On January 4, 2023, the Department of Justice issued a press release stating that Jet Medical Inc. has agreed to pay $200,000 to resolve criminal allegations relating to a migraine headache treatment. Jet Medical and two related companies also agreed to pay $545,000 in a civil settlement involving the same device. The device, Allevio SPG Nerve Block Catheter, was intended to treat migraine headaches by administering nerve blocks to a collection of nerves located in the midface of the skull.
The government alleged that, between April 2014 and April 2019, Jet Medical introduced devices into interstate commerce that were misbranded under the Federal Food, Drug and Cosmetic Act (FDCA) because Jet Medical did not obtain approval or clearance from the U.S. Food and Drug Administration (FDA) prior to distribution. The government also alleged that Jet Medical did not conduct an investigational study regarding the device’s safety and effectiveness when used as intended. Violations of this nature constitute criminal charges under the FDCA. As part of a deferred prosecution agreement, which must be approved by the court, Jet Medical admitted that it distributed misbranded devices and agreed to implement enhanced compliance measures.
In addition to the criminal charges, a civil lawsuit filed under the qui tam or whistleblower provision of the False Claims Act alleged that Jet Medical and two related companies, Medical Components Inc. and Martech Medical Products Inc., violated the False Claims Act by causing medical providers to submit false claims to Medicare. The lawsuit alleged that the device was not approved or authorized by the FDA and that the procedure was not covered by Medicare. The lawsuit alleged that the companies encouraged medical providers to submit improper billing codes for Medicare reimbursement.
In the press release, government attorneys and regulators highlighted the dangers to patient safety and public health that can arise when medical device manufacturers circumvent the proper regulatory pathways and place “profits over people.” The press release warned that “[t]he resolution of this matter illustrates the government’s emphasis on combating health care fraud.”
The case above illustrates that failing to obtain approval or clearance from the FDA can lead to costly consequences and threaten patient safety. Before introducing a device to market, it is critical that medical device manufacturers ensure that their product has undergone the appropriate regulatory process.
The FDA has jurisdiction to regulate products that meet the definition of “device” under section 201(h) of the FDCA. The FDA regulates devices differently based on their intended use, level of risk, and substantially equivalent products already on the market. Device regulation can range from enforcement discretion to full investigational studies.
There are a number of resources, both formal and informal, available to help device manufacturers determine the regulatory requirements for their products, such as:
A lawyer knowledgeable about the FDA regulatory process can help manufacturers navigate these options and help manufacturers develop a robust compliance program to maintain adherence to FDA requirements throughout a device’s lifecycle.
Foley is here to help you address the short- and long-term impacts in the wake of regulatory changes. We have the resources to help you navigate these and other important legal considerations related to business operations and industry-specific issues. Please reach out to the authors, your Foley relationship partner, or to our Health Care Practice Group with any questions.