The Fda Has Its Eye On Gray Market Lasers

Scores of doctors are using unapproved machines for surgery

The U.S. Food & Drug Administration has brought pharmaceutical giants to their knees and recently sent shudders through the mighty tobacco industry. So it comes as a surprise that as many as 150 of the nation's ophthalmologists have decided to flatly defy tough new FDA rules on eye surgery.

The rules focus on a new procedure that uses a laser to correct nearsightedness--an advance doctors say may be one of the most significant in 20th century eye care. The surgery is likely to spawn a multi-billion-dollar industry that could allow many of the nation's 70 million myopics to throw away their glasses.

"SIGNIFICANT RISK." The new procedure--known as photorefractive keratectomy, or PRK--was approved in October, 1995, when the FDA sanctioned a new PRK laser made by Summit Technology Inc. in Waltham, Mass. In March, the FDA signed off on a laser made by Visx Inc. in Santa Clara, Calif. Only those lasers are approved for PRK.

In the months since, the FDA has found that doctors increasingly are performing surgery with lasers that don't have FDA approval. The agency says it's unclear how many doctors are violating the rules but estimates it could be some 150. It sent warning letters to three ophthalmologists last spring and summer before deciding it couldn't pursue every violator individually. Now, it is preparing a letter to be sent to all ophthalmologists, warning them to discontinue use of unapproved lasers or apply for permission for experimental use.

"There is a serious potential for injury--this is a significant risk product," says Dr. Susan Alpert, director of the FDA's Office of Device Evaluation. Patients who undergo surgery with unapproved lasers risk permanent damage to their vision, she says.

Some of the unapproved lasers are gray-market machines that have been exported to Europe or Canada and reimported to the U.S. Many can be used to treat astigmatism and farsightedness, therapies allowed in some countries but not approved by the FDA. Other doctors are hiring engineers to build lasers from off-the-shelf electronics parts--so-called black-box lasers.

FDA officials say the defiance of its regulations is prompted by the unusual arrangement under which the lasers are sold. The Summit and Visx lasers sell for about $500,000 each, but the companies also demand a royalty fee of $250 each time a laser is used. The gray-market and black-box lasers allow doctors to evade payment of royalties.

FBI FOCUS. The royalty payments are shared by Summit and Visx through an entity called Pillar Point Partners, created as part of the settlement of a patent dispute. Many ophthalmologists are outraged by the royalty: Pillar Point has been hit with eight separate class actions challenging the payment, says Mark Logan, Visx's CEO.

Pillar Point is fighting back. In early September, it sued William D. Appler, a Washington attorney, charging that he advised an ophthalmologist on reimportation of an exported Summit laser. Pillar Point also sued the Barnet-Dulaney Eye Center in Phoenix, charging that it violated patents by contracting with an engineer to build its own laser. Appler did not return phone calls seeking comment. Michael Eaton, a Washington attorney representing Barnet-Dulaney, released a statement saying: "The doctors of the Barnet-Dulaney Eye Center are outraged that anyone would suggest that their laser is unsafe."

At about the time Pillar Point filed the lawsuits, Summit announced that it had terminated its CEO, David F. Muller. A Summit spokeswoman says the termination was "performance-related" and concerned "differences of opinion on the future of the company." Summit lost $15.3 million in the first six months of this year, and its stock dropped from about $34 per share at the beginning of the year to 5 5/8 on Sept. 17. Muller did not return calls seeking comment.

Now the issue has grown beyond the FDA. The agency is embroiled in a scandal in which confidential Visx documents--including blueprints for its STAR laser--turned up in Muller's mailbox last Thanksgiving. As the FDA continues to pursue violators, the Federal Bureau of Investigation is now sharpening its focus on the suspicious leak.

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