Legal observers discuss red flags that can trigger action against device makers

Legal observers discussed some of the red flags that can trigger legal actions against healthcare product manufacturers, as well as some of the lessons learned following Medtronic’s 2015 consent decree related to its SynchroMed II infusion pump at the Food and Drug Law Institute’s (FDLI) annual enforcement meeting. Experts also predicted that the number of consent decrees in the sector will increase going forward.

Mark Levy, an attorney with Eckert, Seamans Cherin & Mellot LLC said he “doesn’t think there is any more challenging moment for an outside counsel to a company than to learn that there’s been outreach by the Department of Justice and that the outreach involves a possible injunction action.” He added that injunctions are “a powerful enforcement tool.”

Over the past 15 years, FDA has shifted its enforcement focus away from seizures to using injunctions to resolve violations, said Perham Gorji, partner of DLA Piper LLP. “Injunctions, historically, were not the most favored enforcement tool by FDA.” He added that “FDA is looking for more long-term comprehensive oversight over companies that are violative, and an injunction is a tool that provides that kind of relief to FDA.”

Gorji then described the process FDA follows for taking enforcement action again companies for violative practices. The first step is FDA gathers and submits the referral package to DOJ. If DOJ’s consumer protection branch approves it, a “sign or sue letter” is issued to the company. The letter formally informs the company that “judicial action is imminent.”

Gorji advised defendants to obtain legal counsel after receiving such a letter. FDA and DOJ will then expect the defendant to provide a response to the proposed consent decree that is attached. The consent decree is FDA’s wish list for the steps companies need to take resolve the violations without going to court.

Levy told Focus that these letters tell the defendant that they need to agree to the proposed consent decree or else DOJ will file an injunction action. The letter leads to a follow-up discussion with the offending party.

Some of the areas addressed in consent decrees include problems observed with the quality unit, data integrity, computer systems violations, manufacturing controls, aseptic process controls, stability concerns and inadequate oversights of vendors.

While Gorji said it is “next to impossible” for firms not to know they will be the target of an injunction, “there are warning signs.”

These warning signs include repeat Form 483 reports with similar repeat violation, an inadequate response to a warning letter, multiple inspections in a short period of time, a delay or non-approval of a regulatory filing, or if FDA is unwilling to meet with a firm.

Medtronic’s consent decree
Anne Miller, principal legal counsel at Medtronic, said many of these red flags were raised before the company was served an injunction in 2015 for repeated failure to correct violations related to its SynchroMed II infusion pumps.

The complaint alleged that Medtronic’s then-chief executive officer, Omar Ishrak, and then-senior vice president, Thomas M. Tefft, were distributing adulterated medical devices in violations of current good manufacturing practices (GMPs).

“As Perham noted, there were 483s and warning letters … there was a lot of back and forth going on” in the compliance area.

Miller said this consent decree was unique in that it involved a medically necessary product, and the company never stopped manufacturing the pump. “This was the only device approved with this indication. Had we stopped, there would be patients without an available therapy.”

She also discussed what did—and did not—work in resolving the consent decree.” This included using multiple experts to assess corrective actions. “We were very strategic and careful about how we used the auditors to assess what they need to assess.”

Another key element was to “raise the bar” within the organization and bring in “good teachers who knew quality system backwards and forwards.” It was also important to tear down the silos in the company and have “everyone working on the same plan.”

It took eight years to resolve the problems identified in the consent decree, which she said is shorter than normal. The consent decree was lifted in August 2023.

More consent decrees
Marc Wagner, an associate with Baker & Hostetler, told the gathering to expect more consent decrees, which are linked to FDA’s issuance of 483 reports and warning letters.

“We are observing more 483s and warning letters, this is a partial signal that in the next couple of years, additional companies will be subject to consent decrees.”

The number of 483s has increased from FY 2020 to FY 2023 in most areas regulated by FDA. In the biologics sector alone, warning letters increased from 28 in FY 2020 to 45 in FY 2023.

Similarly, the number of device warning letters increased from 422 in FY 2020 to 720 in FY 2023, and for drugs, from 349 in FY 2020 to 510 in FY 2023. RAPS.org