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Our first post of the fall (and new year, according the Hebrew calendar), concerns something we do not usually post about – the adequacy of allegations in a criminal indictment.  Much like we feel about seasonal changes, we have mixed views about the opinion in United States v. Kaplan, No. 2:13-CR-00377-PMP-CWH, 2014 U.S. Dist. LEXIS 124174 (D. Nev. Sept. 5, 2014), a review of a Magistrate’s Report and Recommendation (R&R) found at 2014 U.S. Dist. LEXIS 124176.  The case involves allegations that a urologist, as part of his scheme to increase profits, re-used needle guides that were indicated as single-use devices.  He was investigated by FDA and charged with conspiracy to adulterate medical devices and false statements to a federal official, the latter based on alleged misrepresentations to FDA investigators about when he stopped re-using needle guides.

We should state up front that we do not advocate unsafe medical practices.  (An extreme stance for us to take, we know.)  We would hope that procedures like those at issue here, prostate biopsies with an accompanying transrectal ultrasound, are performed with maximal sterility—maybe the not word when discussing this anatomical region—and professionalism.  Jokes about prostate and rectal exams have been a comedy staple for years (e.g., “Mr. Babar” singing “Moon River” in Fletch), but medical practices that would entail the use of less than sanitary devices or instruments in such exams are not funny.  We should also state that we do not know what it is about Nevada medical practice and alleged re-use of single-use devices.  There have well publicized trials (and a few decisions) in cases against drug manufacturers predicated on the idea that the approved size of the vials of medications encouraged a Nevada clinic to engage in colonoscopy practices that allegedly resulted in a hepatitis outbreak.  We do not practice criminal law, so we can only guess whether some part of all of this is trying to deter dangerous medical practices in a place where they may not be sufficiently rare.

The allegations being tested in Kaplan did not include, from what we can tell, that anybody had been physically injured as a result of re-using needle guides. There was not even an allegation of economic injury to a patient or payor, because there was no suggestion that the defendant charged the new needle guide price for re-used needle guides or even that he charged for the needle guides at all, as opposed to just charging for the diagnostic procedure.  Whether such a re-use practice was actually dangerous or in violation of standards of care for urologists was not was not spelled out in the decision, which focused instead on the straight legal issue of whether using a single use device more than once constituted adulteration under the FDCA. (We would say “approved as single use,” but the regulatory status of the devices that the defendant used is not discussed.  We can quickly see that needle guides, whether “reusable or disposable,” are Class I devices under 21 CFR § 878.4800, so they do not get approved or cleared.)

Many times in the course of arguments on preemption and primary jurisdiction and testimony on company conduct, we have taken the position that the FDA’s charge to police compliance with the FDCA and its regulations is real and meaningful.  While the plaintiffs’ bar may contend that FDA is the puppet of industry and needs its help in punishing bad conduct—for a slight fee, of course—examples where FDA investigates, shuts down operations, and tries to put people in jail go some way to giving judges and juries the confidence to keep enforcement of FDA laws and regulations out of the hands of private litigants.  While the Kaplan defendant was not a user-fee-paying manufacturer, his prosecution is an example of FDA enforcement.  Similarly, tacking on an indictment for allegedly lying to an investigator from the FDA’s Office of Criminal Investigations shows a little more of FDA’s teeth.  Evidence about FDA inspections of manufacturers, whether routine or “for cause,” are standard fodder in drug and device cases.  The same statute, 18 USC §1001, used here also can be used to criminalize a materially false statement (with requisite mens rea) to an inspector.  The court’s decision to not dismiss the false statement count also helps, in this sense, as it affirms FDA’s “jurisdiction to investigate violations of the FFDCA, including the adulteration of medical devices”–§1001 requires the false statement be made to a federal agency acting within its jurisdiction—and that adequate pleading of a false statement involves allegations of “the date of the alleged false statement, the content thereof, and to whom the statement was made”—allegations often lacking in consumer fraud and similar claims against manufacturers.  2014 U.S. Dist. LEXIS 124174, **12-15.

We also liked some language, more in the R&R than in the opinion, about how states regulate the practice of medicine and FDA does not.  In concluding that FDA gets to prosecute adulteration even when done by an individual in connection with practicing medicine, because it regulates the distribution of drugs and medical devices, the opinion has an unexplained cite to 21 USC § 396.  Id. at *10.  That provision, without much more analysis, seems hard to reconcile with the indictment, as the FDCA is not to be “construed to limit or interfere with the authority of a health care practitioner to prescribe or administer any legally marketed device to a patient for any condition or disease within a legitimate health care practitioner-patient relationship.” While we are fine with the idea that parties other than the FDA are not allowed to enforce the FDCA’s prohibitions against adulteration or misbranding, we would think that there needs to be some act by the physician that is more than just “prescrib[ing] or administer[ing a] legally marketed device to a patient,” on-label or off-label, to allow prosecution for misbranding.

Given § 396, the evaluation of whether the alleged conduct here meets the requirements of adulteration is lacking. 21 USC § 331(k) prohibits:

The adulteration, mutilation, destruction, obliteration, or removal of the whole or any part of the labeling of, or the doing of any other act with respect to, a food, drug, devise, tobacco product, or cosmetic, if such act is done while such article is held for sale (whether or not the first sale) after shipment in interstate commerce and results in such article being adulterated or misbranded.

In the criminal context—again, not our area—statutes can be too vague to impose liability in some or all situations.  The term “held for sale” is not defined in the FDCA and the Ninth Circuit has prohibited using § 331(k) to impose liability for distributing homemade GHB for free. (GHB is not to be confused with the “roofies,” or, rather, “floories” featured in The Hangover.)  By contrast, because the Kaplan defendant charged for his services (although not necessarily for the needle guides themselves), there was a “commercial component” to defendant’s actions with regard to the needle guides and that was enough.  Id. at **7-10.  Such an interpretation of “held for sale” was “consistent with the FFDCA’s overall structure and purpose of ‘protect[ing] consumers from dangerous products . . . from the moment of their introduction into interstate commerce all the way to the moment of their delivery to the ultimate consumer.’”  Id. at *8 (quoting Unites States v. Sullivan, 332 U.S. 689, 696 (1948)).

The ultimate consumer here was the patient, not the physician who had bought the needle guides for use in his practice. This is a necessary conclusion for the needle guides to still be “held for sale” when the alleged adulteration takes place.  But this is where we think the logic breaks down.  Quoting from the R&R, the opinion stated that the “patients’ payment for medical services undoubtedly reflects the costs of materials used to provide the unique medical service.  When the single use needle guide is used for a patient’s biopsy, its value and usefulness as a medical device is transferred to the patient in exchange for payment.”  Id at *9 (internal quotations omitted).  The next sentence from the R&R stated “It has no residual value, at least as a needle guide, because it can only be used once.”  2014 U.S. Dist. LEXIS 124176, *15.  Defendant’s alleged adulteration, however, was not with regard to the first patient on whom a new needle guide was used—the patient who paid for its complete value—but any patient on whom a needle guide was re-used.  What constituted adulteration beyond simply prescribing or administering the device, as reading § 331(k) with § 396 would require, is not specified. Whether re-sterilizing the device, simply re-using it, or doing something else changed the device enough to adulterate it,  the acts must have occurred after the care of the first patient for each needle guide. If the first patient bought the needle guide and used up all of its value, then how was the needle guide still held for sale for the unwitting second and third patients?  We do not know, but we also do not see how this logic could be used to impose liability on the manufacturers of drugs or devices, which is always our primary concern.  Should the new year bring new cases with allegations that manufacturers are liable for adulteration because doctors re-used products contrary to labeling, we promise to think about it harder.