FDA Issues Warning to Over 30 Fertility Centers In Last Five Years

What the FDA has been looking for in their audits

This News Digest Is Paid Sponsored Content From
THE FDA CONSULTANTS, LLC

BY: ERIN FLYNN JAY

Last year, the FDA issued a warning letter to a New York City fertility center after an FDA investigator documented significant deviations for human cells, tissues, and cellular and tissue-based products. In 2020, the FDA issued a warning letter to a California IVF fertility center after an FDA investigator found the same issue.

In 2019, the FDA ordered a San Juan, Puerto Rico clinic and its Medical Director to cease manufacturing immediately due to significant violations of FDA regulations. An FDA inspection revealed violations regarding donor eligibility determinations. According to the FDA, the clinic put patients at risk for exposure to communicable diseases, including HIV and Hepatitis.

How does the FDA audit fertility centers? According to Rijon Charne, Fertility Attorney with Sunray Fertility and Chief Legal Officer with The FDA Consultants, the FDA performs random inspections whenever they want. The inspector arrives without notice to inspect the clinic. “They go straight into your lab, they start pulling files, and they start looking at the specimens to see if any of them violate FDA regulations under the specific code.”

Sunday Crider, PhD, HCLD/ELD (ABB), Chief Scientific Officer with The FDA Consultants, said when the FDA finds an offense during a laboratory inspection, they generate a “Form 483”, which is an official documentation of deficiencies .. “The FDA will review areas of concern with the responsible person at the clinic in a debriefing session post-inspection.  The official Form 483 is then sent to the clinic within a few weeks. The laboratory will generally have 30 days to respond to the FDA on how they are going to address those deficiencies.”

Once a clinic registers with the FDA, they are subjected to routine, unannounced inspections at the Agency’s discretion. However, Crider said if serious issues are found on any laboratory inspection,, the FDA may come and inspect more frequently..  Inspection records are retained by the FDA for every registered facility.  Inspections are generally on a two year rotation and almost always unannounced.  FDA inspections are nerve-racking for clinics because of the repercussions if the FDA finds something. Charne spoke of issues of donor eligibility, one of the most common deficiencies the FDA discovers. There are specific labeling requirements for donors that might have HIV or a sexually transmitted infection (STI). Regarding donor oocytes, “those eggs have to be specifically labeled and they need to be put in a separate freezer so that there is no chance of possible cross-contamination with other eggs or other specimens that are being held in the lab.”

If the FDA finds there are egregious issues with donor screening, testing, labeling or storage  during an inspection, they issue a public warning and post it to the FDA website. The clinic then needs to address the issue with a written plan, to be approved by the FDA. Charne said the FDA will return and either pass the lab’s inspection or shut them down.

“The worst part of it all is that the warning to the clinic becomes public,” added Charne. “The notice is put out in an FDA Warning Letter and the clinic goes on the FDA warning list. Any patient (current or potential) of the IVF clinic can see the warning letter on the FDA website. As the fertility space is such a small community and reputation is everything, when people talk, it looks very bad for the clinic.”

FDA violations and warnings can be especially harmful during mergers or acquisitions, especially for private equity firms or Management Services Organizations (MSO) that may want to sell a fertility clinic in the future. An FDA violation could affect the price valuation of the entity and create pause for an insurance company to underwrite a policy for the clinic.

“An FDA violation or warning will raise questions and concerns,” said Charne. “That is why private equity companies and law firms assisting in fertility acquisitions bring on people like the FDA Consultants to do a neutral third party inspection before getting caught in are a unknown FDA violation. The worst issue that could occur is the FDA shutting you down.”

Crider said that while the FDA is only concerned about donor issues, a warning or violation from the FDA tarnishes the reputation of the entire clinic. “You don't want it made public that you do not have good patient care and are okay putting a patient at risk,” she said.

The FDA requires clinics to maintain donor records for at least 10 years.   This is to ensure traceability of donor records, such as communicable disease testing.  For instance, Crider stated, if the recipient of donor eggs or sperm contracted HIV at some point in their life after receiving the donor tissue, it would be important to have records on file to show that the source likely did not come from their anonymous donor, as they are thoroughly screened and tested as a part of becoming an eligible donor.     Proper documentation that the donor was thoroughly screened and tested would become critical should any patient care or legal issues arise. 

Bottom line: every IVF laboratory that processes, screens, stores, tests or distributes any type of donor tissue--be it egg, sperm, or embryo--must register with the FDA and follow the Federal Code 21 CFR Part 1271, guidelines they have set forth. If not, prepare for that FDA violation.

This News Digest Story is paid featured sponsor content, where the Advertiser has editorial control. They do not reflect the views of Inside Reproductive Health.

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These 5 Deficiencies Lead to FDA Nightmare

HCLD IVF lab director comes together with reproductive health attorney  to make checklist of what she wishes she had known about what the FDA is looking for in the IVF lab. 

Download their free FDA checklist for the five most common IVF lab deficiencies before the FDA audits you.

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FTC to Fine Easy Healthcare $100K For Data Breaches Connected to Premom App

Justice Dept., Connecticut, Oregon and D.C. Attorneys General Also Take Action

By: RON SHINKMAN

The U.S. Federal Trade Commission (FTC) on May 17 proposed fining the maker of the Premom smartphone app $100,000. It is also working with the U.S. Department of Justice to obtain curbs on how it manages the highly sensitive information provided by users. Attorneys specializing in healthcare and privacy law say other reproductive health companies may soon find themselves the target of similar actions.

Premom, which was created by the Chicago-area firm Easy Healthcare, helps users get pregnant by charting their ovulation cycles. Pregnant users can also use the app to chart their pregnancies. It has been downloaded more than 1 million times by Android users, and has been reviewed more than 19,000 times by iPhone and iPad users.

The FTC also said that data gathered by the Premom app was illegally shared with third parties, among them two Chinese companies. According to a complaint the Justice Department filed against Easy Healthcare in federal court in Illinois on May 17, the companies are Umeng, a mobile app analytics firm owned by the e-commerce firm Alibaba, and Jiguang, a mobile development and data analytics company that goes by the name Aurora Mobile Ltd.

Premom also disclosed sensitive medical data to both Google and a company called AppsFlyer, which engages in data analytics. The Justice Department complaint describes the data that was shared as “identifiable health information,” a term for medical data that can be used to identify a specific individual. Such data includes names, addresses and dates of birth, among others.

Easy Healthcare, the Illinois-based firm that operates Premom, also failed to notify consumers of such disclosures, an alleged violation of the federal Health Breach Notification Rule.

“Premom broke its promises and compromised consumers’ privacy,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, in a statement. “We will vigorously enforce the Health Breach Notification Rule to defend consumer's health data from exploitation.” 

In conjunction with the Justice Department, the FTC has also proposed that Easy Healthcare be barred from sharing users’ personal health data for advertising or marketing purposes, obtain their consent before sharing that data for any other purpose, and must also tell consumers how their personal data is being used. Although a federal judge is required to approve this order, a recent court filing states that Easy Healthcare is not contesting any of the proposed actions.

Michelle Merola, a partner with the New York-based law firm of Hodgson Russ and a former U.S. Assistant Attorney in Washington, D.C., called the FTC/Justice Department action a “shot over the bow to developers and vendors of health apps,” and that similar steps against other app makers will be forthcoming.

Cynthia Khoo, a senior associate at the Center on Privacy and Technology at the Georgetown University school of law, agreed that enforcement is being ratcheted up.

“The FTC has become overwhelmingly cognizant of the harms of not just privacy…but the social, psychological and economic harms of technology companies engaging in these types of privacy practices,” she said.

Andrea Frey, San Francisco-based senior counsel and co-chair of the digital health practice of the law firm Hooper Lundy Bookman, added that regulators have a target-rich environment for enforcement.

“My guess is that there are certainly a lot of companies (that are) intentionally or unintentionally, gathering information through tracking technologies that are potentially in violation of FTC or HIPAA rules,” she said.

Khoo said that last year’s decision by the U.S. Supreme Court to strike down Roe v. Wade has made the feds and some state attorneys general particularly sensitive to the legal risks posed by not protecting personal information regarding the ovulation and pregnancy cycles of individual women. That has been further compounded by the growth of healthcare apps in recent years and gaps in the Health Insurance Portability and Accountability Act (HIPAA) that do not completely cover businesses that work with consumers but not with healthcare providers.

Khoo noted that the federal health breach notification rule – which requires companies managing breaches of healthcare information impacting 500 or more individuals report the incident to the general public – has been on the books for 14 years. However, it has only been used twice to punish violators – both times in 2023.

“This suggests to me that they are willing to use it again going forward,” Khoo said. She added that was further reinforced by the FTC recently introducing new guidelines for how businesses collect and manage biometric data.

In addition to the federal fine, Premom’s parent company, Illinois-based Easy Healthcare, has also agreed to pay an additional $100,000 in fines to attorneys general in Connecticut, Oregon and the District of Columbia for state-level violations.

“District residents who used the Premom app were entitled to have their locations and devices kept confidential, but Easy Healthcare shared that private information with third parties without notice or consent, putting users at risk,” said D.C. Attorney General Brian Schwalb in a statement.

In a statement issued in mid-May, Easy Healthcare said “our agreement with the FTC is not an admission of any wrongdoing. Rather, it is a settlement to avoid the time and expense of litigation and enables us to put this matter behind us and focus on you, our users. Rest assured that we do not, and will not, ever sell any information about users’ health to third parties, nor do we share it for advertising purposes.” Easy Healthcare’s statement ended with a pitch for a new line of supplements for those trying to conceive and an upcoming line of prenatal vitamins; a segue Merola and Khoo said was extremely odd for a company responding to a federal regulatory action.

“Odds are that the FTC takes issue with Easy Healthcare’s response and that it is removed from the website before the settlement is finalized,” Merola said.

An Easy Healthcare spokesperson would only refer back to the posted statement when asked to comment about the specifics of the settlement and the product pitches.

The themes reported in this publication are those of the news. They do not reflect the views of Inside Reproductive Health.

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Chart Inc reserves >$300 million to settle suits from 2018 PFC Tank Failure, sues insurance provider, contractor

The Latest: More Than 550 Legal Actions from 2018 Pacific Fertility Tank Failure

By: RON SHINKMAN

March 4, 2018 was a day that shook U.S. reproductive medicine in a way few others have.

That Sunday, a seal in a cryogenic tank at the Pacific Fertility Center in San Francisco failed. That caused the liquid nitrogen inside to vaporize and the tank’s temperature to rise above the optimal temperature for storing eggs and embryos. Its contents – some 4,000 eggs and embryos belonging to approximately 600 clients – were soon ruined.

The first lawsuit over the failure was filed just nine days after the crack was discovered – and only two days after Pacific Fertility had informed its clients of the issue, court records show. That first suit was filed by a client known only as a female San Francisco resident who is referred to by the initials “S.M.” Virtually all of the subsequent suits were filed by plaintiffs who did not reveal their identities. Pacific and its parent Prelude Fertility were accused of negligence in that first suit for failing to monitor the liquid nitrogen tanks more closely.

That initial legal volley was a mere preview of a flood of litigation in both state and federal court, as well as in private arbitrations – more than 550 cases in total, according to court records. 

The legal battles have also embroiled collateral parties. Chart Industries, the Georgia-based manufacturer of the tank that cracked, was added to the initial lawsuits after they were filed. According to court records, the failed tank was manufactured by a Chart subsidiary company in 2012. Chart’s warranty guaranteed the tank would perform without issue for at least a decade. Altogether, that company is trying to resolve some 217 state and federal lawsuits in total, according to a report the company filed in January with the Securities and Exchange Commission. 

Chart also disclosed to the SEC that it is “in ongoing discussions in an effort to establish a settlement framework for the various lawsuits” and that it would be in place as early as the first quarter of 2023. Chart also said it has set aside $305.6 million to fund settlements, or about $1.4 million per case. However, records indicate that only one case in federal court has been settled. Chart did not respond to a query seeking comment.

Chart also filed suit against Navigators Specialty Insurance Co. in February 2019, claiming it refused to provide a high enough payout to cover some costs for its legal counsel. Chart dropped that suit last March and agreed not to refile it, also suggesting a settlement was reached. 

Law Firms Involved

Chart has been represented by Zenere Cowden and Stoddard of Santa Clara, Calif.; the Chicago law firm Swanson Martin & Bell; and until May 2020, Morgan Lewis & Bockius in Los Angeles. Pacific Fertility has been represented by San Francisco-based law firm Morrison & Foerster and another Northern California firm, Galloway, Lucchese, Everson & Picchi, court records show. 

More than four-dozen plaintiffs in the state lawsuits are represented by Lieff Cabraser Heimann & Bernstein in San Francisco. Another San Francisco firm, Walkup, Melodia, Kelly & Schoenberger, represents 33 state case plaintiffs. Five other firms represent between two and four plaintiffs apiece.

Among the federal cases, where multiple law firms are often representing a single client, the Gibbs Law Group of Oakland, Calif. is representing 39 plaintiffs, while Girard Sharp of San Francisco is representing 36. Lieff Cabraser is representing eight clients, while New Orleans-based Peiffer Wolf Carr Kane & Conway is representing seven. Two other firms are representing a handful of other plaintiffs. Pennsylvania-based Sauder Schelkopf is representing three plaintiffs, while the Clarkson Law Firm in Malibu is representing a single plaintiff jointly with Gibbs, Girard Sharp and Lieff Cabraser.

Cases Consolidated

The litigation surrounding the tank failure has been so large and complex “due to the sheer size and how many people were affected” by the incident, said Rob Marcereau, an attorney and founder of the Fertility Law Group, a firm in Irvine, Calif. that often represents fertility clients in malpractice suits. And while a large number of the 600 clients were California residents, many were not. That led to litigation in both state and federal court.

Eventually, the number of lawsuits became so voluminous – more than 60 filed in state court alone – that those were mostly consolidated into a single case. The state cases were settled in late 2021 for an undisclosed sum, court records show. Most of the nearly 150 federal suits have yet to be resolved.

Pacific Fertility Benefited From Contract Terms, >340 Cases Arbitrated

Pacific Fertility eventually scored legal victories. Most of its contracts with its clients contained an arbitration clause. In March 2019, it obtained a court ruling forcing most of the state lawsuits into arbitration. The process is intended to work much more swiftly – and less expensively – than a lawsuit. A retired judge usually hears the case, and their rulings are binding and almost always private. Court records indicate that Pacific Fertility has arbitrated more than 340 cases to date.

However, Chart – which did not have direct contracts with the affected clients – could not move its cases to arbitration. Along with the state lawsuits, there have been at least 140 cases filed in federal court against Chart, records show. 

To give breadth and scope to the federal litigation, a case involving just five Pacific Fertility clients contained more than 1,000 docket entries – individual motions and other documents pertinent to the case. Nevertheless, the lawsuit moved fairly quickly for a federal civil case, which can take five years or more to get to trial. In June 2021, a jury awarded the five clients $14.975 million. The jury also decided that Chart and its manufacturing defect was 90% responsible for the damages. Pacific Fertility was found 10% liable.

“This is an important and emotional ending for our clients who have been through so much pain and hardship since the 2018 tank failure,” said Amy Zeman, a partner with the Gibbs Law Group, after the verdict was delivered.

It didn’t end there, however. Chart and Pacific appealed the verdict. Nearly two years into the appellate process and just days before oral arguments were scheduled in front of the U.S. Ninth Circuit Court of Appeals, the plaintiffs agreed to settle the case last March for an undisclosed sum, the Washington Post reported. The Gibbs attorney who handles media inquiries on the case did not respond to a request seeking comment.

Chart Inc Files Suits of Its Own Against Associates

The episode also embroiled Chart in litigation with its insurers. It was sued in June 2022 by its primary liability insurer, Starr Indemnity & Liability. The carrier asked the court to declare that Chart’s claim for excess liability insurance payouts of up to $231.9 million should not be honored. Chart quickly countersued Starr, accusing it of engaging in a “classic insurance company preemptive strike” to try and get out of paying a claim.  Starr and Chart dismissed their lawsuits in March and April, respectively, suggesting a settlement was reached. 

And even as Chart is moving to settle all the lawsuits against it, it is also suing other parties it believes contributed to the tank failure.

Chart filed a lawsuit in federal court in Ohio against electronics manufacturer Extron, accusing it of supplying a faulty control panel that did not provide accurate pressure and temperature levels for the tank, which it claims contributed to its failure. It is seeking reimbursement from Extron for all liability payments it must make connected to the tank failure.

Whether Chart will prevail in that case remains to be seen. In the 2021 federal trial, the jury found that Chart was aware of potential defects in the tank’s electronics but took no steps to repair or recall them. 

An Extron executive did not respond to a request seeking comment.

Litigators Call For More Regulation

Despite all the ramifications from this single tank failure, the incident did not lead to tighter regulations for egg and embryo storage at either the state or federal levels, according to Marcereau.

“There should be basic, uniform requirements in place for cryogenic storage of embryos or eggs, but sadly there aren’t,” he said. “Until state or federal laws mandate it, many fertility clinics will continue to cut corners – even in the wake of this litigation.”

The themes reported in this publication are those of the news. They do not reflect the views of Inside Reproductive Health, nor of the Advertiser

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External links are being provided as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by Fertility Bridge or Inside Reproductive Health of any of the products, services or opinions of the corporation or organization or individual. Neither Fertility Bridge nor Inside Reproductive Health bears responsibility for the accuracy, legality or content of the external site or for that of subsequent links. Contact the external site for answers to questions regarding its content.

Investigation: Progyny Aim of 'Wall Street Suing Machine' After Anonymous Firm Alleges Deceptive Accounting in Competitor-Informed Short Report

This News Digest Brought to You by
BUNDL

BY ERIN FLYNN JAY
 
Rosen Law Firm, The Schall Law Firm, and two other national shareholder rights litigation firms, each announced an investigation of potential securities claims on behalf of shareholders of Progyny, Inc., the largest fertility employer benefit company (NASDAQ: PGNY). 
 
The litigators cite a competitor-informed report by unknown authors that alleges that Progyny “is deceiving the investor community via its financial reporting practices”.
 
On December 7, 2022, Jehoshaphat Research published a short report addressing Progyny, entitled “A Love Child of Accounting Games & Credit Risk. The Jehoshaphat Report alleges that Progyny “is deceiving the investor community via its financial reporting practices” and that Progyny “is actually unprofitable but masks this problem with accounting games.” Among other items, the report alleges that Progyny recently stopped accruing allowances for customer cancellations.
 
According to the report, an employee of KindBody, a competitor of Progyny, talked to the Jehosaphat Research Group. We asked KindBody to comment on who that was and what their relationship with Jehosaphat is. Gina Bartasi, Chair, replied in an email: “We do not know who spoke with Jehosaphat. We won't be weighing in on this report.”

Six investment banks, including KeyBanc Capital and JP Morgan Securities provide analysis on Progyny. None of them have issued short reports on the company.

Rosen Law, Schall Law, and the two other law firms are investigating claims on behalf of investors of Progyny, Inc. (NASDAQ: PGNY) for violations of securities laws. The Rosen Law Firm is preparing a class action seeking recovery of investor losses. Rosen has ranked in the top four of securities class action firms nationwide each year since 2013 by ISS Securities Class Action Services. This ranking is based on the volume of settlements.  
David Sable, a former practicing fertility specialist who now manages a life sciences fund, said “occasionally these types of lawsuits are substantive and unearth malfeasance. Often, they are reverse-pump and dump schemes that cause brief movements in the stock if the firm (already having sold the stock short) can cover the short sale and make a profit.
“There is a well-oiled suing machine on Wall Street that responds to sudden stock drops by filing class action suits — they race to the courthouse to be first to file. The outcomes rarely benefit the shareholders; company boards sometimes pay a ‘settlement’ to make the nuisance suits go away,” he added. 
When reached by phone, Laurence Rosen of Rosen Law Firm said he does not comment on litigation. 

Jehoshaphat Research is operating anonymously, according to their website. 

Neither Progyny nor Jehoshaphat Research responded to requests for comment. 

The themes reported in this publication are those of of the news. They do not reflect the views of Inside Reproductive Health, nor of the Advertiser

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External links are being provided as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by Fertility Bridge or Inside Reproductive Health of any of the products, services or opinions of the corporation or organization or individual. Neither Fertility Bridge nor Inside Reproductive Health bears responsibility for the accuracy, legality or content of the external site or for that of subsequent links. Contact the external site for answers to questions regarding its content.