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When FDA Goes to Bat for One Company Against Another
04/17/2017
 

 

[Analysis by Jim Dickinson] Picture this: Your company is in a bitter fight with another company to control a specialized market that each of you think isn’t big enough for both of you. What would it be worth to have FDA take your side in a marketplace brawl about the regulatory status of your products and promotional claims?

Companies have long used FDA Warning Letters and legal actions to disparage competitors, but what a small New York-based maker of infusion devices, Repro-Med Systems, Inc., (RMS) says it experienced at the hands of California-based EMED Technologies, a former business partner, raises FDA’s role to an unprecedented level.

The specter of FDA clandestinely taking EMED’s side against RMS arose out of a routine inspection at RMS’s Chester, NY facility in June of 2015. Right in the middle of the inspection, in Silver Spring, MD, CDRH acting director of compliance Jan Welch received a trade complaint about the legality of RMS’s lead products sent by DuVal & Associates, an influential Minneapolis law firm specializing in FDA matters — and, without saying so, representing EMED.

The 34-page document told Welch that RMS’s Freedom60 Infusion System and FreedomEdge infusion pumps and Precision Flow Rate Tubing sets “are misbranded and adulterated for various reasons” — among which, DuVal alleged, were changes to the products and labeling that “could significantly affect the safety or effectiveness of the device requiring new premarket notification(s). Changes include the removal of a contraindication as well as changes to performance specifications, ergonomic and dimensional specifications.” The trade complaint spelled all these out in detail, with pictures, charts and diagrams.

In addition, DuVal’s letter charged that RMS was promoting its products off-label for the infusion of “blood products” like immunoglobulin (IgG), a listed contraindication under its 510(k) clearance.

The inspection at RMS continued on until the issuance of a 10-page, 16-observation FDA Form 483 by New York District investigator Jacqueline S. Warner on 6/23/2015. The observations were all relatively minor. None involved misbranded or adulterated products. Warner blandly noted on the 483’s last page that RMS “promised to correct” all observations.

Seven months and three days later, at the end of February 2016, FDA’s bombshell arrived at RMS by UPS: a 10-page Warning Letter from New York District director Ronald M. Pace, bearing as its first concern DuVal’s complaints about misbranded and adulterated products, and about their promotion for IgG and other contraindicated blood products. The Warning Letter contained no hint of DuVal’s role an RMS would not become aware of it until another nine months had passed.

Notwithstanding the FDA-483’s evident ignorance of such issues, Pace’s letter said the inspection “revealed that the Freedom 60 and Freedom Edge Infusion Pumps are adulterated … because these devices are class III devices … and you do not have an approved application for premarket approval (PMA) in effect as required …” It went on to charge that the devices were also “misbranded … because you did not notify the agency of your intent to introduce these devices into commercial distribution in that a notice or other information respecting significant modifications … and their intended use was not provided to the FDA as required …” Pace also elaborated on DuVal’s complaint about off-label promotion of the devices for IgG and other blood products and liquid medicines.

RMS promptly answered the Warning Letter in detail, referencing the products’ 510(k) clearances for their intended uses and asserting that modifications were not significant since the performance characteristics remained unchanged. In 10 prior inspections over the years, the devices’ classification had never been questioned, nor were objectionable conditions noted, RMS’s response said. It added that a 2010 Establishment Inspection Report “clearly indicated that immunoglobulin drugs and antibiotics can be infused through RMS’ devices. (Immunoglobulin drugs, while made from the blood product plasma, are not a blood product itself.)”

The existence of the Warning Letter was promptly exploited by EMED. Less than a month later, it filed a motion for preliminary injunction based largely on the Warning Letter in the U.S. District Court for the Eastern District of California. EMED asked the court, which had already enjoined RMS in a patent case from making false statements about EMED’s products, to further prohibit its rival from selling Freedom60, FreedomEdge and High-Flo Subcutaneous Safety Needle Set in California “on the ground that such sales would constitute ‘unfair competition’ as defined by California’s Unfair Competition Law.”

Eight months later, last October, EMED lost a motion to hold RMS in contempt of the pending preliminary injunction, but not before DuVal had been forced under subpoena to produce documents that included the trade complaint to FDA, exposing its existence to RMS for the first time. On 11/1/16, a deeply angered Andy Sealfon, RMS CEO, sent an annotated copy of the trade complaint, rebutting its allegations in detail, to CDRH director Jeffrey Shuren. In a cover letter, he said he was “surprised and appalled by the content of a letter on behalf of a client who appears to be motivated by competitor spite as opposed to device safety and effectiveness.

“However,” Sealfon continued, “I am more concerned about how [CDRH] reacted to this letter and how this was managed by your office. At some point in the near future I will seek a complete explanation.”

As of this writing, neither Shuren nor any other FDA official contacted by Sealfon and his attorneys have responded to his concerns about the inspection, the DuVal trade complaint or the Warning Letter ꟷ or any other matter. “They keep doubling down, doubling down on us,” Sealfon says.

All of which has cost RMS dearly. Sealfon says his company has lost more than $2 million in sales since the Warning Letter was spread by EMED through multimedia disparagement and “fake news.” As EMED sales and marketing vice president Joe Barbrie wrote in emails to customers, FDA’s action would create a “void in the supply chain. EMED assures you and your customers we have the capability to supply pumps, needle sets and rate control devices to meet the expected increase in demand. We will alert our distribution partners, sales representatives and marketing partners to advise EMED will be there to provide an increased level and satisfaction.”

It’s not the first commercial exploitation of an FDA Warning Letter in the marketplace, but it may well be the most spectacular. Particularly troubling is the timing of DuVal’s factually erroneous trade complaint in the middle of its competitor’s routine FDA inspection, and how that inspection’s tepid FDA-483 morphed into a clumsily deficient but highly damaging, incendiary FDA Warning Letter seven months later.

According to Sealfon, who was in Europe at the time of the inspection, RMS later discovered that investigator Warner was sent DuVal’s trade complaint while her inspection was in progress — in fact, as soon as it was received at CDRH. She asked to see company records about the adulteration and misbranding allegations at the heart of the trade complaint, but she made no mention of this in her 483. Warner seemed to be a food specialist unfamiliar with medical devices, Sealfon told us recently.

When he got back from Europe, Sealfon said he found the company’s hitherto amicable relationships with FDA had become strained. No matter who he contacted in CDRH and the New York District office, his questions were always rebuffed or ignored. “Everything since DuVal trade complaint has been against us and for EMED,” Sealfon told us. “It looks very monolithic to me.”

That’s not the way DuVal sees it. Sealfon’s view “certainly ascribes more influence and power than we have with the agency,” he wrote in commenting on a draft of this article:

“The FDA is a very data driven, fair-minded, consumer-safety driven agency. Anything we brought to their attention was independently verified by dedicated and astute agency personnel. I don’t think anyone for a minute believes the FDA would conspire with our firm or any other firm. We have good and respectful relationships there, but often our job is to challenge their thinking and advocate for our client. It helps when the law and regulations are on our side….

“There is way more to the RMS story than is told in your first draft. Our FDA complaint speaks for itself. The simple facts are these. There are three issues RMS has faced with FDA. Two issues relate to modifications to their device which were not submitted to FDA for review. FDA requires that when a medical device is modified by a company, the company has two options: to file a new 510(k), or do an internal letter-to-file that can be seen by an investigator upon a routine inspection. If the change is a) “major change” to the intended use, or b) a change that “significantly affects safety or effectiveness,” then the company must submit a new 510(k) to FDA to permit a review to determine if the modified device is still safe and effective with those changes.

“Our point was simple. RMS is marketing a new generation device for which it did not receive FDA clearance. The third issue relates to FDA’s inspection of their firm for which RMS received some serious quality observations.”

Those quality observations, listed in FDA-483s from the 2015 inspection and a “follow-up” inspection last December, are beyond the scope of this article and are the subject of ongoing discussions between RMS and the agency. We expect to deal with them in a separate article.

Asked to comment on this article, EMED Technologies CEO Paul Lambert responded:

“RMS reminds us of a serial offender who, when finally brought to justice, deflects blame by arguing he’d never been caught before. RMS has been cited by the FDA for numerous regulatory infractions, some of which have potential impact on patient health and safety. The most recent of which was in December of 2016. While RMS may snub its nose at the FDA, the deficiencies uncovered by the FDA are serious business. To complete the record, RMS is also a defendant in lawsuits being brought by EMED Technologies alleging that RMS has been consistently infringing patents created and controlled by EMED, to the detriment of the healthcare consumer.”

 

 

 
 
 
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