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Archive for the ‘Life Sciences’ Category

New Medical Devices and Performance Criteria

Posted on: February 12th, 2019

By: Koty Newman

The Food and Drug Administration (“FDA”) recently issued final guidance (the “Guidance”), providing a framework for its new Safety and Performance Based Pathway for its updated 510(k) process. Section 510(k) of the Food, Drug and Cosmetic Act requires medical device manufacturers to notify the FDA of their intent to market a medical device. Notification enables the FDA to determine if the product is equivalent to a device already on the market, which by extension, helps the FDA determine if the device is at least as safe and effective as the already marketed device.

The FDA’s Safety and Performance Based Pathway evidences the FDA’s recognition that it may be less burdensome for device manufacturers to show a new device’s substantial equivalence to a predicate device by demonstrating that the new device meets certain performance criteria, rather than directly testing the new device against a predicate device. Thus, “[i]nstead of reviewing data from direct comparison testing between the two devices, FDA could support a finding of substantial equivalence based on data showing the new device meets the level of performance of appropriate predicate device(s),” the Guidance states. In order to discern the requisite performance criteria, manufacturers should look to descriptions in FDA guidance, FDA-recognized consensus standards, and special controls.

The Guidance states that the “FDA believes that use of performance criteria is only appropriate when FDA has determined that (1) the new device has indications for use and technological characteristics that do not raise different questions of safety and effectiveness than the identified predicate, (2) the performance criteria align with the performance of one or more legally marketed devices of the same type as the new device, and (3) the new device meets all of the performance criteria.” Further, a manufacturer may use this program only if the manufacturer can rely entirely on performance criteria to demonstrate substantial equivalence. The FDA will still require that a manufacturer identify a predicate device in order for the FDA to determine the relevant intended use and technological characteristics decision points.

The FDA will maintain a list of device types that are appropriate for the Safety and Performance Based Pathway on its website, along with other information that will be helpful for manufacturers intending on navigating this particular Pathway, such as “guidances that identify the performance criteria and testing methods recommended for each device type.”

This policy represents an expansion of the long-applied approach by the FDA, giving device manufacturers an additional pathway to demonstrate substantial equivalence. For the manufacturers who cannot, or prefer not to, rely on this Safety and Performance Based Pathway, direct comparison with a predicate device will remain available to determine whether the new device is substantially equivalent to a predicate device.

The FDA is also seeking public comment on questions such as whether it should make public a list of devices or manufacturers who make products that rely on older predicates, such as predicates that have been on the market for ten-or-so years, and whether there are actions the FDA could pursue to promote the use of more current predicates. The public will have until April 22, 2019 to comment.

If you have any questions or would like more information, please contact Koty Newman at (678) 996-9122 or [email protected].

Office of Inspector General Approves Warranty Program for Medical Device Manufacturer

Posted on: November 5th, 2018

By: Ali Sabzevari

The Department of Health and Human Services Office of Inspector General recently approved a medical device manufacturer’s proposed warranty program, which provides a refund to the hospital at which a patient underwent joint replacement surgery using the manufacturer’s knee or hip implant and related products, if the patient was readmitted within 90 days because of a surgical site infection or need for implant replacement surgery. The proposed model could serve as a road map for these kinds of risk sharing arrangements.

Advisory Opinion No. 18-10, which can be accessed here, set forth that although the suggested warranty implicates the safe harbor regulations to the anti-kickback statute, 42 C.F.R. § 1001.952, the “Proposed Arrangement poses a sufficiently low risk of fraud and abuse under the anti-kickback statute.”

The anti-kickback statute makes it a criminal offense to knowingly and willfully offer, pay, solicit, or receive any remuneration to induce or reward referrals of items or services reimbursable by a Federal health care program. See section 1128B(b) of the Act. Where remuneration is paid purposefully to induce or reward referrals of items or services payable by a Federal health care program, the anti-kickback statute is violated. By its terms, the statute ascribes criminal liability to parties on both sides of an impermissible “kickback” transaction. For purposes of the anti-kickback statute, “remuneration” includes the transfer of anything of value, directly or indirectly, overtly or covertly, in cash or in kind. The statute has been interpreted by several federal courts to cover any arrangement where one purpose of the remuneration was to obtain money for the referral of services or to induce further referrals.

The U.S. Department of Health and Human Services has promulgated safe harbor regulations that define practices that are not subject to the anti-kickback statute because such practices would be unlikely to result in fraud or abuse. See 42 C.F.R. § 1001.952. The safe harbors set forth specific conditions that, if met, assure entities involved of not being prosecuted or sanctioned for the arrangement qualifying for the safe harbor. However, safe harbor protection is afforded only to those arrangements that precisely meet all of the conditions set forth in the safe harbor.

The Advisory Opinion concludes that the Proposed Arrangement would not generate prohibited remuneration under the anti-kickback statute. Value-based care and risk sharing models continue to gain appeal, and the Office’s approval of this warranty program shows that the era of value-based care is here to stay.

If you have any questions or would like more information, please contact Ali Sabzevari at [email protected].

PUNITIVE DAMAGES: How Much Is Too Much?

Posted on: November 1st, 2018

By: Rebecca Smith

On August 10, 2018, in the first Roundup cancer lawsuit to proceed to trial, a jury awarded Dewayne Johnson a total of $289 million dollars. On Monday, October 22, 2018, a San Francisco Superior Court Judge refused to overturn the jury verdict, however, ruled that if plaintiff would accept a reduction in the punitive damages from $250 million to $39 million she would deny Monsanto’s Motion for New Trial. On Friday, October 26, 2018, attorneys for Plaintiff Johnson accepted the trial court’s reduction of the punitive damage, reducing the total verdict to Mr. Johnson from $289 million to $78 million.

This case involved the trial of design defect and failure to warn claims asserted by Dewayne Johnson alleging that his exposure to glyphosate and glyphosate-based herbicides (Roundup) developed by Monsanto caused him to develop non-Hodgkin’s Lymphoma. At trial, the jury was asked to resolve the complex question of whether plaintiff’s exposure to Roundup caused his Lymphoma, to which the jury responded affirmatively. Monsanto challenged that determination in post-trial motions, however, Judge Suzanne Bolanos denied such contest, finding there was no legal basis to disturb the jury’s determination that plaintiff’s exposure to Roundup was a substantial factor in causing his Lymphoma. Judge Bolanos, however, did “disturb” the punitive damage award.

Monsanto had argued that there was no clear and convincing evidence of a specific managing agent authorizing or ratifying malicious conduct and accordingly that punitive damages should not be awarded. Judge Bolanos, however, indicated that when the entire organization is involved in acts that constitute malice, there is no danger a blameless corporation will be punished for bad acts of which it had no control. Further, she held that the jury could have concluded that Monsanto acted with malice by consciously disregarding a probable safety risk of Roundup and continuing to market and sell its products without a warning.

In addressing the amount of the punitive damages, Judge Bolanos began her disagreement with the jury. The award, she indicated, was extremely high for a single plaintiff and consisted largely of non-economic damages which the due process case law recognizes as a punitive element. Pointing to the prior U.S. Supreme Court decision of State Farm Mut. Auto Ins. Co. v. Campbell that “[p]unitive damages found to exceed the ceiling of what due process allows must be reduced,” Judge Bolanos ordered the ratio of compensatory damages to punitive damages be reduced to one to one.  Accordingly, the court held that regardless of the reprehensibility of Monsanto’s conduct, the constitutionally required punitive award could be no more than the compensatory damages award of $39 million.

It is unlikely that this case will end here. While the plaintiff has accepted the reduction in the punitive damages and accordingly, the reduced amount will be entered as a judgment, this does not preclude Monsanto from appealing the judgment. Further, should Monsanto appeal the judgment, plaintiff has reserved its right to appeal the reduction of punitive damages. This is a case well worth watching.

If you have any questions or would like more information, please contact Rebecca Smith at [email protected].

Leaked DOJ Memo Unearths New Strategy in Qui Tam Cases

Posted on: February 13th, 2018

By: Samantha L. Skolnick

On January 10, 2018, an internal Department of Justice memorandum (the “Granston Memo”) was leaked to the public, turning heads. The Granston Memo included an in-depth analysis of the DOJ’s position on evaluating dismissals pursuant to the False Claims Act (FCA). The Granston memo outlined the DOJ’s position on FCA claims brought by whistleblowers. Under the FCA, a whistleblower may bring what is known as a “qui tam” action on behalf of the government, which potentially allows said whistleblower to receive a share of any government recovery.  The Granston memo is particularly significant, as it provides those faced with claims of False Claims Act violations with insight into the DOJ’s stance on a range of factors for dismissing these qui tam actions.

Under the FCA, the Attorney General can dismiss a whistleblower’s qui tam action, so long as the whistleblower is given the opportunity to be heard. 31 U.S.C. § 3730(c)(2)(A). Despite this provision, the DOJ noted that this dismissal option has not been actively utilized by the DOJ.  The Granston Memo specifically addresses seven enumerated circumstances where the DOJ should be considering moving to dismiss these qui tam actions:

(1) curbing meritless qui tams;

(2) preventing parasitic or opportunistic qui tam actions;

(3) preventing interference with agency policies and programs;

(4) controlling litigation brought on behalf of the United States;

(5) safeguarding classified information and national security interests;

(6) preserving governmental resources; and

(7) addressing egregious procedural errors.

Of course, the factors above are not mutually exclusive or exhaustive. The DOJ could move to dismiss these actions for multiple or other reasons.

The Granston Memo also sheds light on the increased number of whistleblower filings per year, which appears to have triggered this concern by the DOJ of the underutilized dismissal provision of the FCA. Indeed, the Granston memo mentions the possible negative consequences of the Government’s failure to use the dismissal provision, including generating adverse decisions which affect the government’s ability to enforce the FCA.

Companies or persons facing FCA claims should be particularly aware of the Granston memo, and should argue to the DOJ and/or to the whistleblower themselves that any such claim is subject to dismissal based on the seven factors above. In some circumstances where the government has decided not to intervene, the whistleblower can obtain permission and voluntarily dismiss a qui tam action.

For more information, contact Samantha Skolnick at [email protected]

Eleventh Circuit Rules Florida Strict Liability and Negligence Claims Not Preempted by the MDA

Posted on: February 12th, 2018

By: Robyn Flegal

A panel of the Eleventh Circuit determined in a February 8, 2018 published decision that a Florida district court erred when it ruled that a husband’s claims, brought against a medical device manufacturer after its Life Vest defibrillator failed to shock his wife’s heart, were preempted by federal law.

A defibrillator is worn by patients at risk of sudden cardiac arrest. It delivers a dose of electric current to the heart, depolarizing the heart muscle and ending dysrhythmia. The lower court dismissed the action in January 2017, ruling that the claims against the manufacturer were preempted by the Medical Device Amendment of the Food, Drug and Cosmetic Act. The FDA previously determined the Life Vest device was safe, and the district court agreed with the manufacturer that the allegations improperly contradicted the FDA’s prior approval of the product.

The Eleventh Circuit disagreed with the lower court’s ruling, deciding that the claims were not preempted. The court reasoned that the strict liability and negligence claims were not preempted by the federal regulations because the plaintiff alleged the defect was due to the manufacturer’s purported failure to comply with these regulations—which then caused a violation of Florida’s laws. The Court considered that a 2014 FDA warning letter put the manufacturer on notice that it was in violation of certain regulations. That letter can, now, serve as a basis for the plaintiff’s claims—even though the letter referred to shocks being delivered to patients who did not need them, as opposed to the failure to deliver shock to patients who needed them (as allegedly experienced by the plaintiff’s wife). The Court determined that the complaint’s references to the letter sufficiently stated a claim that was plausible on its face despite this disconnect between the warning letter and facts relating to the plaintiff’s wife’s use of the product.

Medical device manufacturers should be aware of the Eleventh Circuit’s ruling that claims of strict liability and negligence may not be preempted by the Medical Device Amendment. Such manufacturers should be particularly cognizant of this Eleventh Circuit decision where they have received an FDA warning letter.

For more information, please contact Robyn Flegal at [email protected].