June 10, In Re: Draft Request for Proposal for Biological Implants, Solicitation Number: VA11916R0139

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1 June 10, 2016 Henry T. Wells U.S. Department of Veterans Affairs Strategic Acquisition Center Spotsylvania Ave. Fredericksburg VA In Re: Draft Request for Proposal for Biological Implants, Solicitation Number: VA11916R0139 Sent via to Dear Mr. Wells: The American Association of Tissue Banks (AATB) is a professional, non-profit, scientific and educational organization. It is the only national tissue banking organization in the United States, and its membership totals more than 125 accredited tissue banks and 650 individual members. These banks recover tissue from more than 30,000 donors and distribute in excess of two and a half million allografts for more than one million tissue transplants performed annually in the U.S. More than 90 percent of the human tissue distributed for these transplants comes from AATB-accredited tissue banks. AATB s Tissue Policy Group, LLC (AATB TPG) includes Chief Executive Officers and senior regulatory personnel from U.S. tissue banks that process donated human tissue. The purpose of the AATB TPG is to drive public policy in furtherance of the adoption of laws and regulations that foster the safety, quality and availability of donated tissue. The AATB TPG s membership is responsible for the vast majority of tissue available for transplantation within the U.S. The AATB and the AATB TPG are responding to your solicitation number (VA 11916R0139) to thank you for particular provisions and to correct some misconceptions within the solicitation. First, we want to thank you for ensuring that veterans only have access to the highest quality allografts by requiring accreditation by the AATB or similar accreditation body. 1 With this requirement, the Veterans Health Administration (VHA) will be joining the ranks of leading medical centers of excellence, which currently require all tissue to be sourced from accredited entities. Unfortunately, the solicitation also contains a problematic statement. Namely, we are gravely concerned with the implication within the solicitation that the industry labeling standard for 1 The Contractor shall provide a copy of AATB (American Association of Tissue Banks) accreditation or EBAA (Eye Bank Association of America) accreditation or equivalent accreditation body Greensboro Drive, Suite 320, McLean, VA, Phone: (703) Fax: (703) aatb@aatb.org

2 VA Letter June 10, 2016 Page 2 human tissue (or allograft biological implants) is ICCBBA s ISBT As the attached survey attests, the AATB found that our member banks plan to choose between all three issuing agencies approved by the FDA as an issuing for Unique Device Identification (UDI), with the majority not choosing ISBT-128, and, as such, ISBT-128 is not the industry standard. As detailed in the attached survey, most tissue banks do not intend to label their biological implants using ICCBBA. Of the 19 tissue banks that process HCT/Ps regulated as devices, three selected more than one issuing agency. One selected all three, while the two remaining picked two (one chose both GS1 and HIBCC, while the other chose both GS1 and ICCBBA). Of the 16 who selected only one issuing agency, there was not unanimity on the appropriate issuing agency. Of the 37 tissue banks who responded, only 1 tissue bank (14%) noted that they did not process conventional tissue. Of the remaining 36 U.S.-based tissue banks who process tissue and who responded to the survey, the majority (62%; 24 tissue banks) are planning to label their conventional tissues using the UDI system coding approach. Of the 24 tissue banks that are planning to label their conventional tissues, one tissue bank plans to use all three issuing agencies while one other plans to use HIBCC and GS1. Of those that selected only one issuing agency (total of 22 tissue banks), there was not unanimity on the appropriate issuing agency: 55% selected GS1, 36% selected ICCBBA, and 9% selected HIBCC. In other words: the solicitation unilaterally mandates an industry standard when the industry itself has determined that all three issuing agencies meet industry standards for tracking human tissue. If the VHA restricts certain purchases only from suppliers using ISBT-128, then the Department of Veterans Affairs (VA) will raise costs for the Agency and prevent veterans from accessing the full range of tissue products available, as more fully outlined above. As the VHA s testimony before Congress recently noted, shortages of biologic products could affect the ability of the VHA to obtain biological implants, and the VHA must maintain the ability to provide safe, effective, and timely care to veterans. Therefore, given the goals of the VHA, it is unclear why the VA would want to restrict its purchases to entities utilizing a specific labeling issuing agency. In addition, we would like to note that Congress is currently contemplating legislation (S. 2921, the Veterans First Act ). This legislation would prohibit the VHA from limiting veterans options for biological implants only to implants from vendors utilizing ISBT-128. Namely, the new section 8130(a)(4) states [i]n procuring biological implants under this section, the Secretary shall permit a vendor to use any of the accredited entities identified by the Food and Drug Administration as an issuing agency pursuant to section of title 21, Code of Federal Regulations, or any successor regulation. Thus, Congress is explicitly noting that 2 The Contractor shall submit a verification statement that they agree to meet Industry labeling requirements (ISBT 128), for Human tissue (Allograft Biological Implants) (Offeror shall be in compliance by the first anniversary date of the effective date of the IDIQ Contract Award [sic].

3 VA Letter June 10, 2016 Page 3 all three issuing agencies (ICCBBA, GS1, and HIBCC) are appropriate for allograft biological implants. We urge you to reconsider your position with respect to this request for information. Finally, you recently indicated that it may be helpful to share with you a list of questions for your subject matter experts (SMEs) to better understand your current proposed position that the VA only purchase tissue products labeled with ISBT-128. Please find below a list of those questions. (1) As indicated by the attached document, tissue banks are opting to use all three issuing agencies for the labeling of their products. Are you aware that ISBT-128 is not the industry standard but it is one of three industry standards? (2) The Food and Drug Administration has indicated that all three issuing agencies are appropriate for human allografts. 3 Can you provide the rationale for departing from the parameters established by the FDA -- the agency with primary jurisdiction over unique device identifier (UDI) matters and the regulation of biological implants? (3) As clearly indicated by this letter and others to the VA regarding biological implants, the American Association of Tissue Banks (AATB) is strongly opposed to the VA restricting the procurement of biological implants to those labeled by only one issuing agency. To help provide information to the VA related to those concerns, the AATB has offered to meet on numerous occasions, and yet the VA has not opted to discuss the key topic with the AATB. Further, the VA has contracted with the AABB (Solicitation Number VA Q-0259) to assist with developing a standard for the tracking of biological implants. In doing so, the VA has not acknowledged a potential conflict of interest on behalf of the AABB in that ISBT-128 was designed initially solely for blood products (which AABB assisted in developing). The solicitation also fails to acknowledge that AABB does not accredit tissue banks, including those banks which supply the vast majority of biological implants for the VA (e.g., musculoskeletal tissue including bone, tendon, ligaments; corneas; dermis and amnion, etc.). Can you explain why you are 3 FDA confirmed that position on August 13, 2014, in response to a UDI Help Desk submission seeking clarification on this point. Specifically, FDA noted that manufacturers of HCT/Ps must comply with the tracking and traceability requirements contained in 21 CFR , which means that they must assign and label each HCT/P with a distinct identification code that they can use to trace back to the donor and to all records pertaining to the HCT/P. This requirement may be met through the use of a serial number (which is available as a form of production identifier under the GS1, HIBCC, or ISBT 128 UDI systems), lot number (also available under GS1, HIBCC or ISBT 128 UDI systems) and/or donation identification number (ISBT128 only). Therefore, any of these UDI systems may be used for an HCT/P that is regulated as a device.

4 VA Letter June 10, 2016 Page 4 opting to communicate with only one accreditation entity (AABB) and not with the accreditation entity focused on accrediting biological implants? Have you considered having a dialogue with other accreditation entities, such as the AATB? The AATB would be happy to meet with the correct VA officials to be a resource related to biological implants and the UDI system as it applies to such implants. (4) The Statement of Guiding Principles for the Federal Acquisition System state that [i]t is the policy of the System to promote competition in the acquisition process. 4 The VA s proposed limitation on labeling agencies accomplishes the opposite: by restricting the available labeling agencies to just one, the solicitations inhibit competition, raising costs and limiting options for veterans. Because all three systems are indeed appropriate for tissue products, individual tissue banks have adopted the system that is most appropriate for their specific products. As the attached survey results indicate, tissue banks have not all adopted ICCBBA s ISBT-128; indeed, only a minority has done so. Thus, any decision by the VA to only procure tissue from vendors who use ISBT-128 is overly restrictive as it eliminates a large group of potential vendors. Can you further explain why you are opting to inappropriately limit competition in the acquisition process in violation of your guiding principles? (5) The Statement of Guiding Principles for the Federal Acquisition System state that [t]he System must support the attainment of public policy goals adopted by the Congress and the President. In attaining these goals, and in its overall operations, the process shall ensure the efficient use of public resources. 5 The mission statement of the VA is [t]o fulfill President Lincoln's promise To care for him who shall have borne the battle, and for his widow, and his orphan by serving and honoring the men and women who are America s Veterans. 6 There is no question that the procurement of biological implants is necessary to carry out the mission of caring for our veterans. However, the solicitation fails to use public resources efficiently, as the exclusion of two of the three FDAaccredited labeling agencies will raise costs by limiting the number of vendors available to the Agency. Further, per the GAO report, 7 the VA has a problem with tracking and tracing both animal and human-derived products. Unlike the FDA, the VA uses different terminology (i.e., biological implants) that covers both human and animal tissue. Therefore, if the VA is to effectively deal with its tracking efforts, then that would be best

5 VA Letter June 10, 2016 Page 5 served by creating a system that allows or the tracking of all biological implants, not just those of human origin. As further noted in the attached, 8 ISBT-128 is only applicable to materials of human origin. And, as such, cannot be used to track xenografts (or animalderived implants). Can you better outline how you plan to track all biological implants, not just those of human origin? (6) As noted above, the Statement of Guiding Principles for the Federal Acquisition System state that [t]he System must support the attainment of public policy goals adopted by the Congress and the President. In attaining these goals, and in its overall operations, the process shall ensure the efficient use of public resources. (emphasis added) 9 Given the desire to follow the policy goals established by Congress, are you aware that Congress is currently contemplating legislation (S. 2921, the Veterans First Act )? This legislation would prohibit the VHA from limiting veterans options for biological implants only to implants from vendors utilizing ISBT-128. Namely, the new section 8130(a)(4) states [i]n procuring biological implants under this section, the Secretary shall permit a vendor to use any of the accredited entities identified by the Food and Drug Administration as an issuing agency pursuant to section of title 21, Code of Federal Regulations, or any successor regulation. Thus, Congress is explicitly noting that all three issuing agencies (ICCBBA, GS1, and HIBCC) are appropriate for allograft biological implants. Given this, how are you planning to ensure that your procurement activities mirror the public policy goals outlined by Congress, especially as it relates to biological implants? (7) While the request for information focused solely on a subset of biological implants, as noted by the GAO, 10 the VA not only purchases biological implants but also surgical implants. Such non-biological surgical implants are generally regulated by the FDA as devices. And, as such, those devices will be labeled using one of the three issuing agencies under the UDI final rule. Therefore, in the interest of public policy, the VA should have the ability to track all of its implantable devices whether biological or not. And, as such, eventually, the VA will need to accept bar codes from all three issuing agencies, not just ISBT-128, which would be limited to a subset of biological implants. Given that eventuality, it is unclear why the VA, from a public policy perspective, should not alter its tracking systems now to allow for the use of all three issuing agencies. Can 8 See AATB s document related to the limitations of ISBT-128, along with two additional AATB-related documents which outline the various distinctions related to classification of biological implants Op cit.

6 VA Letter June 10, 2016 Page 6 you detail any restrictions you may have for other implants with respect to their labeling? Is the VA planning to issue similar restrictions for other products? (8) There has been some indication that such a restriction is not too burdensome, given that the VA would allow tissue banks to alter its labeling within one year after awarding the contract. Such a statement ignores the practical reality of the FDA regulations of the UDI as well as the inability to relabel certain products (e.g., those that are cryopreserved). Has the VA discussed with the FDA any potential challenges with tissue banks shifting their labeling systems? Has the VA contemplated the appropriate response for labeling or relabeling of special tissue products, such as those that are cryopreserved? We would like to work with the Agency to help correct the solicitation and to be a resource for the VA with respect to allograft biological implants. The AATB has previously requested a meeting with the VA to discuss some of these issues. Such a meeting could be beneficial for the Agency, and we renew that request at this time. Sincerely, Frank S. Wilton President & Chief Executive Officer American Association of Tissue Banks Thomas A. Cycyota Chair American Association of Tissue Banks Tissue Policy Group Attachments: Survey, Limitations of ISBT-128, Distinctions related to Classification of Biological Implants, VA tissue tracking, Tissue Regulation Flow Chart Cc: Secretary Robert A. McDonald, Gregory L. Giddens (Principal Executive Director Office of Acquisition, Logistics and Construction), Dr. David J. Shulkin (Under Secretary for Health), Christopher E. O Connor (Principal Deputy Assistant Secretary for Congressional Affairs, Performing the Duties of the Assistant Secretary for Congressional and Legislative Affairs), Rep. Phil Roe, and Sen. Bill Cassidy

7 April 2015 Survey: UDI Implementation FDA s UDI Rule. In 2013, the Food and Drug Administration (FDA) released a final rule establishing a unique device identification system designed to adequately identify devices through distribution and use. The final rule requires device labelers to include a unique device identifier (UDI) on device labels and packages, except where the rule provides for an exception or alternative. Each UDI must be provided in a plain- text version and in a form that uses automatic identification and data capture (AIDC) technology. The UDI is a unique numeric or alphanumeric code that consists of two parts: (1) a device identifier (DI), a mandatory, fixed portion of a UDI that identifies the labeler and the specific version or model of a device, and (2) a production identifier (PI), a conditional, variable portion of a UDI that, for a human cells, tissues, and cellular and tissue- based products (HCT/Ps) regulated as devices must include a distinct identification code (which is an alphanumeric code that relates the HCT/P to the donor). 1 All UDIs are to be issued under a system operated by an FDA- accredited issuing agency. Currently, the FDA has accredited three different issuing agencies (1) GS1, (2) Health Industry Business Communications Council (HIBCC), and (3) ICCBBA. 2 Despite the different issuing agencies, given the specific requirements of the UDI, each specific device (including those HCT/Ps regulated as devices) will have a unique UDI. Further, the FDA has confirmed the position that all three issuing agencies are appropriate for HCT/Ps. On August 13, 2014, in response to a UDI Help Desk submission seeking clarification on this point, FDA noted that manufacturers of HCT/Ps must comply with the tracking and traceability requirements contained in 21 CFR , which means that they must assign and label each HCT/P with a distinct identification code that they can use to trace back to the donor and to all records pertaining to the HCT/P. This requirement may be met through the use of a serial number (which is available as a form of production identifier under the GS1, HIBCC, or ISBT 128 UDI systems), lot number (also available under GS1, HIBCC or ISBT 128 UDI systems) and/or donation identification number (ISBT128 only). Therefore, any of these UDI systems may be used for an HCT/P that is regulated as a device. UDI Application to Tissue Devices. For HCT/Ps regulated as devices, the vast majority of such products are implantable devices. As such, the labels and packages of those devices produced on or after September 24, 2015 must bear a UDI. 3 Such devices generally include corneal lenticules, preserved umbilical cord vein grafts, human collagen, femoral veins intended as ArterioVenous shunts, demineralized bone with handling agents (e.g., glycerol, sodium hyaluronate, calcium sulfate, gelatin, collagen), and bone- suture- tendon allografts. 4 In addition, tissue banks may also work with xenografts (animal- derived grafts), including porcine heart valves, bovine or porcine acellular dermis and bovine bone. Implantable xenografts have a similar timeframe for implementation. ICCBBA nomenclature is not appropriate for xenografts, given that xenografts are not of human origin. Further, The ents/default.htm 4 Last updated August 2015

8 Joint Commission (TJC) tissue safety handling requirements tend to cover not only conventional tissue but also xenografts, given the broader definition of the term tissue. UDI Application to Conventional Tissues. For conventional HCT/Ps or those regulated as 361 HCT/Ps, the UDI final rule does not apply. However, many tissue banks (as described more fully below) are voluntarily applying the UDI processes to conventional tissue. Conventional tissues include bone (including demineralized bone), ligaments, tendons, fascia, cartilage, ocular tissues (such as corneas and sclera), skin (include acellular dermal matrix), pericardium, vascular grafts (veins and arteries), pericardium, amniotic membrane, minimally manipulated heart valve allografts, hematopoietic stem cells derived from peripheral or umbilical cord blood, etc. 5 AATB Survey. To better ascertain how tissue banks are opting to implement the UDI, the American Association of Tissue Banks (AATB) performed a survey of its members in April Of the 125 accredited tissue banks, the AATB sent the survey to the 38 U.S.- based tissue banks who are accredited for processing tissue other than reproductive tissue. This summary data includes information from all 38 tissue banks (100% response rate). Issuing Agency Selection for Tissue Devices. As outlined in the pie chart below, of the 38 tissue banks, 18 (47% or nearly half) noted that the UDI was not applicable to them because they do not process tissue regulated as a device. Chart 1. % UDI applicable No 47% Yes 53% Of the 20 tissue banks that process HCT/Ps regulated as devices, four selected more than one issuing agency. One selected all three, while the three remaining picked two (one chose both GS1 and HIBCC, while the other two chose both GS1 and ICCBBA). Of the 16 who selected only one issuing agency, there was not unanimity on the appropriate issuing agency, as outlined in the table and chart below

9 Table 2. Chart 2. Issuing Agency for HCT/Ps regulated as devices % of Tissue Banks GS1 81% 13 HIBCC 6% 1 ICCBBA 13% 2 Total 16 N ICCBBA 13% HIBCC 6% % of Tissue Banks, HCT/Ps regulated as devices GS1 81% Issuing Agency Selection for Conventional Tissues. As outlined in the pie chart below, of the 38 tissue banks, only 2 tissue banks (5%) noted that they did not process conventional tissue. Of the remaining 36 U.S.- based tissue banks who process tissue, as outlined in the pie chart below, the majority (67%; 24 tissue banks) are planning to label their conventional tissues using the UDI system coding approach. Chart 3. % Labeling ConvenPonal Tissue No 33% Yes 67% Of the 24 tissue banks that are planning to label their conventional tissues, two chose more than one issuing agency - - one tissue bank plans to use all three issuing agencies while one other plans to use HIBCC and GS1. Of those that selected only one issuing agency (total of 22 tissue banks), as outlined in the table and chart below, there was not unanimity on the appropriate issuing agency. 3

10 Table 4. Chart 4. Issuing Agency for conventional or 361 HCT/Ps % of Tissue Banks GS1 55% 12 HIBCC 9% 2 ICCBBA 36% 8 Total 22 N ICCBBA 36% HIBCC 9% % of Tissue Banks, ConvenPonal Tissue GS1 55% Given that the UDI timeframe does not apply to conventional tissues, the AATB also inquired as to when the tissue banks planned to implement the UDI specified labeling convention. As outlined in the pie chart below, of those 24 tissue banks that plan to label their conventional tissue, the vast majority plan to issue it within 2 years (96%). Chart 5. Timing of Labeling ConvenPonal Tissue > 2 years 4% W/in a 1-2 years year 46% 50% Concordance Between Systems. To gain a better understanding of whether tissue banks were opting to alter the selection of the issuing agency depending on the tissue classification (e.g., utilizing at least two issuing agencies one for devices and one for conventional tissue), we examined the concordance between the selection of the issuing agency for HCT/Ps regulated as devices and conventional tissue. Of the 38 tissue banks, 14 (37%) plan to label both their HCT/Ps regulated as devices and conventional tissue, nearly all (13 tissue banks; 93%) plan to maintain the same issuing agency or agencies for both the devices and conventional tissue. 4

11 Chart 6. No 7% UPlize the same labeling convenpon for devices, convenponal Pssue Yes 93% Cost. While not directly addressed by the most recent survey, cost factors may be a consideration for tissue banks in their selection of the issuing agency. In general, ICCBBA is a more expensive option for tissue banks. For more information regarding the cost implications, visit AATB s comparison of the various issuing agencies Banks%20- %20Dec%2020% pdf?utm_source=News+Release+- +UDI+Systems+Comparison+Report+for+Tissue+Banks&utm_campaign=7th+World&utm_medium= 5

12 Limitations of the Application of ISBT- 128 to Conventional Tissue UDI Implementation According to the January 2014 U.S. Government Accountability Office (GAO) report titled VA Surgical Implants: Shortcomings in Implant Purchasing and Tracking, 1 the GAO noted problems in tracking biological implants within the Department of Veterans Affairs (VA). To address some of those limitations, the VA has been leaning toward requiring the use of ISBT- 128 for certain biological implants. The American Association of Tissue Banks (AATB) and the AATB Tissue Policy Group (AATB TPG) has concerns with this approach, as outlined below. Not applicable for all biological implants. Biological implants within the VA include both human tissue products (also known as 361 Human Cells, Tissues, and Cellular and Tissue- Based Products or 361 HCT/Ps) as well as xenografts (animal- derived tissue products). ISBT- 128 is only appropriate for materials of human origin and not of animal origin. Therefore, ISBT- 128 cannot be utilized for all biological implants within the VA but only for a subset of those. Limited purchasing options. According to a recent AATB survey, a minority of tissue banks are planning to utilize ISBT 128. In fact, only 13% of tissue banks are planning to use it for their tissue devices, and only 36% of tissue banks are planning to use it for their conventional tissues. Rather than use ISBT- 128, the majority of tissue banks plan to use one of the other two issuing agencies GS1 or HIBCC. Thus, if the VA opts to move forward with this decision, veterans may not have access to the full range of needed biological implants. Most expensive option. Of the three different issuing agencies allowed under the FDA s final UDI rule (1) ISBT- 128, (2) GS1, and (3) HIBCC, ISBT- 128 is the most expensive option for vendors. Therefore, if the VA moves forward with this decision, the overall costs of for the purchase of such implants will likely increase. May not be appropriate for all VA facilities. While many of the VA facilities use ISBT- 128 within the blood banks for the labeling of blood and cellular therapies, it is not clear that the same system is being used within the surgical suites. According to a 2006 AABB survey, the department of surgery (e.g., operating room; n = 245, 76%) most often had responsibility for tissue use 2 and not blood banks. An updated survey in 2014 confirmed this information. 3 Given this information about the responsibility for tissue services tending to rest with the surgery centers, the AATB and AATB TPG is unaware of any surveys which examine how such biological implants are tracked within VA hospitals. Thus, for those hospitals currently handling tissue within the surgical suites, the requirement for the use of only ISBT- 128 could disrupt the current practice within surgical centers, which tend to track all devices, not just biological implants. A recent Booz- Allen report noted that approximately 50% of devices will be labeled with GS1. 4 As such, for the surgery centers to be able to track all implantable medical devices (including some human tissue products such as demineralized bone matrix with a putty or xenografts), it may be appropriate to also allow for tracking with GS1. Benefits not fully realized. One potential advantage of ISBT- 128 over other labeling conventions is that aids in donor traceability if the donor identification number (DIN) is attached to the tissue or organs at the donation event. Thus, the key advantage requires that the tissue and organ procurement agencies all utilize this convention. Unfortunately, our understanding is that, at this time, many organ and tissue procurement organizations are not utilizing ISBT T 2 ustomisedmessage= Last updated August 2015

13 Flow Chart: 351 versus 361 Is the tissue more than minimally manipulated? NO. Is the tissue intended for homologous use? YES. No longer 361 HCT/P. YES. Does the manufacture involve combining the cells or tissues with another article? NO. No longer 361 HCT/P. NO YES No longer 361 HCT/P. Does the tissue have a systemic effect, or is it dependent on metabolic activity of living cells for its primary function? NO. The tissue is a 361 HCT/P. YES. Is the tissue for autologous use, for allogeneic use in Airst or second degree relative, or for reproductive use? NO. No longer 361 HCT/P. YES. The tissue is a 361 HCT/P. Last Updated August 2015

14 Different FDA Classifications for the VA s Term Biological Implants The Veterans Administration refers to all of the following FDA regulated classes as biological implants : FDA regulated class: 361 HCT/P (all human) 351 HCT/P (all human) Other Tissue Devices (non- human) Examples: Bone Chips Skin Heart valves Tendon Human bone chips Human bone chips in medium Bovine Bone Chips Human skin (i.e., acellular dermal matrix) n/a Pig skin (i.e., porcine dermis Human heart valves Decellularized heart valves (i.e., MMM allograft heart valves) Pig or cow heart valves (i.e., porcine or bovine heart valves) Human tendon Human bone- suture- tendon Bovine tendon Appropriate for ISBT- 128? Appropriate for GS1? Yes Yes Yes Yes Yes Yes No Yes Yes Appropriate for HIBCC? Last Updated August 2015