“The more precise the documentation, the more valuable it is.”
must contact the appropriate state’s li- censing agency.
TMA has compiled a list of contact in- formation for most states’ medical device licensing entities. To access it, visit www
.texmed.org/medicaldevices/. TMA used information from the Health Industry Distributors Association Licensure Stan- dards for Medical-Surgical Products Dis- tributors in creating the list.
Letter from Austin
One physician ran afoul of the attorney general when he purchased a medi- cal device from Elite Med LLC, an un- licensed distributor operating in New Braunfels. It turns out that besides operating without a license, Elite Med sold physicians medical products not approved for sale in the United States — unbeknownst to many of the purchas- ers. Following an investigation by the at- torney general, Elite Med shut down in 2010 when a Texas court prohibited the company and its owner from doing busi- ness in the state. The physician, who asked to remain
anonymous, received a letter from the attorney general’s office telling him he violated the DTPA and could be liable for huge fines. He wound up signing a settlement because, he said, “I was giv- en absolutely no choice in the matter. It was that or go to court and risk millions of dollars in penalties for using an Elite Med product.” Among the agreement’s many provi- sions, the physician pledged not to pur- chase devices from a Texas manufacturer or distributor without verifying that it has a DSHS license. The physician says the attorney gen- eral’s guidance will be difficult to follow and is an unreasonable burden on physi- cians and their staff members. “There has been no real effective guid- ance from the attorney general’s office
44 TEXAS MEDICINE June 2012
on how to discern which companies are in Texas. No doctor’s office has the time to spend hours trying to find out who is licensed,” the physician said. Mr. Kelley says as of April, 50 phy- sicians had signed similar agreements with the attorney general’s office for purchasing products from Elite Med. He says physicians who signed agreements with the state didn’t pay any financial penalties “as long as they agreed to take steps that would ensure they only uti- lized licensed distributors in the future.”
Compliance could be difficult The attorney general’s guidance directs physicians to consult the DSHS online Public License Search,
www.dshs.state
.tx.us/dmd/find.shtm, before buying drugs from a distributor, whether lo- cated in Texas or another state, and be- fore purchasing medical devices from a distributor located in Texas. The attor- ney general says physicians can also fax DSHS at (512) 834-6741 to verify licen- sure. “Physicians should print this page [the fax page or the website page] and save it as proof of status of verification,” the guidance states.
When verifying licensure status for medical device distributors outside Tex- as, however, the attorney general says doctors should start with DSHS because it licenses some out-of-state distributors. If DSHS doesn’t license an out-of-state medical device distributor, physicians
In its guidance, the attorney general acknowledges the possibility that a med- ical device distributor “may not possess a state license, but may still be autho- rized by a manufacturer to distribute a medical device. In that case, the physi- cian should contact the manufacturer to verify the manufacturer’s authorization.” The attorney general’s guidance says physicians should contact the medical device manufacturer directly only when the medical device distributor doesn’t have a Texas license. James McClendon, an Austin attor- ney for another Texas physician who purchased a medical product from Elite Med, says that could prove cumbersome, time-consuming, and complicated. David Bragg, an Austin attorney who
represented two physician groups that signed agreements with the attorney general’s office over using Elite Med products, agrees. “I’ve not come across a lot of physi- cians who routinely check licensure sta- tus of drug and medical device vendors,” he said, adding that in the case of Elite Med “ostensibly, everything suggested the company was properly licensed.” He says physicians need to know
“they can’t take things at face value but have to confirm licensure status when purchasing drugs and medical devices they plan to use in their own facilities.” Educating staff members on how to determine a drug or medical device distributor’s licensure status is pivotal to ensure compliance with the attorney general’s guidance, Mr. Bragg says. Be- cause physicians are ultimately respon- sible for verifying that a company has legal authority to distribute drugs and devices, Mr. Bragg stresses the impor- tance of documentation. He encourages physicians to print and retain the fax or Internet record when verifying licensure
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