Cytori Therapeutics, Inc. v. Food

• Decision Date: 22 March 2013
• Docket Number: 11–1279.,Nos. 11–1268,s. 11–1268
• Citation: 715 F.3d 922
• Court: U.S. Court of Appeals — District of Columbia Circuit
• Parties: CYTORI THERAPEUTICS, INC., Petitioner v. FOOD & DRUG ADMINISTRATION, Respondent.

715 F.3d 922

CYTORI THERAPEUTICS, INC., Petitioner

v.FOOD & DRUG ADMINISTRATION, Respondent.

Nos. 11–1268, 11–1279.

United States Court of Appeals, District of Columbia Circuit.

Argued Sept. 21, 2012.

Decided March 22, 2013.

On Petitions for Review of Orders of the Food & Drug Administration.

Andrew S. Ittleman argued the cause for petitioner. With him on the briefs was Mitchell Fuerst.

Adam C. Jed, Attorney, U.S. Department of Justice, argued the cause for respondent. With him on the brief were Stuart F. Delery, Acting Assistant Attorney General, and Scott R. McIntosh, Attorney. Douglas N. Letter, Attorney, entered an appearance.

Before: BROWN and KAVANAUGH, Circuit Judges, and SENTELLE, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge KAVANAUGH.

KAVANAUGH, Circuit Judge:

In Administrative Procedure Act cases alleging arbitrary and capricious agency action, courts must be careful not to unduly second-guess an agency's scientific judgments. That basic principle of administrative law controls this case.

The Food and Drug Administration must approve certain medical devices before they are marketed. Here, Cytori Therapeutics applied to FDA to market two new medical devices, the Celution 700 and the StemSource 900. Those two devices use adipose tissue—that is, fat—as a source of stem cells that could later be used in lab analysis or, potentially, in regenerative medicine. The most similar devices on the market extract stem cells from blood or bone marrow.

Federal law establishes two basic paths for FDA approval of new medical devices. One is the “premarket approval” process. See21 U.S.C. § 360e. That process generally requires extensive clinical research on a new device to ensure the device's safety, and it often takes significant time. The other is the streamlined “premarket notification” process, which simply requires that the new device be “substantially equivalent” to another device already on the market. See21 U.S.C. §§ 360(k), 360c(i).

Here, FDA concluded that the Celution and the StemSource were not substantially equivalent to any device already on the market. The FDA reasoned, in essence, that using fat rather than blood as a source of cells made those new devices different from existing devices. Therefore, FDA ruled that Cytori must go through the extensive premarket approval process.

Cytori argues that FDA's decision was arbitrary and capricious under the Administrative Procedure Act. Cytori contends in particular that FDA acted unreasonably in rejecting Cytori's substantial equivalence application and that, in any event, FDA did not reasonably explain its decision. In response, FDA first raises a jurisdictional argument: that Cytori must file its petition in the district court rather than in this Court. On the merits, FDA argues that it reasonably determined and explained that the Celution and the StemSource were not substantially equivalent to any device already on the market, meaning that Cytori must go through the more extensive premarket approval process.

On the threshold jurisdictional issue, we conclude that this Court is the proper forum for direct review of FDA's substantial equivalence determination. On the merits, we conclude that FDA's determination was reasonable and reasonably explained for purposes of the Administrative Procedure Act. We therefore deny the petitions for review.

I

Cytori Therapeutics manufactures medical devices, including devices for use in cell therapy and other forms of regenerative medicine. In a typical cell therapy treatment, doctors introduce stem cells ¹ or other regenerative cells into the patient's body to treat a disease. The cells may come from the patient or from a donor. For example, there are several devices on the market that draw and concentrate blood or bone marrow in order to treat leukemia and blood-borne diseases, among other things. The healthy donor cells are used to replace the diseased or damaged cells and regenerate new tissue.

Cytori is anticipating a major breakthrough in regenerative medicine: the expanded use of adipose tissue—that is, fat—as a source of stem cells for therapy and other medical uses. Cytori recently developed technology to harvest and concentrate stem and regenerative cells from fat via its Celution system. The Celution and the StemSource are two versions of this broader Celution system.

But before a new medical device such as the Celution or StemSource may be marketed in the United States, the manufacturer must obtain approval from FDA. In many cases, premarket clearance is obtained by submitting a “premarket notification.” The premarket notification process requires that FDA find the new device “substantially equivalent” to a device that is currently on the market. See21 U.S.C. § 360c(i). Once FDA makes that finding, the device may be marketed.

Some devices—in recent years, a low percentage of all devices marketed in the United States—are not “substantially equivalent” to existing devices and must go through FDA's more extensive “premarket approval” process. Premarket approval entails scientific review of a device and often requires clinical studies.

Cytori recently submitted premarket notifications for two of its cell-harvesting devices. Although the notifications both referred to virtually identical physical devices, each notification corresponded to a different marketing version of the device that would be sold for different medical purposes. One version of the device, labeled as the Celution 700, is intended to harvest and prepare stem cells for clinical laboratory analysis. The other, labeled as the StemSource 900, is also intended to harvest stem cells but for storage, so they can be used or analyzed in the future, potentially for therapeutic purposes. Neither version of the device is expressly intended for a specific cell therapy treatment, at least not yet.

In general, federal law requires a new device to meet two criteria to be considered “substantially equivalent” to a previously marketed device. First, the new device must have the same intended use as the predicate device. Second, the new device must use the same basic technology as the predicate device—or, if not, the materials submitted must establish that the devices are equally safe and effective, and the technological differences must not raise any different questions of safety and effectiveness.

In its premarket notifications, Cytori claimed that the Celution and StemSource were substantially equivalent to currently marketed devices, including devices that harvest cells from blood and bone marrow. FDA's basic response was simple: Fat is not blood. And a device meant to derive cells from fat does not have the same intended use as a device meant to derive cells from blood. FDA also determined (as an alternative basis for the “not substantially equivalent” finding) that the devices had different technological characteristics or posed different safety concerns. In particular, FDA highlighted risks posed by an enzyme that the Celution and the StemSource use to separate the useful cells from other tissue. FDA stated that this enzyme posed new safety questions based on its effect on the harvested cells. ² Moreover, FDA said that the testing data for the Celution were based on a study of only 12 donors and thus not sufficient to demonstrate substantial equivalence. Therefore, FDA concluded that Cytori's devices would need to complete the more extensive premarket approval process.

Cytori contests FDA's “not substantially equivalent” determination. Cytori claims that the Celution and the StemSource share an intended use with other predicate devices already on the market: They all process tissue samples and isolate cells. In addition, according to Cytori, the devices share basic technological characteristics. Cytori therefore claims that FDA acted unreasonably in rejecting its premarket notification.

FDA contends that this Court does not have jurisdiction to hear Cytori's petitions and, alternatively, defends its determination on the merits.

II

As a preliminary matter, FDA asserts that this Court lacks jurisdiction to hear Cytori's petitions. In particular, FDA argues that the relevant statutes establish the district court as the proper forum for initial review of Cytori's petitions.

In general, initial review “occurs at the appellate level only when a direct-review statute specifically gives the court of appeals subject-matter jurisdiction to directly review agency action.” Watts v. SEC, 482 F.3d 501, 505 (D.C.Cir.2007). The medical device section of the Food, Drug, and Cosmetic Act contains such a direct-review provision. See21 U.S.C. § 360g. That provision allows “any person adversely affected by” a specified regulation or order to file a petition in the U.S. Court of Appeals for the D.C. Circuit. 21 U.S.C. § 360g(a). The specified orders in Section 360g include “an order pursuant to section 360c(i) of this title”—that is, an order determining whether a new device is substantially equivalent to an existing device. 21 U.S.C. § 360g(a)(8).

This Court may therefore review an “order” that is made “pursuant to section 360c(i)” of Title 21. We thus must decide (i) whether a “not substantially equivalent” determination is an “order” for purposes of the Act's direct-review provision; and, if so, (ii) whether such an order is “pursuant to” Section 360c(i).

First, a “not substantially equivalent” determination is plainly an “order” for purposes of the direct-review provision. Because the Food, Drug, and Cosmetic Act does not define an “order,” we look to the Administrative Procedure Act's definition. See Watts, 482 F.3d at 505. The APA provides that an “order” is “the whole or a part of a final disposition, whether affirmative, negative, injunctive, or declaratory in form.” 5 U.S.C. § 551(6) (emphasis added).

In this case, FDA's decision was the “final disposition” of the issue. FDA's letter to Cytori stated that, after consideration, FDA...