United States District Court, District of Columbia
For IVY SPORTS MEDICINE, LLC, Plaintiff: Mark A. Heller, Matthew Michael Hoffman, GOODWIN PROCTER, LLP, Washington, DC.
For KATHLEEN G. SEBELIUS, Secretary of Health and Human Services (in her official capacity), MARGARET A. HAMBURG, Commissioner of Food and Drugs (in her official capacity), U.S. FOOD AND DRUG ADMINISTRATION, Defendants: Adrienne Elise Fowler, LEAD ATTORNEY, U.S. DEPARTMENT OF JUSTICE, Office of Consumer Protection Litigation, Washington, DC.
ROBERT L. WILKINS, United States District Judge.
This litigation is the latest chapter in a decades-long effort seeking government approval of a medical device. Plaintiff Ivy Sports Medicine, LLC (" Ivy" ), or its predecessor ReGen Biologics, Inc. (" ReGen" ), have been trying to get the medical device at issue in this litigation approved for at least 16 years; that is when ReGen began clinical research trials. The Food and
Drug Administration (" FDA" )  rejected multiple applications fro ReGen before eventually approving the device in December 2008. But at present, the device is no longer allowed on the market because the agency changed the device's classification in March 2011. The parties agree a mistake was made. For the FDA, the mistake occurred when they approved the device in December 2008, because they claim the process by which they did so was marred by procedural irregularities. For Ivy, however, the agency's mistake occurred when the agency changed the classification of the device in March 2011 using inherent authority rather than a statutory procedure.
The case is now before this Court on cross-motions for summary judgment, and is ripe for a decision. (Dkt. Nos. 22 & 28). Based on the Court's review of the Administrative Record, the parties' briefs, the relevant law, and the arguments of counsel during the hearing held on March 14, 2013, and for the reasons stated below, Defendants' Motion for Summary Judgment (Dkt. No. 28) is GRANTED and Plaintiff's Motion for Summary Judgment (Dkt. No. 22) is DENIED.
I. FACTUAL SUMMARY
A. Regulatory Framework
Certain medical devices intended for human use are regulated for safety by the FDA under the Federal Food, Drug and Cosmetic Act (" FDCA" ), 21 U.S.C. § 301 et seq. There are " two basic paths" by which new devices reach the market. Cytori Therapeutics, Inc. v. FDA, Nos. 11-1268, 11-1279, 715 F.3d 922, 404 U.S. App. D.C. 447, 2013 WL 1164775, at *1 (D.C. Cir. Mar. 22, 2013). The " premarket approval" path involves more scrutiny, usually requires clinical research demonstrating the safety of the device, and can be a lengthy process. See 21 U.S.C. § 360e. The " premarket notification" path, far more common, is a more streamlined process that requires the new device to be " substantially equivalent" to a device already on the market. See 21 U.S.C. § § 360(k), 360c(i). There are three established classes for medical devices, which help determine whether a new medical device proceeds along the " premarket approval" or " premarket notification" path. See 21 U.S.C. § 360c(a)(1). Devices in Class I are the least risky, Class II devices are more risky than Class I and may require " special controls,"  and devices in Class III are the most risky of all and require premarket review and approval. See 21 U.S.C. § 360c(a)(1)(A)-(C) (describing all three Classes).
In addition, devices can be identified as preamendment or new (postamendment). Preamendment devices are any of about 1,500 generic types of devices used before the enactment of the Medical Device Amendments on May 28, 1976. See 21 C.F.R. § 860.3(i). A device is categorized as postamendment if it was first proposed for use on or after May 28, 1976. Anyone seeking to register a postamendment device can submit a premarket notification, which has come to be known as a 510(k) application, in an effort to demonstrate the device is " substantially equivalent" to a
device already approved by the FDA, also known as a " predicate device." See 21 U.S.C. § § 360(k) (Section 510(k) of the FDCA), 360c(f). The criteria for substantial equivalence are set out at 21 U.S.C. § 360c(i)(1)(A). See also 21 C.F.R. § 807.100(b). If the agency determines a new device is substantially equivalent to a predicate device, the new device is cleared and subject to the same regulatory Class controls as the predicate. See 21 U.S.C. § 360c(f). If not, the new device is classified into Class III, and subject to premarket approval of its safety and effectiveness. See 21 U.S.C. § 360c(f). The law was changed in 1990 to clarify that most devices, including postamendment devices, can serve as a predicate for classifying other new devices. See 21 U.S.C. § 360c(i).
Congress has provided procedures for the FDA to follow for device classification changes if the agency determines a device has been incorrectly classified. At the time the device at issue in this case was reviewed by FDA,  a key statutory provision, 21 U.S.C. § 360c(e)(1)(A), provided that
[b]ased on new information respecting a device, the Secretary may, upon his own initiative or upon petition of an interested person, by regulation (A) change such device's classification, and (B) revoke, because of the change in classification, any regulation or requirement in effect . . . with respect to such device. In the promulgation of such a regulation respecting a device's classification, the Secretary may secure from the panel to which the device was last referred pursuant to subsection (c) of this section a recommendation respecting the proposed change in the device's classification and shall publish in the Federal Register any recommendation submitted to the Secretary by the panel respecting such change.
B. Device at Issue: Collagen Scaffold (" CS" )
The meniscus is made of tissue and is found between the knee bones. The menisci distribute body weight to prevent damage to the underlying articular cartilage, they " act as shock absorbers and secondary stabilizers, and they provide joint lubrication and nutrition for the articular cartilage." (Dkt. No. 1, at ¶ 18). Unfortunately, meniscus injuries are quite common, and often result in a surgical procedure known as a partial meniscectomy. That procedure removes torn meniscus cartilage interfering with knee joint function. ( See Dkt. No. 69, at 9 n.2). The product at issue in this litigation is a Collagen Scaffold (" CS" ) manufactured by Ivy that was marketed in the United States as Menaflex. According to Ivy, the CS is intended " to reinforce damaged or weakened meniscal soft tissue in the knee and to provide a resorbable scaffold for replacement by a patient's own soft tissue." (Dkt. No. 1, at ¶ 19). A partial meniscectomy would involve use of a CS only if a doctor determined such use was appropriate. According to Ivy, although debated by the FDA as explained below, use of the CS is limited to repairing and reinforcing tissue, and the CS is not intended to replace tissue. ( See AR 2648-49, 2661).
ReGen began clinical research on the safety of the CS around 1997, and sought premarket approval in 2004. ( See AR 37). Later, instead of pursuing premarket approval, ReGen submitted its first 510(k) application in 2005, describing the CS as
" a resorbable collagen-based surgical mesh" that " serves to reinforce and repair soft tissue." (AR 559). The FDA rejected the 510(k) application in February 2006 as not substantially equivalent to a predicate surgical mesh, stating its " decision is based on the fact that the performance data you have provided did not demonstrate your device to be as safe and effective as legally marketed devices." (AR 1097). The agency reconsidered its rejection and requested additional information from ReGen, but in July 2006 the FDA's lead reviewer concluded that the CS " has a new intended use and is not substantially equivalent to other surgical mesh or bone fixation devices." (AR 1193) (emphasis in original). That same month the agency again rejected the 510(k) application, " based on the fact that your device has a new indication (i.e., the reinforcement and repair of soft tissue where weakness exists, including, but not limited to . . . meniscus defects) that alters the therapeutic effect, impacting safety and effectiveness, and is therefore a new intended use." (AR 1207) (ellipses in original). ReGen appealed unsuccessfully to the FDA's Office of Device Evaluation. (AR 1266-67).
ReGen submitted a second 510(k) application in December 2006, describing the device's use as " repairing and reinforcing meniscal defects." (AR 1286). The FDA's lead reviewer found the device not substantially equivalent to a predicate device, and wrote that the CS " was not used to repair and reinforce a repair but to replace tissue that has been removed after partial meniscectomy." (AR 1930). After the agency again requested and received additional information from ReGen, in August 2007 the FDA ultimately again rejected ReGen's application. The agency " determined the device is not substantially equivalent to devices marketed in interstate commerce prior to May 28, 1976 . . . or to another device found to be substantially equivalent through the 510(k) process," and stated this was because data provided on the CS suggested an increased risk and uncertain benefits as compared to predicate devices. (AR 2426-28).
In December 2007, both of New Jersey's United States Senators, and two members of its United States House of Representatives delegation, wrote to the FDA on behalf of ReGen, asking for the agency's review of the current submission and requesting a meeting to " discuss this situation." (AR 2431). ReGen's principal place of business is in New Jersey. (Dkt. No. 1, at ¶ 3).
Following the suggestion of Dr. Daniel G. Schultz, the then Director of the FDA's Center for Devices and Radiological Health (" CDRH" ), (AR 2627), ReGen later submitted a third 510(k) premarket notification to the FDA on July 22, 2008 for its CS, noting an indication that the device " is intended for use in surgical procedures for the reinforcement and repair of soft tissue injuries of the meniscus," (AR 5467). On August 14, 2008, the FDA's lead reviewer recommended that the CS be found not substantially equivalent " for lack of performance data," and also noted that " the subject device is being used to replace the meniscus in an area that cannot be repaired." (AR 2836). Representatives from ReGen and CDRH spoke on August 18, 2008, and notes of the call conclude by stating that the " FDA needs data that supports benefit of the device, as well as clear labeling that explains what the device does and how best to use it." (AR 2924). Multiple staff of the FDA, including the Director of the Office of Device Evaluation, recommended in September that the CS be found not substantially equivalent. (AR 2936, 2957). The agency did not deny the CS, however, and notified ReGen in October 2008 that review of the CS would
include input from an Orthopedic Advisory Panel scheduled to meet on November 14, 2008. (AR 2958-59). The agency gave the panel one week, rather than the usual three to five, to prepare, and because of the short notice several standing members could not attend. (AR 3498-99). A summary of the meeting prepared by the FDA stated that " [t]he Panel generally believed that the ReGen CS was able to withstand physiological forces, would foster ingrowth of unorganized fibrocartilage tissue, was appropriate for both acute and chronic meniscal soft tissue injuries, and was as safe and effective as the [Class II] predicate devices." (AR 2976). A report by the FDA examining the panel one year later wrote that the transcript of the panel meeting reflects " confusion" and contains internal inconsistencies that are " difficult to reconcile." (AR 3505). The same FDA report stated that ReGen " succeeded in excluding the Review Division from speaking at the Panel meeting." (AR 3499). The Review Division included " staff most knowledgeable about the CS device and the 510(k) submission for it." (AR 3505). After the panel, some FDA staff continued to believe the CS was not substantially equivalent. (AR 3230-31; see also 3234 (" After considering the Panel recommendations, the ODE review team continued to find that the data were insufficient to demonstrate substantial equivalence . . . ." )).
The Director of the Office of Evaluation, who had recommended a finding of not substantially equivalent in September, noted in a December 2008 Memorandum to the Record that, " Dr. Schultz and I have discussed this submission in detail, and he believes that ReGen has provide[d] sufficient clinical data to demonstrate that the new indications for use ha[ve] a similar risk/benefit profile to previously cleared indications for surgical mesh. Therefore, I have concluded that the ReGen CS device is substantially equivalent to predicate surgical meshes, in that the new indication does not constitute a new intended use." (AR 3236) (emphasis added). By letter dated December 18, 2008, Dr. Schultz informed ReGen of the agency's decision to classify the CS as a Class II device under the FDCA, because the agency had " determined the device is substantially equivalent (for the indications for use stated in the enclosure) to legally marketed predicate devices . . . or to devices that have been reclassified in accordance with the provisions of the Federal Food, Drug, and Cosmetic Act (Act) that do not require approval of a premarket approval application (PMA)." ( See AR 3240-42). The agency at that time determined the CS to be substantially equivalent to an approved surgical mesh. Surgical meshes are regulated as Class II devices. See 21 C.F.R. § 878.3300 (a mesh is " intended to be implanted to reinforce soft tissue or bone where weakness exists" ). As a result, ReGen began commercial distribution of the CS in the United States, and first distributed the device in April 2009. (Dkt. No. 24-5, at ¶ ¶ 4-5).
Shortly before they began distribution, however, an article about the approval of ReGen's CS appeared on the front page of the Wall Street Journal. Alicia Mundy, Political Lobbying Drove FDA Process, WALL ST. J., Mar. 6, 2009, at A1. The article purports to document, for example, " emails show[ing] the FDA's integrity office excising language from a draft letter an FDA lawyer said would 'document special treatment for ReGen.'" That day Senator Charles Grassley contacted the FDA about the substantial equivalence determination for the CS device, and within days members of the United States House of Representatives' Committee on Energy and Commerce had done the same. ( See AR 3251-60, 3276-91). The agency began
an internal review at the end of April 2009. (AR 3269). Members of the House Committee on Energy and Commerce wrote to the FDA on May 11, 2009, stating: " We understand that you may be reexamining the decision to approve this device for marketing. Given the questions raised by FDA scientists about the lack of data on the safety and efficacy of this device, we believe this is a prudent course of action." (AR 3300). ReGen was aware of this, as they commented on this letter on June 9, 2009. ( Id. ).
As part of its internal review process, the FDA issued a September 2009 report entitled " Review of the ReGen Menaflex: Departures from Processes, Procedures, and Practices Leave the Basis for a Review Decision in Question." (AR 3485-3578). The report found " procedural irregularities" in the review of ReGen's 510(k) application, including " highly unusual . . . Congressional involvement," and called for " a focused scientific reevaluation of the decision to clear the CS device." (AR 3488, 3494, 3497). It stated that, " [t]he Director of FDA's Office of Legislation described the pressure from the Hill as the most extreme he had seen and the agency's acquiescence to the Company's demands for access to the Commissioner and other officials in the Commissioner's office as unprecedented in his experience." (AR 3494). It also referred to " the agency's failure to respond appropriately to external pressure on decision-makers; the exclusion of individuals, if not viewpoints, from parts of the scientific debate; and the excessive reliance on advisory panel deliberations in reaching the final decision to clear the CS device for marketing." (AR 3488). At a press conference that September regarding the CS, new CDRH Director Dr. Jeffrey Shuren stated: " [W]e have no basis to question the safety of this device. . . . What we have concluded is the integrity of our process for reaching a decision was compromised in this case and so we are revisiting and re-evaluating the record and the basis for making that decision." (Dkt. No. 24-9, at 4) (emphasis added).
The following month, on October 7, 2009, the FDA and ReGen met. At the meeting the agency told the company that a new team would reconsider the decision to clear the CS. (AR 3579-84). That team reported in December 2009 that the CS " is intended for replacement of the meniscus and there are no legally marketed predicate devices intended for replacement of the meniscus. . . . Therefore, the current review team does not believe the record supports a determination of substantial equivalence for the" CS. (AR 3649) (emphasis in original). The FDA notified ReGen in January 2010 that the agency planned to convene a second Orthopedic Advisory Panel two months later. (AR 3928-30). For the most part, the panel that met in March 2010 found that the CS is " generally considered safe," but had " some concerns about efficacy." (AR 4502). Panel members from the March 2010 meeting also " provided mixed responses regarding whether the CS device was intended to or could repair and/or reinforce the meniscus." (AR 5464) (citing March Panel Transcript at 216-29).
The FDA's lead reviewer recommended in a September 2010 Memorandum that the CS be found not substantially equivalent. (AR 5404-57). She stated that the CS was intended " to replace the meniscus to prevent or delay the progression of osteoarthritis of the knee joint ," and not for " reinforcement and repair of soft tissue injuries of the medial meniscus." (AR 5407) (emphasis in original) (footnote omitted). With respect to a comparison to predicate devices, the ...