FDA identifies more problems at Invacare Corp.

Invacare Corp.'s quality control system still isn't up to par.

Federal regulators once again found a long list of problems during a lengthy inspection at the medical equipment company's Elyria, Ohio headquarters.

None of those problems sound all that scary on their own.

Together, however, they show that Invacare has yet to fix some of the issues that forced the company to shut down almost all manufacturing operations at its plant on Taylor Street three years ago, according to regulatory experts who spoke with Crain's.

The list of problems includes some “pretty big misses” that Invacare should have taken care of by now, according to Ray Ursick, principal consultant at Matrix Medical Devices in Cleveland.

The problems noted by the U.S. Food and Drug Administration are fixable, but “it's going to take a lot of work for Invacare to get out of this,” Ursick said.

So what did the company miss? For one, the report starts by noting that Invacare deviated from the consent decree issued by the FDA in December 2012 — the one that forced the company to overhaul its quality control system.

What did it do wrong? When the FDA inspection began in July, Invacare had yet to identify all the products that needed to go through a process called design remediation.

On Aug. 28, it provided a list of 21 power wheelchairs and power beds that still needed to go through the process, which involves re-evaluating the methods used to design and test a product, as well as the documentation processes that ensure those methods are properly followed.

Deviating from a consent decree might not look good from the FDA's perspective, according to Stephanie Harrington, founder of Matrix Medical.

“You're not doing what you told us you would do. How do we have any confidence that you're going to be able to fix the rest of it?”

Harrington estimates that it would take three to six months to fix the violations listed in the report, which fills just over 11 pages.

And that doesn't include the time it will take Invacare to prove to the FDA that these sorts of mistakes won't keep happening.

The inspection lasted 71 days, stretched out over five months. Its goal was to determine whether Invacare was living up to changes it said it would make following two third-party audits it completed in 2013.

Even if Invacare had aced the inspection, the FDA still wouldn't have lifted the consent decree: The company has spent a few years trying to pass a third audit designed to analyze its entire quality control system. Once that audit is complete, the FDA will conduct another inspection before deciding whether to lift the decree — and give Invacare the go-ahead to ramp up manufacturing at its Taylor Street plant.

The FDA issues have bogged down Invacare's stock price since they started coming to light in 2011. They're also bogging down profits. The company has been losing money since 2013.

So it's no wonder that CEO Matthew Monaghan said during an October conference call that establishing a strong quality culture is Invacare's number one priority.

Matthew Mishan thinks Monaghan, who was hired about a year ago, is serious about that.

Mishan, an equity research analyst for KeyBanc Capital Markets in New York, said Monaghan appears to be “dotting all the i's and crossing all the t's” when it comes to Invacare's FDA issues. He believes that Invacare's team “probably got these observations and went straight to work on them,” he said.

Mishan added that the observations shouldn't be a big concern for investors, noting that the FDA hits a lot of medical device companies with violations.

But two other consultants who help companies address FDA issues were more concerned.

Glen Feye, who is president of Accurate Consultants Inc. of San Diego, said the first problem listed sounds serious.

“These are major findings and should have been previously addressed by Invacare and their outside third party experts,” he said.

Robert Takashi Gibson noted that the findings are “going to be a concern to the FDA,” especially since Invacare has been under a consent decree.

“The bar for them is higher. They have to essentially be perfect,” said Gibson, a senior adviser on regulatory affairs issues for YourEncore of Indianapolis.

Gibson noted that the FDA inspection turned up problems related to how Invacare handles customer complaints, which has been “a hot button with the FDA for a number of years.”

For instance, after reviewing a few hundred complaints about problems that could have been caused by two robotic welding machines, Invacare noted that it found “no systemic issues” with the machines.

However, the FDA reportnotes that there was “no documented assessment of these complaints to support your conclusion.”

Some observations in the report describe instances where Invacare didn't properly test a product or confirm that it met the company's design standards.

Others criticize the company's effort to evaluate the risks posed by a few of its products. For instance, Invacare did not have documents showing that it took proper steps to mitigate “unacceptable” risks related to a power wheelchair called the TDX-SP.

Why did these problems occur?

Invacare wouldn't comment for this story, but during the October conference call Monaghan did say that the company is putting a “tremendous” amount of resources toward improving its quality system.

So if it's not a lack of effort, what could it be? Sometimes companies have trouble fixing quality control problems because they're in too big of a rush or because employees who understand the problem leave and have to be replaced, according to Ursick and Harrington.

If Invacare can show the FDA that it has strong momentum, it may not have to fix every single problem it faces to get the consent decree lifted.

But Ursick says Invacare's quality system doesn't appear to have reached that point.

“It's just going to take a lot of time. That's the bottom line. This is going to be work,” he said.

"FDA identifies more problems at Invacare Corp." originally appeared on the Crain's Cleveland Business website.