Food and Drug AdministrationSilver Spring, MD 20903

March 26, 2009

Mr. Scott A. VantreaseDirector, Special Investigations unitDHHS/OIG/OI/SIUWilbur J. Cohen Building330 Independence Avenue, SWRoom #5409Washington, DC 20201

Dear Director Vantrease:

The purpose of this letter is to refer allegations of misconduct to you for a formalinvestigation. The allegations may relate to the referral I sent you on December 3, 2008,regarding allegations of misconduct by managers at FDA's Center for Devices and RadiologicalHealth (CDRH). As we discussed in January, the allegations against CDRH managementinvolved particular applications. The sponsor for one of those applications, iCAD, Inc., hascontacted FDA to complain about the alleged release of confidential information contained inthat application. We are referring iCAD's allegations to your office for a factual determination ofwhether any laws or any of internal FDA policies have been violated.

On January 13,2009, Les Weinstein, the Ombudsman and Quality Assurance Manager forCDRH, received a phone call from John J. Smith, an attorney for iCAD. Mr. Smith stated thatGardiner Harris, a reporter for the New York Times, had called Ken Ferry, President and ChiefExecutive Officer for iCAD. On that same day, Mr. Smith followed up this phone call with an e­mail to Mr. Weinstein (Attachment #1), which included a copy of a letter signed bythat described the conversation between Mr. Harris and (Attachment #2). Accordingthe letter, Mr. Harris demonstrated detailed knowledge device and statedthat he had received "internal FDA documents" from "Scientific Officers ofthe FDA." Theletter also included copies of articles published in the New York Times and Wall Street Journal,which, according to , further suggest that confidential information has been disclosedoutside of the agency (Attachment #3). On January 16,2009, Mr. Weinstein received anotherletter from Mr. Smith on behalf of (Attachment #4). The letter included documents .purporting to be minutes of the conversation between Mr. Harris and

(b) (4)(b) (4)

(b) (4)

(b) (4)

(b) (4)(b) (4)

Please be advised that we are prepared to assist you in any way that we can in investigatingthe foregoing allegations. Thank you very much for your time and attention to this matte~.

Sincerely,

William A. McConaghaAssistant Commissionerfor Integrity and Accountability

2

US Department of Health & Human Services Office of Inspector General

Referral of Potential Employee Criminal Violations (Non-Conflict of Interest or Ethics)

REFERRING INFORMATION:

Referring Party Name: Referring OPDIV: William A. McConagha FDA/OC Referring Office Name : Office Phone: Office of Accountability and Integrity 301-796-4612

EMPLOYEE/CONTRACTOR INFORMATION:

Subject Full Legal Name: I Position/Title/Series & Grade: Unknown DOB: I OPDIV/STAFFDIV//Branch/Agency: I Social Security Number:

ALLEGATION INFORMATION: (Provide brief narrative)

iCAD, Inc., a sponsor of an application for pre-market approval that was submitted to FDA's Center for Devices and Radiological Health, has complained to the agency that staff within FDA has disclosed confidential information in that application outside of the agency. Please see the enclosed letter and its attachments for additional information. The allegations implicate 21 USC 3310), 18 USC 1905, and 21 CFR part 20. We defer to your experience and expertise with respect to whether there is a violation of any other statutes, regulations, or internal policies.

D Position Description

D Performance Plan & Evaluation

D HHS 520: Request for Approval of Outside Activity

D SF278 I OGE450: Public Financial Disclosure I Confidential Financial Disclosure report

D Copy of OPDIV/STAFFDIV/Branch/Agency/lnstitute policy governing violation(s)

D Copies of prepared reports/memorandums regarding interviews/meetings with the referred employee/contractor.

~ Copies of any electronic mail messages or other correspondence relating to this matter

~ Copy of the incoming allegation

D Copies of certificates or other evidence of all relevant ethics and/or conflict of interest training received by employee/contractor

Any Additional Remarks/Information:

We are forwarding all documentation iCAD has provided the agency in conjunction with their allegations.

Directions:

US Department of Health & Human ServicesOffice of Inspector General

Referral of Potential Employee Criminal Violations(Non-Conflict of Interest or Ethics)

Please complete this form and submit all of the information requested for each personinvolved in the matter that you are forwarding to OIG for review. Only one (1)employee/contractor per form. If there are several possible employees/contractorsinvolved in the matter their names should be noted in the "Any AdditionalRemarks/lnformation" section of each form so that the OIG is aware that there aremUltiple persons involved.

Please submit to: Director, Special Investigations UnitDHHS/OIG/OIISIUWilbur J. Cohen Building330 Independence Avenue, SWRoom # 5409Washington, DC 20201

The Department's General Administrative Manual (5-10-20) requires that allegations of potential criminal conduct by HHSemployees be referred to the OIG. OPDIVS may choose to refer non-criminal violations to the OIG as they deem necessary. Inreferring such non-criminal conflict of interest or ethics matters, this form may also be utilized.

2

(~f-'.«-r, DEPARTMENT OF HEALTH AND HUMAN SERVICES

~~+<~..a(J

December 3, 2008

Mr. Scott A. VantreaseDirector, Special fuvestigations unitDHHS/OIG/OI/SIUWilbur J. Cohen Building330 fudependence Avenue, SWRoom #5409Washington, DC 20201

Dear Director Vantrease:

Food and Drug AdministrationRockville, MD 20857

The purpose of this letter is to refer allegations ofmisconduct to you for a formalinvestigation. On May 30,2008, the Commissioner ofFDA received a letter from a group ofscientific reviewers at FDA's Center for Devices and Radiological Health (CDRH)(enclosed,Tab 1). The letter alleged that managers in CDRH's Radiology Devices Branch (RDB) engagedin misconduct relating to the scientific review of applications for pre-market approval orclearance ofradiological devices. The complaining scientific reviewers (the Branch staffers or .the staffers) have since supplemented the allegations in thdr original letter to include both morespecific details relating to individual applications submitted to RDB and allegations ofreprisal.We are referring all ofthese allegations to your office now because the Office of theCommissioner would like a factual determination ofwhether any laws or any of internal FDApolicies have been violated.

To assist your office in its investigation, we have attempted to summarize the Branchstaffers' allegations below. l Unless otherwise noted, we have taken these allegations from theletters and documents submitted to the Office of the Commissioner or management withinCDRH (Tabs 1, 2, and 4-11). The allegations are organized by type under headings, withspecific reference to the law or regulation alleged to have been violated, as appropriate. If youidentify other potential legal violations or wrongdoing in the materials we are providing for yourreview, we defer to your experience in selecting those that warrant investigation.

1 We have exercised no independent judgment with respect to those allegations' credibility or merit. We havemerely attempted to summarize the allegations submitted to the Office of the Commissioner.

ALLEGATIONS

1. CDRH management ignores scientific and legal deficiencies in approving andclearing devices.

The Branch staffers' central allegation is that CDRH management is approving and dearingmedical devices for market (or advancing them toward approval or clearance) without adequateregard to their safety and effectiveness. Under section 515 of the Federal Food, Drug, andCosmetic Act (FFDCA), certain devices require FDA's approval of a premarket approvalapplication (PMA) before those devices may be marketed to the public (see 21 CFR part 814).Certain other devices require FDA's clearance of a premarket notification under section 51O(k)of the FFDCA (see 21 CFR part 807). To act on both types of submissions, FDA must evaluatethe safety and effectiveness of the subject device.

The Branch staffers maintain that CDRH management has disregarded serious issues bearingonsafety and effectiveness in acting on PMAs and 51 O(k) notifications. The staffers maintainthat, by doing so, CDRH management has violated the FFDCA and its implementing regulations,which require devices to be safe and effective for their intended uses before they are approved orcleared for use by the public. Specifically, the staffers contend that

have overturned the staffers' expert recommendations withrespect to at least four regulatory submissions without any scientific justification. Further, theBranch staffers argue that Dr. Tillman has institutionalized this problem by issuing two separatememoranda, one on May 2, 2008, and the other on October 7, 2008 (Tabs 12 and 13), that directstaffers to evaluate devices for approval or clearance in a manner that is ostensibly consistentwith precedent but that is inconsistent with ensuring that devices are safe and effective becausethe methodologies and approach set forth in them do not account for the uniqueness of either thedevices themselves or the studies submitted to show safety and effectiveness. In addition tothese two memoranda, the Branch staffers provide the following submission-specific examples:

a. In approving PMA supplements submitted by iCAD, Inc.,

b. required staffers to re-evaluate PMA supplementssubmitted by (Tab 1) and . (Tabs 5 and 10), by usingmethodologies inadequate to assess safety and effectiveness;c.

(Tab 10); andd. Without adequate justification,

(Tab 11).

2 The reviewers further contend that overturned their recommendations under pressure from Congress.2

(b) (6)

(b) (6)

(b) (6)

(b) (6)

(b) (6)

(b) (4) (b) (4)

(b) (4)

(b) (6)

(b) (4)

(b) (5)

(b) (5)

(b) (5)

We ask that, in evaluating these allegations, you consider whether there has been a criminalviolation of the FFDCA. You may wish to consult with FDA's Office of the Chief Counsel inmaking that determination.

2. CDRH management fails to follow Center guidance for resolving scientificdisagreements between management and scientific reviewers.

The Branch staffers further allege that CDRH management has not followed establishedprocedures for resolving scientific disagreements between supervisors and reviewers, as requiredby FDA regulations and Center guidance. Under 21CFR 10.70, there must be an administrativefile for any significant decision on an FDA matter, and the file must include documentation ofthe basis for the decision. The administrative file must document recommendations and decisionsof individual employees, including supervisors, and must reveal significant controversies ordifferences of opinion and their resolution (see 21 CFR 10.70(b)). Consistent with 21 CFR10.70, CDRH has issued guidance stating that supervisors "may not order a draft review [of aregulatory submission] to be changed; final responsibility for the content of the review rests withthe reviewer" ("Documentation and Resolution of Differences of Opinion on ProductEvaluations" (G93-1), at p. 3). Moreover, the guidance states that supervisors should documentany disagreement with the scientific reviewer in a memorandum submitted to the administrativefile.

The Branch staffers contend that, when their supervisors have disagreed with draft scientificreviews, the supervisors have in certain instances ordered that those draft reviews be changed bystaff rather than documenting the disagreement themselves through submission of their own"overturn" memorandum to the administrative file. Specifically, for a PMA supplementsubmitted by , allegedly directed the staffers to amend their ownscientific reviews by "provid[ing] supplemental review comments" that were inconsistent withthe staffers' scientific opinion but conformed to management's view of the science (Tab 1,Appendix 5). also required staffers to "revisit" a "not approvable" lettersent to for the purpose of evaluating whether it was consistent with management's viewof the science, and not the staffers' (Tab 10). Finally, as mentioned above, the staffers contendthat Dr. Tillman issued two separate memoranda (Tabs 12 and 13) directing them to applyinappropriate methodologies and standards with which they disagreed when conducting theirscientific reviews ofregulatory submissions.

3. CDRH management does not include required documentation (or includesmisleading information or statements) in the administrative file.

The Branch staffers claim that their supervisors further violate 21 CFR 10.70 by failing toinclude required documentation and materials in the administrative file. To that end, the staffersassert that their managers have failed (a) to document conversations they have with the sponsorsofPMA supplements and 510(k) notifications; (b) to ensure that materials submitted by thesponsor are included in the administrative file through the appropriate channels;.(c) to enSureadequate. and truthful documentation of their consultations with scientists outside the reviewteam; and (d) to include information on which the review team relied in conducting theirreviews. The Branch staffers provide the following submission-specific examples:

3

(b) (4)

(b) (4)

(b) (6)

(b) (6)

a. did not document discussions she had with iCAD about draft labeling for aPMA supplement (Tab 9), and did notdocument discussions they had with about a PMA (Tab 2);

b. did not include in the administrative file all the information on which sherelied in her review ofiCAD's PMA supplement, and permittediCAD to submit draft labeling for a PMA outside of formal application channels (Tab 9);

c. consulted with scientists outside the review team in evaluating a 51O(k)notification submitted by but did not include consultations in theadministrative file or adequately explain those consultations in her own memorandum (Tab11);

d. The Branch staffers have also told me directly that falsely represented thathe consulted with other scientists for the 51 O(k) notification;

e. refused to include Dr. Tillman's draft decision overturning thestaffers' recommendations for the iCAD PMA supplement, even though the review teamrelied on that document in reviewing revised labeling (Tab 9).

4. CDRH management denies Branch staffers access to aspects of the administrativefile.

The Branch staffers allege that CDRH management has denied their access to aspects oftheadministrative file when such access was necessary for scientific review of a regulatorysubmission. Under 21 CFR 10.70(e), FDA employees must have access to the administrative filewhen access is appropriate for conduct of their work. The staffers aliege, however, that

, denied them access to the administrative file for iCAD'sPMA supplement when they were conducting a review of draft labeling (Tab 9). According tothe Branch staffers, also effectively denied them access to a memorandum shesubmitted in an untimely manner to the administrative file for the 51 O(k)notification (Tab 11), and she subsequently denied one staffer access to a draft action letter onthe PMA supplement (Tab 2).

5. CDRH management fails to comply with Good Guidance Practices.

The Branch staffers allege that management has failed to comply with the agency's ownregulations regarding the steps to be followed when adopting a new policy or approach to aregulatory issue. Under 21 CFR 10.115, which outlines the agency's good guidance practices(GGPs), FDA must adhere to certain procedures when issuing guidance documents, which are

. documents that describe the agency's "interpretation ofor policy on a regulatory issue" such asthe evaluation or approval of submissions (see 21 CFR 10.115(b)(1) and (2)). Dr. Tillman issueda "Note to Record" on May 2, 2008, and a."Memorandum" on October 7, 2008, that purport toset forth policies for evaluating certain types of regulatory submissions to RDB (Tabs 12 and13). The Branch staffers contend that Dr. Tillman's two memoranda constitute guidancedocuments that required compliance with GGPs but that Dr. Tillman made no effort to follow theprocedures in 21 CFR 10.115.

4

(b) (6)(b) (6)

(b) (6)(b) (6)

(b) (6)

(b) (6)

(b) (4)

(b) (4)

(b) (4)

(b) (6)

(b) (6)(b) (4)

(b) (4)

(b) (6)

6. CDRH Management has threatened Branch staffers with discipline if they do notfollow direct orders to violate the law.

The Branch staffers contend that CDRH management has threatened them with discipline fortheir refusal to violate the law (i.e. for their refusal to apply the review standards thatmanagement insists the staffers use, but which the staffers believe are inadequate to ensure thatdevices are safe and effective for their intended uses). Specifically, the Branch staffers allegethat told staffers. that any failure by them to evaluate an action letter to under ascientific standard that they (the staffers) deemed inappropriate would be viewed as unacceptableperformance and that such failure might lead to discipline (Tab 10).

7. CDRH Management has retaliated against several Branch staffers.

Finally, the staffers maintain that, since they first reported managerial misconduct to theOffice of the Commissioner, and others have retaliated against them. First, the staffersassert that management included unsubstantiated and unwarranted remarks in their mid-yearPerformance Management Appraisal Program (PMAP) evaluations (see, e.g., Tab 8). Inaddition, the staffers contend that management is compelling one of them against her wishes tomove full-time to another office within CDRH (Tab 7). They also have complained directly tome that this same employee was recently tendered a I-year contract renewal but has receivedtwo- or three-year contracts in the past.

Given the timing of this alleged conduct, we note that some of these allegations mayimplicate the Whistleblower Protection Act.

Please be advised that we are prepared to assist you in any way that we can in investigatingthe foregoinKallegations, including providing any additional documentation that we have in ourpossession. Thank you very much for your time and attention to this matter.

~ely,

, ~fV\~~---'7William A. McConaghaAssistant Commissionerfor Integrity and Accountability

5

(b) (6)

(b) (6)

(b) (4)

US Department ofHealth & Human ServicesOffice of Inspector General

Referral of Potential Employee Criminal Violations(Non..Coni:Uct of Interest or Ethics)

REFERRING INFORMATION:

Referring Patty Nartle: Referring OPDM

W1LL Ifat'" fir. ~c:CoNA~AReferring OffIce Name: Office Phone:

OFf.<.E ,,. A-CCDI~1L,1TY J.. -':,..,.£G..rrt' 7DI- I'd; - ~tf~.,

EMPLOYEE/CONTRACTOR INFORMATION:

Subjee:;t Full Legal Name: I Posltlonlntle/Serles & Grade:

M\t L.,.., ~leiDOB: IOPDIVISTAFFDlV/lBranchlAgency: ISocial Security Number:

,

I

ALLEGATION INFORMATION: (provide briefnarrathe)

Ql~ Sa.c.. e,.,..(,.\<¥-~ (4L~('" +l>t'" Q.. $u~~ ~ ~~\\e~"'h.~.

OI Conflict/Ethics Referral Form 07·23·2007

0 Position Description

0 Perfonnance Plan & Evaluation

0 HHS 520: Request for Approval of Outside Activity

0 SF278 JOGE450: Public Financial Disclosure / Confidential Financial Disolosure report

0 Copy of OPDIV/STAFFDIV/Branch/Agenoy/lnstitute policy governing violation(s)

D Copies of prepared reports/memorandums regarding interviews/meetings with thereferred emplovee/contractor.

~ Copies of any electronic mail messages or other correspondence relating to this matter~

M Copy of the Incoming allegation

0 Copies of certificates or other evidence of all relevant ethics and/or conflict of interesttrainina received by emplovee/contractor

Any Additional Remarks/Information: . D·

We.. Q."''' .~ ~O'IJ\~:::r 0.\\ J.. ~ '1''-1~ \ ""-"WI ""'-4"oft ......,be..CQ,\)~ ~ Q.\\e.~""'l."'" bL\~, ~~.,.ed ""L\.~-h:.. +0.M\Jt+lpiL Mt>."''''~ S ~t1k'''''' "P01'- J Cc.r.+c..(' .fOr D~\/\CA..r 4- J.rt>6\.\~lC"'\ H~4/..J&.,. WtL wo~\~ ~ ~~t(>y +0 CI\:r.f\t+ y....JW\ "'t:r/1A.1f\\'J ~ (~"l,)~ 1W'\,-Pot~ ~tD"",, ""'t' "'~c.~~y.

1

Timeline

• May 30, 2008: Employees in the Radiology Devices Branch (RDB reviewers) send aletter to the Commissioner. The letter alleges misconduct relating to the scientificreview of applications submitted to the Radiology Devices Branch within CDRH.

• June 4: McConagha meets with the RDB reviewers to discuss their allegations.• June 18: McConagha meets with the RDB reviewers again.• June 30: McConagha is copied on an e-mail from one ofthe RDB reviewers to Dr.

Schultz. The e-mail includes an attachment detailing allegations that overlap with theallegations in the letter to the Commissioner.

• July 1: The Commissioner e-mails the RDB reviewers to thank them for bringingtheir allegations to his attention and to encourage them to work with McConagha toresolve the issues they raise.

• July 2: McConagha meets with the RDB reviewers again.• July 2: McConagha attempts to schedule a meeting with CDRH Ombudsman Les

Weinstein for the following week to discuss the RDB reviewers' allegations.• July 16: McConagha exchanges e-mails about the allegations with Dr. Daniel Schultz

and discusses the allegations with CDRH Ombudsman Les Weinstein.• July 18: McConagha forwards to Dr. Schultz and Weinstein a redacted copy of the

RDB reviewers' May 30 letter.• July 28: McConagha speaks with Dr. Schultz, Kate Cook, and others about the RDB

reviewers' allegations of misconduct. Dr. Schultz states that he will have a managerfrom another office speak with the RDB reviewers to discuss their allegations.

• July 28: Dr. Steve Gutman, a manager in a division other than RDB's, contacts oneof the RDB reviewers to set up a time to meet with the RDB reviewers to discusstheir allegations.

• July 28: McCongha and 'Others reach out to the General Law Division (GLD) at HHSfor

• July 29: McConagha forwards the May 30 letter to GLD

• July 30: Dr. Gutman meets with theoRDB reviewers to discuss their concerns.• (August 6: McConagha receives advice from counsel

• Week of August 11: The Commissioner, Dr. Schultz, Kate Cook, and McConaghameet to discuss the RDB reviewers' allegations. The Commissioner directs Dr.Schultz to address the situation and resolve the dispute between the RDB reviewersand their managers.

• August 18: Dr. Schultz begins setting up a meeting with the RDB reviewers. Themeeting is ultimately scheduled for September 3.

• August 27: On behalf of McConagha, Matt Warren meets with the RDB reviewers todiscuss their concerns regarding the upcoming meeting with Dr. Schultz. Warrenrelates those concerns to Kate Cook via e-mail.

• August 28: CDRH management announces that will be actingdirector for DRARD in light of Dr. Nancy Brogdon's retirement.

(b) (5)

(b) (5)

(b) (5)

(b)(6)

• August 29: Warren and McConagha, on separate occasions, discusspromotion with Cook

• September 2: McConagha discusses promotion with Dr. Schultz.• September 3: Dr. Schultz meets with the RDB reviewers and listens to their

allegations ofmisconduct. He advises them that he will speak with their managersand others in the Branch and explore what actions need to be taken to address thereviewers' concerns.

• September 10: Dr. Schultz meets with other employees in the Branch (excluding allbut one of the RDB reviewers) to discuss the reviewer's allegations.

• September 10: Warren meets with RDB reviewers to discuss their concernsregarding: (1) the temporary, lateral transfer of their branch chief, , tothe Office of Compliance; (2) the appointment of an acting branch chief who has littleradiological experience; and (3) their understanding that the Commissioner expectsthat Dr. Schultz will resolve their issues by September 18.

• September 24: McConagha and Warren meet with RDB reviewers to discuss thereviewers' perception that Dr. Schultz's corrective actions are inadequate.

• September 29: The RDB reviewers contact the Commissioner again via letter andcomplain that the steps taken by Dr. Schultz are inadequate to address their concernsand that there is an ongoing pattern of retaliation.

• September 30: CDRH management, including Dr. Schultz, has "Moving Fo~ard"

meeting with DRARD.• October 7: Dr. Donna-Bea Tillman issues a memorandum revising her "Note to File"

from May 2.• October 9: McConagha meets with the RDB reviewers to discuss their dissatisfaction

with Dr. Schultz's corrective actions.• First half of October: McConagha meets with to

discuss the RDB reviewers' allegations in general terms. .• Week of October 12: McConagha meets with the Commissioner to update him on the

situation and relate the RDB reviewers' dissatisfaction with Dr. Schultz's correctiveactions. The Commissioner suggests mediation as a way to resolve the situation.

• October 20: The RDB reviewers send McConagha a letter detailing alleged acts ofretaliation against one of the reviewers, i.e., her removal from the Branch.McConagha forwards a redacted version of that letter to CDRH management andrelays the Commissioner's suggestion that the matter go to mediation.

• October 22: McConagha and Warren meet with the RDB reviewers to discuss theirallegations of retaliation and to update them of the Commissioner's take on theirsituation, including his suggestion of mediation.

• October 24: McConagha and Warren meet with Wendy Kadingo ofHHS's Laborand Employee Relations to discuss the alleged acts ofretaliation against one of theRDB reviewers. Kadingo advises that she will look into the circumstancessurrounding the alleged retaliatory actions.

• October 27: The RDB reviewers send McConagha another letter, which renews theallegations of retaliation in the previous letter and further asserts that CDRH

(b) (5)

(b) (6)

(b)(6)

(b)(6)

(b)(6)

management has refused to correct a derogatory statement in a reviewer's PMAPeven though management has no documentation to support it.

• October 29: FDA receives a letter from Senator Mikulski that seeks a briefing on theRDB reviewers' allegations.

• November 5: McConagha and Warren meet with the RDB reviewers and discuss theirongoing issues with the way Dr. Schultz has addressed their allegations.

• November 5: McConagha and Warren discuss specific allegations of misconduct with

• November 7: McConagha and Warren meet with Kadingo again to discuss herfindings regarding the circumstances of an RDB reviewer's transfer to another office.They seek further advice regarding how the matter should be handled going forward.

• November 12: McConagha and Warren receive an e-mail from the RDB reviewers.The e-mail threatens "grave consequences" if the issues they've raised are notresolved in their favor. McConagha reaches out to GLD, Kadingo and Les Weinstiento update them on the situation.

• November 13: McConagha meets with NIH mediator to solicit his help in mediatingbetween CDRH management and the RDB reviewers.

• November 13: McConagha forwards a two-page summary of the RDB reviewers'allegations to CDRH management.

• November 17: McConagha meets with Cabrera and Kadingo for further discussionsregarding

• November 17: FDA receives letter from Reps. Dingell and Stupak.

(b) (6)

(b) (5)