An Honest Assessment May Boost FDA Appropriation

After some prodding from Congress, the FDA commissioner admits that the agency needs much more money than was originally allotted.

James G. Dickinson

July 1, 2008

21 Min Read
An Honest Assessment May Boost FDA Appropriation


In May, the Senate authorized an emergency infusion of $275 million for a beleaguered FDA. The amount takes into account the suggestions FDA commissioner Andrew von Eschenbach gave the Senate after he was pressed on how much money the agency needs to fulfill its mission. The money was a tacit admission that the White House had understated the agency's actual needs by one-third when it presented its fiscal year 2008 budget request last year.

Congressional appropriators thought Bush's budget proposal for FDA was too small, but they couldn't get answers to determine the right amount. Adding to their frustration was the rising public alarm over contaminated imports that the agency seemed unable to intercept. Frustrated, they eventually added $150 million more than Bush had requested, and the president signed it into law December 26 without comment.

New FDA Funding by the Numbers

$125 millionFood safety activities

$100 millionMedical device and drug safety measures

$40 millionModernizing FDA's science and workforce

$10 millionCapital spending on laboratory facilities

By May, the situation had gotten worse. The contaminated-heparin scandal focused yet more attention on FDA's failures, but Bush's fiscal year 2009 budget request contained only a 6% increase for FDA. Congressional appropriators were even more frustrated with Bush's numbers than they had been before.

As a close friend of the Bush family, FDA commissioner Andrew von Eschenbach had the miserable task of not revealing how much FDA really needed under brutal congressional questioning through March and April. He deflected angry questions from Energy and Commerce chairman John Dingell (D–MI), who accused him of “not doing [his] job” and using “buzzwords” and “toe dancing.” Other questioners were almost as testy.

The crack came in a May 1 letter from friendly senator Arlen Specter (R–PA), ranking minority member of the appropriations subcommittee responsible for parceling out funds to FDA. In the letter, he begged the commissioner to give the details of what FDA really needed in addition to the amount allotted in Bush's fiscal year 2008 budget. In one of the margins, Specter wrote: “Andy, I know the situation is extreme. I want to get you financial help now.”

Commissioner Andrew von Eschenbach broke with tradition and gave Specter a sincere assessment of FDA's financial woes.

Four days later, von Eschenbach took the unprecedented step of giving Specter an estimate labeled as his own “professional judgment” ostensibly independent of the Bush budget—a historic break from established tradition. Two days after he did so, appropriations chairman Herb Kohl (D–WI) tacked those same numbers, a total of $275 million, onto the “must-pass” emergency Iraq war funding bill.

The supplement included $125 million for food safety activities, $100 million for medical device and drug safety measures, $40 million for modernizing the agency's science and workforce, and $10 million to upgrade FDA facilities and laboratories outside of Washington, DC. Those facilities are currently below public safety standards and are inadequate to perform agency requirements.

The memo may have been an unspoken admission that administration secrecy had underequipped its primary health and safety agency until it could no longer do its job.

Just weeks earlier, von Eschenbach had drawn widespread scorn for testifying that FDA “could use” only an extra $100 million, and that it could not absorb an extra $375 million that had been recommended by the agency's own Science Board. As former FDA associate commissioner and Alliance for a Stronger FDA president Wayne Pines commented: “Dr. von Eschenbach has broken with a long and unfortunate tradition of FDA leaders being publicly silent about the real needs of FDA.”

As this column was being written, Kohl's full committee passed the $275 million FDA infusion, but the House had taken no comparable action—and more political maneuvering loomed.

Another FDA Court Loss Flags Need for Policy Change

Florida federal judge G. Kendall Sharp ruled against FDA on four out of five counts in U.S. v. Endotec Inc. It was the fifth consecutive federal court loss for the agency, spanning 17 years.

In Endotec, Sharp, a 1983 Reagan appointee, took the opportunity to lecture the agency that its “stringent regulations and strict interpretation of procedural requirements are resulting in technological innovation being stymied, rather than advanced.”

CDRH Defeats in Federal Court

The center has lost court cases to the following companies:

Endotec Inc. (South Orange, NJ; 2008)

Utah Medical Products (Golden, CO; 2005)

Andersen Products (Haw River, NC; 1997)

Laerdal Medical Corp. (Stavanger, Norway; 1994)

BioClinical Systems (1988)

As in all of FDA's other defeats, in Endotec the agency made no allegations of patient injuries from the challenged devices, or even likely safety risks. The judge emphasized this fact in his order.

The case involved CDRH charges that Endotec (South Orange, NJ) and its two principals—president and coowner Michael Pappas and vice president, medical director, and coowner Frederick Buechel—marketed unapproved, adulterated, and misbranded implantable devices.

The government sought a permanent injunction and an order of disgorgement. On the basis of several FDA inspections between 2001 and 2005, it charged that the company had shipped about 4000 devices when its investigational device exemption (IDE) allowed only 109 for clinical trials. (Endotec was unable to say how many devices were exported versus shipped domestically.) FDA also alleged shipments to physicians who were not enrolled in Endotec's clinical studies, distribution of devices that differed from their approved design and did not have required labeling, and distribution “under the guise of the ‘custom device' exemption...even though the devices did not qualify for such exemption,” among other violations.

The devices cited in FDA's complaint were knee, ankle, and temporomandibular joint replacements. Endotec contended that its manufacture and distribution of these devices was at all times protected by the “custom device” or IDE provisions of FDA regulations. CDRH dental devices branch chief Mary Susan Runner acknowledged weaknesses in the government's case against the firm.

Sharp's decision follows four others—Utah Medical Products (2005), Andersen Products (1997), Laerdahl (1994), and BioClinical Systems (1988)—in which CDRH-sourced prosecutions have failed in federal court when contested. In each of these defeats, CDRH interpretations of regulatory terms and requirements figured prominently. In Endotec, Sharp found a definition of custom device by CDRH associate director for regulatory guidance and government affairs Casper Uldriks “so narrow as to make the definition useless.”

CDRH's losing streak involves an enforcement policy that is reminiscent of the court battles its drugs counterpart, CDER, fought against the generic drug industry more than 20 years ago. Notably, in U.S. v. Barr Laboratories, the presiding judge became so exasperated with FDA's interpretation of its archaic drug GMP regulations that he rewrote a large section of them.

Since those battles have faded from memory, CDER has adjusted to a new judicial climate. Federal judges are much less likely than before to defer to federal agencies' interpretations absent evidence of actual harm to public well-being.

As I wrote in 1999, this judicial shift required FDA policymakers to collaborate more intimately with the Office of Chief Counsel in recrafting enforcement and compliance policies if they wished to avoid continuing reversals. CDER seems to have done this, but not CDRH. This intransigence was most recently seen in its civil case against TMJ Implants Inc.

The chief counsel seems to support both CDER's and CDRH's approaches, notwithstanding their apparent divergence. Perhaps this is evidence of an unintended consequence of an HHS General Counsel instruction issued in the Reagan era. It elevated the “lawyer-client” relationship between FDA and the chief counsel to a controlling ethic. Could it be that this move also spawned a “my client, right or wrong” advocacy mentality among FDA lawyers in place of the old, collegial collaborator's role in designing the legally soundest policies?

A comment on the Web site that could have come from an FDA enforcement official may shed some light on CDRH's position. It stated that CDRH's current policies are seen inside the center as having “been more than accommodating to the medical device industry. It gets kid-glove treatment compared with other industries. For example, the inspections are preannounced and 483s are annotated with the firm's comments. For some years, FDA held off on issuing warning letters to device manufacturers to allow them time to respond to 483s and prevent issuance of such letters.”

The observer went on to say that these accommodations were implemented after “FDA had grassroots-level meetings with industry [stakeholders] to address their concerns about being regulated and their opposition to inspections and investigators. At that time, the industry group accused investigators of being renegades, when in fact they were only guilty of being competent and dedicated. It also griped about the lack of consis-tency in inspections and FDA responded by implementing the use of canned-language 483s.

“The QSRs [quality system regulations] were spearheaded within FDA by individuals with industry experience and in conjunction with industry. Industry had opportunities during rulemaking to comment on the QSRs,” the statement continued. “Seems like FDA has bent over backwards to coddle the industry, but they are still just not happy to be regulated. Instead of just complying with the regulations that were promulgated with their input, they still blame FDA for doing its job. They skewer the investigators and mock the attorneys.”

FDA Submits Consent Decree with Medtronic's Physio-Control

FDA and Medtronic's Physio-Control unit (Redmond, WA) have reached agreement, pending court approval, on a consent decree over quality system deficiencies involving the company's external defibrillator products.

The agreement, submitted to the U.S. District Court for the Western District of Washington, “addresses issues raised by FDA during inspections regarding the company's quality system processes and outlines the actions Physio-Control must take in order to resume unrestricted distribution of its external defibrillators,” states a Medtronic press release. “We've made significant investments and improvements to our quality systems, and we are pleased to have a plan that formalizes the path to resume full distribution,” said Physio-Control president Brian Webster.

The troubled plant reportedly stopped shipping the alleged problem defibrillators in the United States in January. The decree is intended to prevent further U.S. shipping until quality improvements are made and confirmed by agency experts.

It requires the company to contract with an outside GMP or quality systems expert to inspect the firm's defibrillator manufacturing operation and certify its compliance with FDA regulations. Notably, the firm must identify and address the root causes behind defibrillator failures over the past 24 months.

FDA can assess a penalty of $15,000 per day if the firm fails to comply with the regulations outlined in the decree. This penalty cannot exceed $20 million in any one calendar year, and if Medtronic sells its interest in Physio-Control, then the penalty cannot exceed $7 million each year.

Previous Violations

FDA inspected Physio-Control in 2006 and documented quality systems as well as corrections and removals reporting violations. Similar problems led to a consent decree in 1992 between FDA and the firm, which was eventually vacated after corrections were made. The firm had been warned in 2000 over reporting device corrections and removals, and additional violations were documented in 2003 and 2005, the complaint says. A 2005 warning letter was also issued on corrective and preventive action (CAPA) violations.

FDA's most recent inspection appears to have focused on a lack of adequate CAPA procedures, according to the agency. It also identified problems with design validation, incoming product acceptance procedures, management reviews, and complaint investigations.

Commissioner Admits a ‘Failure' in TMJ Implants Case

FDA commissioner Andrew von Eschenbach acknowledged in a private meeting on Capitol Hill in April that a “process failure” had occurred in the agency's handling of a TMJ Implants Inc. (TMJI; Golden, CO) appeal to the commissioner's office before he joined the agency. The comments were revealed in a letter to von Eschenbach by House Energy and Commerce minority members Joe Barton (R–TX) and John Shimkus (R–IL). It memorialized key points from the commissioner's meeting with them.

The mishandling of the appeal involved an eight-month delay in rejecting TMJI's appeal request. In the interim, the agency filed a civil money penalties case against the firm, which TMJI lost. In their letter, Barton and Shimkus said they “appreciate that you acknowledged that the concerns we raised about how an appeal of a warning letter to the office of the commissioner involved a process failure.”

The letter further noted that von Eschenbach and his staff “are addressing the legitimate concerns we have raised” and that the commissioner had asked his assistant commissioner for integrity and accountability to “examine these concerns and address process improvements. You further mentioned that FDA was creating and developing internal operating guidelines to improve [its] conduct of dispute resolution. Finally, you emphasized FDA's need for feedback to continuously improve and to be preemptive of dispute problems.”

The assistant commissioner referred to is attorney Bill McConagha, who was appointed last year by von Eschenbach from FDA's Office of Chief Counsel to investigate internal procedural problems.

In an earlier letter requesting the meeting, Barton and Shimkus's language was much more to the point on TMJI's behalf. They complained about the way the company's appeal had been held in limbo while FDA prepared the civil money penalties case against it for not filing 17 medical device reports. “We do not believe there is ever a situation where FDA should be given a license to lie to regulated industry,” they wrote. At the April 22 meeting, von Eschenbach agreed, promising significant changes.

A committee source told me that the two congressmen were determined to hold von Eschenbach to his verbal commitments, and would follow up in a “few weeks.”

LASIK Adverse Events Draw Publicity

Public comments presented to CDRH's Ophthalmic Devices Panel in April included ample reference to physical side effects and complications associated with LASIK eye surgery. But the session was dominated by patient anecdotes and professional disputes over reports of severe depression and suicidal thoughts and actions attributed to adverse or poor surgical outcomes.

Common physical complaints by patient advocates and patients claiming to have suffered adverse effects from LASIK surgery included persistent pain and stinging (dry eye); impaired night vision with the appearance of glare, halos, or starbursts; and loss of visual acuity. But for some individuals, the chronic, unresolved nature of these and other conditions becomes so incapacitating as to lead to career and financial disaster, disruption of marriages and other personal relationships, and even suicide.

Clinical psychologist Roger Davis, who also suffers from adverse effects of LASIK surgery, called for an end to, or at least a moratorium on, refractive eye surgery. “Research connecting complications to quality of life provides the ethical basis for informed consent,” he said. “Because this research does not yet exist, refractive surgery cannot be performed ethically, whatever its satisfaction or complication rate.”

Davis and other witnesses charged that all too often, LASIK patients have not been afforded the opportunity to give “real” informed consent to surgery. They also said that the LASIK industry has lied to the public about the nature of risk and has sought to suppress public awareness of the severity of LASIK injuries in order to maintain public perception of the procedure as safe. They noted that, given this perception, many injured patients will begin to think of themselves as victims of a medical conspiracy.

FDA recently announced a partnership with the several LASIK surgeons' organizations, including the American Society of Cataract and Refractive Surgery, to study LASIK safety and quality-of-life issues. But agency critics complain that the partnership represents an inherent conflict of interest, and they call for any such research to be conducted by an independent body.

LASIK patient Michael Patterson expressed skepticism over the integrity of the FDA–LASIK industry partnership. He said he has suffered severe adverse results from LASIK surgery, which he attributes to lax FDA oversight of ambulatory surgical facilities and, more specifically, to improper reuse of a single-use microkeratome device.

The agency has never initiated a compliance program for LASIK devices, as it has for most other invasive surgical devices, he said.

Several presenters offered testimony pointing to an exceptional degree of satisfaction with LASIK surgery, as revealed in meta-analyses of the medical literature and patient surveys. Medical University of South Carolina ophthalmology professor Kerry Solomon cited results of a comprehensive review of the world literature since LASIK surgery's inception. Of 1581 articles reviewed, Solomon said 19 dealt specifically with patient satisfaction, indicating that more than 95% of patients report satisfactory results with LASIK, even five years after the procedure.

This finding is consistent with data presented by U.S. Navy Refractive Surgery Program director David Tanzer. He reported that more than 98% of naval aviators who have undergone LASIK surgery say they are either “extremely satisfied” (90.9%) or “moderately satisfied” (7.2%) with their results.

The public testimony was followed by presentations from FDA officials who described several LASIK-related agency activities. These include requirements for preclinical studies, device labeling considerations, refractive laser and ophthalmic standards, and postmarket and quality-of-life assessments.

CDRH chief ophthalmic medical officer Eva Rorer said the center has recently assumed an “integral role” in the design of a quality-of-life questionnaire for LASIK patients, to be used in conjunction with clinical trials conducted by FDA and its sister agency, the National Eye Institute.

GE Healthcare Surgery Released from Decree

FDA says GE Healthcare Surgery has satisfied criteria in a January 2007 consent decree and can resume shipping its OEC 9900 Elite C-arm fluoroscopy device. The device uses x-rays for real-time imagery of a patient's internal structure. The company plans to ship more than 300 units in the first 10 days of resumed operations.

The consent decree prohibited manufacturing and distributing specified GE systems at facilities in Salt Lake City and Lawrence, MA, until the devices and facilities were found to comply with FDA quality system requirements.

Deficiencies found in an inspection at the Salt Lake City plant included failure to establish and maintain adequate procedures for validating device design and for implementing corrective and preventive actions.

Company officials said the steps they took to comply with the consent decree made them a stronger company with an improved quality system.

FDA Study Finds Risks in Infusion Pump Technology

A retrospective FDA study has found that use of infusion pump technology for treating diabetes and for pain management may pose special risks for adolescents. The study was published in the journal Pediatrics.

Lead author Judith Cope, of CDRH's Division of Postmarket Surveillance, says the 10-year study of data from 1996 to 2005 was started after FDA received five reports of adolescent deaths associated with the use of insulin pumps in 2005.

Within the study period, researchers found more than 1500 unique reports of insulin pump–related adverse events among adolescent users. They say that although the large number of reports may reflect expanding pump use in this age group, it is important to consider the unique challenges posed by adolescent users.

The study data showed that nearly two-thirds of FDA reports on this population revealed problems with hyperglycemia. The researchers say that although insulin pumps mimic physiologic insulin replacement, they may be a problem because of adolescent lifestyle and psychosocial factors. Several adverse events noted were related to activities such as binge drinking and suicide attempts. Others were attributed to accidental dropping and breaking of pumps.

The study found that one-third of all pump-related problems were malfunctions, and detailed information reported various device problems with error messages and problems with the alarm, catheter, and screen display.

The study also found 12 cases of respiratory depression requiring medical intervention in adolescents using pumps for pain management. More than half of the adverse events indicated the adolescent received an excess bolus of opioid. In most of the reports, the researchers say, it was unclear whether incorrect dosage boluses, programming errors, drug errors, or accidental bolus administration had occurred.

Stryker Biotech Cited for ‘Illegal' Study, Sales

An FDA inspection last fall at Stryker Biotech's Hopkinton, MA, manufacturing facility found numerous violations in the firm's manufacture of its Calstrux, OP-1 Implant, and OP-1 Putty devices.

An April 25 warning letter from FDA's New England District Office says the company failed to obtain an investigational device exemption (IDE) before starting a clinical investigation of the OP-1 implant. The FDA-approved indication for the implant is for its use alone. But the warning letter says contracts the company entered into with clinical investigators indicate the firm initiated studies to determine the implant's efficacy in combination with other unidentified items.

The company also reportedly illegally introduced the OP-1 implant into interstate commerce for a new intended use. The company failed to obtain premarket approval (PMA) or an IDE, the letter says, and also did not notify FDA of its intent to introduce the device into commercial distribution.

Further, the letter says, a number of quality system violations were found, including:

  • Failure to adequately establish and maintain procedures analyzing processes, work operations, concessions, quality audit reports, quality records, service records, complaints, returned product, and other sources of quality data to identify existing and potential causes of nonconforming product or other quality problems.

  • Failure to adequately implement changes in methods and procedures needed to correct and prevent identified quality problems.

  • Failure to document all activities required under regulations and their results.

  • Failure to adequately establish and maintain complaint procedures and to ensure that complaint files are maintained.

  • Failure to adequately ensure that all equipment used in manufacturing meets specified requirements and is appropriately designed, constructed, placed, and installed to facilitate maintenance, adjustment, cleaning, and use.

The inspection also found medical device reporting (MDR) violations, including the following:

  • Failure to submit an MDR no later than 30 calendar days within receiving or otherwise becoming aware of information that reasonably suggests that the firm's device may have caused or contributed to a death or serious injury.

  • Failure to conduct an investigation of each event and evaluate the cause of the event.

  • Failure to establish and maintain MDR files containing information in the company's possession or references to information related to the adverse event. This includes all documentation of company deliberations and decision-making processes used to determine whether a device-related death, serious injury, or malfunction was reportable.

The letter says FDA is aware of falsified institutional review board (IRB) documentation submitted by some of the company's sales force before the inspection began. The agency has received the company's plan to identify the scope of the problem and a proposed plan to correct it. FDA “looks forward to hearing how your firm continues to implement corrective actions to ensure proper documentation of IRB approval for the humanitarian device exemption devices, OP-1 Implant, and OP-1 Putty prior to distribution.”

The inspection also revealed that the company uses software to ensure approval of each device shipment and that an OP-1 implant was distributed to two facilities after Stryker employees overrode the distribution software without a written justification for the deviation.

FDA says it has reviewed company responses to all of the noted violations and found some of them to be adequate but others inadequate. The company was told to promptly correct the violations and to notify FDA of specific steps taken or to be taken and a plan for preventing such violations from recurring. FDA said PMAs for Class III devices to which the quality system deviations are reasonably related will not be approved until violations have been corrected.

FDA Discovers GMP Problems at Immucor

An FDA inspection at Immucor's Norcross, GA, facility in January found significant deviations from GMP requirements in the firm's manufacture of serological reagents. A May 2 warning letter says deviations cited on the FDA-483 included:

  • Failure to establish and maintain procedures to control product that does not conform to specified requirements.

  • Failure to establish and maintain procedures for changes to a specification, method, process, or procedure.

  • Failure to establish and maintain complaint-handling procedures to ensure that all complaint files are evaluated to determine whether the complaint represents an event that is required to be reported to FDA.

  • Failure to establish and maintain procedures for implementing corrective and preventive actions, including requirements for investigating the cause of nonconforming product and identifying the action(s) needed to correct and prevent recurrence of nonconforming product and other quality problems.

  • Failure to submit a medical device report to FDA within 30 days of receiving information reasonably suggesting that a marketed device may have malfunctioned and would be likely to cause or contribute to a death or serious injury if the malfunction were to recur.

FDA says the company's three written responses to the FDA-483 observations did not provide sufficient detail to fully assess the adequacy of its corrective actions. The firm was told to respond within 15 days with a listing of any additional steps taken or planned, including a timeframe for completion of the corrective actions.

FDA Issues Guidance on CLIA Procedures, but Not Waivers

FDA has issued a guidance for industry and FDA staff, titled Administrative Procedures for CLIA Categorization, and it describes the general administrative procedures the agency will use to categorize tests under the Clinical Laboratory Improvement Amendments of 1988 (CLIA). The document does not specifically address CLIA waiver applications.

The guidance was needed because responsibility for categorizing commercially available in vitro diagnostic tests was transferred from the Centers for Disease Control and Prevention to FDA. This transfer enables manufacturers of such tests to submit premarket notifications or applications for tests and requests for complexity categorizations under CLIA to one agency.

The document covers procedures for determining CLIA categorization, CLIA waiver protocols and applications, and the Paperwork Reduction Act of 1995. To download the guidance, visit

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