As if the deadening hand of a collapsing U.S. economy was not enough, even before Barack Obama was sworn in on January 20, his comfortable Democratic majority on Capitol Hill was working up two more body blows for the medical device industry, making for the proverbial triple whammy.
Five days before Obama's inauguration, the Government Accountability Office (GAO) delivered a report commissioned by the newly Democratic Congress in its FDA Amendments Act of 2007. Titled FDA Should Take Steps to Ensure That High-Risk Device Types Are Approved through the Most Stringent Premarket Review Process, the report focused on the relatively few Class III (high-risk) devices that are approved by FDA through the 510(k) process.
GAO found that between 2003 and 2007, FDA cleared 24 types of these devices (228 devices in all). The group urged FDA to develop new regulations to either reclassify them into 510(k)-eligible Class I or Class II devices or require premarket approval (PMA) submissions for them. In its comments on the GAO report, FDA concurred but did not provide a timeline for doing this.
The report arrived hard on the heels of a highly publicized CDRH staff minirevolt in which both Capitol Hill Democrats and the Obama transition team were separately told that unqualified managers had interfered in reviewers' scientific judgments at the behest of device companies. These complaints paralleled earlier ones from FDA's drug and veterinary medicine review staffs.
The complaints probably have more to do with some companies' clumsy sense of ownership of the FDA product-review process, now that they are paying for it through user fees, and less to do with the underlying process itself. But political adversaries were quick not to see the distinction.
The New York Times disregarded GAO's focus on Class III devices and instead latched on to the inescapable truth that most new devices (overwhelmingly Class I and II) go through the 510(k) process. Investigative reporter Gardiner Harris covered the new GAO report with a quote from Memorial Sloan-Kettering pulmonary physician Peter Bach, a former Medicare and Medicaid adviser: “So on the one hand, the manufacturer wheels in its new Ferrari to FDA and says, ‘Look, it's a car just like the Model T.' Then they go out in the marketplace and say to doctors, ‘Why would you drive anything but a Ferrari?' This drives up the cost of care without any necessary actual improvement in outcomes.”
Concepts like that doubtless drove Representative Frank Pallone (D–NJ), chairman of the House Energy and Commerce Health Subcommittee, to announce that he was not surprised by the GAO findings. “I plan to hold hearings in my subcommittee to review the overall process,” he said, “and will develop legislation, if necessary, to ensure that recipients of these high-risk devices are not in any danger.”
It's quite likely that cooler heads will eventually prevail on this incubating Democratic whammy (i.e., legislation restricting or replacing the 510(k) process). But the industry and CDRH should expect strenuous efforts by politicians to take a body count of injuries that could be blamed on devices that should have gone through the PMA process but slipped through 510(k) instead.
The second whammy could be measures to respond to the complaints about company interference in device reviews through the clumsy—if not illegal—intimidation of review scientists and physicians by CDRH managers.
These first came to light in November after nine scientists and physicians took their complaints to the House Energy and Commerce Committee, then under the aggressive chairmanship of John Dingell (D–MI). The scientists had been frustrated in their efforts to get CDRH director Daniel Schultz and the commissioner's office to take action.
The whistle-blowers told Dingell that Schultz conducted his own investigation and concluded that they needed to “move forward” without him taking any curative or disciplinary action. The dissidents also alleged that Schultz had “aggravated the situation by knowingly allowing a continuation of management reprisals” that included removal and threatened removal of physicians and scientists and illegal and improper employee performance evaluations.
When Dingell lost his chairmanship to Henry Waxman (D–CA), it looked as if the committee's investigational interest would shift away from such issues. But the nine CDRH dissidents wrote in January to Obama transition team leader John Podesta and garnered another rash of headlines.
These stories fingered CDRH Office of Device Evaluation director Donna-Bea Tillman as one of the meddling managers who had interfered in approvals. One example they cited was the forced approval of Nashua, NH–based iCAD Inc.'s SecondLook Digital, which is a computer-aided detection system for mammography. The system is approved for use with Fuji Medical Systems' Computed Radiography for Mammography system. Tillman allegedly responded to pressure from Fuji's congressional representative, Christopher Shays (R–CT), who lost his seat in the last election.
Another example the dissidents gave involved Israel-based Shina Systems' application for AngioCT, a device that combines computed tomography (CT) images with x-rays to help guide cardiac surgeons during angioplasty and stenting. Shina sought an abbreviated review, according to the documents.
CDRH cardiologist Brian Lewis pushed for a clinical trial to prove that the device works, since it was novel and risky, according to a New York Times report on the documents. “Should the images be misleading,” he wrote in a memorandum, “FDA could expect immediate misguidance of catheters and possibly puncture of coronary vessels or overaggressive, inappropriate, or inadequate stent or balloon use.”
Nonetheless, the Times reported, a supervisor that Lewis did not name pressed scientists, after meeting with Shina representatives, to consider allowing an abbreviated review. “The agency's decision on the device is pending, according to the documents. Dr. John Smith, a lawyer for Shina, said that he would not comment on ‘ongoing regulatory matters.'”
Although such complaints may be trivialized as palace gossip, their potential whammy status comes from the Democrats' high interest in them. FDA's critics could use the complaints to build momentum for a thorough statutory reconstruction of the agency—reducing industry's influence on the agency and its processes.
The third potential whammy involves budget-squeezing efforts to deal with the economic crisis. One wonders whether the next HHS secretary will proceed with former HHS secretary nominee Tom Daschle's plans for a national healthcare costs–constraining board. These efforts might be used in arguments to mitigate the other two whammies, but sympathy for the medical device industry is in short supply on Capitol Hill these days.
Larry Pilot Leaves McKenna, Long & Aldridge
Pilot said that CEOs who had grown up in the industry were more likely to defend themselves in court rather than sign an FDA consent decree.
After 26 years with the Washington, DC, law firm McKenna, Long & Aldridge, former FDA medical device compliance director Larry Pilot, 68, has withdrawn and plans to write a book about FDA's big federal court loss in United States v. Utah Medical Products, which he defended. Pilot, the 1970 coleader of the agency's current device program, told me in an interview that “it's time to shift my practice.”
In his 40 years of experience as a lawyer, Pilot said he has found cases of this kind to be rare. Since the 1980s, such cases have been made all the rarer by the growing tendency of companies to sign consent decrees with FDA when confronted by agency aggression. He attributes this trend to managerial and legal inexperience with FDA on the industry side and a combination of both legal inexperience and bureaucratic aggressiveness on FDA's side.
Recalling his early days as a lawyer at the Pharmaceutical Manufacturers Association (now PhRMA), Pilot said major brand-name companies in those days tended to be run by CEOs who had grown up in the industry, and “they believed so much in what they did for the public that they wouldn't have elected not to defend themselves in court” by signing a coerced and unfair FDA consent decree. He cited two examples of companies (Abbott Laboratories and Becton Dickinson) doing just that in the 1970s—“It was the industry's persona.”
In the following decades, however, the growth of corporate globalization, mergers, and management turnovers brought in new blood from conglomerates that had neither the culture of the firms they took over nor the necessary appreciation of the effect that FDA could have on them. At the same time, Pilot said, FDA regulatory aggression was encouraged by former commissioner David Kessler by shifting enforcement discretion to the district offices.
This culminated in the forced closure of Physio-Control Inc. (Redmond, WA), then an Eli Lilly subsidiary, for more than a year in 1992–1993 under a consent decree that Pilot felt should never have been signed. After Pilot led the small medical device maker Laerdal to victory over FDA in 1994, Physio-Control's CEO, Dick Martin, whose representative sat through the three-week Laerdal trial, readily admitted that his consent decree had been a mistake, Pilot said. Martin later went on to head the Medical Device Manufacturers Association, founded by Pilot, and is now retired.
Against the new trend of industry capitulation to unreasonable FDA demands, Pilot said he was fortunate to find two rare resisters. Tore Laerdal and Utah Medical Products CEO Kevin Cornwell—and their respective boards of directors—were willing to place principle before the bottom line. Both companies suffered enormous legal costs to win their points in court. Laerdal exited the U.S. manufacturing scene rather than risk FDA's infamous capacity to get revenge through regulatory retaliation.
Pilot on the 510(k)
The prospect of a witch hunt by politicians for dangerous 510(k)-approved medical devices has prompted device lawyer Larry Pilot, who in January withdrew from law firm McKenna, Long & Aldridge after 26 years, to explore the possibility of starting a new industry group to oppose any such efforts.
Estimating that more than 100,000 devices have been cleared by the 510(k) process, Pilot said that if FDA “has abused its discretion and responsibility, there is no need to revise a well-conceived statutory mandate.
He continued, “Congressional oversight and responsible management are the cure for the incompetent administration of a good law; more than 30 years of experience demonstrate the value of the process.”
Court Upholds FDA Preemption in Medtronic Case
A Minnesota federal judge has dismissed with prejudice the master consolidated complaints for individuals and third-party payers under multidistrict litigation involving Medtronic's Sprint Fidelis defibrillator leads. The court ruled that the claims were preempted by FDA regulation.
Company CEO Bill Hawkins said the ruling “is consistent with the U.S. Supreme Court's ruling in Riegel v. Medtronic last year, following a long line of circuit court decisions. This decision supports the principle that FDA is the appropriate body to determine the safety and efficacy of innovative technologies.”
Meanwhile, Representatives Henry Waxman (D–CA) and Patrick Leahy (D–VT) plan to introduce legislation soon on Capitol Hill to reverse the effects of the Riegel decision.
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