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Articles from 1997 In January


FDA Makes Quality the Rule (continued)

An MD&DI January 1997 Feature Article

DESIGN CONTROLS

As advertised throughout the long process of revising the GMP regulation, the addition of design control requirements (subpart C) is the most important change to be incorporated in the new regulation.9 These requirements will go into effect at the same time as the rest of the revision, this coming June 1. In recognition of the major effort that will be required for companies to come into compliance with these requirements, however, FDA has determined that it will not actively enforce them until June 1, 1998.

A key unanswered question relating to the new design control requirements is how FDA intends to enforce them. The agency is currently working with manufacturers to develop an inspectional strategy that its field personnel can use to conduct design control audits, and it is expected that this work will be completed by the end of March. During the following two months, the agency is planning to conduct extensive training activities for both its own inspectors and industry personnel, in anticipation of the new regulation becoming fully effective on June 1.

Even with all this activity, however, FDA knows that many manufacturers will require additional time to satisfy the design control requirements. Hence, the agency will use the period from June 1, 1997, to June 1, 1998, as a transitional period for both inspectors and device companies. During this period, inspectors' observations relating to design control will be left with the manufacturer and made a part of the establishment inspection report, but will not be included on any FDA-483 forms or used as part of another regulatory action. Nevertheless, the agency will follow up on conditions or situations that it believes create a safety hazard.

The design control requirements become effective on June 1, 1997, and the agency expects manufacturers to have design control programs in place by that date. The grace period is to enable industry to make any adjustments necessary to comply with FDA's evolving guidances.

When the regulation becomes effective on June 1, the design control requirements will apply to all devices that are then in the design phase of their life cycle. Those devices will not be expected to have met design control requirements in previous stages of their development, nor will they be required to backtrack in order to do so. However, they will be required to meet established design control requirements from that point onward. The company's design and development plan should define how its design control program will be implemented for devices that are already in the design phase during the transitional period. If a manufacturer has a product in the development phase on June 1, 1997, and cannot comply with the applicable design control requirements, it must provide justification for the noncompliance.

The design control requirements will not be retroactive and will not apply to devices that have already been distributed. However, changes to the design of marketed devices have always been subject to design change control, and will continue to be so under the new regulation.

In the past, the GMP regulation did not apply to devices that had been granted an investigational device exemption (IDE). With the issuance of the new quality system regulation, however, FDA is also amending the IDE regulation to require that such devices comply with design controls. Devices with approved IDEs will continue to be exempt from the remainder of the quality system regulation, unless the sponsor states an intention to comply.

According to FDA, this change in policy will not affect the agency's IDE program: no new information will be required in IDE submissions, nor will bioresearch monitoring inspections be altered to include a design control review. Instead, the agency will determine a manufacturer's compliance with design control requirements as part of routine GMP and premarket approval inspections. During such inspections, manufacturers will be required to show that devices used in clinical studies were developed under the applicable design controls. Despite the agency's assurances, however, it is doubtful whether this inspectional strategy will last long. If the intent of design control requirements for IDE devices is to prevent unsafe devices from being used--even investigationally--bioresearch monitoring inspections would seem the appropriate place to establish compliance. It's a bit late to ensure safety after the clinical studies are completed.

General (820.30(a)). In the 1995 working draft, this section said that "each manufacturer shall . . . establish and maintain procedures to control and verify the design." In the new regulation, however, mention of verification has been deleted. Manufacturers are now required to "control the design," which is a broader requirement than that of verification alone.

In the proposed rule of November 1993, the agency named 15 different types of Class I devices that were to be subject to design controls. In the 1995 working draft, the format of this list was changed to five specified devices plus the general category of devices automated with computer software. In the final regulation this short list of Class I devices subject to design controls remains the same; no new devices have been added.

Design and Development Planning (820.30(b)). The requirements of this section are essentially the same as those proposed in the 1995 working draft. The requirement for identifying and describing interfaces has been reworded to make it clear that the interfaces in question are those that provide, or result in, input to the design and development process.

Design Input (820.30(c)). Only one change has been made to the design input requirements since the publication of the 1995 working draft. The requirement that "the procedures shall include a mechanism for addressing incomplete, ambiguous, or conflicting requirements" was added in order to bring the regulation into harmony with ISO 9001 (clause 4.4.4). Manufacturers can meet this new requirement by simply defining how these issues will be resolved, and then including the information within the procedure that defines how design input will be established and controlled.

Design Output (820.30(d)). The 1995 working draft included language requiring that "design output procedures shall ensure that design output meets the design input requirements." In the final regulation this requirement was deleted, because it duplicated one included under design verification.

The final regulation includes the new requirement that design output must be documented and reviewed before approval. Previous iterations of the regulation assumed that this requirement would be carried out, but the final text now leaves no doubt about manufacturers' need to do so. The remainder of the design output requirements are the same as proposed in the 1995 working draft.

Design Review (820.30(e)). For the most part, the design review requirements of the new regulation are the same as in the 1995 working draft. Where the earlier version said merely that the results of a design review must be documented in the design history file, however, the new version now specifies how this should be done, namely, that "the results of a design review, including identification of the design, the date, and the individual(s) performing the review, shall be documented in the design history file (the DHF)."

Design Verification (820.30(f)). In the 1995 working draft, design verification and validation were combined under a single section with that title. The final quality system regulation lists the requirements for the two subjects under separate headings. The requirements have not changed from those proposed in the 1995 draft, except that the term risk analysis is now used to replace the phrase "an analysis of available information to identify potential sources of harm and estimate their probable rate of occurrence and degree of severity."

Many manufacturers continue to be confused about the difference between verification and validation as they apply to device design. FDA offers definitions for each of these terms (820.3(aa) and 820.3(z)(2), respectively). The term design verification is intended to describe those activities used to provide evidence that design requirements have been met (inspection, test, specification review, etc.). The term design validation is intended to have a much broader meaning, and encompasses activities used to demonstrate compliance with all design control requirements, including testing of actual production units under actual or simulated use conditions.

Following FDA's definitions, design verification is most often, but not always, a subset of design validation. In the preamble to the new regulation, FDA states that the design validation requirement cannot be met without complying with all applicable design control requirements.

Design Validation (820.30(g)). The design validation requirements of the new regulation are the same as those proposed in the 1995 working draft. This section requires testing of production units under actual or simulated use conditions, and also includes a requirement for software validation and risk analysis.

However, the final regulation adds an interesting twist: now, design validation may be performed "under defined operating conditions on initial production units, lots, batches, or their equivalents." This section's permission to perform design validation on product equivalents is new, but it is apparent that the agency included it somewhat grudgingly. In the preamble to the regulation, FDA spends almost a column explaining why the use of equivalents is not a good idea. The allowance also conflicts with FDA's position that design validation must include testing of actual production units.

Design Transfer (820.30(h)). The design transfer requirements contained in the final regulation are basically the same as earlier requirements that appeared in the 1978 GMP regulation (820.100(a)(1)). In the past, however, this section was not enforced as a set of design transfer requirements, but rather used by the agency to establish the interpretation that the 1978 GMP regulation required process validation.

The new design transfer requirement is essentially the same as that contained in the 1995 working draft. The phrase "ensuring the design basis is correctly translated" was dropped in favor of "ensuring that the device design is correctly translated."

Design Changes (820.30(i)). The design change requirements are the same as proposed in the 1995 working draft, except that the final regulation specifies that change control must be applied to design changes before they are implemented. This means that changes to a product's design requirements must be documented and evaluated before they are implemented. The design change requirements apply to changes both before and after a design is released to production and distribution.

Design History File (820.30(j)). Since the publication of the 1995 working draft, some changes have been made to this section in order to clarify it and alleviate industry concerns. Where the 1995 version said that the manufacturer must establish a DHF for each design, the final regulation states that DHFs must be established for each type of device.

In addition, the final regulation alters the 1995 requirement that the DHF "shall contain or reference all records necessary to demonstrate that the design was developed in accordance with the approved design plan" and the design control requirements. The new version of the text omits the word all.

INTRODUCTION

QUALITY SYSTEM REQUIREMENTS

DESIGN CONTROLS

REFERENCES


FDA Makes Quality the Rule (continued)

An MD&DI January 1997 Feature Article

1. "Medical Devices; Current Good Manufacturing Practice (CGMP) Final Rule; Quality System Regulation," Federal Register, 61 FR:52602­ 52662, October 7, 1996.

2. Code of Federal Regulations, 21 CFR 820, "Good Manufacturing Practice for Medical Devices," 43 FR:31508, July 21, 1978.

3. "Medical Devices; Current Good Manufacturing Practice (CGMP) Regulations; Proposed Revisions; Request for Comments," 58 FR:61952­ 61986, November 23, 1993.

4. "Medical Devices; Working Draft of the Current Good Manufacturing Practice (CGMP) Final Rule; Notice of Availability; Request for Comments; Public Meeting," 60 FR:37856, July 24, 1995.

5. "Guidance on Quality Systems for the Design and Manufacture of Medical Devices," issue 7, Global Harmonization Task Force, August 1994.

6. "Quality Systems--Model for Quality Assurance in Design, Development, Production, Installation, and Servicing," ISO 9001:1994, Geneva, International Organization for Standardization (ISO), 1994.

7. "Quality Management and Quality System Elements, Part 5: Guidelines for Quality Plans," ISO/DIS 9004-5, Geneva, ISO, 1994.

8. "Quality Systems--Medical Devices--Particular Requirements for the Application of EN 29001," European Norm 46001, Brussels, European Committee for Standardization, 1996.

9.Design Control, MD&DI Reprint Series, Santa Monica, CA, Canon Communications, 1994.

GENERAL PROVISIONS

QUALITY SYSTEM REQUIREMENTS

DESIGN CONTROLS

REFERENCES


FIRST PERSON:Challenges to Competitiveness in a Changing Medical Device Market

Jay GrafAn MD&DI January 1997 Commentary


A. Jay Graf
President, Cardiac Rhythm Management Group
CPI/Guidant

Most medical device companies today compete in technology-driven markets that respond eagerly to a steady stream of innovative new products. My own company, CPI/Guidant, is a case in point: 55% of its sales in the first 9 months of 1996 came from products introduced in the previous 12 months. Such rapid product development is a necessity in the health-care market, for it is the ability to bring innovative technology forward in a cost-effective and clinically relevant way that distinguishes winners from losers.

I do not believe that this basis of competition will change in the future. But it will be challenged by the expectations of the capital markets and the dynamics of the rapidly changing health-care marketplace. Device companies not only will need to continue their innovations, but they will need to do so while increasing sales volume, reducing production costs, and, in fact, speeding up the pace of R&D still more.

A TENTATIVE VOTE OF CONFIDENCE

The recent stock market performance of the health-care industry as a whole, and of the device industry in particular, indicates a strong vote of confidence by Wall Street in the collective future of our companies. Investors clearly agree with us that vast opportunities remain for companies with innovative products and solutions.

But a closer look at the impressive earnings growth behind these stock market gains suggests that another dynamic is at work. It suggests that growth in most health-care companies was a function of improving margins, primarily from productivity programs implemented in recent years.

As a source of growth, this approach has distinct limitations. Ultimately, the major source of increased earnings will have to be revenue growth. Single-digit revenue and earnings growth clearly will not sustain the price-earnings ratios that many medical device companies enjoy today. In the future, then, the challenge for medical device companies will be to move beyond incremental savings and to bring to market innovative products that provide clear cost justifications as replacements for existing products or that offer entirely new therapies.

NEW MARKET REALITIES

This growth will have to come in a rapidly consolidating market that is placing fundamentally new demands on its suppliers. The cause of this consolidation can perhaps be traced to the moment that the United States became the first nation in which health care exceeded 10% of the gross domestic product. This startling statistic gave new visibility to the issue of health-care costs. Soon after, U.S. businesses, which for years had watched the costs of health-care benefits rise faster than most other items on their ledgers, warned that enough was enough.

In response to the pressures from both the private and public sectors to reduce costs, payers and providers began consolidating in order to gain economies of scale, reduce costs, and increase purchasing leverage. Managed care, with its emphasis on cost control, began its steady and rapid growth.

Just three years ago, there were about 5000 independent hospitals in the United States. In the not-too-distant future, it is likely that their place will be taken by 150 to 200 integrated systems nationwide. These systems will use their enormous purchasing leverage to reduce their materials costs, pushing more volume through fewer suppliers.

They will, of course, use this leverage to exact price concessions from us. In this situation, even physicians, once a countervailing force against the bias of hospital administrators toward price rather than product functionality, can no longer be counted on. Increasingly, as network employees who sit on purchasing committees, doctors are motivated by financial incentives that look much like those of their administrative counterparts.

IMPLICATIONS FOR INDUSTRY

The consolidations taking place among payers and providers are clearly having their effect on the medical device industry. Consolidation of device companies allows them to lower costs and offer providers one-stop shops through broadened product lines, and price concessions through increased volume. In many cases, medical device companies will not have the resources needed to create the broad product portfolios the integrated networks demand from suppliers, and will need to consider strategic acquisitions or partnerships. This process began in earnest in 1995. From 1991 to 1994, the average number of acquisitions and mergers per year was 50, with an average annual value of $1.8 billion. But in 1995 there were 88 acquisitions, valued at $66.4 billion.

Acquisitions and mergers are just two responses that must be explored. In addition, device companies will have to reduce the fundamental manufacturing costs of a device itself. This challenge will need to be addressed during the design of the product, since opportunities to reduce costs once a device reaches the manufacturing floor are limited. Cost targets will need to receive equal billing with the two traditionally dominant priorities in product specification--feature functionality and time-to-market.

Similarly, the cost of research and development will require stricter management. If the industry is to sustain the current rate of innovation in this changed environment, R&D productivity will need to increase. This will mean still shorter product development times driven by the following:

  • Investing more capital in design tools.
  • Developing an organizational structure that provides for focus, autonomy, responsibility, and accountability in the product design effort.
  • Keeping true invention off the critical path of new product development efforts.
  • Creating design libraries of software and hardware building blocks that can be reused instead of reinvented.
  • Pursuing more partnerships and joint ventures with academic institutions to do basic research.

Finally, medical device companies must find a way to reduce the regulatory costs that are associated with the design of new devices. These costs have risen far faster than any other element of R&D. The cost of evaluating a product's readiness for market release has increased dramatically over the past five years. The immense costs associated with an uncertain and unpredictable regulatory process affect all the fundamental cost drivers, including labor, overhead, inventory investment, and obsolescence.

Inherent in these challenges to our industry is the opportunity for aggressive and agile medical device companies to grow substantially in the next five years. Cost-effective and clinically relevant product innovation in rapidly changing customer markets is imperative to remaining competitive.


Copyright © 1997 Medical Device & Diagnostic Industry

Microtechnology Opens Doors to the Universe of Small Space

An MD&DI January 1997 Feature Article

MANUFACTURING


Highly innovative microfabrication techniques have emerged from the laboratory environment during the last decade, creating a new method for developing and producing microstructures and tiny microsystems. What began about 20 years ago with the three-dimensional micromachining of silicon wafers has since become a technology that holds much promise for the medical device industry. Today, thousands of pressure or acceleration sensors can be batch processed from a single silicon wafer, and numerous applications for microfabrication techniques have been identified, including sensing or actuating principles for mechanical, optical, or fluidic functions. For instance, structures with micron features and tolerances in the submicron range are being used in optical systems as waveguides, switches, or connectors, and as read-write heads in miniaturized disk drives, and microstructured orifices are used for ink-jet printing and fuel injection applications.

The medical industry has certainly benefited from spinoffs from other industries. For example, disposable micromachined sensors are now being used to monitor blood pressure in a patient's IV line or to support treatment after a brain trauma. Among the medical applications that involve microfabrication and assembly techniques are drug-delivery systems that use micropumps or flow restrictors to precisely administer medicine over time, microneedles that are used as medical implants to stimulate nerves or as ultrasharp lancets for less-painful blood sampling, and micronozzles that are key in atomizing aerosols with droplets that are several microns in diameter and allow accurate control of metered dose inhalation. Additional applications are automated in vitro diagnostic systems that use disposable microstructures for defining capillary flow paths, mixing structures, reaction chambers, and structures that support their assembly. Flexible endoscopes or catheters developed for brain surgery also use microstructured components that can integrate multiple sensing and working functions. With these sorts of advances, it seems the real impact of new applications for microfabrication technology is just beginning to be realized.

TECHNIQUES

Microfabrication techniques are no longer limited to silicon machining. Techniques used today range from various types of laser machining to UV lithography to newer techniques like high-aspect-ratio micromolding. Determining which method or combination of methods to use for a particular application depends on a variety of factors, several of which are listed in Table I (below) along with current micromachining techniques.

Technique Materials Typically Used Smallest Lateral Aspect (µm) Aspect Ratio (height/
width)
Surface Roughness (µm)Design FreedomPrototyping (Simple Geometries)Prototyping (Complex Geometries) Mass Fabrication (Simple Geometries) Mass Fabrication (Complex Geometries)
HARM* (high-aspect-
ratio micro-
replication)
Plastics, metals< 1 < 15> 0.2013, 41, 21-3 1
LIGA (x-ray lithography, electroform-
ing molding)
Plastics, metals< 1 < 15 (for molding)0.02-0.0323, 42, 32, 31, 2
UV litho-
graphy (and electroforming)
Plastics, metals 2< 5> 0.03 221, 222
Wet etchingSilicon, quartz< 1< 40> 0.03324 12, 3
Dry etchingSilicon, metals, plastics, ceramics< 1< 10> 0.03 323, 42, 32, 3
Excimer laser Metals, polymers1< 10> 0.1 2, 31, 21, 22 2, 3
Other lasers Nd:YAG,
CO
2
Metals, polymers, ceramics25< 10 > 0.241 4, 513, 4
EDM (electro-
discharge machining)
Metals 40< 3> 0.13, 423, 43 5
Diamond milling Metals, plastics20< 5> 0.13, 4233 5
*Includes LIGA or different micromachining techniques that can be combined to generate the tool insert for the succeeding molding step.

Table I. Micromachining techniques with corresponding information regarding their effectiveness in various practical applications. (Scale for columns 6-10: 1 = very effective; 5 = ineffective.)

High-Aspect-Ratio Microreplication (HARM). HARM is a process that involves micromachining as a tooling step followed by injection molding or embossing and, if required, by electroforming to replicate microstructures in metal from molded parts. It is one of the most attractive technologies for replicating microstructures at a high performance-to-cost ratio. In this approach, a microstructured preform is defined in a polymer or soft metal and is replicated by electroforming into a tool insert. This insert, or an array of inserts, is then used in the succeeding molding step.

Products micromachined with this technique include fluidic structures such as molded orifice plates for ink-jet printing and microchannel plates for disposable assays used in various diagnostic applications. The materials that can be used are electroformable metals and plastics, including polysulfone, acrylate, polycarbonate, polyimide, and styrene. Additional materials that customers may suggest need to be qualified by tests.

The most challenging features to manufacture with any technique are high-aspect-ratio microstructures with structural aspects that can be as small as a few microns in the two axes of the plane and up to several hundred microns deep. Molding an array of several hundred thousand posts or holes with a minimum post diameter of 2 µm and a structural height starting at 20 µm isn't an easy task. Doing it consistently in high volume while maintaining quality is the most challenging part, and success is mostly determined by the precision of the tool inserts.

LIGA. An important tooling and replication method for high-aspect-ratio microstructures is called LIGA, which is a German acronym for deep-etch lithography, electroforming, and molding. The technique employs x-ray synchrotron radiation to expose thick acrylic resist (polymethylmethacrylate) under a lithographic mask (see Figure 1 below). The exposed areas are chemically dissolved and, in areas where the material is removed, metal is electroformed, thereby defining the tool insert for the succeeding molding step.

Figure 1. The LIGA technique.

Other Combined Techniques. Other microreplication techniques can be combined to generate a preform for the tool insert. These include laser ablation, multiple-step optical (UV) lithography, and mechanical micromachining, which includes electrodischarge machining (EDM) and diamond milling. EDM uses a spark erosion technique, while diamond milling uses highly accurate, preshaped diamond geometries. This mix of techniques provides the freedom to develop and design geometries for a wide range of customer-specific design requirements. Designs may include stepped features, parallel lines, and tapered or curved slopes. Additionally, special alignment helps and interconnecting bridging structures can be integrated to interface with conventional industrial assembling and handling techniques.

The molding process itself is also demanding since it is difficult to fill the small, high-aspect-ratio features without leaving cavities. After the ejection of the molded parts, an additional step can be added by electroforming metal into cavities to replicate the structure in metal, or to define electrically conductive areas. Different from conventional tooling and molding, the microreplication techniques require a more extensive feasibility and design phase up front in order to avoid high costs for multiple redesigns.

Bulk and Surface Machining. Two micromachining techniques often used are bulk machining and surface machining. Bulk machining is a subtractive process that uses wet anisotropic etching—which depends on the crystal orientation of silicon—or a dry etching method such as reactive ion etching (RIE). Materials typically used for wet etching are silicon and quartz, while dry etching is generally used with silicon, metals, plastics, and ceramics. Typical features for sensing or fluidic structures that can be created using bulk machining include geometries such as membranes, beams, holes, or grooves. In addition to bulk machining, surface machining—which is an additive process used to deposit several layers onto a silicon wafer, including sacrificial layers that are then selectively etched—can be used to combine different layers to add sensing functions such as measuring temperature, magnetic fields, or pressure.

While silicon is a well-known material preferred in applications that combine its electrical performance as a semiconductor with its excellent mechanical properties (for instance, high tensile strength, hardness, elasticity, and low density), limiting factors can include lengthy processing times and the relatively high cost of the substrate if a large area is required. In some medical applications, such as with micropumps or valves, the brittleness of the material may limit its usefulness as well.

Laser Machining. The first use of lasers in industrial manufacturing processes began more than 25 years ago. Today, lasers are increasingly used for precise welding and cutting, and for structuring many polymers, metals, and especially hard materials. Recent technological advances have significantly improved laser performance, reliability, and cost. Better optics and the development of a line-narrowed microlithographic excimer laser, for example, have increased the precision and flexibility in combining various geometries. Applications for laser machining vary, ranging from uses in prototyping to drilling holes in flow restrictors and in catheters for liquid or material removal.

The integration of internal halogen generators, higher pulse rates, and improved corrosion-resistant materials have pushed the processing costs of excimer laser equipment to less than $1 for 250,000 laser pulses. A new application for ink-jet printing has just recently become available in which 100 to 300 nozzles with hole diameters as low as 20 µm are drilled in a field of 8 X 20 mm with precisely defined hole shapes and submicron tolerances.

A good overview of laser manufacturing is provided in Ronald Schaeffer's article in the November 1996 issue of MD&DI. The article addresses the advantages associated with laser machining and also details the most common industrial lasers available: carbon dioxide (CO2), solid-state (Nd:YAG), and excimer lasers. While these techniques are not specifically addressed here, they have been included in Table I.

APPLICATIONS

The demand for diagnostic and analytical equipment that is smaller and performs faster is a major growth area in today's industry that involves microstructure technology. A fast and reliable response is essential, for instance, to measure blood parameters in emergency situations and during surgery, and to test for drugs of abuse at a crime scene. In point-of-care situations such as in a physician's office or in home-care applications, the use of on-site tests is currently limited because of the complexity of test procedures or the limited reliability of existing disposable tests. This is why tests for infectious diseases, therapeutic drugs, drugs of abuse, immunology, allergy, and tumors are typically performed in centralized laboratories on advanced instruments operated by skilled personnel.

The types of diagnostic testing mentioned above often require sophisticated instrumentation and multiple-step procedures, including sample dilution, variable incubation times, and wash steps. Most of these functions can be incorporated by microfabrication techniques that already have the ability to improve the performance of disposable assays. New tests are currently being developed in which microreplicated capillary structures are used to improve the performance of disposable assays for the exam- ination of human fluids. Extremely precise geometries allow for exact control of the volume flow, the timing of reactions between the sample and predeposited reagents, the separation of cells, and the mixing of different substances.

This postage-stamp-size spectrometer is microreplicated in polymer as a complete optical bench and mounted on a chip.

Some additional advantages of microfabrication result from the drastically reduced sample and reagent consumption, the low-power operation feasible with microfluid components, and the reduction of analysis time resulting from the short diffusion zones inside the miniaturized fluid system. Other developments include applications such as cell counting, cell separation, and the emerging field of DNA sequencing. DNA bases, for example, can be incorporated into microstructured capillaries where they are mixed with buffers, reagents, and a torturous post matrix to help filter the fragments. Electric current sent through a gel pulls the DNA fragments along, and different fragment sizes can then be separated by the speed of movement into visible groups. The fragments that are tagged with a visible dye can be finally distinguished with a closely located miniaturized spectrometer.

CONCLUSION

Micromachining and microreplication techniques have been qualified for high-series production in many applications, providing the key to integrating the intelligence of electronic circuits with sensing and actuating functions to produce complete microsytems. The advantages are evident not only in the reduction of size, but also in the increase of functional performance and reliability, and a unit-cost reduction in high-volume batch processing. Because of high capital investments for expensive manufacturing equipment, microstructures or microsystems are successful in applications where the performance-to-cost ratio of the system increases significantly and high production volumes offset the up-front investments. And as the medical and diagnostic industry continues to benefit from breakthroughs in other application areas, it is expected to be one of the fastest growing areas for micromanufacturing.

Photos courtesy of American Laubscher Corp.

Peter Zuska is product manager for American Laubscher Corp. (Farmingdale, NY).
Copyright © 1997 Medical Device & Diagnostic Industry

Today's Health-Care Industry Focuses on Cost Containment

An MD&DI January 1997 Feature Article

VERBATIM

An interview with Clateo Castellini
Chairman, President, and CEO, Becton Dickinson and Co.



There is no doubt that today's market for health-care products and services is changing. At a time when progress continues to be made along the information superhighway, patients, their families, and their employers are looking for ways to contain medical costs while still reaping the benefits of new medical technologies. It is the market in which manufacturers of medical devices currently find themselves, and it is certainly different from the medical marketplace of 100 years ago, as Clateo Castellini, chairman, president, and CEO of Becton Dickinson and Co. (Franklin Lakes, NJ), can attest. As head of a century-old company that earns nearly $3 billion in annual revenues from domestic and overseas sales, Castellini has a global perspective on the device industry. In this interview with MD&DI, he discusses the trends and challenges that will face medical product manufacturers in the years ahead.

What are the major changes occurring in today's health-care marketplace, and how are they affecting device companies?

Health-care costs have grown out of proportion in the United States, and society is beginning to make major adjustments to contain these costs. As a result, several trends are emerging. Hospital and purchasing groups are forming to take advantage of economies of scale, which concentrate hospital purchasing power as never before. Three organizations--the Columbia Health Care System, the Voluntary Hospital Association of America, and Premier--now have purchasing power over 70% of the hospital beds in the United States. This sort of consolidated purchasing also takes place outside of the United States. In many countries, purchasing power lies with the government, which provides health-care coverage.

As a result, device companies must respond to their customers' efforts to contain costs. For example, Becton Dickinson has reorganized its selling activities so that hospital organizations contract with the entire company. Customers now deal with only one entity as opposed to the separate Becton Dickinson business units that contacted them previously. We used to operate with seven or eight such independent business units, each with its own costs and shipments.

Now, the customer sees one company, one order, one shipment, and one invoice for Becton Dickinson products. Where traditionally our company representatives sold to doctors, nurses, and laboratory personnel in the hospital, they now write a contract with top hospital management for the whole product line. Acting as one company allows us to reduce costs. It's a big change in our way of doing business compared to 10 years ago.

Advances in information technology have also helped device companies in terms of product delivery and cost containment. Information technology allows a company to consolidate its orders and automate much of the distribution process. For instance, customers are now able to replenish their supplies of a company's products automatically when those supplies fall below a specified level.

What types of medical products and procedures do you expect to emerge as a result of current cost-containment efforts?

As health-care laboratories become fewer in number and larger in size, bigger laboratory diagnostic machines with higher throughput and lower unit cost will continue to be sought. Automation becomes crucial to accomplish this, and automated diagnostic instruments will fill this need.

At the same time, health-care cost containment has triggered the need for small, low-cost, quick-response diagnostic machines to be used at a patient's bedside in a clinic, doctor's office, emergency room, or home. Examples of these sorts of products are small automated blood analysis systems and small hematology instruments used in clinics and doctors' offices.

Another promising product is the prefilled syringe. In U.S. hospitals, hospital pharmacists generally fill syringes with medications every morning. In Europe, nurses usually fill syringes at a patient's bedside. With ready-to-use syringes, however, accurate dosages can be administered easily, saving hospitals both time and money. Syringes may be basic, low-cost products, but they are used by every specialty on every hospital floor, and they're sold by the billions around the world.

New technology will of course aid in making medical procedures possible in the next 15 years that are less costly, less problematic, and less time-consuming, and that allow patients to return home faster. For instance, we can expect to see more techniques like laparoscopic surgery, which minimizes trauma, speeds the operation, is simpler, and costs less.

Disease management will also play an important role in the future. This concept addresses cost containment and emphasizes new technology. Today's new health-care organizations like to see someone who can manage a disease--someone who can diagnose it, offer a drug therapy for it, and provide a device to deliver the drug. Companies that can provide these elements will be in a good position.

Becton Dickinson has for years been helping patients manage diabetes by supplying insulin syringes and tests for blood-sugar levels. We are moving deeper into diabetes management by supporting the International Diabetes Center's Staged Diabetes Management program, which is a scientifically based, clinically piloted model for reducing variability and improving diabetes patient care through better control of glucose levels. This sort of disease management program is likely to become more common in coming years, when device companies will work more closely with pharmaceutical companies to diagnose and treat certain diseases.

In theory, many drugs would work very well if they had an easy-to-use test. For example, the correct dosage for Merck's drug for osteoporosis depends on calcium concentration in the patient's bones. To date, patients need to have their calcium monitored on a large hospital machine. But what if we could develop an easy-to-administer test at home or in the doctor's office that would give precise readings of calcium levels? In such a case, the diagnostic test and the drug's success would go hand in hand. We expect to see more tests like this one that would be used in concert with drug therapy and that would be easy to administer at home or in the doctor's office.

There will also be more partnerships and alliances between diagnostic, device, and drug companies to solve disease problems together. Here we will deploy our special skills to solve a problem and, when limited to these projects, we will not be regarded as a competitor of the pharmaceutical company. The increasingly more costly, more difficult task of finding new drugs encourages this ad hoc approach.

How is the global market for health-care products and services changing?

Health-care spending in countries with underdeveloped health-care systems falls many times below that in the United States, Europe, or Japan, but the ratio is rising as these countries increasingly democratize and allow public participation. As emerging countries begin to upgrade their health-care systems, they begin to adopt our products.

While health care hasn't yet reached large groups among the populations of lesser-developed countries, economic and political improvements in such regions are bound to push health-care spending to higher levels. When people start participating more, the first thing they want is better health care. Such economic improvements around the world will create strong demand in underfunded health-care systems and will help the device industry grow.

What sort of management techniques will companies need to implement to be successful in this global environment?

I believe in the implementation of a participatory management approach that turns away from hierarchical, command-control style management. To gain the power of an organization that is committed, involved, and participatory, you need to dismantle the hierarchical structure in which the privilege of making decisions resides at the top and others are merely followers. We're currently doing this at Becton Dickinson. We are turning the organization almost upside down and replacing top-down management with more self-managed teams in which people know what they have to do and then go do it. We also need to make people independent in their jobs, so they can try things that are more innovative and imaginative and can make mistakes without the fear of always having to be right.

Part of spreading this new management approach is to work with middle management to make them comfortable with something they might feel threatens them. Much of corporate America is coming around to this management style.


Copyright © 1997 Medical Device & Diagnostic Industry

Thailand Will Enter 21st Century with a Growing Device Market

An MD&DI January 1997 Feature Article

GLOBAL MARKETS

Once counted among the world's poorest nations, Thailand has recently developed one of the world's fastest-growing economies, and is following closely in the footsteps of the other Asian Tigers. In 1996, the growth rate of Thailand's economy was estimated at 8.5%. The International Monetary Fund projects that from 1998 to 2002 it will grow at a solid 7.5% per year, ranking it as the eighth-fastest-growing economy in the world. In 1995, Thailand's per-capita GNP was $2310; in Bangkok the figure was nearly twice this amount. At this rate of development, Thailand is on track to become the largest economy in Southeast Asia by the turn of the century, and the eighth-largest economy in the world by 2020.

The Thai medical device market has also flourished over the last 10 years and will continue to expand as its large population ages. The market grew 24% in 1993, 16% in 1994, and 13% over the first six months in 1995. In 1995, it totaled $370 million and in 1996 is expected to be worth about $450 million. Moreover, as the rest of Thailand catches up with Bangkok's development, a number of opportunities will open for foreign medical device exporters.

Such growth, along with increased government spending on health care, expanding health-care needs, and several other factors discussed below, makes Thailand an attractive market for U.S. medical device manufacturers.

INCREASED GOVERNMENT SPENDING

Since 1990, the Thai government has made a significant effort to improve health-care facilities and extend services to a greater number of its citizens. Its plan to revitalize existing hospitals and establish new ones offers U.S. manufacturers increasing opportunities to market their products. And, as the number of insured citizens rises, the demand for medical devices will also rise.

Government-run hospitals account for 70% of all hospital beds in Thailand. The public sector includes 148 major general hospitals, 7 medical schools, 266 small general hospitals, and 369 community hospitals. Because of a great demand for medical services in Thailand, public hospital occupancy rates have been as high as 90% of capacity.

Initiated in 1992, the seventh Development Plan reflects the Thai government's efforts to improve and expand these health-care facilities and hospitals. The plan's goal is to set up 1576 new health centers, upgrade 250 10-bed community hospitals, set up 85 new 10-bed community hospitals, upgrade 16 hospitals to general hospitals, upgrade 7 general hospitals to regional hospitals, establish 5 regional centers for the care of noncommunicable diseases, and form 3 new medical science centers. In an attempt to achieve these goals, the plan's budget was expanded 54% between 1992 and 1996, from $1.33 billion to $2.05 billion (in U.S. dollars).

Another example of the Thai government's commitment to improve the country's health-care system is its work with telemedicine. According to the Bangkok Post, the Ministry of Public Health is working to link doctors in rural areas with specialists at major hospitals via satellite. The system will offer services such as teleradiology, telecardiology, telepathology, video conferencing, distance learning, and on-line medical databases. The four-year project, lasting from 1995 through 1998, is expected to serve 61 stations across the country, including a mobile station for transmitting signals.

In an attempt to meet the broadening health-care needs of its citizens, the Thai government enacted legislation in 1990 requiring companies with more than 10 employees (and perhaps as few as as 5 in the coming years) to help provide health-care insurance. Under this Social Security plan, employers, employees, and the central government each contribute an amount equivalent to 1.5% of the covered employee's salary to a health-care insurance fund. This system covers about 35 million citizens (about 58% of the population).

In 1995, the ministry proposed a plan to provide health care for those underprivileged citizens, elderly, and children who are not covered by the Social Security law. This plan would establish a multiple-fund system in which a family of five contributes 500 baht a year, or about $20, to get a health insurance card that entitles them to free medical services for a year.

Thai companies also fund private health insurance that covers 15% of the country's total health-care expenses. The number of persons covered by private companies is expected to double over the next few years.1

Hospitals may register with the government to provide health-care services to those covered by Social Security. Hospitals are paid 800 baht, or about $32, per registered beneficiary. The beneficiary is then entitled to the services of a general practitioner or specialist at that hospital. Additional payments from the government of up to 100,000 baht, or about $4000, are provided for more-expensive procedures. Thailand's Social Security plan has dramatically increased the number of people that are covered by health insurance, but in 1995 only 70 private hospitals accepted Social Security insurance because most feel that the compensation is inadequate.2

CURRENT HEALTH ISSUES IN THAILAND

Just as Thailand's economy has evolved from an impoverished, primarily agricultural economy to a more sophisticated industrial one, health-care concerns have also evolved. Because of major changes in living standards, disease patterns are also changing. When Thailand was a less-developed nation, nutritional deficiencies and parasitic infections were common causes of illness or death. Today, industrial-related and chronic degenerative diseases such as cancer, strokes, and cardiovascular diseases, as well as traffic accidents, are among the leading causes of death. It is also expected that occupational hazards and environmental pollution will become a larger health concern in Thailand (see table below). These conditions require more sophisticated medical devices than do infections and malnutrition, offering device manufacturers more opportunities to market their products.

Rank CauseNumber of OutpatientsRate per 1000 Population
1 Diseases of the respiratory system11,684,922203.7
2Diseases of the digestive system6,597,400115.0
3Accidents, poisoning, and violence3,700,79464.5
4Infectious and parasitic diseases3,694,35664.4
5Diseases of the musculoskeletal system and connective tissue3,153,09455.0
6Diseases of the skin and subcutaneous tissue2,707,28047.2
7Diseases of the nervous system and sense organs2,435,48342.4
8Diseases of the circulatory system1,871,22032.6
9Endocrine, nutritional, and metabolic diseases1,797,23531.3
10Diseases of the genito-urinary system1,762,15230.7
Others9,500,444165.6
Total48,904,380852.4

Table I. The top 10 causes of illness in Thailand and the
rate of occurence based on data from 1992.

Heart disease is one of the nation's leading health problems. According to the Singapore Straits Times, over 35,000 Thais died of heart disease in 1994. Cigarette smoking, lack of exercise, and poor diets all contribute to this high rate of heart disease. Complicating the problem is the lack of experienced surgeons to treat these patients.

Another serious health problem in Thailand is the AIDS epidemic. In 1995, there were over 800,000 reported HIV cases, representing one of the highest levels of infection in Asia. This number is expected to grow to 3 million to 4 million Thai HIV carriers by the end of the decade. Such infections, it is estimated, will cost around $9 billion by the year 2000.3 Although the Thai government has had a well-developed program for fighting AIDS in the past, recent leaders seem to be less concerned with AIDS than previous ones were, so the problem might only get worse.

OTHER FACTORS

Several other factors are combining to make Thailand a potentially large market for U.S. medical device manufacturers. Even though Bangkok is near its saturation point for hospitals, the rural areas lack health care of the quality that can be found in the city. It is not surprising that hospitals are concentrated in the Bangkok metropolitan area, because per-capita income is often as much as 12 times that of the more destitute northeast region. Consequently, citizens in these rural areas are in need of better health care.

To deal with the large increase in people seeking medical attention, the Thai Board of Investment has exempted private hospitals from corporate income tax for up to five years, and has reduced import taxes on medical equipment by 50% in order to encourage investments in private hospitals. The number of such hospitals will continue to grow at about 15­20% per year. Currently, there are 186, and over 30 more are scheduled for construction by the year 2000.

Another important incentive for U.S. manufacturers to market their devices in Thailand is the fact that Thailand lacks the manufacturing capabilities to produce expensive medical devices, such as electromedical and diagnostic imaging equipment. Domestic production consists mostly of latex-based products (e.g., condoms and latex gloves), hospital beds, and other low-technology products. Hence, nearly all high-technology medical equipment is imported. In 1992, the United States held 30% of the Thai medical device market; Japan, 32%; Germany, 13%; and France, 2%.

Finally, Thai doctors already welcome the idea of using U.S.-made medical devices. Many of them received their medical degrees in the United States and thus are already accustomed to U.S.-made devices, often preferring them to those manufactured in other countries. Nonetheless, competition from price-cutting foreign manufacturers is substantial. In addition, these firms often provide after-sales services more easily than can U.S. manufacturers.

MARKETING MEDICAL PRODUCTS IN THAILAND

Even though Thailand has tightened up import regulations in the last year or so, perhaps in an effort to protect its domestic market, import tariffs are still relatively favorable for foreign medical device suppliers. In January 1994, duty rates were reduced from a range of 15–30% to a maximum of 5%. However, there is a valueadded tax of 7% on imports.

Foreign medical device suppliers can sell their products in the Thai market either to the government through a bidding process or to private hospitals. The Thai government regulates the purchase of medical devices by the prime minister of procurement. It presents a proposal to purchase a certain amount of a particular product, then awards the contract to the companies with the lowest bids. As expected, preference is give to domestic industries, which normally have a 3% margin over foreign bidders. Unfortunately, this centralized bidding process can lead to possibilities of corruption.

Selling to private hospitals may circumvent some of the corruption.4 However, foreign medical device manufacturers who want to sell directly to hospitals will need a local presence in Thailand to be successful. They can establish such a presence by contracting importers or distributors. A good distributor can also adjust product specifications and prices to win government contracts. Sales to individual hospitals are usually done case by case. Physicians and administrators often take part in making the purchasing decisions, so strong supplier-to-physician relationships are crucial.

NEW THAI MEDICAL DEVICE REGULATIONS

As Thailand's medical device market expands, its registration procedures for medical devices is changing. In 1995, the Thai FDA changed a number of its medical device regulations that affect the way foreign firms register products to be imported to Thailand.

In order to better regulate medical device products sold in Thailand, the Thai FDA recently introduced a classification system. Before 1995, product registration was a relatively simple process: foreign manufacturers could legitimately self-certify that their products were freely sold in their home markets simply by filling out a certificate of products for export or a certificate of free sale. Recent changes, however, established three classes into which all medical devices are categorized. These devices are not, however, categorized according to risk as they are in the U.S. FDA classification system. The classes are as follows.

Class I. The first class is the most rigidly regulated by the Thai government to balance imports and domestic manufacturing. It includes syringes, condoms, surgical gloves, fever thermometers, sutures, contact lenses, magnetic vibrators, and x-ray machines. These products need to go through a complete registration process in order to be sold in Thailand.

In addition, hypodermic and insulin syringe products have recently been subject to further regulation. The new standards have been written by the Thai Industrial Standards Institute in accordance with ISO 9000 standards. Depending on the type of product, group testing may or may not be required. Product retention samples also must be on hand at the importer's warehouse to provide a local sample if there are any problems with the product. The syringe products must be accompanied by product specifications and go through a Thai labeling process. The label must be written in Thai and the Thai characters must be as large as the English. Furthermore, the expiration date must be written in accordance with the Buddhist Era calendar (e.g., 1996 is translated as 2539 according to this calendar system).

Class II. This category includes those products that need only product specifications in order to be registered with the Thai government. An HIV reagent kit is an example of one product that falls in this category. Product specifications include technical drawings, details of the raw materials used, a data sheet on raw material safety, and a manufacturing process summary.5

Class III. The items in the third class need only to be accompanied by a certificate of free sale or certificate of products for export. These certificates are valid for five years. The process for obtaining either one of these documents is becoming increasingly difficult.

A certificate of products for export is issued by the U.S. FDA and may be accompanied by the foreign country certification statement (also issued by the U.S. FDA). These documents must be forwarded to the Office of Commercial Affairs at the Royal Thai Embassy to be notarized for a nominal fee. For products not regulated by the U.S. FDA, a certificate of free sale can be obtained from the state's chamber of commerce, notarized, stamped, and then authenticated by the Office of Authentication in the U.S. State Department. It is then forwarded to the Office of Commercial Affairs at the Royal Thai Embassy. It is becoming increasingly difficult for companies to prepare certificates of free sale.6

RECENT SUCCESS STORIES IN THAILAND

Many companies have been able to benefit from the growth of Thailand's medical industry. BioWhittaker, Inc. (Walkersville, MD), a manufacturer of diagnostic and endotoxin kits and cell culture products, recently decided to enter the Asian biotech market. The company is planning to distribute and market its products, and is considering future joint ventures for manufacturing. It is planning to participate in the U.S.-Thailand Commercialization of Science and Technology Program (UST/COST) to begin business in Thailand.

Israeli companies are also trying to take part in Thailand's growth. In 1995, medical imports from Israel were expected to increase sevenfold from the 1994 level, which was valued at $4.54 million. One reason for this exceptional growth is the boom in private hospital construction in Thailand.

Thai companies, too, are profiting from the growing medical market. Bangkok Ria (Bangkok), a producer of HIV/AIDS diagnostic kits, has grown tremendously after just one year of production. The company was formed when the U.S. Agency for International Development (USAID) granted $50,000 to help transfer HIV dipstick technology from the United States. In 1993, its first year of production, the firm earned 7 million baht, or about $280,000, and in 1994 it increased its earnings to 36 million baht, or about $1.44 million, selling nearly 1 million test kits. The company has even started exporting product to countries as far away as Mexico and Cameroon.

CONCLUSION

Despite increased regulation, Thailand's medical device market still presents tremendous opportunity for foreign medical device companies looking to export their products. The government's continuing commitment to improving the Thai health-care system, as well as the country's rising standard of living, longer life spans, new disease patterns, and affluence, demonstrate a demand for better health-care products and services. U.S. medical device manufacturers should try to meet that demand.

REFERENCES

1. Maire K, Thailand—Hospital/Health Care Industry IMI 960612, Market Research Reports, Washington, DC, National Trade Data Bank, U.S. Dept. of Commerce, June 29, 1996.

2. Thailand Social Security Act in Summary, Washington, DC, Health Industry Manufacturers Association (HIMA), November 27, 1995.

3. Ruderman PS, "Doing Business in Southeast Asia: An Overview of Markets in Thailand, Vietnam, and Indochina," presented to HIMA at Doing Business in Japan and Asia, Washington, DC, December 1995.

4. "AIDS—Counting the Cost," Economist, September 23, 1995, p 26.

5. Update on Thailand's New Regulation of Medical Device Products, Washington, DC, HIMA. April 1995.

6. "How to Obtain a Certificate of Free Sale/Products for Export," Bangkok, Office of Commercial Affairs, Royal Thai Embassy.


Ames Gross is president of Pacific Bridge, Inc. (Washington, DC), a consulting firm specializing in Asian business.


Copyright © 1997 Medical Device & Diagnostic Industry

Task Analysis: Understanding How People Think and Behave

An MD&DI January 1997 Feature Article

DESIGNER'S TOOLBOX

Task analysis is a highly effective tool for studying the way people think about and use a product. This tool has its roots in the early time-motion studies of Gilbreth and Taylor. F. B. Gilbreth, a contractor, observed that no two bricklayers used the same technique to lay a brick. Using a time-motion analysis technique, he was able to identify inefficiencies and therefore reduce the number of discrete motions used to lay a brick--on average from 18 to 4.25. Today the technique remains the same, although the tools are more sophisticated.

Task analysis can be used to help redesign medical devices such as a ventilator system for a neonatal intensive-care unit (see figure below). This system consists of a ventilator, humidifier, oxygen analyzer, alarm unit, and patient interface device. An optimal design enables a user to operate these components with the fewest movements.

Figure 1. Depictions of the primary system functions of a ventilator and a map of the device's 24 links.

LEVELS OF ANALYSIS

The task analysis tool has three levels: general task analysis, motion analysis, and link analysis. Each successive level builds on the information generated in the previous one.

General Task Analysis. General task analysis is a macrolevel inventory of the performed tasks. At this level, the designer defines all tasks and maps their sequence and interactions. On a spreadsheet, the behaviors, responses, and observations can be scored based on their frequency. This step can help researchers identify inefficiencies and problems, such as two successive tasks being too far apart.

Motion Analysis. The second level evaluates the user's body posture and motion paths. The figure below depicts a map of the physical paths of a user's hands to illustrate the movement and frequency of each task and its interdependence with the others. The six-pointed bold-line overlay on the left indicates six subtasks that compose a primary task. Because all users do not move in the same way, it is best to test different users to identify variations. Researchers typically begin with about 25 subjects and add more as needed.

Link Analysis. Link analysis graphically depicts relationships between tasks. It identifies inefficient sequences and repetitive motions. This analysis links tasks together in order of importance based on their duration, frequency, and sequence. Use of this analysis on the tasks in the figure identifies 24 links and illustrates inefficient placement of controls. For example, nodes 6, 7, 12, 11, 5, 8, 9, 22, 21, and 16 are clustered, indicating that a redesigned system should organize and consolidate these controls into a single functional ar- ray. Link analysis can also be conducted on specific subtasks. For example, the ventilator has two modes of operation. Plots of each mode could illustrate a logical left-to-right and top-to-bottom layout of controls based on their impor- tance and frequency.

IMPROVING DESIGN

The task analysis technique is a powerful tool that can be used to integrate into the design process how people use a product. This technique provides the following information about the product studied:

  • The priority of all tasks being performed.
  • The configuration of the six main interface nodes.
  • The configuration for primary control elements.
  • The configuration for ventilator mode controls.
  • The amount of time it takes to execute both subtasks and the primary task.
  • A measure of the current interface to which a new design can be compared.

Through use of these results in the design process, a product can be developed that incorporates the most efficient path for users. The resulting redesigned device should be easier to use and better organized than the original.

Bryce Rutter is principal of the Metaphase Design Group.


Copyright © 1997 Medical Device & Diagnostic Industry

Hemocompatibility: Not All Devices Are Created Equal

An MD&DI January 1997 Feature Article

Sharon J. Northup

Blood-contacting devices such as needles, cannulae, blood containers, and dialyzers all have very different usage requirements. Of course, the hemocompatibility concerns for each will differ as well. For example, a needle may reside in the bloodstream for only a short time; a cannula may be implanted for much longer. The primary hemocompatibility problem for a needle would be hemolysis, the destruction of red blood cells as a result of chemical interaction with the needle material. For a cannula, however, a more likely hemocompatibility problem would be thrombogenicity, or clotting, which can be caused not only by chemical interaction, but also by the flow rate of the blood.

There are standards available for testing whether medical devices can be used safely with blood. But these standards are mostly horizontal, addressing broad groups of products rather than specific devices, and many blood-contacting devices are not adequately covered by them.

The few vertical, or device-specific, standards that have been written are not enough. They also often do not take into account variations in the way a particular device is used. For example, if an anticoagulant is used with a device in some procedures and not in others, this will change the testing required to establish hemocompatibility for all possible procedures.

To create specific standards that will ensure the hemocompatibility of all types of medical devices will require concerted effort on the part of biomedical specialists not only to develop appropriate tests, but also to bring the tests into widespread use.

CURRENT HORIZONTAL STANDARDS

The standards developed by Technical Committee 194 of the International Organization for Standardization (ISO) are recognized as the minimum requirements for biocompatibility testing of all medical devices today. After approval at the international level, regulatory authorities in participating nations have adopted the ISO standards as written or with minor modifications. For example, ISO 10993-1, "Guidance on Selection of Tests," was adopted by FDA in 1995 with modifications for intrauterine and some other types of devices.1,2 Both ISO and FDA standards recommend hemocompatibility testing for medical devices intended for direct or indirect blood exposure.

These horizontal guidelines group medical devices for testing according to route of exposure. For example, percutaneous circulatory support systems, extracorporeal oxygenators, and apheresis equipment are all classified as externally communicating devices, and are therefore given the same testing recommendations. But because they are used for very different lengths of time, they present different risks for air emboli at the blood-air interface and protein denaturation from foaming. Apheresis equipment, for example, is used for hours, whereas circulatory support systems must be designed for days of use. Also, anticoagulants are used for only part of the treatment with circulatory assist devices, but are used throughout therapy with oxygenators or apheresis equipment. Obviously, anticoagulant use will dramatically affect measurement of thrombogenicity.

The current standards describe some hemocompatibility tests in detail. For example, the assay for hemolysis has been described in the research and clinical literature and has been developed as a standard method for medical device testing by the American Society for Testing and Materials (ASTM) in a draft annex to ISO 10993-4, "Selection of Tests for Interactions with Blood" and in several vertical standards for specific medical devices.

But depending on the application, various factors can affect the results of hemolysis testing, and the standards do not account for these possible cases. For example, all the standards that describe hemolysis recommend measuring hemoglobin in a spectrophotometric assay using absorbency at 540 nm; none mentions that the absorption spectrum may shift in the presence of various chemicals.3 Ethanol, propylene glycol, polyethylene glycol 400, dimethylsulfoxide, and dimethylacetamide will shift the absorption spectrum of hemoglobin. The hemolysis standards are also silent about possible interference from fixatives. In the presence of small amounts of formaldehyde or glutaraldehyde, the red blood cell membranes are cross-linked (tanned) and thus are less easily ruptured, making the test results misleading.

Future revisions of the standards for hemolysis and other types of hemocompatibility testing should include sources of variation and methodologies for ascertaining their effect on the interpretation of the assays.

One of the most important factors affecting the results of hemocompatibility testing is how the device contacts the blood. For example, although needles and cannulae serve similar functions, their methods of exposure to blood are quite distinct.

Needles are designed for fast penetration and short exposure time. Most often metallic, they require sharp points and lubricious barrels for nearly painless entry into the vessel. The points may be beveled concavely to increase sharpness. The barrels are lubricated and, in some variations, wall thickness is reduced to enhance tissue penetration.

In-dwelling cannulae, by contrast, are designed to reside in the body for much longer. Made of plastic materials, they have blunt tips that minimize intravascular irritation. Cannulae generally have thick walls to prevent kinking and occlusion through muscular contraction. Their barrels are seldom lubricated because this would lessen skin adherence and increase the likelihood of microbial infection.

The standards recommend only hemolysis testing for both needles and cannulae. But because thrombogenicity is a common failure mode for cannulae, these devices should undergo an implant test for thromboresistance as well. Measurements might include blood flow rate, duration of flow, and cellular deposits on the surface or downstream from the cannulae.

Using a thrombogenicity test for cannulae would have the added benefit of taking into account the reaction of muscles to the devices. When the vascular system becomes irritated by a foreign object, the smooth muscles contract vigorously. This constriction could result in collapsing or kinking of a cannula, which would be evident by the loss of blood flow through it. The strength of the cannula must match or exceed that of the muscular constrictions at the vascular access site.

CURRENT VERTICAL STANDARDS

As noted above, there are some vertical standards for device hemocompatibility: blood container standards are good examples. Blood collection sets are covered in ISO 1135-3, "Blood-Taking Set," and ISO 3826-4, "Plastics Collapsible Containers for Human Blood and Blood Components." 4,5 Both documents list requirements for cell culture cytotoxicity, short-term intramuscular implantation, hemolysis in vitro, delayed contact sensitization, intracutaneous irritation, pyrogenicity, and sterility.

The customary measurements for a whole-blood container are total hemoglobin, hematocrit, and cell counts. The preferred hemolysis test is a static assay occurring under the usage conditions of 21 days of storage at 4°–8°C with citrate phosphate dextrose solution or 42 days with citrate phosphate dextrose adenine solution. Common measurements on containers for red cell concentrate are erythrocyte adenosine phosphate (ATP), lactate, and glucose as indices of an energy source and utilization. Red cells may also be evaluated microscopically for morphological changes.

Depending on whether the patient whose blood is in the container has been treated with an anticoagulant, these tests may not go far enough to ensure device safety. If an anticoagulant has been used, measurements of the stability of the anticoagulant over the product's shelf life—for example, the pH and concentration of each additive—should also be made.

Containers for platelets would also require assays that are specific to the products they hold, such as pH, aggregation, morphology, glucose consumption, lactate accumulation, and cell counts.

COMPLEX DEVICES

Standards for complex or invasive devices are particularly in need of development. For some of these devices, there is no consensus among existing standards on what are appropriate tests. For example, there is disagreement on the testing of hemodialyzers. The French and German standards require hemolysis testing on an eluate from the hemodialyzer,6,7 whereas FDA guidelines require the following tests:

  • Cytotoxicity in vitro.
  • Hemolysis.
  • Complement activation.
  • Cell adhesion
  • Protein adsorption.
  • Whole-blood clotting time for thrombogenicity.
  • Pyrogenicity.
  • Genotoxicity.
  • Acute systemic toxicity.
  • Intracutaneous injection.
  • Implantation.
  • Guinea pig maximization for delayed sensitization.
  • Subchronic toxicity.
  • Thrombogenicity by examining platelet and fibrinogen turnover, thrombus formation, and resulting emboli.8

The FDA requirements do not delineate the biological system and exposure protocol that are necessary for interpretation of the measurements. A whole-blood clotting time assay, for example, may not be meaningful because heparin anticoagulants are used during hemodialysis procedures.

Complement activation has been included in the guidelines to lessen the potential for dialysis-induced chronic lung disease.9 Yet measuring only complement activation as a potential source of inflammation ignores the role of platelet activation in the initiation of free radicals that could contribute to chronic lung disease. Also, some studies have shown that some membrane materials used for hemodialyzers actually absorb complements, making the measurement irrelevant for those materials.

IMPLANTS

Medical devices that are implanted in the vascular system offer an even more challenging task for creating specific testing standards. Hemocompatibility for implantable devices is highly dependent on the material, shape, function, and location of the implant. Many of the currently marketed vascular graft materials are hemolytic. Although it is not clear whether this is due to the specific material or the air-blood interface, clinicians have used this property to seal the grafts before implantation.10 The hemolytic property rapidly creates a tribological surface between the materials of construction and the biological environment by deposition of fibrin and other proteins and globulins, thereby enhancing the biocompatibility of the device and preventing seepage of blood immediately after surgery. For grafts, then, the hemolysis assay has little predictive value for problems encountered in clinical use.

THE WORK AHEAD: VALIDATION

The main difficulty in creating specific standards is the amount of work required to validate tests and thus make them available for widespread use. Numerous assays for hemocompatibility have been and continue to be developed in research laboratories, but widespread adoption of the tests is often stalled because they are not rigorously validated. Validation establishes the credibility of a candidate test through intra- and interlaboratory assessments and database development.

Intra- and interlaboratory assessments are used to determine the sensitivity, selectivity, and predictive value of an assay.11 For a test to be valid, it must be adequate in terms of these three factors. Sensitivity is the percentage of positive results, and selectivity is the percentage of negative results. Predictive value is the percentage of correct test results, and is correlated with prevalence, the ratio of positive results to all substances tested. The predictive value of a test may be correlative or mechanistic.

Validating hemocompatibility assays will require reference materials, databases, and reference laboratories. For a particular test, a reference material is a characterized material or substance that yields a reproducible result when tested. A standard reference material is a universally available material that is characterized in regard to elemental composition, formulation, structure, phase and phase distribution, and impurity level in a prescribed physical form including, but not limited to, shape, surface character, and electrical charge. Biomedical scientists are a long way from developing a consensus on the characteristics of reference materials and establishing a repository of standard reference materials with defined biocompatibility and universal availability. In the early 1990s, the ISO task force on sample preparation and reference materials sought to prepare a list of reference materials and standard reference materials, but could find only a few.12

Other requirements for validation—consensus on what constitutes validation of a new material, a central repository for test performance data, an established network of reference laboratories capable of carrying out interlaboratory assessments, and an understanding of the mechanisms of blood biocompatibility—will also require a committed effort.

CONCLUSION

A review of relevant medical device standards shows that the available hemocompatibility assays are not always predictive for specific devices. In some cases, the assays may not be sensitive or selective enough. The community of biomedical specialists needs to recognize these limitations and work toward creating a framework for validating assays that will establish standards for hemocompatibility that are applicable to all blood-contacting medical devices.

REFERENCES

1. "Biological Evaluation of Medical Devices, Part 1: Guidance on Selection of Tests," ISO 10993-1, EN 30993-1, Geneva, International Organization for Standardization (ISO), 1992.

2. "Required Biocompatibility Training and Toxicology Profiles for Eval-uation of Medical Devices," Blue Book Memorandum G95-1, Rockville, MD, FDA, Center for Devices and Radiological Health (CDRH), Office of Device Evaluation, 1995.

3. Reed KW, and Yalkowsky SH, "Lysis of Human Red Blood Cells in the Presence of Various Cosolvents," J Par Sci Technol, 39(2):64–68, 1985.

4. "Transfusion Equipment for Medical Use, Part 3: Blood Taking Set," ISO 1135-3, Geneva, ISO, 1986.

5. "Plastics Collapsible Containers for Human Blood and Blood Components," ISO 3826-4, Geneva, ISO, 1988.

6. "Medical Surgical Equipment, Single Use Sterile Hemodialyzers and Hemo Filters," French Standard NF S 90–302, Paris, Association Française de Normalisation (AFNOR), 1990.

7. "Extracorporeal Circuit Hemodialysis Dialyzers and Blood-Line Systems Made of Plastics, Requirements and Testing," DIN 58 353, Part 3, Berlin, Deutsches Institut für Normung e.V. (DIN).

8. "Guidelines for Premarket Testing of New Conventional Hemodialyzers, High Permeability Hemodialyzers and Hemofilters," Rockville, MD, FDA, CDRH, Bureau of Medical Devices, March 1992.

9. Moinard J, and Guenard H, "Membrane Diffusion of the Lungs in Patients with Chronic Renal Failure," Eur Respir J, 6(2):225–230, 1993.

10. Vann RD, Ritter EF, Plunkett MD, et al., "Patency and Blood Flow in Gas Denucleated Arterial Prostheses," J Biomed Mat Res, 27:493–498, 1993.

11. Goldberg AM, Frazier JM, Brusick D, et al., "Framework for Validation and Implementation of In Vitro Toxicity Tests: Report of the Validation and Technology Transfer Committee of the Johns Hopkins Center for Alternatives to Animal Testing," J Am Coll Toxicol, 12:23–30, 1993.

12. "Biological Evaluation of Medical Devices, Part 12: Sample Preparation and Reference Materials," ISO 10993-12 (draft 4), Geneva, ISO, 1992.


Sharon Northup, PhD, is a managing associate with the Weinberg Group, Inc. (Washington, DC).


Copyright © 1997 Medical Device & Diagnostic Industry

Another Bloody Season in the FDA-Congress Wars?

An MD&DI January 1997 Column

WASHINGTON WRAP-UP



The departure of David A. Kessler as FDA commissioner is being seen as cause for optimism in the medical device industry. Not much consideration has yet been given to the possibility that the selection process for Kessler's successor could be the precursor to a season of FDA-congressional warfare. If war does result, FDA device approvals could be logjammed, as they were the last time Congress (then in Democratic hands) applied pressure to the agency.

The importance of the search for FDA's next commissioner became obvious the day that Kessler's resignation was announced. Immediately, the Medical Device Manufacturers Association sought to have input on Health and Human Services Secretary Donna Shalala's selection criteria. Health Industry Manufacturers Association president Alan H. Magazine was pragmatic, however, about industry's chances of being allowed to give constructive input on the choice. Asked whether he really thought Shalala would grant it, Magazine answered simply, "No."

Industry's influence will likely be felt at the Senate Labor and Human Resources Committee, which confirmed its first FDA commissioner, Kessler, in a truncated, midnight preadjournment action on October 28, 1990. The committee, now in Republican hands, is certain to give Shalala's nomination a much more vigorous and prolonged examination.

The Republican majority is sure to want a commissioner as unlike Kessler as possible, one who will be content to focus on the agency's internal infrastructure, which is in need of reconstruction, rather than on bold new regulatory initiatives such as scientific upgrading of medical device regulation and Kessler's war on tobacco.

That the Republicans are ready to do battle with Kessler's FDA in the next Congress, whether or not Kessler is in charge or his legacy lives on under another leader, was readily apparent in the aftermath of the November election.

Although both industry leaders and House speaker Newt Gingrich called, on the day after the election, for more cooperation between Congress and the Clinton administration, the political undercurrents all pointed the other way.

The battleground may well be congressional probes into irregularities in FDA's management of staff travel expenses (especially those of lame duck commissioner Kessler, whose departure is expected shortly) and the alleged interactions of device center director Bruce Burlington and subordinates with ophthalmic laser sponsors Summit Technology and Visx. If either or both of these investigations by Texas Republican Joe Barton's House Commerce oversight and investigations subcommittee develop into full-blown, politically driven scandals, they may well choke the flow of FDA's day-to-day business and detract from workable reform efforts.

The precedent was set by the former Democratic majority. Less than five years ago, that same subcommittee under John Dingell (D­MI), suspecting generic drug­type corruption in CDRH, launched such intrusive probes (including stationing a full-time investigator inside CDRH offices) that device approvals slowed almost to a stall.

The subcommittee's current investigations bear some broad similarities to that earlier probe. They also risk setting in motion a series of internal FDA reactions that could stifle the flow of product approvals.

The travel-expenses flap must have seemed irresistible to Barton. The weekend before the election, he issued a news release in which he described as "extremely serious" the allegations in an Associated Press report that Kessler may have improperly billed the government for his use of taxis, an airfare for his wife, and hotel accommodations. The reporter seemed to have been inspired by a plethora of publicly posted Freedom of Information requests for Kessler's records and contacts filed last year by a tobacco-funded Washington group.

In the intricate maze of government rules covering such small items, it's easy to stray from the straight and narrow. Former FDA commissioner Arthur Hull Hayes, Jr., found this out in 1983, when auditors faulted him for double-billing an airplane ticket and $59 worth of other irregularities, and he resigned rather than submit to partisan grandstanding over the affair.

Barton called that incident a "less serious" case than Kessler's, and demanded "a full explanation" from the current commissioner. "After I saw this article," Barton said of the AP report, "I immediately called Dr. Kessler to hear his side of the story. During our discussion, he acknowledged to me that there were some serious perception problems involved. ... That's putting it mildly. I am in the process of initiating informal discussions with [House Commerce Committee] Chairman Thomas Bliley [R­VA], and [subcommittee members] Ron Klink [D­PA] and John Dingell [D­MI] to determine how best to proceed. Abuse of taxpayer funds is always a serious matter, and I intend to work immediately to get to the bottom of this in a bipartisan way."

According to close associates of Kessler, Barton's statement was an overreaction that illustrates well the famous malignancy of the Washington political environment. Kessler, they say, unlike Hayes, is a "stickler for propriety," but was blindsided by poor staff advice (he was first told by an ethics officer that he didn't need receipts for expenses under $25, then that he did, causing his immediate staff to generate such receipts after the fact). He supplemented their work using "the best of his recollection," but being somewhat absentminded, they say, did not do a good job of this.

Kessler apparently used his government credit card against regulations to pay for a plane trip his wife made to join him once in New York and forgot to pay it back. He also accepted a hotel room not knowing that it had already been paid for by an industry group instead of the government, another violation. When the AP reporter uncovered these transgressions and omissions, Kessler was so upset, sources say, that he immediately wrote a personal check for $850 to cover these and all other conceivable errors that might later emerge from further digging (the actual total by then was reportedly under $600).

To anyone in industry reading about these "violations" it must seem incredible that they could cost the job of the perpetrator, but that was clearly the implication of Barton's news release. Kessler's subsequent resignation, however, had more to do with his family's weariness of Washington and the wear and tear of six FDA years than it did with Barton's probe.

As Kessler prepared to leave Washington, Barton's attention seemed to be switching to his chief appointee in CDRH, Burlington, and the laser scandal. In this, Barton was treading on ground already occupied by a lethargic FBI investigation of the same scandal. A public hearing is thought likely to be called by Barton in January as the new Congress convenes.

The essence of this probe seemed to be that in their review of Summit Technology's excimer laser premarket approval (PMA) application, CDRH employees had too cozy a relationship with the sponsor, and that their activities simultaneously served to delay the review of Visx's competitive laser. Summit's laser was approved six months before Visx's, although Summit's PMA application was received by CDRH much later than Visx's. Additionally, there was the infamous leak by FDA of commercially sensitive Visx documents to Summit just after Summit's approval, along with other alleged leaks and charges of after-hours contacts between CDRH and Summit personnel. Then there is the persistent rumor, buttressed by third-hand accounts traced back to Summit CEO David Muller and hotly denied by everyone at FDA, including Burlington, that Senator Edward Kennedy (D­MA) intervened somehow in Summit's approval. Burlington's role, if any, in such irregularities has never been made public, but on the theory that his desk is where the buck stops, he seems vulnerable.

What smells worst about these year-old allegations is the apparently unenthusiastic internal investigation of them that had to be turned over to the FBI when Barton became officially interested, and the subsequent failure of the FBI to come up with any closure--or, according to principal witnesses of possible wrongdoing, even to conduct interviews with those witnesses. Would it be partisan politics if Barton, exasperated in his long wait for something to emerge from the FBI investigation, decided to do whatever he could to uncover the possible cover-up?

In a Washington climate that by voter mandate deliberately pits one party against the other in the conduct of national affairs, logjam and stalemate may inevitably return to CDRH. This would be unfortunate, especially since there is a genuine desire by both FDA policymakers and device industry leaders to work together to achieve major reforms in the way FDA operates.

The big lesson learned from the failure of FDA reform legislation in the last Congress is that aggressive attempts from Capitol Hill to force change on FDA just won't work. FDA wasted a lot of its scarce resources fending off attacks, and with an even tighter budget this year is looking to work something out with the device industry, according to high sources. Whether such an effort can get past potential distractions remains to be seen.

James G. Dickinson is a veteran reporter on regulatory affairs in the medical device industry.
Copyright © 1997 Medical Device & Diagnostic Industry

Remanufactured Devices: Ensuring Their Safety and Effectiveness

An MD&DI January 1997 Feature Article

GMPs

The remanufacturing of medical devices is a growing phenomenon within the health-care industry. The types of devices that are currently refurbished range from machines such as neonatal monitors and anesthesia vaporizers to devices used in surgery, such as forceps, endoscopes, and cytoscopes. Many firms are also restoring used disposable devices, such as catheters and surgical cutting instruments and accessories. Regardless of the product type, medical device remanufacturing carries an indisputable benefit--reduced health-care costs. With that benefit, however, comes an increased risk that the original device's safety and effectiveness may be compromised. Such risk has led many to wonder whether medical devices can, in fact, be restored to their original safety and effectiveness, and to ask about who is ultimately responsible for ensuring the safety of such devices.

FDA fully recognizes the existence of the potential risks related to device remanufacturing. On October 7, 1996, the agency published its quality system regulation--a revision of its good manufacturing practices (GMP) regulation--which specifically includes a definition of remanufacturer.1 As for servicers and refurbishers, the agency has set up a special task force that will separately address regulations for those types of firms.

FDA's concern regarding device remanufacturing is also evidenced by the fact that, by November of last year, the agency had issued at least three warning letters to remanufacturers of medical devices. Among the significant violations cited in these letters were the failure to document conformance to original device specifications, failure to validate reprocessing procedures, and failure to file a 510(k) notification.

The risk of reduced safety and effectiveness extends to the original device manufacturer who, aside from losing sales to its remanufacturing competitors, faces possible damage to its business reputation and the increased likelihood that it will be called to defend a product liability suit. What, if anything, the original manufacturer chooses to do in such situations will vary depending on the circumstances. If the impact on its business is not significant, the best alternative may be to do nothing. However, if substantial sales are being lost and the original manufacturer's reputation is being damaged, some action may be necessary. Options available to companies finding themselves in such situations are discussed in the latter portion of this article.

THE QUALITY SYSTEM REGULATION

The new quality system regulation, which becomes effective June 1, 1997, specifically includes remanufacturers in the category of manufacturer. A person or firm that "processes, conditions, renovates, repackages, restores, or does any other act to a finished device that significantly changes the finished device's performance or safety specifications or intended use" qualifies as a remanufacturer under section 820.3(w). The preamble to the final regulation explains that by specifying that such individuals are subject to the regulation, FDA is simply codifying "longstanding policy."

The longstanding policy was expressed in part in a compliance policy guide (CPG) published by FDA in 1987--and later revised in March 1995--for reconditioners and rebuilders of medical devices.2 Section 300.200 (formerly section 7124.28) states that a company acquiring ownership of a device and restoring or refurbishing it for purposes of resale or commercial distribution must comply with the Federal Food, Drug, and Cosmetic Act (FD&C Act) and FDA regulations. The section also specifies that remanufacturers must register and comply with the requirements for labeling, premarket notification, GMPs, and medical device reporting.

With respect to labeling requirements, section 300.200(C) requires, among other things, that a remanufacturer "clearly and conspicuously" disclose on the label its name and address, the original manufacturer's name and address, and the fact that the device was reconditioned or rebuilt. As for premarket notification, FDA supplemented its guidance in the specific instance of refurbished disposables in a draft document entitled "Deciding When to Submit a 510(k) for a Change to an Existing Device." The agency advises that the labeling change that occurs in the reuse of single-use-only devices "impacts intended use and would usually require submission of a 510(k)."3 Although not binding, an FDA discussion document dated September 1995, which was used to draft the final revisions to the quality system regulation, indicates FDA's policy that the remanufacturing of disposables changes the intended use. It explains that companies that receive used, single-use devices from a health-care provider, resterilize them, and return them to the provider have changed the intended use from single use to multiple use, and are consequently considered remanufacturers.4

FDA previously expressed its concern for the safety of remanufactured disposables in CPG 300.500 (formerly section 7124.16), in which the agency states that "the reuse of disposable devices represents a practice which could affect both the safety and effectiveness of the device." The CPG states that institutions and practitioners reusing disposable medical devices should be able to demonstrate that the device can be adequately cleaned and sterilized, that the physical characteristics or quality of the device are not adversely affected, and that the device remains safe and effective for its intended use. And once a disposable device is used, FDA advises that the responsibility for safety and effectiveness shifts to the refurbisher and second-time user. The CPG states: "Since disposable devices are not intended by the manufacturer . . . for reuse, any institution or practitioner who resterilizes and/or reuses a disposable medical device must bear full responsibility for its safety and effectiveness."

In the new quality system regulation, FDA goes one step further than its previous written policy by defining a remanufacturer as anyone who changes a device's performance or safety specifications. Although the terms performance and safety specifications are not defined in the regulation, use of the terms is consistent with the policy evidenced in the three warning letters FDA issued last year in which it warned remanufacturers of their failure to establish procedures for returning a device to original specifications. Use of those terms also indicates the agency's position that a 510(k) would be required for a specification change that could affect safety or performance. Following publication of the new regulation, Kim Trautman, FDA's quality system expert, stated that, with respect to disposables, the agency will exercise "regulatory discretion" by not requiring 510(k) submissions immediately and will wait until a special task force makes a recommendation.

The preamble to the quality system regulation indicates that FDA recognizes the special issues posed by servicers and refurbishers who return devices to the original specifications outside the control of the original manufacturer. However, because of "sharply divided views" on how to deal with this group, FDA has elected to address them in a separate rule following evaluation by a special FDA task force.5 Many of the firms in this group were previously excluded from CPG 300.200, which specifically stated that it applies to persons or firms that "acquire ownership" of a device and does not apply to those who simply service a device and return it to its owner. In practice, however, some remanufacturers were using special leasing agreements so that they never "acquired ownership" of a device, and therefore the CPG did not apply to them.4,6 Effective June 1, 1997, however, a servicer or refurbisher who significantly changes the performance, safety specifications, or intended use of a device--regardless of whether it acquires title to the device--will fall within the definition of remanufacturer in the quality system regulation. Servicers and refurbishers who do not fall within the new definition, on the other hand, are currently in a state of limbo--at least until FDA publishes a final regulation addressing their regulatory status.

WARNING LETTERS

FDA has recently stepped up its efforts--manifested in the warning letters issued in January, April, and August 1996--to monitor the growing remanufacturing industry. Of particular importance in these letters was FDA's observation that the remanufacturers had failed to document that the refurbished devices met the original manufacturers' specifications. This requirement could be disastrous for remanufacturers that do not consult with original manufacturers. One of the warning letters suggests that a remanufacturer may need to submit a 510(k) premarket notification or premarket approval (PMA) application.

Orlando Warning Letter. On January 11, 1996, FDA's Orlando office issued a detailed and comprehensive warning letter following a GMP inspection of a firm that refurbishes electrophysiology catheters. Six of the eight noted violations specifically involved issues arising from the company's unique position as a remanufacturer.

First, the warning letter noted the firm's failure to meet the requirements of section 820.100 of FDA's GMP regulation, which states the need for written manufacturing specifications and processing procedures that "assure that the device conforms to its original design or any approved changes in that design."7 The letter gave two examples of this violation: inadequate validation of the cleaning, repackaging, and resterilization processes for the disposable devices; and failure to validate a heat sealing operation in the repackaging of the devices.

The company's failure to comply with section 820.116(a) of the GMP regulation requiring written procedures for the reprocessing of a critical device or component was also noted.8 Such procedures must be designed to ensure that the reprocessed device or component meets the original or subsequently modified and approved specifications and to prevent adulteration because of material, structural, or molecular change in the device or component. The warning letter cited the company for failing to establish such procedures and for failing to document the maximum number of reprocessing operations for the device.

Also mentioned was the firm's failure to comply with section 820.160, which requires written procedures for finished device inspection to ensure that device specifications are met.9 Specifically, the letter noted inadequate procedures for measuring the degree of fatigue suffered by some components and for ensuring that repeated use of the devices would be safe and effective.

The warning letter also noted the company's failure to comply with section 820.56(b), which requires documented procedures designed to prevent contamination of equipment by cleaning and sanitizing substances.10 Also cited was the firm's failure to comply with section 820.184, which requires maintaining a device history record that includes, among other things, manufacturing dates and any control numbers used.11 According to the letter, the company also failed to maintain in its device history record the information it received with the devices.

Finally, the January warning letter noted the firm's failure to comply with section 801.1 because the device's label did not contain the name of the original device manufacturer in addition to the refurbisher's name and address and a statement explaining the company's relationship to the device (for example, "refurbished by," "reconditioned by," or "rebuilt by").

New Orleans Warning Letter. Another warning letter was issued on April 18, 1996, by FDA's New Orleans office to a company that was refurbishing oxygen concentrators. Although not as comprehensive as the January letter, it indicates the agency's position that the modifications made in refurbishing a device render it a "new device" requiring 510(k) notification. The April warning letter specifically cited the company's failure to provide "a notice or other information . . . as required by section 510(k)."

The April letter cited three violations arising from the company's position as a device remanufacturer. These violations were the failure to document that the refurbished device conformed to the original manufacturer's specifications, failure to establish criteria for the acceptance or inspection of components used to refurbish the device, and failure to conform to FDA regulations requiring a refurbisher to identify its connection with the device on its label.12 The Form FDA-483 that preceded the warning letter also noted these deviations.

The April letter also noted several general manufacturing violations, including the failure to list the device in its registration with FDA, as required by section 510(j) of the FD&C Act; failure to establish written documentation of testing checks/parameters to be performed; failure to establish written procedures for handling reports of failures and other complaints; and failure to establish written procedures or to document the calibration and maintenance of testing equipment.

Denver Warning Letter. On August 30, 1996, FDA's Denver office issued a warning letter to a firm in Utah that was reprocessing laparoscopic needles, among other devices. This letter echoed the two previous warnings. First, the firm was cited for its failure to establish control measures to ensure that the device met approved specifications as required under section 820.100. Second, the letter warned of the failure to establish procedures to ensure that the reprocessed device met original or approved specifications as required under section 820.115.

PROTECTION FOR ORIGINAL MANUFACTURERS

Several options are available to a device manufacturer wishing to reduce both possible damage to its business reputation and the risk that it will be held responsible for failure or contamination of its remanufactured device. These options include running a promotional campaign, contacting the remanufacturer directly, filing a trade complaint letter with FDA, or, as a more aggressive approach, filing a civil action alleging unfair competition and violations of federal trademark law. Of course, each situation varies, and a manufacturer may decide to pursue none, one, or a combination of the following approaches.

Promotional Campaign. One option for the original manufacturer is to launch a promotional campaign directed at health-care providers and risk managers. Such a campaign would inform them that the refurbished devices could be inferior, resulting in decreased safety and effectiveness and an increased risk that they--the reusers--could be held liable in the event of device failure. Of course, care needs to be taken in any such campaign to ensure that all statements made by the original manufacturer are truthful and are not misleading.

Direct Contact. Another approach is to contact the remanufacturer directly and request that it cease its remanufacturing operations or, at the very least, state on its label that the original manufacturer bears no responsibility for the safety and effectiveness of the device. If the remanufacturer's response is less than satisfactory, the original device manufacturer may wish to consider filing a trade complaint letter with FDA.

Trade Complaint Letter. A trade complaint letter can be filed in the name of the original device manufacturer, anonymously, or through a law firm. An effective complaint letter should point out the possibility of violations such as those enumerated in the previously mentioned warning letters. It should also emphasize the remanufacturer's likely failure to meet the original specifications as well as the possible change in intended use that would require the submission of a premarket notification or PMA application.

Depending on the region and whether the remanufacturing of devices continues to be a high priority of FDA, a trade complaint letter may have limited or slow success, especially if it involves a servicer or refurbisher that is currently excluded from the quality system regulation or a remanufacturer of a disposable device (over which FDA is currently exercising regulatory discretion). Nevertheless, a trade complaint letter serves as a vehicle for the original device manufacturer to communicate to the agency that it is aware that its devices are being remanufactured and that it assumes no responsibility for their reuse.

Civil Action. As a more aggressive approach, the original manufacturer can notify the remanufacturer of its intent to file a civil action for trademark infringement and unfair competition under the federal Lanham Trademark Act. Section 32 of the act provides for a cause of action against a competitor who uses "a reproduction, counterfeit, copy, or colorable imitation of a registered trademark."13 In addition, section 43(a) provides for action against a competitor who causes confusion as to the origin of its goods or misrepresents their nature, characteristics, or qualities.14 Remedies under the Lanham Trademark Act include injunctive relief and, although more difficult to obtain, monetary damages.

The first major case to address unfair competition and trademark infringement in the context of remanufacturing was the 1947 Supreme Court case, Champion Spark Plug Co. v. Sanders. The Supreme Court found that the remanufacture and sale of a product (spark plugs) under the original manufacturer's trademark is permissible under the Lanham Trademark Act if the remanufacturer has clearly stated on the label that the product is repaired or used.15

Based on more-recent federal cases, however, a court could determine that even with such disclosure, the Lanham Trademark Act gives a medical device manufacturer the right to control the manufacturing process and quality of its trademark. As one federal court found in 1994, "A product is not genuine unless it is manufactured and distributed under quality controls established by the manufacturer."16 Another court explained that "the Lanham Trademark Act affords the trademark holder the right to control the quality of the goods manufactured and sold under its trademark."17 Consequently, a device manufacturer could bring an action against a firm that is refurbishing its devices, arguing that the latter is violating its right to control the quality of its trademark.

Similarly, if the original device manufacturer can establish the lesser quality of the refurbished device, that evidence will support a claim under this theory. It has been held that failure to maintain the quality control standards established by the trademark owner constitutes evidence of a trademark violation.18 Proof of lesser quality is not required, however, as one court stated that "the actual quality of the goods is irrelevant; it is the control of quality that a trademark holder is entitled to maintain."19 In yet another case, a court found that a company is entitled to "shape the contours of its reputation," and therefore "there can be a Lanham Act violation even if the plaintiff's and defendant's goods are of equal quality."20

Cases involving the remanufacture of disposables can be distinguished from the 1947 ruling in Champion Spark Plug because the reuse of single-use-only devices presents very different issues. In the Champion case, the products stayed with their labels, which disclosed that they were repaired or used, until they reached the consumer. By contrast, even if disposable surgical devices are marked "restored by" or "reconditioned by," as FDA requires, they are usually separated from their packages before the surgeon uses them. Once the packaging and inserts are separated from the sterilized product, a refurbished device is difficult, if not impossible, to distinguish from an original, unused device. Unless the physician knows where the hospital buys such devices, he or she will have no way of knowing that a device has been refurbished. This could be held to cause confusion as to the true source, nature, characteristics, or quality of the restored device.

Another difference between the situation presented by refurbished disposables and the Champion Spark Plug case could be that the remanufacturer in that case did not claim that its spark plugs were comparable to the original. Some remanufacturers may represent that their restored disposables are as safe and effective as the original devices. A court could find that such statements are not true, especially if presented with FDA regulations and warning letters demonstrating the agency's concern for the safety and effectiveness of restored devices, evidence that reuse of a single-use-only device reduces its effectiveness, or evidence that the remanufacturer's sterilization procedures do not remove all contamination or that they change the molecular structure of the device in such a way as to pose safety concerns.

WHETHER TO LITIGATE

Litigation always involves risk, time, and expense. A company considering this option may determine that the injury caused by the remanufacturing of its device does not outweigh those factors. Nevertheless, litigation does offer at least one significant advantage over filing a trade complaint letter with FDA: a relatively speedy result. A federal court will probably afford relief more quickly than FDA could. With the growing number of remanufacturers entering the market, the agency cannot get to each of them to determine whether there are GMP or other violations, and if it does, it probably cannot do so as quickly as a federal court could rule on a motion for a preliminary injunction.

Two years ago, in a Lanham Trademark Act case concerning remanufactured medical devices, Judge Zita Weinshienk (sitting on the U.S. District Court for the District of Colorado) granted a motion for a preliminary injunction within two months following the filing of the complaint and motion. That case involved the particularly egregious conduct of a remanufacturer that was obtaining used surgical clip appliers, removing the trademark of the original manufacturer, and replacing it with its own. Under trademark law, this process is known as reverse passing off, meaning that the original trademark is removed without authorization before reselling the product as one's own. (Traditional passing off or palming off is the selling of a product of one's own creation under the name or mark of another. A typical example is a company creating and selling inferior copies of an original, such as fake name-brand watches, luggage, and clothing.) While every remanufacturer today may not be guilty of reverse passing off, the Colorado case and the judge's comments indicate that some courts will recognize the need to step in quickly where FDA cannot.

Judge Weinshienk did not believe that FDA's failure to take action indicated that the agency approved of reverse passing off. Rather, the court found that FDA's failure to act was a function of its understaffing and noted the need for courts to assume the duty of preventing customer confusion and eliminating risk to patients who were unknowingly receiving inferior products. Judge Weinshienk ultimately granted the manufacturer's requested relief--an order that the remanufacturer cease distribution of the altered device until it could establish that it had taken sufficient measures to eliminate customer confusion.

CONCLUSION

The answer to the question of who will ensure the quality control of remanufacturers ultimately involves two entities: FDA and the original device manufacturer. For FDA, the tools for ensuring the safety of such devices include warning letters, other enforcement mechanisms, and implementation of new regulations. For original manufacturers, letters, complaints to the agency, and possibly Lanham Trademark Act claims can be effective. The ultimate goal for all players is ensuring that the risks associated with the growth of the remanufacturing industry are kept to a minimum and the benefits are fully maximized.

REFERENCES

1."Medical Devices; Current Good Manufacturing Practice (CGMP) Final Rule; Quality System Regulation," Federal Register, 61 FR:52601.

2.Compliance Policy Guide, sect 300.200 and 300.500, Rockville, MD, FDA, Office of Enforcement, Div. of Compliance Policy, September 1987 and March 1995.

3."Deciding When to Submit a 510(k) for a Change to an Existing Device," draft 2, Rockville, MD, FDA, Center for Diseases and Radiological Health, August 1, 1995.

4."Trial Balloon: FDA Discussion Document," September 1995 (for discussion at the International Association of Medical Equipment Remarketers meeting September 29­30, 1995).

5.61 FR:52601, 52610.

6.Hooten WF, "FDA's New GMP Working Draft: Industry's Last Chance for Comment," Med Dev Diag Indust, 17(9):72­79, 1995.

7.Code of Federal Regulations, 21 CFR 820.100.

8.21 CFR 820.116(a).

9.21 CFR 820.160.

10.21 CFR 820.56(b).

11.21 CFR 820.184.

12.21 CFR 801.1(c).

13.15 USC 1114(1).

14.15 USC 1125.

15.Champion Spark Plug Co. v. Sanders, 331 U.S. 125, 130 (1947).

16.Caterpillar, Inc. v. Nationwide Equipment, 877 F. Supp. 611, 615 (M.D. Fla. 1994) (citing Shell Oil Co. v. Commercial Petroleum, Inc., 928 F.2d 104 [4th Cir. 1991]).

17.Shell Oil Co. v. Commercial Petroleum, Inc., 928 F.2d 104 (4th Cir. 1991) (quotation omitted) (citing El Greco Leather Products Co. v. Shoe World, 806 F.2d 392, 395 [2d Cir. 1986], cert. denied, 485 U.S. 817 [1987]).

18.Anthony Distributions, Inc. v. Miller Brewing Co., 904 F. Supp. 1363, 1367 (M.D. Fla. 1995).

19.Shell Oil Co. v. Commercial Petroleum, Inc., 928 F.2d 104 (4th Cir. 1991).

20.Caterpillar, Inc. v. Nationwide Equipment, 877 F. Supp. 611, 615-16 (M.D. Fla. 1994) (citing Truck Equipment Serv. Co. v. Freuhauf Corp., 536 F.2d 1210, 1216 [8th Cir.], cert. denied, 429 U.S. 861 [1976]).

Edward M. Basile is a partner and Susan S. Quarngesser is an associate in the Washington, DC, office of King & Spalding.


Copyright © 1997 Medical Device & Diagnostic Industry