FDA Regulatory

This post is the first in a series of three in which we recap the Food and Drug Administration’s somewhat difficult year, having spent the majority of it without a permanent Commissioner and facing a slew of political and practical challenges. Today our topic is “medical devices” writ large, which is a product class that is becoming more complex by the day as it grows to encompass software, diagnostics, laboratory tests, and new medical technologies that resemble nothing that Congress had in mind when it first gave FDA authority to regulate medical devices in 1976. In the coming days, we’ll also take a broad look at FDA’s year from the standpoint of therapeutic medical products, including drugs and biologics, as well as the more commonly used category of consumer products.

The Health, Education, Labor and Pensions (HELP) Committee is set to vote on Dr. Stephen Hahn, the Trump administration’s nominee to head the Food and Drug Administration (FDA), on December 3, 2019. Hahn faced a flurry of questions at the confirmation hearing before the Senate Health Committee on Wednesday, November 20, 2019, most of which spoke to the youth vaping crisis with little emphasis on other hot topics such as prescription drug shortages or drug pricing. Despite the barrage of questions, many of his responses were non-specific in nature and avoided committing to any set platform. Instead, Hahn focused on his pledge as a doctor to put patient care first and rely on science and data as a basis for decision-making.

We have previously blogged about the Food and Drug Administration’s year of listening and information-gathering related to products containing cannabis or cannabis-derived compounds since the 2018 Farm Bill removed “hemp” from the federal Controlled Substances Act. Among other things, the Agency issued a call for scientific information on a variety of topics identified in this April 3, 2019 notice; opened a public docket to receive written comments in response to those questions (docket no. FDA-2019-N-1482); and convened a public hearing in May 2019 to hear from stakeholders directly. Our summary of that May 31st hearing, which also provides an overview of the legal and regulatory landscape post-2018 Farm Bill, is available here. This intensive period of evaluation was led by an internal working group charged with making recommendations for the open scientific, technical, and policy questions created by the new legal status of hemp.

Despite congressional attention, Food and Drug Administration (FDA) action, public and private sector efforts, and ongoing media coverage, drug shortages remain a significant public health crisis in the United States. In response to that crisis (and at Congress’s urging), the FDA formed the interagency Drug Shortages Task Force (Task Force) to study the issue. FDA has now released the report resulting from the Task Force’s activities: “Drug Shortages: Root Causes and Potential Solutions.” The report, issued on October 29, 2019, concludes that drug shortages are primarily the consequence of economic factors driven by private and public business practices. Those practices, according to the report, disrupt the supply chain availability of marketed pharmaceuticals. The report offers recommendations to provide a framework for stakeholders to address the underlying economic factors leading to drug shortages.

To anyone who has been following government enforcement and private litigation trends related to the over-the-counter (OTC) homeopathic drug industry over the past several years, the Food and Drug Administration’s (FDA) announcement on October 24, 2019 likely came as no surprise. But to stakeholders in this industry, it was certainly unwelcome news and may portend a coming wave of unapproved drug enforcement actions by the FDA.

On September 26, 2019, FDA released a six revised digital health guidances. The primary objective of these revisions was to bring the guidances into alignment with the software function exemptions described in Section 3060 of the 21st Century Cures Act (the “Cures Act”). The medical device community has anticipated these changes since Congress passed the Cures Act almost three years ago in December 2016.

As promised, the Department of Health and Human Services (HHS) filed a brief in the United States Court of Appeals for the District of Columbia Circuit challenging the district court’s holding that the Secretary lacked the authority to compel drug manufacturers from disclosing drug prices in direct-to-consumers television advertisements (DTC rule). On September 23, 2019, HHS filed its appeal in the D.C. Circuit against plaintiffs Merck & Co., Eli Lilly and Co., and Amgen Inc. The brief argues that the district court erred in holding that HHS lacks the statutory authority through the Social Security Act (SSA) to force the DTC rule upon drug manufacturers because they are not direct participants in the Medicare and Medicaid programs.

Out of a sample of 29 non-representative drug manufacturers surveyed earlier this year, 23 had publicly posted policies related to accessing their investigational drugs outside of the context of formal clinical trials, according to the General Accountability Office (GAO). Of those 23 company policies, GAO reports that nineteen of them stated that the manufacturer would consider individual requests for expanded access to their drug candidates, while the remaining four companies stated that such requests would not be considered at the present time. Moreover, approximately half of those companies who would be open to meeting a patient’s request for expanded access also noted expressly in their policies that additional procedures would need to be followed, including review of the request by the Food and Drug Administration (FDA) and an institutional review board (IRB). The GAO study – released on September 9, 2019 – was conducted in response to a congressional mandate (included in the FDA Reauthorization Act of 2017) for the investigative body GAO to review the agency’s actions to facilitate patient access to investigational drugs.

On August 8, 2019, FDA issued a notice on its medical device recall database that a company called Opternative, Inc. had initiated a recall for the Visibly Online Refractive Vision Test, a software application offered directly to consumers. This represents a recent example of FDA taking enforcement action against a telemedicine software company that ultimately resulted in removal of the app from commercial distribution.

Looks like the Drug Pricing Disclosure Rule may not have seen its last day in court. On August 21, 2019, the U.S. Department of Health and Human Services (HHS) filed a notice of appeal against a federal judge’s decision to block an HHS final rule that would require drugmakers to disclose product list prices within consumer-directed television advertisements for certain prescription drugs.

Our ML Strategies colleague Aaron Josephson was quoted extensively in an August 16 FDA Week article (FDA Week is a focused newsletter from InsideHealthPolicy) covering the debate over FDA’s withdrawal of its proposed rule on reporting data falsification. Aaron spent over a decade working at the FDA, and reviewed the rule when he was working as a senior policy advisor in FDA’s device center in 2017. The rule was proposed back in 2010, and FDA withdrew the regulation last fall after determining it would not protect research subjects or improve the quality of research data submitted to FDA. The debate over this regulatory proposal has resurfaced in recent weeks, following the agency’s announcement that it had learned of a data manipulation issue with animal testing contained in the package submitted for a newly approved gene therapy product called Zolgensma.

Recently, a bipartisan group of Senators introduced the Cannabidiol and Marijuana Research Expansion Act (S. 2032), a bill to encourage scientific and medical research on marijuana and its compounds including cannabidiol, or CBD. The bill would expedite the process by which researchers can request an increase in the amount of a Schedule I substance used for approved research by sidestepping the FDA when requesting more marijuana for use in their research. The legislation also would streamline development of FDA-approved drugs that use CBD and marijuana by allowing accredited medical and osteopathic schools, practitioners, research institutions and manufacturers with a Schedule I registration to manufacture marijuana for research.

On July 31, 2019, the U.S. Department of Health and Human Services (HHS) and the Food and Drug Administration (FDA) jointly published a proposal, called the Safe Importation Action Plan, to allow certain entities to import drugs from foreign entities. While this development was not a surprise given President Trump’s campaign promises to lower drug prices by, among other things, removing barriers to drug product importation, it represents a stark departure from prior agency positions that the importation of drugs could not be adequately verified as safe and would not lead to significant cost reductions.

In June 2019, the Delaware Supreme Court issued a decision reaffirming a risk of director liability where there is no board-level reporting process for essential compliance matters.  The facts of the case arise from a 2015 listeria outbreak at Blue Bell manufacturing which resulted in the death of three people. The Delaware case reaffirmed the position that directors may be subject to liability if the director “(1) completely fail[ed] to implement any reporting or information system or controls, or (2) having implemented such a system or controls, consciously fail[ed] to monitor or oversee its operations thus disabling themselves from being informed of risks or problems requiring their attention.”  

On July 29, 2019, the Food and Drug Administration (FDA) published a notice to the Federal Register (84 Fed. Reg. 36609). The notice invites comments on information collected in connection with FDA research by obtaining information from pharmacists and other management at outsourcing facilities as well as related compounding businesses. The collected information will support a comprehensive analysis of the outsourcing facility sector with hopes to inform future FDA work in this area.

Regular readers of this blog know that we’re closely following the FDA’s proposed regulatory framework for software as a medical device (SaMD), known as precertification—Pre-Cert for short. Generally, Pre-Cert involves a premarket evaluation of a software developer’s culture of quality and organizational excellence and continual, real-time postmarket analyses to assure software meets the statutory standard of reasonable assurance of safety and effectiveness.

In follow-up to our previous post, the pharmaceutical industry gained a win on July 8th when a federal judge struck down the Trump administration’s rule that would have required drugmakers to include list prices for drugs in TV ads.

Several parties from the pharmaceutical industry have teamed up with an advertising association to file a lawsuit against the Department of Health and Human Services (HHS) to prevent a new drug pricing disclosure rule from going into effect. The legal challenge was filed on June 14, 2019 and takes issue with a final rule adopted by HHS on May 8, 2019 (which we previously blogged about here) that purports to provide consumers with information regarding the price of prescription drugs. However, opponents to the HHS rule counter that the opposite will occur and that it will actually mislead patients about the price of prescription drugs. This point may not be difficult for the plaintiffs to demonstrate in support of their request for a declaratory judgment that the rule is unlawful, since even HHS has admitted in the final rule preamble that the new requirement may “discourage patients from using beneficial medications, reduce access, and potentially increase total cost of care.”

On June 6, 2019, the U.S. Department of Health and Human Services’ Office of Inspector General (OIG) issued a report that found among a sample U.S. hospitals that obtained non-patient-specific (NPS) compounded drugs from outside compounders, 89% of hospitals obtained them only from compounders that were registered with the U.S. Food and Drug Administration (FDA) as outsourcing facilities. The OIG study was conducted to provide the FDA with insights to improve its oversight of compounders and enhance patient safety. According to the study, “factors associated with quality, including registration with FDA as an outsourcing facility, are among the most important factors considered when hospitals decide where to obtain their non-patient-specific compounded drugs.” Although use of compounded drugs is widespread in hospitals, the OIG also found that it is rare for hospitals to consider registering their own pharmacies as outsourcing facilities.

Legalizing “hemp” under the Agricultural Improvement Act of 2018 (2018 Farm Bill) has triggered an important change for the examination of federal trademark applications concerning cannabis and cannabis-derived goods and services.  In response to the Bill’s enactment on December 20, 2018, the United States Patent and Trademark Office (USPTO) issued a new examination guide to clarify its examination procedures involving hemp goods and services.  For businesses in the cannabis industry, the examination guide (recently issued on May 2, 2019) will impact the viability of federal trademark applications filed on or after December 20, 2018 that were once previously barred.