On September 26, 2014, the D.C. Circuit issued an opinion holding that the Food and Drug Administration (“FDA”) failed to follow the appropriate statutory procedure for reclassifying a device when the Agency relied on its “inherent authority” to rescind a 510(k) substantial equivalence determination by administrative order rather than using the reclassification procedure set forth in section 513(e) of the Food, Drug, and Cosmetic (“FD&C”) Act. While the holding can be construed narrowly to limit FDA’s inherent authority to rescind a substantial equivalence determination in the specified circumstances, it could also be interpreted more broadly as a sign that courts are more willing to consider challenges when FDA appears to be overreaching or straining its statutory authority.

Background -

The device at issue is a collagen scaffold, called Menaflex, that is intended to support and reinforce the meniscus in individuals with knee injuries. It is made by Ivy Sports Medicine, LLC (“Ivy Sports”), a successor in interest to ReGen Biologics, Inc. (“ReGen”), which filed for bankruptcy shortly after the Menaflex 510(k) was rescinded. FDA originally cleared the 510(k) for Menaflex in December 2008. Shortly thereafter, an article appeared in the Wall Street Journal that raised questions about the propriety of the clearance process and led to FDA’s reevaluation of its determination. On October 14, 2010, FDA informed ReGen of its intention to rescind the Menaflex 510(k). After providing ReGen an opportunity to request a hearing, FDA rescinded the Menaflex substantial equivalence determination in a letter sent March 30, 2011. The letter stated that the device “is not substantially equivalent to devices marketed in interstate commerce prior to May 28, 1976… or to any device which has been classified into Class I (General Controls) or Class II (Special Controls).” Accordingly, ReGen would lose its authorization to market Menaflex and the device would be considered a Class III device.