Current News and Issues

Supreme Court Limits Tort Suits Against Medical Device Manufacturers

The United States Supreme Court, in an 8-1 decision, determined that state law product liability and tort suits are pre-empted by federal law when medical devices have been approved through the Pre-Market Approval (“PMA”) process by FDA. In Riegel v. Medtronic, Inc., the Court found that the oversight exercised by FDA over specific Class III medical devices through the rigorous PMA review process satisfied the pre-emption language in the 1976 Medical Device Amendments statute. Justice Ginsburg offered the sole dissenting opinion arguing in essence that the Court’s 1996 decision in Medtronic, Inc. v. Lohr, which held that pre-emption did not apply to Class III devices brought to market through the less rigorous 510(k) pre-market notification process should apply to PMA devices because there was no evidence that Congress or FDA intended to supplant state tort remedies. (Riegel v. Medtronic, Inc., No. 06-179, Feb. 20, 2008.)

Indiana Supreme Court Upholds Physician Non-Competes

The Indiana Supreme Court upheld the use of non-competition agreements that restrict a physician’s right to practice after leaving an existing practice with other physicians. The court expressly rejected the argument that such restrictions offend public policy. However, the court also found that non-compete provisions must be reasonable in time and geographic scope and noted that trial courts may “blue-pencil” terms that are not reasonable to fashion a restriction that is reasonable. The majority found a geographic restriction that included forty-three counties unreasonable where the interest to be protected was the use of practice resources to attract and maintain patients. The court found that this protectable interest was limited to the counties where the departing physician actually practiced but did not extend to contiguous counties or counties where the practice maintained an office but where the departing physician had not practiced. (Central Indiana Podiatry, P.C. v. Krueger, No. 29S05-0706-CV-256, Mar 11, 2008.) Physician Practice groups should consider updating their agreements in view of this decision.

Seventh Circuit Affirms Convictions Of Medical Device Manufacturer Executives

The Seventh Circuit Court of Appeals affirmed the convictions of two key officers of a medical device manufacturer, AbTox, who sold sterilizers that had not been approved by the FDA for uses that ultimately caused patient injuries. The defendants had appealed their convictions arguing that their representations to customers about the devices were protected by the First Amendment. The Court of Appeals rejected that argument holding

1) that the drafters of the Constitution did not intend to extend protection from government interference in speech when the result was injury to those whom the speech was intended to benefit, and

2) that because the devices in question were never approved by FDA for any indication, the promotion of the devices for sterilizing ophthalmic instruments and other instruments made of materials other than stainless steel (off-label uses in contrast to the cleared indications for a smaller version of the device) constituted fraud, which is not protected speech. (United States v. Caputo, 06-3612 and 06-3619, Feb. 27, 2008)

DOJ Official Testifies That Proposed False Claims Act Amendments Are Unnecessary

Michael Hertz, deputy assistant attorney general for the United States Department of Justice testified before the Senate Judiciary Committee stating that DOJ objected to provisions in the proposed amendments to the civil False Claims Act sponsored by Senator Chuck Grassley (R. Iowa) (S. 2041) stating that such changes were unnecessary. Mr. Hertz stated that DOJ objected to proposed changes narrowing the public disclosure bar that would allow those with no first hand knowledge of fraud to bring suits against government contractors. He also indicated that allowing government employees to act as qui tam relators violated public policy. Finally, DOJ noted that changes intended to allow FCA suits against those who receive indirect federal funding when no direct presentment was made to the government were premature while the matter was pending in the courts.
(Found at http://judiciary.senate.gov/hearing.cfm?id=3161, Feb. 27, 2008.)

FDA Issues Draft Guidance For Distribution Of “Off Label” Scientific Journal Articles

The U.S. Food and Drug Administration released a draft guidance to industry outlining the agency’s current thinking on the distribution by the pharmaceutical, biologics and medical device manufacturers of scientific journal articles that discuss “off label” or unapproved uses for drugs and medical devices. (The announcement, which solicits comments from interested parties, can be found at 73 Fed. Reg. 9342, Feb. 20, 2008.) The FDA guidance permits manufacturers to disseminate truthful, non-misleading and complete reprints of peer-reviewed journal articles and generally available reference works that discuss unapproved uses for approved drugs and approved or cleared medical devices. The guidance warns against disseminating materials that are false or misleading, including articles that are inconsistent with the weight of credible clinical evidence or pose a significant risk to health. (The guidance document may be found at http://www.fda.gov/oc/op/goodreprint.html.)

Editor - James E. Utterback, co-chair, Health Law Group