EXHIBIT 99.1
Salt Lake City, Utah - Stephen W. Bennett, M.D., MPH&TM, Dr. PH, Barbara A.
Payne, Ph.D. and Ernst G. Hoyer, B.S. Engineering, MBA, Utah Medical Products,
Inc.'s (Nasdaq: UTMD) independent directors during the full period of time of
the Company's disagreement with the Food and Drug Administration (FDA) since
2001, advise shareholders that they have been completely informed and kept
current by representatives of management, independent experts and legal counsel
as the Company's disagreement with the FDA has evolved.
The directors confirm their full and unanimous support for the position that, it
is in UTMD shareholders' best interest to proceed through the Federal Court
process because of the fundamental refusal by FDA managers to communicate.
Mr. Hoyer states
"Since the early 2002 inspection, the Company has never had an
opportunity to discuss its differences regarding inspectors'
observations with any reviewer or manager in the FDA. We have
had no opportunity to reach a reasonable resolution. As a
clear example, the Company formally requested non-binding
mediation in May 2004, in which the FDA's CDRH Ombudsman had
agreed to be mediator, but were rejected by the FDA's Tim
Ulatowski.
In mediation, the FDA would be expected to say what provisions
of the QSR were in dispute and why. Instead, FDA's response
was `Tell us what you've done to get into compliance.' I hope
that the paradox is obvious. The Company firmly believes and
has believed, consistent with the opinions of its independent
experts, that it is in compliance with the QSR."
After three years of conscientious, but futile, efforts to seek a response and
dialogue with FDA management regarding the Company's numerous written responses
to inspectors' observations, the only alternative FDA offered to the Company is
an oppressive Consent Decree that would shut down the Company, destroy all
inventory, and literally cede control to FDA personnel whose qualifications/
identity are unknown and who have refused to respond to repeated UTMD requests
to meet.
Dr. Bennett, who participated in the sole meeting with agency personnel other
than inspectors after 2001, states
"There was a complete absence of good faith dialogue in the
May 2003 meeting with Denver District Director Belinda Collins
and Regional Director Dennis Baker, who had requested the
meeting. They were not informed, declined to provide any
information of substance, and refused to discuss the most
recently concluded inspection. The agenda provided by UTMD
could not be implemented, because information was not
exchanged. Rather, information continued to flow only in one
direction - from UTMD to FDA.
We understand that the Company's position is unusual, and may
appear unwise to some shareholders. I assure you that we
haven't been provided another reasonable alternative.
FDA's Larry Spears, in recent public statements, has said that
FDA has identified persistent QSR violations and has given
repeat warnings to the Company. Those statements are false.
Although we would keenly prefer to be in a different
situation, and respect the mission of our FDA, the fact is
that we also have the obligation in our present extreme
circumstances to stand up for the Company's rights, employees'
rights and the rights of American citizens under explicit
requirements of law and regulation, not to mention common
decency. The FDA's position is simply, `Admit violations (that
have not been defined or discussed), and we will let you stay
in business, maybe.'
I am also very disappointed that Utah's elected
representatives have not yet taken an active interest in
investigating this situation, and in trying to keep productive
law-abiding citizens in Utah employed. We look forward to more
involvement and help from Senator Bob Bennett, Senator Orrin
Hatch and Congressman Jim Matheson. I sent a personal letter
to Senator Hatch in June 2003 in which I expressed, among
other things, `It is a sad and disturbing thing when a
government agency abuses its power particularly when both
incivility and incompetence on the part of an inspector, as in
this case, is followed by bureaucratic ineptitude and punitive
actions... I firmly believe that a part of the FDA is out of
control and behaving contrary to its own policies, and a
cover-up is in progress.'"
Dr. Payne asks
"How is this litigation by the FDA consistent with the following
August 4 campaign speech?
`John Edwards and I are campaigning across the country talking about
how we can build an America that is stronger at home and respected
in the world, and that means creating a business climate that helps
companies succeed and create good paying jobs right here in
America,' Senator Kerry said in his prepared remarks.
`Clearly, we can do a better job lowering the cost of doing business
in America. That makes us more competitive and it reduces the
incentive for somebody to decide to go overseas,' Kerry said.
How is it in the public interest to punish an innovative company
making proven safe and effective life-saving devices, ironically
because it prefers to manufacture in the U.S. and agrees with the
FDA's own December 1997 "Guide to Inspections of Medical Device
Manufacturers" which was maintained at least through UTMD's 2003
inspection? The guide, which has a section entitled "The Small
Manufacturer," states, `An investigator should not insist that a
manufacturer meet a QS/GMP requirement that does not contribute to
its assuring conformance to specifications, simply because it's part
of the new regulation.' The guide also states, `Section 519(a)(4) of
the FD&C (Federal Food, Drug and Cosmetic) Act prohibits record
keeping requirements that are unduly burdensome to a device
manufacturer.' The guide states, `An investigator should realize
that a small firm usually does not need the same degree of
documentation necessary as required for a large firm to achieve a
state of control.' The guide also states, `Practices may be more
brief and less detailed for a small manufacturer of less complicated
devices unless the firm is producing non-conforming devices.'
Despite the above consideration theoretically given small companies
by the FDA, UTMD's experts agree that the Company complies with all
provisions of the QSR.
During the multiple and burdensome FDA inspections since 2001, one
fact is certain - UTMD devices do conform to specifications. UTMD
has many years of experience producing and shipping devices
supported by objective evidence that these meet specifications using
current manufacturing processes. The lawyers representing the
government have acknowledged that there is not a risk to public
health."
The directors remind shareholders and the public that FDA statements about
"violations" must be truthfully qualified. No violation exists until the FDA
proves this through supporting evidence in Federal Court proceedings or the
accused (UTMD) agrees to make such an admission. UTMD will not be making such an
admission because, with the firm support of industry experts, it is confident in
its compliance with the QSR. UTMD is proud of its continuing record of providing
safe and effective devices manufactured by dedicated and qualified personnel who
implement quality systems certified to compliance with the worldwide recognized
ISO 13485 standard for medical devices, as further recognized by the FDA.