Federal Court of Appeals Hands FDA A Victory in Custom Medical Device Case

April 1, 2009

By Jennifer B. Davis

Earlier this week, the United States Court of Appeals for the Eleventh Circuit in Atlanta issued its opinion in United States v. Endotec, Inc., an appeal from the United States District Court for the Middle District of Florida.   We previously reported on the lower court decision here

The central issue on appeal was whether various ankle, knee, and jaw implants manufactured and distributed by Endotec qualified as “custom devices” exempt from the FDC Act's premarket approval requirements.  In the district court, FDA sought a permanent injunction against Endotec and its officers to preclude further manufacture and distribution of such devices without the necessary premarket approval.  Siding largely with the company, the District Court held that Endotec’s ankle and jaw implants, but not its knee implants, were exempt “custom devices.” 

On March 30, the Eleventh Circuit affirmed in part and reversed in part, concurring that the distributed jaw implant was a custom device, but not the knee or ankle implants.

The “custom device” exemption, codified at 21 U.S.C. § 360j(b), defines a custom device as one that:

necessarily deviates from an otherwise applicable performance standard or requirement prescribed by or under section 360e of this title if (1) the device is not generally available in finished form for purchase or for dispensing upon prescription and is not offered through labeling or advertising by the manufacturer, importer, or distributor thereof for commercial distribution, and (2) such device –

(A)(i) is intended for use by an individual patient named in such order of such physician or dentist (or other specially qualified person so designated) and is to be made in a specific form for such patient, or (ii) is intended to meet the special needs of such physician or dentist (or other specially qualified person so designated) in the course of the professional practice of such physician or dentist (or other specially qualified person so designated), and

(B) is not generally available to or generally used by other physicians or dentists (or other specially qualified persons so designated).

FDA’s regulation essentially mirrors, but restates the statutory criteria in list format:

Custom device means a device that:

(1) Necessarily deviates from devices generally available or from an applicable performance standard or premarket approval requirement in order to comply with the order of an individual physician or dentist;

(2) Is not generally available to, or generally used by, other physicians or dentists;

(3) Is not generally available in finished form for purchase or for dispensing upon prescription;

(4) Is not offered for commercial distribution through labeling or advertising; and

(5) Is intended for use by an individual patient named in the order of a physician or dentist, and is to be made in a specific form for that patient, or is intended to meet the special needs of the physician or dentist in the course of professional practice.

21 C.F.R. §812.3(b).

In applying the custom device criteria, the agency has historically taken a very restrictive view, characterized by the Endotec district court as “so narrow as to make the definition useless.”  As noted in the district court opinion, FDA officials claimed in their trial testimony that devices studied in clinical trials; devices used on more than one patient; devices available in different sizes; and devices having the same basic design as other available devices, cannot be custom devices.

Those who were hoping that the Endotec case might provide some conclusive analysis of the custom device provision won’t likely find it in the Eleventh Circuit opinion.  Although the opinion makes clear that the burden of proof lies with the party claiming the exemption, the court declined (as courts are wont to do) to address any broad based criteria-related question that was not necessary to resolve the specific issue in this case of whether Endotec’s devices were custom devices.  Finding that Endotec commercially advertised its “custom” ankle devices, the court concluded that “the district court erred with respect to one prong of the custom device definition and, because a device must meet all five prongs of the custom device definition, we decline to address the remainder.”  With regard to the knee implants, it found that the defendants failed to show an abuse of discretion by the district court, failed to address the “special need” requirement, and, like the ankle implants, advertised some of the knee implants in violation of the commercial distribution prong.  With respect to the jaw implant, the court found that the Government failed to demonstrate an abuse of discretion by the lower court in determining that device to be a custom device because it was not generally available to, or used by, other physicians.

Discussing issues that have broader applicability than just to custom devices,  the court of appeals rejected the lower court’s conclusion that for FDA to prevail in an injunction case, it had to “demonstrate dangerousness or actual harm with respect to a medical device.”   The court also ruled that the lower court erred when it relied on the conclusion that FDA's "strict interpretation of procedural requirements are resulting in technological innovation being stymied.”  Finally, it concluded that it “is not within the province of the district court (or, this Court, for that matter) to weigh the medical pros and cons of a certain medical device-that is best left to the FDA.”

Simply based on the reversal of the lower court’s decision regarding the status of Endotec’s ankle devices, the agency will surely view this decision as a victory.  The opinion also contains some agency-friendly language noting that it is “all-the-more necessary” to strictly and narrowly construe exemptions to a statutory scheme when the statute is one that addresses public health and safety.  Beyond that, however, we do not think the decision is likely to have a measurable impact on FDA’s current cramped construction of the custom device exemption.

Categories: Medical Devices