Disclosures: The authors report representing Avedro at the time the article was written.
April 15, 2020
3 min read

Legal, financial issues need to be considered before implementing new technology

Part 1 of this series focuses on understanding the regulatory landscape.

Disclosures: The authors report representing Avedro at the time the article was written.
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The time to implement new technology is when it offers clinical value, helps maintain your practice reputation for cutting-edge care or helps you provide patients with a positive experience. But there are important business considerations when evaluating new technology, too. In this two-part article, we address some of the legal and financial issues.

The role of clinical studies and FDA approval is an area that sometimes is misunderstood. Approved on-label drugs and devices are those that have gone through the FDA approval or clearance process and are used for the indications approved or cleared by the agency.

The FDA does not regulate the practice of medicine. Because of this, doctors sometimes use approved products differently from described in the labeling. Classic examples of off-label practices in ophthalmology include implantation of approved IOLs in patients without cataract and the use of intravitreal Avastin (bevacizumab, Genentech) for the treatment of wet age-related macular degeneration. Avastin is approved for several cancer indications but not for wet AMD.

Allison W. Shuren
Allison W. Shuren

Nonapproved technology

Products that are not approved for any use in the United States are considered nonapproved. Here, the “practice of medicine” does not apply. Use of nonapproved drugs or devices is permitted only through a formal study registered with the FDA, either through an investigational device exemption for significant risk devices or an investigational new drug application.

Bryant M. Godfrey
Bryant M. Godfrey

Doctors who want to evaluate investigational drugs or devices must verify that an IND/IDE study protocol is in place and must also have institutional review board approval. With the exception of nonsignificant risk devices, IRB approval alone is not sufficient to study nonapproved medical products. While enrolling patients in a clinical trial, doctors cannot also treat patients commercially with the study drug or device, with limited exceptions.

Those who were around in the early days of refractive surgery may remember warning letters to doctors who were using “black box” excimer lasers. Quite recently, the FDA issued a warning letter to a doctor for illegally marketing an unapproved medical device. In that case, the physician had developed an innovative technology for his own use when performing breast augmentation procedures but had not sought FDA approval for it.

John McInnes
John McInnes

The distinction between approved, off-label and nonapproved devices can be confusing. An example comes up in the context of corneal cross-linking. Corneal cross-linking is performed using a drug-device combination of Photrexa Viscous (riboflavin 5’-phosphate in 20% dextran ophthalmic solution) and Photrexa (riboflavin 5’-phosphate ophthalmic solution) and Glaukos’ KXL System, which together are indicated for the epi-off treatment of progressive keratoconus or post-refractive surgery corneal ectasia. Absent FDA product approval or clearance, physicians may only use a different drug, including compounded riboflavin, or a different UV delivery system to perform epi-off or epi-on cross-linking as part of an IND study.



Importation of an unapproved product is strictly prohibited under the U.S. Food, Drug, and Cosmetic Act. That means, for example, that a doctor cannot bring home sample IOLs obtained outside the U.S. and implant them in U.S. patients to see how well they work. Similarly, and what is less fully appreciated, is that this prohibition also applies to importing the international version of an approved product for use in the U.S. In July 2019, a Missouri pain medicine doctor and his wife were indicted on 21 counts for purchasing non-FDA-approved medical devices from Canada and England and bringing them into the U.S. They were also charged with health care fraud related to billing Medicare and Medicaid for these devices.

Importantly, restrictions on the use of nonapproved products are not related to whether the procedure or treatment is paid for by the patient, government or third-party payer. However, billing the government has resulted in some high-profile settlements. In 2018, for example, an ophthalmologist paid nearly $7 million to settle a federal False Claims Act case based on allegations that the physician billed Medicare for injecting Lucentis (ranibizumab, Genentech) and Eylea (aflibercept, Regeneron) that he bought overseas.

Understanding the rules

In short, it is important for physicians to understand the nuances of approved, off-label and nonapproved products.

The FDA has issued a number of warning letters to practices and physicians for using technology inappropriately. These warnings could lead to attention from the U.S. Department of Justice or action by individual state attorneys general, particularly if patients are being directly harmed. If a federal government program (Medicare, Medicaid, or any military or veterans health service) is billed for the use of the nonapproved product, the practice risks violation of the False Claims Act or state insurance fraud charges. With the ongoing phase-in of the 2013 Drug Supply Chain Security Act, there could well be more enforcement scrutiny related to use of unapproved drug products in the future.

New technologies must be evaluated to continue innovation and improvement in patient outcomes. It is important to understand the rules and risks to protect your practice.

Disclosures: The authors report representing Avedro at the time the article was written.