Usefulness of New Online Reporting Tool Questioned

The FDA’s new online tool for reporting regulatory misconduct could subject industry to questionable allegations that disrupt business activities while producing little useful information for the agency, Hyman, Phelps, & McNamara attorney Jennifer Thomas said.

Although there is no guaranteed way to avoid becoming the subject of a regulatory misconduct allegation, device companies can reduce potential harm by implementing internal reporting systems and promptly addressing reports that come in. They also should respond quickly and completely to FDA requests pertaining to allegations submitted through the new portal, she said.

The FDA recently launched a website where anyone can file a complaint that a medical device is violating agency rules (IDDM, Oct. 31). Allegations of regulatory misconduct can include failing to register and list a medical device, marketing unapproved products, failing to follow quality system requirements, or engaging in misleading promotions.

Thomas said that while it is unclear exactly how the FDA will use reports of regulatory misconduct submitted through the site, many of these reports might contain misinformation, forcing companies to prepare for unnecessary investigations and the agency to track down false leads. This is primarily because the anonymous online tool is likely to be used by competitors, either as an alternative to a trade complaint or simply to disrupt a rival’s business by initiating an FDA investigation.

She said that employee whistleblowers with well-documented allegations are likely to forgo using the online tool in favor of filing False Claims Act (FCA) lawsuits, which are potentially much more lucrative. Under the FCA, a whistleblower can collect 15 percent to 30 percent of any recovery that the government receives.

In addition, Thomas said the FDA probably will not be able to handle the likely flood of reports and will have to prioritize just a few of them — a decision that could backfire if the agency fails to act on what turns out to be a serious violation.

Finally, although the FDA has said that records will not be publicly released until an investigation is complete, companies could still receive bad press tied to baseless accusations.

For instance, the FDA may close an investigation after deciding that the allegation does not warrant an expenditure of its resources, but without reaching a conclusion about the merits. The allegation then might be subject to disclosure under the Freedom of Information Act, potentially damaging the company’s reputation. — Jeff Kinney