Risks vs Benefits: Applying the REF Rule in FDA Recalls

By Billy Delfs and Brynn Stanley

The FDA’s regulations and expectations for medical devices are designed to ensure that benefits outweigh the risks. In three months, the U.S. will formally harmonize 21 CFR 820, the Quality System Regulation, with ISO 13485 – Medical devices – Quality management systems and, by incorporation, ISO 14971 – Application of risk management to medical devices.

What are the FDA’s expectations when device risks outweigh the benefits? This question is one faced by medical devices professionals from a product's conception to its commercialization. The starting point for on-market devices is determining whether your product is in violation.

The quality system and recall regulations appear circular at first impression. Part 806 seemingly says, “Recall your product if it is in violation,” and Section 7.40 says, “If you recall your product, it was in violation.” This culpability knot seems to deter manufacturers from acting when the balance tilts to more risk than benefit.

While deftly dodging the correction-versus-enhancement debate, we will discuss how to present a device correction during FDA’s recall classification and review process, potentially during an FDA inspection of the design controls facility.

Creating Communications for Corrections

The quality system term that connects an internal non-conformance to an FDA recall is correction. A correction will lead to one of three outcomes, increasing in severity: Voluntary recalls, mandatory recalls, and market removal. Every non-conformance related to a device correction should have a documented Corrective and Preventive Action (CAPA) investigation to resolve and prevent the issue from recurring. Many companies prepare CAPA storyboards or slide decks to tell the story from non-conformance discovery to resolution.

These are useful tools for familiarizing teams and management with progress toward a state of compliance. They are also easier to share and revise than pages and pages of CAPA system printouts saved as PDF files.

The REF RULE for Presenting Non-conformances.

We submit that there are three overarching questions to address within CAPA investigations and presentations: The REF Rule. R is for recurrence, E for escape and F for fraud. Being able to describe your work addresses these three elements will build your credibility with your peers, management, and the Agency.

Recurrence

Once the CAPA is initiated, the Health Hazard Evaluation (HHE) completed, and the recall reported, the issue is out in the open. In parallel with the reconciliation requirements, efforts need to focus on changes that will ensure this never happens again.

For mechanical devices, that may mean redesigned components, materials changed to the correct functional requirements, or refreshed tolerance stack-up calculations reflecting the high volume state of assembly that drifted from the high care state of design and development.

No one wants these problems to recur, and compliant CAPA processes will require justifications explaining the impact of changes made to prevent recurrence. When it comes time to present these changes, lead with the capability of these changes to prevent recurrence as a priority over how well this current problem has been solved. Hindsight is 20/20, and it is important for the presenter or owner of a device recall to convey that foresight is now 20/20.

Escape

Design verification is usually performed at 95/95 or 95/90 confidence and reliability levels to prove aspects of a device design’s robustness. Where does the remaining 5–10% come into consideration? Inspections and inspection-method qualifications.

Comprehensive non-conformance resolutions must include an analysis of inspection methods and how the non-conforming devices left the control of the manufacturer. This is the E in REF.

Failure modes and effects analyses (FMEA) are not just for designs; the FDA requires them for processes, too. A reviewer of the non-conforming (NC) product documentation, whether an FDA investigator or notified body auditor, will expect an analysis of where inspections methods failed allowing the escape of non-conforming product for clinical use.

Focus the NC narrative on how changes to inspection methods have resolved the inspection and QC release failure modes to ensure repeat escapes will not occur.

Fraud

Fraud is never the first topic when addressing recalls, and rightly so. Patient safety and protecting the public must come first. However, the Department of Health and Human Services (HHS), the parent to the FDA, takes the costs of recalls seriously.

All medical devices have an indicated use and expected lifetime. Because many medical devices purchased are reimbursed by Medicare, HHS will consider the economic impact of a device recall and its consequences (e.g., replacement procedures required, costs to purchase and replace, delays in care). An HHS study from 2017 estimated the costs to Medicare of recalled and prematurely failed medical devices as $1.5 billion from 2005 through 2014. A more recent (2023) publication by Randy Anderson and Christabel Tan in the Journal of Industrial Engineering and Management estimates an annual cost of $7.5 to $9 billion, with an added $1 to $2 billion in lost sales and product development to FDA non-compliance (warning letters, observations, recalls, and other non-routine quality events). In September 2025, a false claims act settlement between the US Attorney in Maryland and Exactech Inc. cost the firm $8 million in fines for selling defective knee replacement implants to the Department of Veterans Affairs (VA). This may be only the first settlement, as the government party was limited to the VA.

How Gardner Law Can Help

“FDA expects device makers to act when risks outweigh benefits. If your product is in violation, do not delay. Use the REF Rule, Recurrence, Escape, and Fraud, to guide your CAPA and recall communications. Transparency builds trust with regulators and customers.”
–Billy Delfs, Associate Attorney, Gardner Law

When assembling the narrative for CAPA investigations, recalls, or remediations, remember the REF Rule. Will the listener clearly understand how the issue will not recur, how escape avenues are closed, and how your company’s distributed devices performed within their indicated use, no fraud regarding their claims?

Gardner Law’s attorneys have extensive experience helping medical device manufacturers navigate FDA recall classifications, CAPA investigations, and quality system compliance. Our team works with clients to prepare recall communications, develop CAPA narratives that satisfy regulators, and guide strategic decisions when risks outweigh benefits.

If your company faces a potential recall or quality system violation, we can help you act decisively, communicate transparently, and maintain trust with both regulators and customers.