Can Bankruptcy Be an Unofficial FDA Sanction?

For the second time in less than a year, a small medical device company had to seek bankruptcy protection after becoming the target of FDA action.

Citing $14.6 million in debt liabilities, ReGen Biologics filed for Chapter 11 bankruptcy protection in early April—one week after FDA rescinded its 510(k) clearance for the company’s Menaflex collagen scaffold and two weeks after ReGen had publicly and scornfully rejected an FDA offer for a hearing on the dispute. Recently, ReGen filed a lawsuit against FDA over the snafu. 

Last year, TMJ Implants Inc. filed for Chapter 7 bankruptcy after FDA pressed it for $340,000 in civil money penalties for not filing 17 disputed medical device reports (MDRs). 

In both cases, the companies’ CEOs challenged internal CDRH decisions, sought political remedies, and publicly disparaged the agency when CDRH refused to accommodate them.

TMJ Implants’ battle with CDRH began over premarket approvals that were imposed by management on dissenting CDRH staff. Then the center took an enforcement route against the company, finding after an inspection that postimplant events had not been filed as MDRs with CDRH. The company and its president and CEO, Robert W. Christensen, balked at this determination, arguing that none of the events had been caused by the device, and fought the agency to the U.S. Court of Appeals, ultimately losing and filing for bankruptcy.

In ReGen’s case, political intervention and staff dissent over CDRH management’s decision—with the involvement of then-commissioner Andrew von Eschenbach—to clear the Menaflex 510(k) despite concerns that its predicate devices were not appropriate led to a top-level rereview. In a display of extra-statutory chutzpah, this led to the 510(k)’s rescission in March. The company then filed for Chapter 11 bankruptcy. 

At this point, I can’t help but raise a question. Has FDA added a new and unofficial arrow to its quiver? Is the agency using its power to indirectly effect economic damage if companies don’t play nice?

FDA Approves Neurovasx cPAX Aneurysm Treatment System

FDA has approved the Neurovasx cPAX Aneurysm Treatment System for surgery on brain aneurysms that are difficult to manage due to their size and shape. An agency news release says the cPAX polymeric filler material can be secured in an aneurysm either by insertion through openings in a permanent stent or by using a temporary balloon catheter to block the aneurysm opening and keep the filler material from coming out of the aneurysm as it is being delivered.

Filling the bulging space within the aneurysm with implant material stops the blood flow through the aneurysm and any remaining space around the implant material clots, FDA says. Filling an aneurysm with implant material and blood clot decreases the risk that the aneurysm will rupture.

The system was approved April 1 under a HDE based on safety data from two studies of 43 subjects. 

Plexis Biomedical’s Perianal Stabilizer Approved

Assenting to a 2009 petition submitted by Plexis Biomedical Inc. (Oakland, TN), in April FDA classified the company’s Hem-Avert Perianal Stabilizer, or hemorrhoid-prevention pressure wedge, as a Class II (special controls) device on the basis of a de novo 510(k) submission. The device provides support to the perianal region during the labor and delivery process, preventing the anus from overextending and gorging with blood, a condition that causes hemorrhoids for about 25% of patients who have vaginal deliveries, amounting to between 750,000 and 1 million patients per year in the United States, according to the company.

In an FDA Federal Register notice on April 15, the agency said it believes the following special controls address the risks to health and provide reasonable assurance of the safety and effectiveness of the device:

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