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This excerpt taken from the GPRO 10-K filed Feb 23, 2007. Government
Regulation
Our clinical diagnostic products generally are classified in the
United States as “devices” and are regulated by the
FDA’s Center for Devices and Radiological Health. Our blood
screening products generally are classified in the United States
as “biologics” and are regulated by the FDA’s
Center for Biologics Evaluation and Research.
For us to market our clinical diagnostic product kits as medical
devices in the United States, we generally must first obtain
clearance from the FDA pursuant to Section 510(k) of the
Federal Food, Drug, and Cosmetic Act, or FFDCA. If we modify our
products that already have received FDA clearance, the FDA may
require us to submit a separate 510(k), a “special”
510(k) or a premarket approval application, or PMA, for the
modified product before we are permitted to market it in the
United States. In addition, if we develop products in the future
that are not considered to be substantially equivalent to a
legally marketed device, we will be required to obtain FDA
approval by submitting a PMA.
By regulation, the FDA is required to respond to a 510(k) within
90 days of submission of the application. As a practical
matter, final clearance often takes longer. The FDA may require
further information, including additional clinical data, to make
a determination regarding substantial equivalence. If the FDA
determines that the device, or its intended use, is not
“substantially equivalent,” the device sponsor must
then fulfill much more rigorous premarketing requirements or
re-submit a new 510(k) with additional data.
The PMA process is more demanding than the 510(k) premarket
notification process. A PMA application, which is intended to
demonstrate that the device is safe and effective, must be
supported by extensive data, including data from preclinical
studies, human clinical trials and existing research material,
and must contain a full description of the device and its
components, a full description of the methods, facilities and
controls used for manufacturing, and proposed labeling. The FDA
has 180 days to review a filed PMA application, although
the review of an application more often occurs over a
significantly longer period of time, up to several years. In
approving a PMA application or clearing a 510(k) application,
the FDA also may require some form of post-market surveillance,
whereby the manufacturer follows certain patient groups for a
number of years and makes periodic reports to the FDA on the
clinical status of those patients when necessary to protect the
public health or to provide additional safety and effectiveness
data for the device. Our diagnostic assays for HCV and
tuberculosis are examples of successful PMA applications.
When FDA approval of a clinical diagnostic device requires human
clinical trials, and if the device presents a “significant
risk” (as defined by the FDA) to human health, the device
sponsor is required to file an investigational device exemption,
or IDE, application with the FDA and obtain IDE approval prior
to commencing the human clinical trial. If the device is
considered a “non-significant” risk, IDE submission to
FDA is not required. Instead, only approval from the
Institutional Review Board overseeing the clinical trial is
required.
Clinical trials must be conducted in accordance with Good
Clinical Practice under protocols generally submitted to the
FDA. Our clinical department has comprehensive experience with
clinical trials of NAT products.
After the FDA permits a device to enter commercial distribution,
numerous regulatory requirements apply. In addition to potential
product specific post-approval requirements, all devices are
subject to:
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Failure to comply with the applicable United States medical
device regulatory requirements could result in, among other
things, warning letters, fines, injunctions, civil penalties,
repairs, replacements, refunds, recalls or seizures of products,
total or partial suspension of production, the FDA’s
refusal to grant future premarket clearances or approvals,
withdrawals or suspensions of current product applications,
suspension of export certificates and criminal prosecution.
Our blood screening products also are subject to extensive pre-
and post-market regulation as biologics by the FDA, including
regulations that govern the testing, manufacturing, safety,
efficacy, labeling, storage, record keeping, advertising, and
promotion of the products under the FFDCA and the Public Health
Services Act, and by comparable agencies in most foreign
countries. The process required by the FDA before a biologic may
be marketed in the United States generally involves the
following:
The FDA requires approval of a BLA before a licensed biologic
may be legally marketed in the United States. Product approvals
may be withdrawn or suspended if compliance with regulatory
standards is not maintained or if problems occur following
initial marketing. With respect to patented products or
technologies, delays imposed by the governmental approval
process may materially reduce the period during which we will
have exclusive rights to exploit them.
The results of product development and human studies are
submitted to the FDA as part of each BLA. The BLA also must
contain extensive manufacturing information. The FDA may approve
or disapprove a BLA if applicable FDA regulatory criteria are
not satisfied or it may require additional clinical data. If
approved, the FDA may withdraw a product approval if compliance
with post-market regulatory standards is not maintained or if
problems occur after the product reaches the marketplace. In
addition, the FDA may require post-marketing studies to monitor
the effect of approved products, and may limit further marketing
of the product based on the results of these post-market
studies. The FDA has broad post-market regulatory and
enforcement powers.
Satisfaction of FDA pre-market approval requirements for
biologics can take several years and the actual time required
may vary substantially based upon the type, complexity and
novelty of the product or disease. In general, government
regulation may delay or prevent marketing of potential products
for a considerable period of time and impose costly procedures
upon our activities. Success in early stage clinical trials does
not assure success in later stage clinical trials. Data obtained
from clinical activities is not always conclusive and may be
susceptible to varying interpretations that could delay, limit
or prevent regulatory approval. Even if a product receives
regulatory approval, later discovery of previously unknown
problems with a product may result in restrictions on the
product or even complete withdrawal of the product from the
market.
With respect to post-market product advertising and promotion,
the FDA imposes a number of complex regulations on entities that
advertise and promote biologics, which include, among others,
standards and regulations for
direct-to-consumer
advertising, off-label promotion, industry sponsored scientific
and educational activities, and promotional activities involving
the Internet. The FDA has broad enforcement authority under the
FFDCA, and failure to abide by applicable FDA regulations can
result in penalties including the issuance of a warning letter
directing the entity to correct deviations from FDA standards, a
requirement that future advertising and promotional materials be
pre-cleared by the FDA, and state and federal civil and criminal
investigations and prosecutions.
We and our contract medical product manufacturers are subject to
periodic inspection by the FDA and other authorities where
applicable, and are required to comply with the applicable FDA
current Good Manufacturing
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Practice regulations. Good Manufacturing Practice regulations
include requirements relating to quality control and quality
assurance, as well as the corresponding maintenance of records
and documentation, and provide for manufacturing facilities to
be inspected by the FDA. Manufacturers of biologics also must
comply with the FDA’s general biological product
regulations. These regulations often include lot release testing
by the FDA.
Outside the United States, our ability to market our products is
contingent upon maintaining our International Standards
Organization (ISO) certification, and in some cases receiving
specific marketing authorization from the appropriate foreign
regulatory authorities. The requirements governing the conduct
of clinical trials, marketing authorization, pricing and
reimbursement vary widely from country to country. Our EU
product registrations cover all member states. Foreign
registration is an ongoing process as we register additional
products
and/or
product modifications.
We are also subject to various state and local laws and
regulations in the United States relating to laboratory
practices and the protection of the environment. In each of
these areas, as above, regulatory agencies have broad regulatory
and enforcement powers, including the ability to levy fines and
civil and criminal penalties, suspend or delay issuance of
approvals, seize or recall products, and withdraw approvals, any
one or more of which could have a material adverse effect upon
us. In addition, in the course of our business, we handle, store
and dispose of chemicals. The environmental laws and regulations
applicable to our operations include provisions that regulate
the discharge of materials in the environment. Usually these
environmental laws and regulations impose “strict
liability,” rendering a person liable without regard to
negligence or fault on the part of, or conditions caused by,
others. We have not been required to expend material amounts in
connection with our efforts to comply with environmental
requirements. Because the requirements imposed by these laws and
regulations frequently change, we are unable to predict the cost
of compliance with these requirements in the future, or the
effect of these laws on our capital expenditures, results of
operations or competitive positions.
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