FDA seeks injunction against a Utah medical device manufacturer

Scott Catron

True Artisan
Super Moderator
#21
They fought the law and...

Dateline: Salt Lake City

David drops Goliath

Here's the court decision: View attachment US vs Utah Medical decision.pdf

Here's articles from the local papers:

The Salt Lake Tribune said:
'It's a slam dunk'
Judge rules in favor of Utah Medical on every point and against the FDA

http://www.sltrib.com/search/ci_3140645

(pasted below - link will be dead in a week)

By Bob Mims
The Salt Lake Tribune

A federal judge handed Utah Medical Products Inc. a resounding victory Friday, rejecting the U.S. Food and Drug Administration's bid to shutter the company's Midvale plant.

U.S. Senior District Judge Bruce Jenkins, who chided the agency for its August 2004 filing of "an extended and in some instances nitpicking case," found for the Utah gynecological/neonatal and electrosurgical device-maker on every point.

"As this case progressed, the court wondered how it had evolved into litigation with hundreds of exhibits, endless depositions and high cost 'experts,'" Jenkins wrote. "Product safety is not an issue in this case."

Utah Medical CEO Kevin Cornwell acknowledged being emotional after reading the 15-page memorandum opinion. "It's a slam dunk," he whispered.

"After a long ordeal, we believe the court has vindicated Utah Medical's robust quality system," he added. "Now we hope to move on and repair our relationship with the government while we continue to serve our customers' needs."

Fifteen months ago the FDA sued to close Utah Medical's 160-employee plant, claiming its inspectors had uncovered several regulatory violations related to such things as validation protocols for computer software, review procedures for data analysis and other technical shortfalls.

The agency alleged similar violations in inspections conducted in 2001, 2002 and 2003 - problems Utah Medical insisted had been addressed. The company also said it sought to use mediation to settle differences in interpretation on remaining issues, but the FDA sued instead.

The impact was immediate: In the three days after the Aug. 9, 2004 filing, Utah Medical's stock plunged from $26.75 to $17.50, or 35 percent. Then came rumors, possibly planted by competitors, of an impending shutdown and that the company itself was near collapse. The company countered with strategic stock repurchases to buoy its share prices, and offered loyal customers financial incentives to renew contracts, but the legal costs took a big toll on the bottom line, company officials said.

While Jenkins suggested both sides could have done a better job communicating with each other, he blasted FDA regulations cited in the case as having both "the virtue of generality and the vice of imprecision."

Calls to FDA headquarters seeking comment went unreturned. However, the Justice Department - which tried the case for the agency - issued a terse reaction.

"We are disappointed with the court's decision and we have made no determination as to what our next step will be," said spokesman Charles Miller.

Richard Nelson, president and CEO of the Utah Information Technology Association, said the ruling was "great news for Utah's high-tech community. "It's a solid decision, one that shows the FDA was overreaching in this case," he said.

News of the decision, which Jenkins had taken under advisement on Oct. 4 following a seven-day bench trial, was just breaking as markets closed Friday. Still, Utah Medical's stock was up to $26.28 per share in after-hours trading - an 83-cent, or 3 percent jump from Thursday.

[email protected]
The Deseret Morning News said:
FDA's Utah Medical lawsuit is dismissed
Judge calls action against the Midvale company nitpicking

http://deseretnews.com/dn/view/0,1249,635155336,00.html

(pasted below - link will be dead in a week)

By Dave Anderton
Deseret Morning News

A federal judge has thrown out a lawsuit filed by the U.S. Food and Drug Administration against a Midvale-based medical manufacturer, calling the lawsuit a "nitpicking" case — the result of a communication failure between the two parties.

In August 2004, the FDA filed for a permanent injunction against Utah Medical Products Inc., seeking to shut down operations because of what the agency said were problems with plastic parts manufactured by the company through an injection molding machine.

Those parts can be found in a variety of the company's products, which include medical devices used in labor and delivery, neonatal intensive care, gynecology and blood pressure monitoring.

In his decision, U.S. District Judge Bruce S. Jenkins found that Utah Medical adequately validated its manufacturing process, including the company's injection-molding systems.

Jenkins also found that Utah Medical had properly installed its machinery, validated its software and handled customer complaints properly.

"The question here is whether the processes and procedures used by Utah Medical to currently produce product comply with the applicable regulations," Jenkins said in his order. "The answer is yes, they do."

While the FDA could appeal the judgment, calls to the agency seeking comment were not immediately returned.

Kevin Cornwell, Utah Medical's chief executive officer, said he was pleased by the judge's decision.

"I have to say I'm not pleased with the ordeal that the FDA put us through and the waste of resources on both sides," Cornwell said. "We bent over backwards in a very respectful and diligent way to communicate, but they shunned all of our attempts to constructively resolve our disagreement."

Cornwell said the case has never been about unsafe or recalled defective products. Instead, he said, the issue centers on a 2001 disagreement in which the FDA demanded that the company hire an outside consultant to validate its quality-control systems.

"They don't really have the right to do that," Cornwell said. "In a nutshell, no one had ever refused their demand to hire a consultant. And so I suppose we insulted them, and their response was, 'OK, if you're not going to do what we tell you to do, we're going to shut you down.' "

The judge said the two sides "often talked past each other."

The general nature of the FDA regulations, he continued, had "the virtue of generality and the vice of imprecision.

"This endemic problem is perhaps augmented by decision-makers who themselves rely too much on inspectors' reports," Jenkins said, "without taking a fresh look themselves at ongoing changes made by Utah Medical in response to questions raised."

Jenkins chided the FDA for what he saw as a case evolving into a "litigation of hundreds of exhibits, endless depositions and high-cost 'experts.'"

Cornwell said his company has spent more than $3 million in legal fees fighting the FDA's allegations.

"My guess is the government has spent at least that much themselves," Cornwell said, "and there have been literally hundreds of FDA people involved in this over a four-year period of time."

Utah Medical Products has filed an abuse of process administrative claim with the FDA. The FDA is expected to respond to that by January. Depending on that decision, the company could file a lawsuit of its own, Cornwell said, suing the FDA for abuse of process.

"The real damage to the company is that we had historically been an innovative company, bringing out products that have unique features," Cornwell said. "Our new product development has essentially been shut down for three years because of this. As far as our senior management goes, we've easily spent a third of our time over the last four years on this."

Utah Medical Products stock, which fell 32.8 percent to $17.99 per share the day the FDA's suit was filed in August 2004, has since rebounded. The company's stock rose 41 cents, or 1.6 percent, to close at $25.86 per share Friday on Nasdaq. In the past year, the price has ranged from $17.50 to $26.05.

E-mail: [email protected]
Here's a link to the company press release: http://www.utahmed.com/pr/pr102405.htm

Utah Medical Products aka David said:
UTMD will follow-up this announcement with additional comments.
I bet they will. They've called the FDA terrorists in previous press releases.

Just the facts for now, I haven't read everything yet, so I'll add some comments later.
 
Elsmar Forum Sponsor

Wes Bucey

Quite Involved in Discussions
#22
Thanks for following up on this, Scott!

I recall one guy's comment after he was declared not guilty after a long and protracted battle with the feds which had cost him his job, his house and all his assets, his marriage, and probably his health:

"Where do I go to get my life and reputation back?"

The court decision and comment was buried in the back pages of the newspaper near the car ads on a Saturday, while the indictment and the perp walk photos had been front page news for 3 days.

It would be sweet justice if Utah Medical were able to sue and collect damages from FDA officials individually, but those guys just keep picking up their pay checks with a smug sneer.

Special note:
Please keep an eye on this and let us know if FDA appeals the decision. This, after all, is not like a criminal state court where double jeopardy applies. The feds can keep coming back time after time in a civil case, blithely running up the defendant's legal bills.
 
P

Pataha

#23
The question is: Should the FDA put to rest 21 CFR 820 and require proof of compliance to ISO 13485 with differences? This would be close to what Health Canada does.

Doing earlier press releases and Utah news reports, Utah Medical was claiming compliance because of the annual audit from their registrar.
 

Scott Catron

True Artisan
Super Moderator
#24
These guys are feisty

Utah Medical Products Comments on Outcome of Lawsuit with FDA

http://www.utahmed.com/pr/pr102405(2).htm

Excerpt:

"Most of all, I would like to thank our customers who continued to understand the value of our products for their patients, and allowed us to stay in business while we fought against the virtually unlimited power of a government agency with systemic corruption"
 

Al Rosen

Staff member
Super Moderator
#25
patahaconsulting said:
The question is: Should the FDA put to rest 21 CFR 820 and require proof of compliance to ISO 13485 with differences? This would be close to what Health Canada does.
That will take an act of congress.
 

Scott Catron

True Artisan
Super Moderator
#26
Some analysis

My overall impression was that the judge looked at the hoops the FDA makes companies jump through (IQ, OQ & PQ) and decided it's not the only way to skin a cat.

Some interesting part from the posted decision (attached in main post at top of this page):

1- During the trial the FDA changed what they were asking for - from shutting down UMD's operations to "simple regulatory compliance". They were waving the white flag early on, it appears.

2-
As this matter progressed, it became clear to the court that the question is not whether (UMD) in times past fully and technically complied with the regulations, but whether (UMD) is currently in compliance
This is interesting. So if a company is not compliant at the time the lawsuit is filed but becomes compliant by the time the trial starts, they should be ok?

3-
Edge-of-failure testing to demonstrate what does not work makes no sense when engineers have specified what does work and what has worked over years of operation

4-
It seems to me that a recurring problem in this extended and in some instances “nitpicking ” case is a failure of the regulator and the regulated to communicate. It appears to me they have often talked past each other and, while using the same words, have meant entirely different things. This seems to be a common characteristic of both, arising in part because of the general nature of the regulations themselves, which have the virtue of generality and the vice of imprecision. This endemic problem is perhaps augmented by decision-makers who themselves rely too much on inspectors’ reports without taking a fresh look themselves at ongoing changes made by Utah Medical in response to questions raised.
Emphasis mine - I love that characterization. He also calls the FDA unwilling to communicate and lazy.

5- Last line in the analysis:
It makes no sense for the court to order Utah Medical to do something they are already doing.
In all, it was a colossal waste of time. The public was never in danger and the FDA never stipulated that they were - so how could they file a lawsuit in the first place? What is their mandate, if not to protect the public?
 

Scott Catron

True Artisan
Super Moderator
#27
I'll keep an eye out

Wes Bucey said:
Special note:
Please keep an eye on this and let us know if FDA appeals the decision. This, after all, is not like a criminal state court where double jeopardy applies. The feds can keep coming back time after time in a civil case, blithely running up the defendant's legal bills.
I can't see how they have any basis to pursue this any further the way Judge Jenkins worded the opinion.

I didn't include the sentence before the last line in my comments:
Without a doubt, the United States captured Utah Medical’s attention in the past, and whatever modest deviations from regulations may have occurred in times past no longer exist at present. It makes no sense for the court to order Utah Medical to do something they are already doing.
What's done is done. It's what's now that is important.
 

Al Rosen

Staff member
Super Moderator
#28
It's over

MDDI said:
FDA’s announcement that the Justice Department will not seek review of the court decision surprises many agency watchers. A former FDA district director speculates on the agency’s actions.


There will be no appeal of the federal court decision dismissing all three of FDA’s long-running GMP complaints against Utah Medical Products. In effect, Judge Bruce S. Jenkins ruled that FDA is not the sole arbiter of what quality system regulation (QSR) compliance requires. Saying “many roads lead to Rome,” he stated in his opinion that it “makes no sense” for FDA to order Utah Medical to comply with QSR requirements; it’s already doing so, albeit by means different from those demanded by FDA.
Apparently FDA could not sway the Justice Department, which notified the company on December 15 that it would not appeal. The decision caught many FDA watchers off guard. Just the week before, FDA deputy chief counsel Eric Blumberg had told an FDLI conference that the defeat did not mean FDA would stop pursuing firms with alleged quality control problems, even if there were no safety-related issues. He said a product is considered adulterated if it is not made according to GMPs. Furthermore, he said, the agency does not need to prove safety problems exist to bring an action.
An attorney present at the FDLI conference said Blumberg’s statements didn’t surprise him. Rather, he said, “I believe that he just doesn’t get it.”
Retired FDA Denver district director John Scharmann, in whose former district Utah Medical is located, reviewed many of the documents underpinning the case. He noted that if FDA were to be faulted for the defeat, “it should be for failing to do an adequate job of evaluating the case.”
Scharmann, now a consulting editor for Dickinson’s FDA Webview, said there were not enough QSR deviations to support FDA’s case against the firm. “This was not recognized by FDA’s legal staff when it took in good faith the evidence reported by the investigators and supporting FDA experts,” he said. “This is the area that FDA should concentrate on if it wishes to avoid a repeat of this fiasco.”
Scharmann noted that when developing a case, FDA’s legal counsel must be confident in the guidance of its experts. “For some reason, the experts in this case provided faulty support,” he said. “FDA’s legal counsel may have been remiss in not investigating these experts and, as a result, based the case on this faulty evidence. While trust is an admirable quality, it may not be an attorney’s best friend.”
Finally, he said, he suspects that strong personalities allowed the case to become a personal matter. “The facts in the case were ignored and replaced with an ‘I’ll show you’ attitude, which is not a good basis for a federal court action.”
Read the story here: FDA’s Case against Utah Medical Is Over
 
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