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Healio
Issue: February 15, 2001
February 15, 2001
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LaserVision settles FDA complaint about ‘Bermuda cards’

The complaint stemmed from an inquiry by the FDA-CDRH into LaserVision’s use of “international cards” from 1996 through early 1998.

Issue: February 15, 2001

WASHINGTON — A case that stretches back to the infancy of the laser vision correction market finally came to an end in January when LaserVision Centers, of St. Louis, Mo., reached a settlement with the Food and Drug Administration’s Center for Devices and Radiological Health regarding an administrative complaint filed in April 2000.

The complaint stemmed from an inquiry by the FDA-CDRH into LaserVision’s use of “international cards” from 1996 through early 1998. The international cards were key cards that allowed excimer lasers users — in this case the LaserVision chain of laser centers, which used Visx lasers exclusively at the time — to go beyond the FDA’s regulatory limit at that time of no more than –6 D of myopia correction. The cards were sent to Bermuda, re-coded to allow the excimer laser to ablate to its full potential, and then distributed to LaserVision’s laser centers.

The FDA eventually approved excimer lasers for use with higher myopia cases in January 1998.

Fined but no wrongdoing

The settlement of the case with the FDA will cost LaserVision $1.5 million. The company will pay $1 million, and four of the company’s officers must pay the rest. The company officers forced to pay the fine are CEO Jack Klobnak, vice-chairman and general counsel Robert May, president and COO Jim Wachtman and vice-president of operations Rikki Bradley.

LaserVision noted, however, that the settlement contained no finding of any wrongdoing on the part of the company or its executives.

Company spokesperson John Stiles explained that the company felt singled out by the FDA lawsuit, which originally asked for a $5 million fine. He said it is generally acknowledged that use of excimers beyond their regulated limit was widespread before the FDA lifted the restriction in 1998.

In a press release, LaserVision said many ophthalmologists have taken the position that FDA restrictions on physicians’ use of laser equipment through software control — rather than the traditional means of labeling — deny physicians the flexibility to treat individual patients as the physician deems medically necessary, and represent an unwarranted intrusion upon the physicians’ rights to practice medicine according to their best medical judgment.

LaserVision said it provided the software only at the request of operating surgeons who determined the higher treatments were appropriate in consultation with their patients.

Gone too far?

The company also stated in its press release that “in bringing the proceedings, FDA acted in a manner inconsistent with its stated guidelines which provide for the agency to issue warning letters to alert individuals that a practice may not be in accordance with FDA’s standards. Given the lack of customary warnings, the fact that other laser operators (who were) engaged in the same practice were not the subject of FDA enforcement and other mitigating circumstances, the company believes its defenses to the proceedings had substantial merit.”

The press release stated that the company felt it had a good case, but that it was not worth the time and expense of pursuing the initial administrative civil trial, and that a possible appeal could have been more than the cost of the settlement and would have been a significant distraction to management. In view of these issues, the release said, the board of directors concluded that it was in the best interests of the company and its shareholders to resolve the matter through settlement.

A disappointed Mr. May said, “No one should have been persecuted. After the fact, (the FDA) opened the cards up after all this happened. But technically, (the lawsuit was) what they were entitled to do.”

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