Over the past 20 years, the number of patent infringement disputes filed annually at the U.S. International Trade Commission (ITC) has more than tripled. Although typically associated with smartphones and semiconductor chips, the ITC has also seen quite a few disputes involving medical devices. Important trends are emerging in medical device patent litigation at the ITC.
Johnson & Johnson secured a sweeping victory last week in the first bellwether trial in the multidistrict litigation relating to DePuy’s Pinnacle system metal-on-metal hip implant device. The plaintiff argued that the components of the device could grind together causing pain, swelling, and the introduction of toxic metal fragments into the bloodstream, and that DePuy’s defective design of the device and/or failure to provide adequate warnings about the device caused her injury. After a seven week trial and almost two days of deliberations, the jury rejected the plaintiff’s claims of negligence, defective design, failure to warn, and unfair and deceptive acts or practices under the Montana Consumer Protection Act. Among other things, the jury concluded that the plaintiff’s injuries were not caused by a failure on DePuy’s part to act reasonably with respect to the design of and warnings about the Pinnacle metal-on-metal hip implant.
Last year, DePuy agreed to pay $2.5 billion to settle more than 7,000 lawsuits over a different hip implant device, the ASR device, which it recalled in 2010, but has chosen to take the Pinnacle lawsuits to trial. DePuy ceased selling the Pinnacle device in 2013. At trial, DePuy argued that the device was well designed and safe when implanted correctly. According to DePuy, it was not the design of the implant, but the incorrect positioning of it by doctors that caused the metal to wear unnecessarily, and that a small number of surgeons implanting the device at the wrong angle had skewed the failure results for the device. Furthermore, DePuy had warned doctors that positioning the implant incorrectly could damage tissue.
The bellwether case, Herlihy-Paoli v. DePuy Orthopeadics Inc., 3:12-cv-04975 (N.D. Tex.) was tried in the U.S. District Court for the Northern District of Texas before Judge Ed Kinkeade. There are currently 6,500 pending cases relating to the Pinnacle device. The next trial in the litigation is scheduled for January.
The U.S. Food and Drug Administration (“FDA”) has increasingly focused on promoting cybersecurity because compromised medical devices can pose a risk to patient health as well as the confidentiality of personal medical information. On October 2, 2014, FDA issued final guidance on the content of premarket submissions for the management of cybersecurity in medical devices. The final guidance sets forth recommendations for the design and development of medical devices, as well as the preparation of premarket submissions, that are intended to reduce the likelihood that medical devices will be compromised as a result of inadequate cybersecurity.
Although the final guidance is not binding, it is broadly applicable—the recommendations apply to all premarket submissions except investigational device exemption applications, as well as to requirements under the Quality System Regulation. The guidance supplements other standards generally applicable to software included in medical devices, as well as specific standards addressing cybersecurity risks in medical devices containing off-the-shelf software. The final guidance also adopts the National Institute of Standards and Technology’s core cybersecurity framework, which FDA recently agreed to promote in a Memorandum of Understanding with the National Health Information Sharing and Analysis Center.
On October 3, 2014, FDA announced in the Federal Register the availability of a draft guidance titled “Framework for Regulatory Oversight of Laboratory Developed Tests (LDTs)” and the availability of a companion draft guidance titled “FDA Notification and Medical Device Reporting for Laboratory Developed Tests (LDTs).” The draft guidances, if finalized, would implement a new regulatory framework for oversight of LDTs. Both draft guidances will be open for public comment for 120 days following the announcement.
Earlier this month, a medical device company settled allegations that it had violated the False Claims Act (FCA) by improperly certifying that it had complied with the Trade Agreements Act (TAA) when providing the U.S. Government with end products manufactured in Malaysia. The TAA requires certain end products sold to the U.S. Government to be made in the United States or a country covered by a trade agreement with the United States. End products manufactured in Malaysia, as well as India and the People’s Republic of China, are not compliant with the TAA.
The settlement resolved litigation that began in 2008 when a former employee alleged that the company sold orthopedic devices on a federal supply schedule administered by the U.S. Department of Veterans Affairs (VA) after purchasing the devices from a third-party manufacturer in Malaysia. Although the TAA only applies to end products sold to the U.S. Government if the value of the end products meets a specific monetary threshold, the VA has taken the position that all end products sold on a federal supply schedule must comply with the TAA because the orders placed under a federal supply schedule are expected to meet the applicable threshold. As a result, different country-of-origin requirements may apply to medical device manufacturers and suppliers depending on whether they sell their products to the U.S. Government on the open market, through a federal supply schedule, or under a separate federal contract. The company at issue had used multiple sales mechanisms to provide end products to the U.S. Government.
Last week, a state court jury in Dallas awarded the plaintiffs in a pelvic mesh device litigation against Boston Scientific approximately $23.5 million in compensatory damages and $50 million in punitive damages.
In the bellwether case, Salazar v. Lopez, plaintiffs Martha Salazar and her husband Felix Salazar sued Boston Scientific alleging she was injured by its Obtryx sling device. After a two-week trial, the jury found that Boston Scientific was negligent in designing the Obrtyx device and that negligence was a proximate cause of Salazar’s injuries. The jury also found that Boston Scientific failed to provide adequate warnings to doctors about the risks associated with the device. Finally, the jury found gross negligence, permitting the recovery of punitive damages.
While the jury awarded $50 million in punitive damages, the actual amount of recovery of punitive damages is limited by Texas Civil Practice & Remedies Code § 41.008 to two times the amount of economic damages, plus an amount equal to any noneconomic damages found by the jury, not to exceed $750,000, which in this case amounts to approximately $11.2 million.
There are tens of thousands of pelvic mesh cases pending nationwide against various manufacturers. Only a few have gone to trial thus far. The Salazar verdict is the largest. Boston Scientific itself won two previous bellwether pelvic mesh trials in Massachusetts state court, one involving Obrtyx and another involving a different device. What accounts for the outcome in the Salazar trial?
Many trial observers have pointed to a key internal Boston Scientific email introduced by the plaintiffs and used to argue that the company had knowledge of safety concerns about the device before it communicated such concerns to physicians. The August 2010 email from a Boston Scientific executive discussed a study published in December 2009 in the American Journal of Obstetrics and Gynecology comparing Boston Scientific’s Obtryx device with its Advantage sling system. In the email, the executive stated, “I don’t feel this paper would be useful to the sales force in terms of helping defend business or selling more slings.” “It actually is a fairly negative outcome in terms of our Obtryx sling. I certainly wouldn’t hand this out to any physicians.”
In addition to using the email to argue what the company knew and when, the plaintiffs used the email to imply that the company attempted to conceal negative information about the product from physicians. Based on the verdict, it appears the jury may have been persuaded. The Salazar case is a prime example of how internal company communications can play a major, even decisive, role in medical device product liability trials.
Boston Scientific faces thousands of additional mesh lawsuits, which are currently pending across the country. It will be interesting to see how the outcome of the Salazar trial and the plaintiffs’ use of internal company email affects the future course of the litigation.
The United States District Court for the District of Columbia, in Prevor v. FDA (Prevor II), rejects for the second time FDA’s “erroneous and unreasonable interpretation” of the definition of “device” under the Federal Food, Drug and Cosmetic Act (FDCA) (op. at 21). The court has remanded the case to FDA to use a lawful standard in determining whether the product “does not achieve its primary intended purposes through chemical action.”
The case arose from Prevor’s second court challenge to FDA’s proposed classification of Prevor’s Diphoterine™ Skin Wash (DSW) as a “drug,” in contrast to Prevor’s belief that the product is a device. The product consists of a pressurized canister with a liquid solution. Prevor described the liquid solution as being intended to: (1) wash chemicals off the skin, and (2) neutralize the chemicals on the skin. Prevor claimed that the first use was a physical mode of action and comprises 90% of the product’s overall effect, whereas the neutralizing chemical effect was not the primary intended purpose of the product and comprises about 10% of the overall effect. Prevor also said the product’s “purpose is to help prevent and minimize accidental chemical burn injuries.”
FDA classified DSW as a combination product that would be regulated as a drug because it depended, at least in part, on chemical action within or on the body to achieve one of its intended purposes. This determination was consistent with the position stated in FDA’s draft guidance issued in 2011, where FDA states: “a product that depends, even in part, on chemical action within or on the body of man to achieve any one of its primary intended purposes, would not be a device.”
In the earlier Prevor I decision, the court rejected FDA’s “new expansive interpretation” of “primary” purpose to mean “at least in part” or “even in part,” which would prevent a device from having even a de minimus chemical effect. The court criticized FDA for failing to address or explain what makes the chemical effect a “primary intended purpose” of this DSW product. The court ordered FDA to narrow its interpretation of “primary intended purpose,” and to provide a reasonable basis for concluding that DSW’s chemical effect achieved a primary intended purpose.
On remand, FDA again classified DSW as a drug-device combination product that should be regulated as a drug. In doing so, however, FDA asserted that the product did not have two intended purposes but only one purpose — “to help prevent and minimize accidental chemical burn injuries.” The court found that this determination was reasonable, because Prevor had also described the product as having that purpose. Next, the agency interpreted “achieve” in the chemical action clause to mean “meaningfully contributes to.” Without the need to ascertain a primary purpose, FDA determined that DSW was a drug on the basis that its neutralizing action meaningfully contributes to the prevention and minimization of chemical burn injuries.
In Prevor II, the court rejected FDA’s interpretation of the term “achieve” as being contrary to the plain meaning of the word. The court said the word “achieve” means to “accomplish or attain,” and is not synonymous with the term “meaningfully contributes to” (which requires a lesser degree of involvement, such as to help). FDA cannot substitute a different standard from the one Congress had intended. Although the court left the precise formulation of the standard to FDA, the court’s ruling means that FDA will be required to apply a standard that requires a greater degree of involvement between a product’s chemical action and its intended purpose than a meaningful contribution.
The impact of the case on FDA’s future classification decisions of combination products remains to be seen. The court did not decide the ultimate question of whether DSW should be classified as a device or a drug in deference to FDA’s scientific expertise. Nor did the court find that FDA had acted unreasonably in redefining DSW’s two primary intended purposes as one broadly defined primary purpose, even though the broader characterization allowed the agency to avoid distinguishing between primary and secondary purposes. This result leaves open the possibility that FDA may reclassify DSW as a drug if the agency reassesses the scientific evidence under a reasonable interpretation of the device definition and reaches the same conclusion. The court’s remand may also leave open the possibility that FDA may frame a product’s primary intended purpose in such a way that the agency may reasonably find that the product’s chemical action achieves that purpose.
Although the formulation of the precise standard is now in FDA’s hands, the court’s ruling may affect FDA’s apparent policy of favoring the regulation of drug-device combination products as drugs. Many manufacturers have opposed this policy trend since new drugs have more stringent premarket review requirements than devices.
On August 22, 2014, FDA issued a final guidance addressing the collection and analysis of sex-specific data in medical device clinical trials, entitled “Evaluation of Sex-Specific Data in Medical Device Clinical Studies.” The guidance outlines “FDA’s expectations regarding sex-specific patient enrollment, data analysis, and reporting of study information.” According to the guidance, studying both sexes is crucial because clinical study outcomes can be affected by the different responses of women and men—whether attributable to intrinsic differences such as body size, hormones, or the arrangements of sex organs, or extrinsic differences such as diet or environment.
Historically, women have been underrepresented in device trials, leading to a lack of information on the risks and benefits for women of many medical devices. The guidance is in part a response to pressure from Congress—including section 907 of the Food and Drug Administration Safety and Innovation Act of 2012 (FDASIA), requiring FDA to investigate and enhance the availability of demographic subgroup data in medical product applications—and special interest groups such as National Women’s Health Network. The guidance applies to devices that require clinical information to support a marketing submission, whether a premarket notification (510(k)), premarket approval (PMA), de novo request, or humanitarian device exemption (HDE) application. The guidance focuses on sex—classification as male or female based on chromosomal complement—rather than on gender, defined by the guidance as a person’s self-representation as male or female or by the response of social institutions to that person.
The guidance does not clearly define the consequences for non-compliance with its recommendations. Nevertheless, the guidance indicates that sex-specific data can be relevant to questions such as whether data are poolable across sex, and whether sex-specific outcome differences should be included in labeling. By satisfying FDA’s expectations for enrollment and data analysis, sponsors may be able to avoid delay in FDA approval or clearance of medical devices or the expense of follow-up trials. While some devices may be intended for one sex only and thus may be studied in one sex (e.g., gynecology products), FDA expects that devices intended for use in both sexes will be studied in both sexes.
The guidance includes steps that sponsors can take to meet FDA’s expectations and potentially ease FDA’s review process, including the following:
- Enroll proportions of men and women consistent with disease prevalence. For example, it could be appropriate that 75% of study subjects are women if women are three times as likely as men to suffer from the disease under investigation.
- Target investigational sites where more women might be recruited (e.g., women’s clinics) and consider incentives to increase recruitment and retention.
- Analyze the data for possible sex-specific differences, including pre-specified analyses in the statistical analysis plan for new or ongoing studies, or exploratory post hoc analyses of data from completed studies in the marketing application.
FDA’s FDASIA Action Plan was also released in late August 2014, citing the guidance and making clear that FDA plans to quickly incorporate recommendations of the guidance into its review of medical device notifications and applications. Reaction to the Action Plan has generally been positive, though some have criticized the plan for not doing enough to ensure the participation of minorities and pregnant women in clinical trials.
Medical device manufacturers and life sciences companies frequently supply commercial products and services to the U.S. Government under the Federal Supply Schedule (FSS) or General Services Administration (GSA) Schedules program. For example, in one such program managed by the Department of Veterans Affairs, suppliers provide surgical instruments, hospital equipment, and surgical dressing materials to the Government. Under these programs, suppliers publish a list of items offered for sale along with pricing, terms, and conditions applicable to the sale of each item, and individual agencies issue purchase orders incorporating these terms to acquire the listed item.
Until recently, it was thought that rules in Part 12 of the Federal Acquisition Regulation (FAR) applicable to commercial item purchases—rules that restricted agencies from including non-standard terms in their commercial item acquisitions without heightened justification—would apply equally to commercial items purchased under the FSS. But in CGI Federal Inc. v. United States, No. 14-cv-355C, the U.S. Court of Federal Claims held that agencies could ignore the restrictions of FAR Part 12 except in three narrow circumstances. If the holding is affirmed, suppliers selling on the FSS will need to be on the lookout for an increasing number of requirements that are inconsistent with standard commercial practices. Such requirements—which could include, for example, slower payments or increased product liability obligations—have the potential to significantly affect suppliers’ pricing, compliance burden, and strategy to supply goods and services to the Government.
Throughout August 2014, the China Food and Drug Administration (CFDA or the Agency) made significant process in issuing finalized rules and guidances to implement the revisions to its core medical device regulation, the Medical Device Supervision and Administration Regulation (MDR) (see our alert, here). The State Council revised the MDR in March, and it went into effect on June 1, 2014. The following is a brief introduction to some of the more significant finalized rules and guidances, as well as additional proposed rules and guidances that CFDA put out for public comment.
Final Rules: CFDA finalized five major implementing rules, all of which go into effect on October 1, 2014.
- It finalized two revised “registration regulations,” one for in vitro diagnostics and the other for all other medical devices. These registration regulations govern the entire market approval process from research and development through CFDA’s issuance of the appropriate registration, or in the case of Class I devices, notification documentation. They also govern the procedures for amending and renewing that approval documentation.
- CFDA also finalized two sets of rules governing the manufacture (including contract manufacturing) and distribution of medical devices. These rules serve as the starting point for understanding the requirements for obtaining the necessary manufacturing license for a Class II or Class III device or the necessary distribution license for a Class III device. These rules are separate from China’s medical device Good Manufacturing Practices and its proposed medical device Good Supply Practices, which are both the subject of ongoing rulemakings (see our entry, here).
- CFDA finalized new rules on medical device labeling and package inserts. These new labeling rules set forth a more detailed list of required items for labeling.
Notices: CFDA has issued several notices to clarify the applicability of the new implementing regulations. One notice, applicable to both registration regulations, advises stakeholders how implementing regulations will apply, for example, to active licenses, license applications that are currently pending, and planned clinical trials. Another notice is to manage issues related to new impending requirements for manufacturing and distribution enterprises. CFDA issued similar transitional notices related to the MDR itself (see our entry, here) and new provisions on Class I devices (see our entry, here) in May 2014. The new notices provide significant information about the effective dates and the operation of new requirements.
Catalogues: CFDA also issued three finalized catalogues related to the two sets of registration regulations. The first two catalogues, respectively, set forth a list of Class II and Class III devices that will enjoy exemptions from the clinical trial requirements. The third catalogue is a list of high risk Class III devices for which CFDA will now require pre-approval for clinical trials.
New Proposals: CFDA released several proposed rules and guidances in August, including:
- Proposed rules on the naming of medical devices, with a comment period that closed on August 30, 2014.
- Proposed revisions to medical device good manufacturing practices; the comment period closed on August 15, 2014.
- Proposed guidance on clinical trials for IVDs, which sets forth new requirements on the number of samples in different trials and new standards for ethical issues, such as informed consent and ethics committee review.
- Proposed guidance for drafting package inserts for IVDs. The comment periods for both IVD guidances closed on August 31, 2014.
- Proposed guidance governing clinical evaluations for non-IVD devices. The comment period closes on September 8, 2014. This important proposed guidance provides insight into the how to utilize the above catalogues to determine whether a device meets the exemptions to the clinical trial requirement, as well as guidance on gathering and evaluating clinical data.
CFDA has also released some of the new forms and templates associated with applications for licensure of devices and device enterprises, but stakeholders should continue to monitor for more in the coming month.
We encourage medical device companies to take advantage of opportunities to comment and other opportunities to discuss concerns with CFDA. For example, the Agency is planning to hold a roundtable on medical device regulation and is accepting applications for attendance until September 14, 2014. Medical device manufacturing and distribution companies that do not have a history of legal violations, have been in business for more than three years, are familiar with relevant laws and regulations, and are able to offer concrete suggestions on medical device regulatory enforcement may apply to have representatives attend this meeting. We can provide further information about applying for the roundtable or commenting on the proposals.