We have blogged recently about several FDA setbacks in court (here, for example). Add one more to that tally. Genus Medical Technologies secured an important victory in the D.C. Circuit Court of Appeals on Friday.
In Genus Medical Technologies v. FDA, the Court of Appeals ruled that FDA cannot regulate a medical product – in this case, the radiographic contrast agent barium sulfate – as a drug when the product meets the definition of a device. The decision has wide-ranging implications for FDA’s assertion of discretion in classifying and regulating medical products. The Court decision limiting FDA’s discretion provides regulatory certainty for device manufacturers, as the claimed discretion, if recognized by the Court, would have meant that any medical device potentially could be classified and regulated as a drug. And, of course, requiring medical devices to be regulated as such precludes the imposition of significant additional costs. As most readers of our blog are aware, the regulatory costs to manufacturers of medical products are much lower if FDA regulates a product as a medical device rather than a drug requiring FDA marketing approval.
Devices are defined by statute as excluding products that achieve their primary intended purposes through chemical action in or on the body, or through metabolic action (what Genus referred to in its submissions to the Court as the “mode-of-action clause”). Two judges on the D.C. Circuit rejected FDA’s claim that it could regulate, at its discretion, any medical device as a drug. A third judge, who filed a concurring decision, argued that, although FDA might, in some instances, be able to classify and regulate as a drug a product meeting the definition of a device, FDA had not adequately justified its decision in this case.
Our client, Genus Medical Technologies, manufactures and distributes barium sulfate for use in radiographic procedures. After an FDA inspection in 2016, Genus was told that it could not distribute barium sulfate because it was an unapproved drug. In response, Genus argued that barium sulfate meets the definition of a device because it does not achieve its primary intended purposes through either chemical or metabolic action. (The product is effective because of its physical characteristics: barium sulfate absorbs X-rays, coating the digestive system with light to provide a contrast to surrounding tissues.) FDA replied that the product appeared to meet the definition of a device, but said it nonetheless had discretion to regulate it as a drug. Pointing to an overlap in the statutory definitions of “drug” and “device” (which pertains only to a product’s “intended use”), FDA took the position that it could choose whether to regulate a device as a drug at its will. FDA chose to do so for contrast agents because FDA wanted to regulate all contrast agents—no matter their mode of action—the same. Because some other contrast agents achieve their primary intended purposes through chemical action, and because FDA claimed discretion to regulate all devices as drugs, FDA decided to regulate all contrast agents as drugs.
Genus responded by filing a Request for Designation with FDA’s Office of Combination Products, which backed up FDA’s earlier claim of wide discretion. Genus challenged the designation of barium sulfate as a drug in U.S. District Court, which sided with Genus in December 2019. FDA appealed that decision, and the D.C. Circuit upheld it on Friday.
Two of the judges agreed with Genus that the federal statutory scheme directed FDA to treat products as devices if they meet the statutory definition of a device, and while the statutory definition of the purposes of both types of medical products might be overlapping, the statute lays out a clear distinction in the device definition’s mode-of-action clause. Notwithstanding the overlap in the statutory definition of “drug” and “device,” the judges relied on the long-accepted adage that specific statutory language supersedes general statutory provisions. The judges also said that changes to the language of the governing Federal Food, Drug, and Cosmetic Act over the last couple of decades did not abrogate the clear statutory definitions.
A third judge wrote an opinion agreeing that the FDA decision on barium sulfate needed to be reversed and remanded to FDA. But her opinion noted a statutory change in 1990, in the Safe Medical Devices Act, removing a clause excluding devices from the definition of drugs. As a result, she said, FDA does have the discretion to classify and regulate some devices as drugs, but only if they do not meet an additional portion of the device statute describing devices as including an “an instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article, including any component, part, or accessory.” While FDA did say in numerous communications to Genus, in its initial brief in District Court, and in its oral argument in the D.C. Circuit that barium sulfate appeared to meet the definition of a device (including the language cited by Judge Pillard), Judge Pillard would have remanded the decision to FDA to consider whether barium sulfate meets that portion of the definition.
The majority decision drafted by Judge Henderson and joined by Judge Katsas left open the possibility that FDA could, on remand, decide that the product does, in fact, achieve its primary intended purposes through chemical or metabolic action. However, the government attorney at oral argument about this case stated that he believed that FDA would probably classify barium sulfate as a medical device if the case is remanded, which is the result that the majority opinion would require.
As we noted in our blog post on the District Court decision in 2019, Friday’s decision is a big win for industry (as well as for our client). This decision limits FDA’s typically broad discretion and precludes the Agency from imposing significant regulatory hurdles and costs based on policy positions rather than the congressionally imposed risk-based regulatory scheme. In other words, FDA cannot regulate a device as a drug on a whim.
Of course, we can’t represent that we will always or usually win when we challenge FDA in court, or that the government may not decide to further challenge Friday’s ruling. But we are happy for our client to be able to celebrate.