The Food & Drug Administration is once again making noises about Steris Corp.’s (NYSE:STE) System 1 processor, warning endoscope manufacturers that they must change any labeling indicating that their devices can be reprocessed using the popular sterilizing device.
The Steris System 1 processor is typically used in surgical and endoscope suites for sterilizing and disinfecting medical devices.
In a letter dated Feb. 22, the FDA warned all endoscope makers that they must change the labeling on any devices that state they can be reprocessed using the Steris system and even suggested they add language indicating that “The STERIS System 1 (SS1) is not a legally marketed device.”
“If your devices are labeled for use with the SS1, you should revise your labeling to correct these violations as soon as possible by removing all statements indicating that your devices may be reprocessed with the SS1 and by specifying only legally-marketed reprocessing devices. FDA anticipates that you should be able to do this within one year,” according to the letter.
In December 2009, the Center for Devices and Radiological Health told hospital administrators across the country to stop using the system within six months, after the federal watchdog agency could not verify its safety. The agency later extended the period to 18 months earlier this month.
The unusual action follows more than 18 months of legal wrangling with Mentor, Ohio-based Steris, ending in the de-facto recall of a product that hasn’t been linked to any cases of infection or injury.
The CDRH issued a stakeholders letter to hospital administrators Dec. 4, 2009, about the processor. The agency said Steris made significant modifications to the SS1 device over a 14-year period without seeking additional 510(k) clearances, in violation of the original 1989 indication for the device. It’s primarily used to sterilize endoscopes between procedures, replacing the more time-intensive practice of soaking instruments in toxic chemicals such as glutaraldehyde.
In May 2008 the FDA issued a warning letter to Steris saying the modifications could significantly impact the safety or effectiveness of the device. After several meetings, Steris agreed to work with customers to help them transition to “legally-marketed alternatives.”
In January, Steris sent a letter to customers informing them that the FDA was requiring the company to file another 510(k) covering the modifications, saying it would discontinue sales of the product but continue to service models it had already sold. The company denied the FDA’s claims that modifications made on the machine from 1988 to 2002 required further regulatory action.
But the FDA said Steris continued to assure customers the units were safe and continued to sell new units, prompting the agency to act more aggressively and actively advise hospitals to switch to competing devices. That’s a potentially huge boon for competitors like Advanced Sterilization Products, the Johnson & Johnson (NYSE:JNJ) division that makes the Sterrad sterilization system.
For its part, Steris defended the SS1, writing in a Dec. 7, 2009, response to customers that the “System 1 processor has been safely used for more than 300 million cycles over more than 20 years.”
The dust-up hasn’t been too much of a drag on Steris’s bottom line thus far. The company reported higher operating profits and a modest increase in revenues for its fiscal third quarter earlier this month.
However, CEO Walt Rosebrough said in prepared remarks that the company can’t be sure how the donnybrook with the FDA will affect future results.
“While we are pleased with our performance this quarter, we have so far been unable to resolve our System 1 510(k) issue with the FDA. As a result, although our operating performance excluding System 1 continues to be strong, given the forecast uncertainty with System 1, we are not providing guidance for the full fiscal year 2010 at this time,” Rosebrough said. “We have been in nearly daily communication with the FDA to develop a plan to assist healthcare facilities with their transition to acceptable alternatives. As soon as we have a definitive plan, we will provide as much clarity as possible to both our customers and shareholders.”
