Reused Devices Attract Entrepreneurs, Scrutiny

The FDA cleared both applications that same month.

Aldana also said ClearMedical was paying for his services until March, nearly two years after the FDA had barred him from the reprocessing business. Incorporation records in Minnesota show that his Adven Medical firm is still an active business. Aldana said he has kept it active in case he decides to do more reprocessing consulting.

Larry Spears, the FDA's deputy director for regulatory affairs in the Office of Compliance in the Center for Devices and Radiological Health, said he was unaware that Aldana was advising reprocessors. "We don't regulate consultants," he said.

Serial Entrepreneur

Aldana also consulted for Ronald E. Eames, an entrepreneur who has had his own trouble with authorities.

The avuncular inventor from St. George, Utah, started a company in the early 1980s that supposedly created a cheaper, more efficient fuel additive for use in gasoline. In court records, automakers at the time said his product created pollution, and in 1986, the Environmental Protection Agency put a stop to his fuel additive.

He jumped into the medical reprocessing business in the early 1990s when a surgeon friend asked him whether he thought he could refurbish medical devices. Eames said he had no medical background but was a voracious reader of technical journals.

In 1993, he co-founded a reprocessing company called Applied Medical Technologies Inc. in Nevada, which later merged into Alliance, now one of the nation's big three.

After a falling-out with his business partners, tax problems and a plunge into bankruptcy, Eames went on to found another reprocessor, Medical Device Services Inc., in 1996 with $100. He worked out of the garage at his St. George home. Over the next several years, the company grew to have annual revenue of more than $1 million and about 20 employees as Eames expanded his list of reprocessed devices to include orthopedic devices and cardiovascular instruments. By 2000, Eames saw a threat posed by reprocessors that were beginning to refurbish what he considered higher-risk instruments, such as angioplasty balloon catheters.

In a letter to the FDA then, Eames wrote: "The greed and stupidity of a certain segment of our industry may destroy us all. Between some time in the future . . . and the 'here and now,' some patient is likely to be seriously injured or even killed in a procedure using a reprocessed instrument."

A year later, in 2001, the FDA found 27 violations of good manufacturing practices at Eames's firm and issued a warning letter. A year later, the FDA found 42 violations. In 2003, it found 46.

"They were technical violations," Eames said.

The Justice Department found the issues to be more serious. Last year, it sued Eames and his reprocessing firm, seeking a permanent injunction to stop him from reprocessing. Eames sold his business to SterilMed, one of the big three reprocessors, but he said he continues to do reprocessing consulting work on the side.