Although the FDA has never been accused of being the most forgiving of government agencies, establishments that run afoul of FDA due to compliance issues are given multiple opportunities to atone for their transgressions. The most innocuous of the tools in the agency’s compliance tool chest is the Form 483 observation. There are very few establishments that at one time or another have not received one. Typically, they can be quickly remedied and life continues as normal. For some Chief Jailable Officers (CJOs) that are slow learners, the next warning shot fired by the FDA might be the “Untitled Letter” coupled with the proverbial “Come-to-Jesus Meeting” at the local district office; and yes, Dr. D understands the concept of separation of church and state. The phrase is just a metaphor (look-it-up) my dear readers. For those establishments needing to feel the burn (not to be confused with Bernie Sanders) on their backsides, the FDA can work with the federal courts and obtain product injunctions, product seizure orders, or decide to place imported devices on the infamous detention hold, on their own fruition (look-it-up). Eventually, sooner than later, the FDA will issue a warning letter, and all sense of normalcy for an offending device establishment comes to a screeching halt. But what happens when all of the warning shots fired by the FDA fail to grab the attention of an offending device establishment? Or, the CJO is looking at his or her calendar while the FDA is looking at their watches? Can you say consent decree? Can you say the price of poker for the offending device establishment has just went through the roof? Ouch!

Consent Decree – November 12, 2015

Consent decrees can result in varying degrees of regulatory pain courtesy of the FDA, the U.S. Department of Justice and the federal courts. The underlying goal of the FDA is to keep the American population safe while enforcing the Federal Food, Drug, & Cosmetic Act. The consent decree referenced in this week’s DG is a direct result of the ongoing saga associated with the reprocessing of endoscopes that began a couple of years ago when a “superbug” began sickening patients and, in some cases, led to patient deaths. As many of the readers are already aware, the FDA issued multiple warning letters to manufacturers of duodenoscopes. There was an ongoing concern relating to the reprocessing protocols and the ability of these protocols to adequately clean and sterilize these scopes. The consent decree excerpt (FDA Letter) downloaded from the agency’s website reflects the power of a consent decree coupled with the power of a permanent injunction forcing the removal of violative product from the U.S. marketplace. Note: FDA was clear about the decision delineated within the consent decree pertaining to a forced market withdraw “RECALL” (Dr. D’s favorite 6-letter word) being non-negotiable.

Consent Decree – FDA Letter Excerpts

“On November 12, 2015, pursuant to the Consent Decree of Permanent Injunction (Consent Decree) entered in the above-referenced action, FDA ordered [Custom Ultrasonics, Inc. (Custom Ultrasonics or the firm) to recall, at its expense, all of its automated endoscope reprocessors (AERs), namely, all System 83 Plus, System 83 Plus 2, and System 83 Plus 9 AERs (collectively, System 83 Plus) released or distributed by Custom Ultrasonics or under the custody and control of its agents, distributors, customers, or consumers (hereinafter, “Recall Order”). On November 24, 2015, Custom Ultrasonics provided to FDA a proposal to recall the System 83 Plus. The recall proposal is inadequate, in large part because it offers to correct System 83 Plus devices presently on the market rather than to remove those devices from use as directed by the Recall Order: “[Custom Ultrasonics’] written recall proposal must address user facilities’ ability to transition from the System 83 Plus as soon as possible.”

“On December 11, 2015, after FDA granted Custom Ultrasonics request for a meeting, FDA representatives met with you and other firm representatives to discuss the System 83 Plus recall strategy. During the meeting, FDA explained that your proposal to correct the devices was unacceptable and emphasized that Custom Ultrasonics must remove from the market, rather than attempt to correct, all System 83 Plus devices as soon as possible. During the meeting, you committed to provide to FDA a written recall strategy for removing the System 83 Plus from the market, which you have yet to submit to FDA. FDA’s Center for Devices and Radiological Health (CDRH) agreed to further explain the reasons your corrective actions to date fail to address the violations set forth in the Recall Order. That evaluation of your corrective actions is set forth below in section II.”

“FDA hereby reaffirms the Recall Order. Further, in accordance with paragraph 5 of the Consent Decree, FDA orders Custom Ultrasonics to immediately recall all System 83 Plus devices by removing them from use. Custom Ultrasonics shall conduct the recall in accordance with 21 C.F.R. Part 7, and within ten (10) business days after receipt of this letter, shall notify FDA in writing at the address provided below, with all supporting documentation, of the specific actions Custom Ultrasonics has taken to implement the ordered recall. Additionally, as required by the Recall Order, Custom Ultrasonics must submit monthly reports to FDA, detailing the status of its servicing operations and expected timeframes for its discontinuation of servicing as user facilities transition from the System 83 Plus.”

Compliance for Dummies

Obviously, the regulatory pain associated with a warning letter is enough to make the most resilient of CJOs cringe. However, mix an already agitated FDA with the federal courts and the regulatory pain is quickly injected with steroids. In fact, the fiscal impact to offending establishments, already hurting from a warning letter, become greatly exacerbated by the new and quite expensive costs associated with the consent decree activities. So what are some of the salient influencers of a consent decree? Just log into FDA.gov and navigate through the pages of the Regulatory Procedures Manual. Tools opened to the FDA to drive enforcement are: (a) product seizures, (b) injunctions, (c) inspection warrants, (d) search warrants, (e) prosecution, and (f) other civil penalties, including fines. However, one of the most expensive propositions associated with a consent decree is the contracting with a third-party consulting establishment to assist in all remediation activities. Cha-ching!

Once agreed upon by the court, FDA, and the offending establishment, the third-party consulting establishment selected begins their task of helping the offending establishment fix its compliance issues. Can you $300 an hour (some firms charge a little more and some a little less)? Please keep in mind, these activities can take a year or longer to fix, depending on the nature of the compliance transgressions, while employing several consultants (consultants x hourly rates = many, many, dollars). In fact, by the time this entire process comes to an end, there is a very good chance that the offending establishment’s Chief Financial Officer (CFO) might be suffering from carpal tunnel due to the repetitive motion associated with signing many, many, checks for the consultants.

Additionally, while under the guise of a warning letter, all submissions made to the FDA (510(k)s and PMAs) are essentially sitting in an in-basket collecting dust in Maryland. In fact, Certificates to Foreign Governments (CFGs) are collecting some of that same dust, while waiting for FDA signatures that will never come.

Furthermore, the FDA is not going pull their foot off the regulatory-pain accelerator until the compliance issues are resolved to their satisfaction. Please keep in mind that the FDA can continue to induce a high level of regulatory pain for a very long time.

Finally, it is important to remember the entire goal of the FDA (Dr. D’s opinion) is to use the financial pain inflicted on the offending establishment to drive compliance. Hopefully, establishments executing the consent decree process exit the process stronger. However, there is always going to be a real threat that some establishment may be forced into bankruptcy as a result—ouch! In fact, some establishments may not survive the consent decree.

Takeaways

For this week’s guidance there are three takeaways. One: It really does take a lot of inaction on the part of an offending establishment to reach the point of consent decree and intervention by the U.S. Attorney’s Office and the federal courts. Two: The costs associated with consent decrees, including the interruption of day-to-day operations of an offending establishment, are unbelievably expensive. Three: Establishments typically exit from the shadow of a consent decree stronger; however, some establishments may not survive. The risk of fiscal death is real. In closing, thank you again for joining Dr. D, and the doctor hopes you found value in the guidance provided. Until the next installment of DG, cheers from Dr. D., and best wishes for continued professional success.

References

1. Code of Federal Regulation. (April 2015). Title 21 Part 820: Quality system regulation. Washington, D.C.: U.S. Government Printing Office.
2. Devine, C. (2011). Devine guidance for complying with the FDA’s quality system   regulation – 21 CFR, Part 820. Charleston, SC: Amazon.
3. Devine, C. (2013). Devine guidance for managing key attributes of a FDA-compliant quality management system – 21 CFR, Part 820 Compliance. Charleston, SC: Amazon.
4. FDA. (February 2016). Consent Decree of Permanent Injunction entered in United States v. Custom Ultrasonics, Inc. Accessed. July 15, 2016. Retrieved from http://www.fda.gov/downloads/aboutfda/centersoffices/officeofmedicalproductsandtobacco/cdrh/cdrhfoiaelectronicreadingroom/ucm487452.pdf