FDCA Framework: Physician Office Use as “Held for Sale”
The FDCA aims to protect patients by prohibiting adulteration or misbranding of medical products held for sale after shipment in interstate commerce.¹ Courts consistently interpret “held for sale” to include medical products physicians use to treat paying patients, even without explicit charges for the products themselves.²³⁴ Thus, a physician’s use of drugs or devices is deemed commercial distribution under federal law, subjecting practices to FDCA regulation.⁵
For instance, the Fifth Circuit in United States v. Evers affirmed that physicians using drugs in their practice fall within FDCA’s commercial distribution chain.² Similarly, the Second Circuit in United States v. Diapulse Corp. recognized physician-used devices as “held for sale.”³ Courts consistently reject exemptions for medical practice, emphasizing Congress’s intent to regulate products until they reach the ultimate patient-consumer.⁶⁷⁸
Implications of “Sale” in Medical Context
Although physicians typically charge for services rather than individual products, courts view treatment payments as inherently commercial. If a medical practice operates for profit, the products used in treatment are legally considered part of a commercial transaction.⁹¹⁰ The Ninth Circuit underscored this in United States v. Kaplan, highlighting the economic relationship wherein patients indirectly pay for products used during medical procedures.¹¹ Physicians must recognize that using products in paid treatment inherently qualifies as “held for sale” under the FDCA.
Device Reuse and Sanitary Conditions
Physicians risk FDCA violations if device reuse compromises sanitation. The Act deems devices adulterated if held under unsanitary conditions potentially harmful to patients.¹² Reusing single-use disposable devices is particularly risky. Such devices are often unsuitable for sterilization and can harbor harmful contaminants upon reuse.¹³ Even reusable devices must strictly follow sterilization protocols; failure to do so could render them adulterated.
FDA’s Quality System Regulations (21 C.F.R. Part 820) mandate strict adherence to device cleaning and sterilization instructions. Physicians deviating from these guidelines may inadvertently engage in unauthorized device manufacturing, triggering FDCA liability.
Case Study: United States v. Kaplan
Dr. Michael Kaplan, a Las Vegas urologist, faced FDCA charges after reusing disposable biopsy needle guides labeled for single use. Kaplan instructed his staff to clean and reuse these plastic guides, potentially contaminating them with blood, tissue, and bacteria.¹¹ Kaplan argued he never sold these devices directly; however, the Ninth Circuit rejected this defense, affirming that use in paid medical treatment constituted a commercial transaction under FDCA.¹¹ Kaplan’s conviction emphasized that physician practices engaging in device reuse under unsanitary conditions commit federal crimes, not mere malpractice.¹¹
The court also rejected common defenses like “off-label use” and “practice of medicine,” clarifying that neither defense protects adulteration or misbranding.¹¹¹⁴ The ruling reinforced FDA’s authority to regulate product safety, irrespective of clinical discretion in patient treatment.¹⁴
Compliance Takeaways for Physicians
Given these developments, physician offices must integrate FDA regulations into compliance programs:
- Adhere to Label Instructions: Never reuse devices labeled “single-use.” Strictly follow sanitation guidelines for reusable instruments.
- Implement Robust Sanitation Protocols: Regularly train staff on FDA-compliant cleaning and sterilization processes.
- Avoid Unauthorized Modifications: Altering devices beyond approved instructions risks significant liability.
- Drug Compliance: Properly store and handle medications to avoid adulteration or misbranding.
- Staff Education and Documentation: Ensure comprehensive training and maintain detailed records demonstrating compliance.
- Seek Legal Guidance: Consult compliance experts for novel or unclear practices involving regulated products.
Conclusion
The “held for sale” interpretation under the FDCA significantly broadens physicians’ regulatory responsibilities. Improper reuse, adulteration, or misbranding of drugs and devices exposes physicians to severe federal penalties. Practices must proactively embrace FDA compliance to protect patient safety and mitigate legal risks. As United States v. Kaplan illustrates, adherence to FDA regulations is crucial not merely for compliance but fundamentally for safe medical practice.
The team at Safe Harbor Group has assisted healthcare professionals across the country develop compliant practices. If you are a healthcare professional in need of a partner to help guide you through complex guidelines and regulation, or a healthcare attorney looking for compliance experts to help in your case defense, contact Safe Harbor Group.
