDA policy in response to the agency's May 16, 2002, call for public comments on its First Amendment performance. On September 19, the Advanced Medical Technology Association (AdvaMed) filed a detailed critique. The author, AdvaMed special counsel Nancy Singer, focused on the agency's first of nine questions posed in the unprecedented Federal Register notice.

That question asked whether FDA could "sustain a position that certain promotional speech about drugs is inherently misleading, unless it complies with FDA requirements." Don't confine the query to drugs, Singer replied, adding that FDA takes that position with respect to medical devices as well.

"To be 'inherently' misleading, the very nature of the speech itself must mislead," she wrote. FDA's current policies, she pointed out, ban or permit "the exact same speech depending on the identity of the speaker." Instead of taking this position, she argued, FDA should first target programs that could potentially be misleading. It should then proceed on a case-by-case basis with actual evidence to support its enforcement position.

In doing this, Singer said, the agency should be guided by the judicial standard of weighing "the ability of the intended audience to evaluate the claims made." FDA "cannot merely ignore First Amendment concerns," she said, "when a category of speech is targeted to consumers as opposed to learned intermediaries, i.e., physicians." Singer conceded that some types of information are more appropriate for healthcare professionals. But, she said, "we question whether even that type of speech would necessarily be 'inherently misleading' if provided to consumers." In fact, she argued, FDA should be required to show "evidence that the speech is 'more likely to deceive the public than to inform it.' "

AdvaMed challenged FDA to avoid a paternalistic approach to consumer-oriented communications from manufacturers. Quoting from a 1996 Supreme Court decision in Liquormart v. Rhode Island, Singer reminded the agency that, as the court wrote, " 'bans against truthful, nonmisleading commercial speech usually rest on the offensive assumption that the public will respond irrationally to the truth. The First Amendment directs us to be especially skeptical of regulations that seek to keep people in the dark for what the government perceives to be their own good.' "

AdvaMed urged FDA to allow the dissemination of specified types of peer-reviewed, scientifically sound off-label-use information by manufacturers under specific conditions. The conditions would include a ban on any oral discussion of such information by the manufacturer's sales staff. AdvaMed also proposed that FDA permit manufacturers to tell physicians and consumers when a product has received 510(k) clearance.

To a question asked by FDA in the Federal Register about whether distributing off-label-use information undermines the law's requirement that new uses must be approved by FDA, AdvaMed answered no. Assuming FDA limits the scope of such speech, manufacturers "would retain a significant incentive to pursue FDA approval for the new use," AdvaMed said.

"Specifically, [the manufacturer] would need FDA approval to make safety and effectiveness claims," AdvaMed stated. "In fact, we would argue that not only should certain types of speech regarding off-label uses be permitted, but [so] also [should] certain types of speech regarding unapproved products. After all, the fear of misuse of the disseminated information is far less, and the incentive for obtaining FDA approval far greater, in the context of unapproved products because they are not commercially available."

FDA Field Offices Will No Longer Issue Warning Letters

FDA has formally revoked a compliance policy guide that allowed field offices to issue warning letters on their own. According to a Federal Register notice published on September 6, the guide had authorized FDA's field districts to issue warning letters or recommend seizure actions without prior CDRH approval. (The policy guide bore the lengthy title, "Sec. 300.700 Direct Reference Authority for Class III Medical Devices Without a premarket notification (510(k)) or an approved Premarket Approval Application [PMA] [CPG 7124.30].")

FDA says this procedure no longer reflects current agency policy and that the field districts should forward all proposed warning letters and seizure recommendations to CDRH for concurrence.

Baxter Dialyzers OK Despite Deaths

Baxter Healthcare said in mid-September that a preliminary investigation into reports of five deaths associated with the use of the company's Meridian dialysis machines had found the machines to be operating properly.

"The investigation is in its early stages, and it remains unclear whether the deaths were due to the underlying disease of the patients or an element of the treatment," the company said in a statement. It pointed out that investigating deaths associated with hemodialysis is "very complex" because there are many potential contributing factors, such as the variety of dialysis products not made by Baxter that are used with the machines. While continuing its investigation, Baxter cautioned that facilities should stop using certain bloodlines and safety arterial-venous fistula needles until the probe was complete.

In a separate statement, on September 12, FDA said that "although the cause of the deaths has not yet been determined, Baxter on September 6 notified hemodialysis centers that it is exploring the possibility that the patients' hemodialysis treatments may have used the same model dialysis machine and bloodline set." The deaths and injuries occurred at Nephrology Inc., in Mishawaka, IN, and Physicians Dialysis Inc., in Grand Rapids, MI.

Late last year, FDA and Baxter investigated 50 deaths that occurred worldwide with some of Baxter's dialyzers. Baxter recalled the suspect devices.

FDA Dialysate Guidance

FDA believes it is necessary "to regulate disinfectants used to disinfect dialysate delivery systems and water purification systems used in hemodialysis . . . to ensure the appropriate level of regulation necessary to protect public health." So the agency writes in a new CDRH document, "Regulatory Status of Disinfectants Used to Process Dialysate Delivery Systems and Water Purification Systems for Hemodialysis; Guidance for Industry and FDA." The guidance provides a classification for these disinfectants, outlines the risks to which patients are exposed, and explains why FDA does not consider the disinfectants to be liquid chemical sterilants, or high-level or general-purpose disinfectants.

According to the guidance, dialysate delivery systems and water purification systems for hemodialysis are both classified as Class II devices. As a result, disinfectants that are accessories to these systems are likewise classified as Class II. Included in the guidance is a table that identifies these disinfectants, the component devices they are intended to disinfect, and their classification and respective product codes.

The guidance may be accessed at www.fda.gov/cdrh/ode/guidance/1419.pdf.

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