Stryker Biotech Indictedby U.S. Attorney’s Office

Amid debate, device industry insiders continue to support the 510(k) review process.

The Biotech division of Kalamazoo, Mich.-based Stryker Corp., the unit’s former president and three current sales managers recently were charged in U.S. federal court with alleged improper promotion of its OP-1 bone-growth products—implant and putty—used in spinal and long-bone surgeries. The indictment did not charge Stryker Corp. The company disclosed in March that its Biotech division was the target of a federal grand jury investigation being conducted by the U.S. Attorney’s Office for the District of Massachusetts.

Stryker said at the time that it discovered that problem and reported it before the FDA inspection that prompted the warning. Meanwhile, the company said prior to the announcement of the indictments that the Biotech warning letter has been resolved following an FDA re-inspection. The company still has three warning letters related to issues the FDA found at other company plants, however, and is spending more than $200 million over three years to improve quality and compliance.

“The company is disappointed with this action and still hopes to be able to reach a fair and just resolution of this matter,” Stryker officials said in a released statement. “Conviction of these charges could result in significant monetary fines and Stryker Biotech’s exclusion from participating in federal and state healthcare programs, which could have a material affect on Stryker Biotech’s business.” The company added that it would not have any further comment on the allegations. The names of those charged are: Mark Philip of Lexington, Mass., former president of the Hopkinton, Mass.-based Stryker Biotech; and sales managers William Heppner of Illinois, David Ard of California, and Jeff Whitaker of North Carolina. Stryker Biotech and Mark Philip also were charged with making false statements to the FDA, according to the U.S. Attorney, and Stryker Biotech, Ard and Whitaker were charged with misbranding.

One of the restrictions placed on the OP-1 products was that the devices could only be used to treat a condition that affected fewer than 4,000 patients in the United States, and could not be sold for a profit. The indictment charges that the defendants promoted the use of these devices in a manner that was different from its FDA approved use—namely that they promoted a combination of the devices with a bone void filler called Calstrux, and provided “recipes” to surgeons, medical technicians and others as to how to mix the OP-1 products with Calstrux.

Prosecutors said some patients who received the combination suffered serious medical problems. The indictment also charges that Stryker Biotech and Philip made false statements to the FDA about the number of patients the firm was treating on an annual basis with OP-1 Putty.

If convicted on all counts, Stryker Biotech could face fines of $500,000 for each count of wire fraud, conspiracy, misbranding and making false statements to the FDA; double the damages caused by the misconduct; or double the company’s gross profits stemming from the misconduct—whichever is greatest. Total fines could reach $4 million.

Philip, Heppner, Ard and Whitaker each face up to 20 years in prison, three years of supervised release if convicted on the wire fraud charges. They also face a fine of $250,000 or twice the gross gain or loss from the offense, whichever is greater, if convicted. The conspiracy charges carry up to five years in prison and the same fine and supervised release provisions for the four men, should they be convicted. If convicted on the misbranding charges, Ard and Whitaker could get up to three years in prison, a year of supervised release and the same fine. Philip faces up to five years in jail, three years supervised release and the same fine if convicted of lying to the FDA. Philip, who was president of Stryker from 2004 to 2008, told the Boston Globe that he plans to plead not guilty and contest the charges.

Device Industry Reps Say 510(k) Process is OK

Medical device companies—as if they didn’t have enough on their plates at the moment—are eager to learn how the most common U.S. Food and Drug Administration (FDA) review process is going to change in the near and long term.

The agency’s 510(k) device evaluation process has been under the microscope recently—under attack from some lawmakers and industry watchdog groups for not being robust enough, particularly when it comes to more advanced devices. The head of the FDA’s Center for Devices and Radiological Health (CDRH) recently stepped down, in part because of fallout from 510(k) program. To add fuel to critics’ fire, the agency recently admitted it “failed” when it cleared the Menaflex collagen scaffold by ReGen.

According to FDA Deputy Commissioner Joshua Sharfstein, there were “definite problems in the review process” of Menaflex. In December 2008, the FDA cleared Menaflex to be marketed for use in surgical procedures for the reinforcement and repair of soft tissue injuries of the medial meniscus in the knee.

In response, the FDA recently asked the Institute of Medicine (IOM) to conduct a two-year study of the program and to provide recommendations for changes, if necessary. In addition, officials within CDRH have said they will implement an internal review process immediately. The IOM will convene a committee to answer two principal questions: Does the current 510(k) process optimally protect patients and promote innovation in support of public health? If not, what legislative, regulatory or administrative changes are recommended to achieve the goals of the 510(k) process? The review is supposed to be completed in 2011.

Despite all the wrangling, the message from some industry insiders, however, seems to be: What’s the big deal?

“[The 510(k) process] works well,” said Steve Ubl, president and CEO of the Advanced Medical Technology Association to reporters during a press briefing during the association’s annual conference in Washington, D.C. “I think some of the reporting has been misleading. It is a good, science-based process. That said, any process can benefit from more clarity.”

At the conference, a panel of industry experts outlined what some of the misconceptions of the program have been.

The FDA classifies medical devices into three categories depending upon the product’s level of risk. Class III devices, which have the highest level of risk, generally require premarket approval application (PMA) to prove safety and efficacy before they are marketed. Class I and Class II devices usually are lower risk. Most Class II devices are cleared through the 510(k) process. The agency requires that a 510(k) device is at least as safe and effective—what the FDA calls “substantially equivalent”—to a product currently on the market that is not subject to a PMA. Devices with a new intended use or include novel technology that presents new questions of safety or effectiveness may not be found substantially equivalent and may require a PMA.

The 510(k) process was established under the Medical Device Amend-ments of 1976 to make safe and effective devices available and to promote innovation in the medical device industry. It is the largest premarket device program at the agency, and 50 percent of all devices make it to market via the 510(k) route. The agency receives 3,000-4,000 submissions per year, compared to 30-50 original PMAs, officials said.

“This is not a rubber stamp or ‘fast-track’ approval as some mainstream news outlets have incorrectly identified it,” said Heather Rosecrans, director of 510(k) staff at CDRH. She said that most significant-risk devices—such as hip implants, dialysis machines or infusion pumps, for example—go through the 510(k) process, because significant market predicate devices exist.

“This is a risk-based, data-driven evaluation,” she added, noting that some 510(k) applications require clinical trial data—roughly 10 percent of submissions, in fact. Critics have charged that the agency has used the 510(k) process to clear riskier devices that should undergo a PMA.

The Government Accountability Office (GAO) examined the process and released a study in January this year, revealing that some Class III products—”pre-amendments” devices, meaning they were on the market before 1976—are allowed to go through the 510(k) process until FDA issues a rule explicitly requiring a PMA. However, more than 14 years after publishing plans to do so, as required by a 1990 statute, FDA has failed to either reassign the device types to the medium-risk Class II category, or keep them Class III and require PMA approval. Study authors hasted to add, however, that about 1 percent of the approximately 5,000 submissions for Class II or III devices in the three-year study period (2005-2007) had a new intended use, and about 15 percent had new technological characteristics.

In response to the calls for reform, Rosecrans and other FDA officials said technology and the medical device industry have changed dramatically during the past three decades, making it an appropriate time for a review of the adequacy of the premarket notification program.

“The GAO report was favorable, overall,” said Patricia Shrader, vice president of corporate regulatory, public policy and communications for Franklin Lakes, N.J.-based diagnostic giant BD. “I think that fact gets lost. Media reports have been sensational, misleading inaccurate, anecdotal and random. The report didn’t have such a bad outcome except that there were a handful of pre-amendment devices being reviewed under 510(k). Big deal. So what?”

Many insiders consider some sort of review of the program on Capitol Hill likely, but for now falls far down on lawmakers’ priority list.

Panel Says No to Zimmer Spine System

A U.S. Food and Drug Administration advisory panel recently recommended against wider use of a spine stabilization system from Zimmer Holdings Inc. The panel questioned the company’s data but noted that the device “holds promise.”

In a 5-1 vote, panel members said that data from the company’s Dynesys Spinal System was unclear and that some changes should have been made to its clinical trial, including missing data and a lack of follow-up with some patients. They also questioned how the device would hold up over time and expressed concern about possible breakage of the de-vice screws.

The device already is approved for use in patients with back problems who undergo surgical fusion. It consists of a series of screws and flexible spacers used to help align and support the spine. It is a type of dynamic stabilization system, a type of device that aims to offer an alternative to traditional spinal fusion or disc replacement surgeries known to limit patient’s ability to bend and move. Zimmer wants additional approval to market Dynesys for stand-alone use. Company officials claim the device allows a greater range of motion for patients than other products. Many other orthopedic companies are either marketing or studying such products, including DePuy Spine, Synthes and Medtronic. The market for similar devices could reach more than $1.2 billion in 2012, according to a 2007 analysis by Medtech Insight/ Windhover Information.

Following the panel’s decision, Zimmer said in a statement the company “will continue to work with the FDA to determine necessary next steps.”

“Zimmer Spine remains committed to the Dynesys system, which has a proven clinical track record over 14 years in more than 42,000 cases globally. The system is used in fusion applications in the United States and non-fusion applications outside of the United States,” according to a statement released by Zimmer’s Director of Public Affairs Brad Bishop. “This recommendation by the FDA panel does not impact use of the product outside of the United States. The company continues to believe the Dynesys system has the potential to become a valuable treatment alternative in a non-fusion application for Americans suffering from lumbar degeneration.”

In an unprecedented move, FDA reviewers also pointed to possible bias in Zimmer’s study, noting that a majority of patients were treated by researchers with a financial interest in the company. Reviewers added, however, that the bias could have been due to chance.

Mark Melkerson, head of the FDA’s division for restorative devices, said the agency had received questions about clinicians’ company ties from members of Congress and that financial disclosures would be part of future device reviews. Melkerson told reporters that financial ties would be included more widely in other types of reviews in an effort to be more transparent. If there appears to be an impact on data, it could be raised as an issue for advisers to discuss, he said.

The FDA is not bound by the decisions of advisory panels, though it usually follows them. The agency recently required postmarket studies for spinal stabilization devices (see Industry News).