It’s Not A Section 518 Mandatory Recall, But The Baxter Infusion Pump Recall Comes Close

By Jeffrey K. Shapiro –

On May 3, FDA announced that it has ordered Baxter to recall and destroy an estimated 200,000 Colleague infusion pumps in use, reimburse customers for the “value” of the recalled device, and assist in finding a replacement.  The press release is available here.  (FDA did not release a copy of the order.)

In 2006, FDA obtained a consent decree entered against Baxter forbidding further manufacture of the Colleague infusion pumps.  The consent decree also required Baxter to submit a corrective action plan within 20 days for correcting the deficiencies with the Colleague pumps already in use.

Apparently, Baxter has attempted several rounds of upgrades during the past four years, with unsatisfactory results.  FDA states that Baxter’s most recent proposed plan contemplated a new round of corrections beginning in May 2012 that would be complete in 2013.  FDA found that was simply too long to allow these pumps to remain on the market.

The consent decree (paragraph 15) authorizes FDA to order a recall of the pumps at Baxter’s expense and also to take “any other corrective action” to protect the public health or to ensure Baxter’s compliance.  FDA apparently views the refund / replacement requirement imposed on Baxter as falling within this latter catch all provision.

Baxter’s press release does not really dispute FDA’s rationale for ordering a recall.  However, Baxter signals that it is not entirely in agreement with the details:  “The consent decree permits Baxter to propose alternative actions to achieve the FDA's objectives under the decree, which the company intends to do.  The final nature of the recall and offer to customers remain subject to that ongoing dialogue.”  It does not appear that Baxter is negotiating from a position of strength.

Baxter says it hopes to offer an exchange of Sigma SPECTRUM infusion pumps for COLLEAGUE infusion pumps without charge to customers.  For those who opt for a refund, an interesting question is the formula for determining how much it will be.  FDA’s press release does not address this issue, referring variously to the payment as a “refund” (which implies a return of the original purchase price) and “reimbursement” for the “value” of the recalled pump (which implies a payment less than the original purchase price, perhaps based upon depreciated value).

Baxter says it is taking a pretax charge of $400 to $600 million for the recall.  Given FDA’s high end estimate of 200,000 units in the field, Baxter’s charge implies an average cost of $2,000 to $3,000 per pump.  This figure presumably includes the administrative expense of the recall and destruction of the pumps, some mix of pump exchanges and refund or reimbursement according to some formula, and other costs.

It is worth noting that FDA has authority to order mandatory device recalls and repair, replacement or refunds (and reimbursement of expenses in complying with the order).  This authority is set forth in Section 518 of the Federal Food, Drug, and Cosmetic Act.  The implementing regulations (21 C.F.R. Part 810) specify the procedure for ordering a mandatory recall but does not speak to the repair, replacement or refund authority.  To our knowledge, FDA has never ordered a mandatory device recall under Section 518, much less a recall with an accompanying mandate to provide a refund or replacement.  The Baxter recall, although ordered pursuant to a consent decree, is the closest FDA has come.  Watching this recall play out should provide some interesting data about what a mandatory Section 518 recall might look like.  With FDA's tougher stance on enforcement and heightened focus on postmarket safety, the mandatory Baxter recall may not be the last of its kind.

UPDATE:

• FDA Q&A regarding Baxter pump recall