Medical Device Daily Associate Managing Editor

It appears that the ongoing saga between embittered Utah Medical Products (UTMD; Salt Lake City) and its perceived nemesis, the FDA, is still far from being resolved.

On Tuesday, UTMD said it received a letter from the FDA's parent, the Department of Health and Human Services (HHS), denying the company's claims under the Federal Tort Claims Act (FTCA), alleging abuse of process in relation to the negligence and wrongful acts of FDA employees while acting within the scope of their employment during the inspections, review and subsequent enforcement actions taken and/or attempted, including public statements, during the period of 2001 through 2005.

UTMD, which manufactures devices used in obstetrics, gynecology, neonatal intensive care, urology, electro-surgery and blood pressure monitoring, remains convinced that its claims under the FTCA filing are valid.

The company's outspoken CEO, Kevin Cornwell, said with the latest action from the HHS, that Utah Medical now is free to file suit against the FDA in U.S. district court, or file a request for reconsideration, before Aug. 10. He noted the company will “carefully consider all of its options.“

Cornwell told Medical Device Daily that the company has proof that officials affiliated with the FDA “committed a huge amount of fraud.“

He said this proof was acquired via depositions that Utah Medical took with certain FDA officials during the discovery phase of the lawsuit filed against the company by the FDA in August 2004, alleging violations of the FDA Quality System Regulation (QSR).

The FDA ultimately lost the suit (Medical Device Daily, Oct. 25, 2005), which was originally designed to permanently enjoin UTMD from making and distributing medical devices, and the company has hoped to regain its good name and reputation which it said were damaged by the unnecessary regulatory actions.

Utah Medical also had sought to recoup its costs for the trial, which it said it should never have had to be involved in since it already was in compliance with all the QSR regulations.

“We were hoping that independent and objective representatives of the executive branch of government would have been assigned to investigate this claim, and be willing to discuss a constructive settlement with UTMD,“ said Cornwell. “Such a settlement would include restoring our reputation for manufacturing high quality products, rectifying a permanent public record that is incorrectly disparaging of UTMD, actually conducting the UTMD requested investigation in which FDA claimed it found no evidence of inspector bias but has been proven never to have happened, and repaying UTMD's totally unnecessary costs of litigation that resulted because no one in FDA wanted to open a dialogue regarding UTMD's responses to predetermined inspectional observations.“

During its trial on the alleged QSR violations, Cornwell said UTMD filed counterclaims against the FDA, which were dismissed because the company is required to go through an administrative claim process with the agency before it can file a lawsuit, the same agency that he said was dragging its name through the mud and had refused to go through mediation prior to the QSR regulation lawsuit going to trial.

The company filed its administrative claim against the agency on July 15, 2005, “well before anybody knew that the court was going to rule in our favor.“

He said from the date of that filing of the administrative claim, the agency had six months to respond, which it finally did with the denial letter that said UTMD's claim “is not cognizable under the FTCA.“

Cornwell said the company has not had an active dialogue with the FDA for years. Asked by MDD why he believed the FDA has neglected to respond, he said he fears the answer “is a combination of [a] lack of competence and [a] lack of ethics,“ from some people at the agency, “and I've got proof of it.“

He said many of the problems that the company has experienced stem from the discretionary function privilege of inspectors from the FDA, which allows them to inject their opinions into reports on companies, but may have absolutely no bearing on whether or not a company is actually in compliance.

“The reality is that if they decide they don't like you, it doesn't matter what you do – you're not in compliance,“ Cornwell said.

He said the way the system is set up now, if inspectors write up a bad report on a company simply because they're insulted that company officials don't agree with their opinions, there is no redress from those inspectors' immediate superiors.

“Their superiors, instead of being independent and reviewing what their subordinates did, simply circle the wagons,“ Cornwell said. “We [even] have an [FDA] district director that admitted that she signed the injunction recommendation without reading any of Utah Medical's responses.“

UTMD said that a former 28-year employee of the FDA, hired by the company to review the documentation of the prior FDA inspections, said he found “that the investigators who conducted the inspection of the Utah Medical facility in February and March of 2003 engaged in inspectional practices in disregard of explicit instructions and policy stated in the FDA's Investigations Operations Manual and prepared an Establishment Inspection Report that contains numerous misrepresentations of the actual facts, bias and material omissions.“

This former FDA compliance officer, Cornwell said, informed UTMD that it is “up at the top somewhere in terms of our compliance system and that there is a huge case for misconduct here.“ If the company goes to trial, he said the compliance officer would be the company's “star witness.“

Despite all the problems Utah Medical has had in this nearly five-year ordeal, Cornwell said he still is hopeful that somebody in the U.S. government will sit down and have a reasonable conversation with his company and talk through the issues. However, his hopes are waning.

“It continues to be disappointing that officials in our government prefer to hide than to admit any wrongdoing,“ he said. “It's not hard, with an effective quality system, to do the right thing necessary to take corrective actions, and appropriate preventive actions for the future.“