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  • Maine and Nevada Update Drug Price Transparency Laws

    Maine and Nevada previously enacted laws requiring drug manufacturers to report information about the pricing of their products. (See our coverage here and here). As summarized below, each state has recently updated their reporting requirements.  Both states’ new requirements will become effective in October 2021 and should be considered as manufacturers prepare for state drug price transparency reporting in 2022.


    LD 686 provides the Maine Health Data Organization with new authority to publish a list of the prescription drugs for which the manufacturer has: (A) increased the wholesale acquisition cost (WAC) of a brand-name drug by more than 20% per pricing unit; (B) increased the WAC of a generic drug that costs at least $10 per pricing unit more than 20% per pricing unit; or (C) introduced a new drug with a WAC that exceeds the threshold for a specialty drug under the Medicare Part D Program (currently $670). This list will be posted on a publicly accessible website no later than January 30, 2022 and updated annually thereafter.

    LD 686 also revises the process for disclosures by manufacturers, wholesale drug distributors and pharmacy benefits managers (PBMs). Previously, manufacturers, wholesale drug distributors and PBMs were required to provide “pricing component data” within 60 days of a request from the state. Now, the state will post a list of drug product families for which it intends to request pricing component data from manufacturers, wholesale drug distributors, and PBMs on a publicly available website on or before February 15th each year. No sooner than 30 days after the posting of the list, the state shall provide notice via email to manufacturers, wholesale drug distributors, and PBMs of its request for pricing component data. These entities will then have 60 days to provide the pricing component data to the state. “Drug product family” is defined as “a group of one or more prescription drugs that share a unique generic drug description and drug form.” In determining which drug product families are included on the list, the state intends to consider prescription drugs included on the public notice list described above, as well as the 25 costliest drugs, the 25 most frequently prescribed drugs, and the 25 drugs with the highest year-over-year cost increases.

    The definition of “manufacturer” has also been updated to specify that a manufacturer is an entity that manufactures or repackages, and sets the WAC for, prescription drugs.

    Finally, LD 686 updates the confidentiality provisions that apply to information disclosed to the state by manufacturers, wholesale drug distributors and PBMs. While information could previously be shared in the aggregate if it did not allow for the identification of an individual drug, the state may now share information in the aggregate “as long as it is not released in a manner that allows the determination of individual prescription drug pricing contract terms covering a manufacturer, wholesale drug distributor or [PBM].” In addition, the state may share information that is publicly available.


    Nevada’s reporting requirements have previously been primarily focused on drugs deemed to be essential for treating asthma and diabetes and included on an annual list published by the state (the “Essential Drug List”). SB 380 removes asthma from the Essential Drug List, and provides the state with authority to compile an additional new list of drugs for which manufacturers will need to report information. The latter list, which will be published at the same time as the Essential Diabetes Drug list, will consist of prescription drugs with a WAC exceeding $40 for a course of therapy that have been subject to an increase in WAC of 10% or greater during the immediately preceding calendar year or 20% or greater during the immediately preceding two calendar years (the “WAC Increase List”). A “course of therapy” is defined as the recommended daily dosage as set forth on the FDA-approved label for 30 days, or, if the normal course of treatment is less than 30 days, the recommended daily dosage set forth on the FDA-approved label for the duration of the recommended course of treatment. Manufacturers of drugs that appear on either or both of the current Essential Drug List or WAC Increase List must submit reports to the state by April 1 of each year. The elements of the manufacturer’s reports remain substantially the same, however SB 380 adds new reporting elements if the manufacturer acquired the intellectual property for the drug within the immediately preceding five years.

    SB 380 also updates the reporting requirements for PBMs and adds a new reporting requirement for wholesalers that sell prescription drugs included on either or both of the lists compiled by the state. By April 1 of each year, wholesalers that sell these products must report information regarding WAC and rebates with manufacturers, pharmacies, PBMs, and other entities. Wholesalers that do not comply with the reporting requirements are subject to the same penalties that can be assessed against manufacturers and PBMs – i.e., up to $5,000 per day of violation.

    FTC codifies its Enforcement policy for “Made in the USA” Claims; False “Made in the USA” Claims May Now Result in a Monetary Penalty

    On July 1, 2021, the Federal Trade Commission (FTC) announced the availability of the pre-publication of the final rule on “Made in USA” (MUSA) claims in the Federal Register. The final rule was published on July 14, 2021.  We previously reported on events that resulted in this rule.

    FTC received more than 700 comments in response to the notice of proposed rulemaking from individuals, industry groups, consumer organizations, and members of Congress. FTC concluded that none of the comments provided a compelling basis to change the substantive requirements of the proposed rule.

    The rule does not set a new standard for MUSA claims.  Instead, it authorizes FTC to seek not only an injunction but also civil penalties of up to $43,280 per violation of the final rule.

    The new rule applies not only to product labeling, but to any “mail order catalog” or “mail order promotional material” that includes a seal, mark, tag, or stamp that labels a product as having been made in the United States.  Mail order catalogs and promotional material are defined as “any materials, used in the direct sale or direct offering for sale of any product or service, that are disseminated in print or by electronic means, and that solicit the purchase of such product or service by mail, telephone, electronic mail, or some other method without examining the actual product purchased.”

    As we previously reported, two Commissioners did not support the proposed rule and questioned FTC’s application of the rule to materials that did not appear to constitute labels, such as mail order catalogs.  In the preamble to the final rule, FTC concludes that the final rule does not cover MUSA claims in all advertising.  Instead, it covers labels appearing in all contexts, whether, for example, they appear on product packaging or online.  FTC does not clarify the definition of labels and we anticipate that the meaning of that term will become a topic of discussion when FTC asserts that a Company is liable under the new rule for a claim appearing in a context that arguably does not constitute a “label.”

    Some notes about the final rule:

    • It applies only to unqualified MUSA label claims.  For false or misleading qualified MUSA claims, FTC authority remains limited to injunctive relief.
    • It includes a list of equivalents to “Made in USA” in 16 C.F.R. § 323.1 (listing “made,” “manufactured,” “built,” “produced,” “created,” or “crafted” in the United States or in America).  However, this list is not exhaustive.
    • The final rule does not supersede, alter, or affect the application of any other federal statute or regulation relating to country-of-origin labeling requirements, including but not limited to regulations issued under the Federal Meat Inspection Act, the Poultry Products Inspection Act.; or the Egg Products Inspection Act.  As readers of our blog know, “Product of USA” and other country of origin labeling issues on meat and poultry products have been an issue of discussion in recent years.  Last year, in response to a Petition regarding such claims, USDA committed to  rulemaking to address the voluntary use of “Product of USA” claims on meat and poultry.  On July 1, 2021, USDA announced its plan to initiate a top-to-bottom review of “Product of USA” claims.  (Incidentally, earlier in June, the National Cattlemen’s Beef Association submitted a Petition to USDA requesting notice and comment rulemaking regarding “Product of USA” claims on beef products).
    • The effective date of the rule is Aug. 13, 2021.

    What’s in a name? FDA Calls out Amgen for Misdirection

    In case you missed it, FDA took to email and social media earlier this week (the equivalent of shouting it from the rooftops) to announce that it has notified Amgen Inc. of Neulasta (pegfilgrastim) misbranding due to false or misleading promotion.  This is OPDP’s second Untitled Letter and fourth letter overall this year.

    Notably, this Untitled Letter is solely based on false or misleading benefit claims – FDA did not take ANY issue with Amgen’s presentation of safety.  This is only the second letter of this type in over five years; in the first instance, FDA took issue with a demonstrably false claim.  FDA’s 2018 CFL Guidance seemed to signal to industry that FDA would be more flexible on Rx drug benefit claims.  Generally, FDA has stayed true to that approach – with a focus on promotion that has some element of risk minimization.  Given this background, what happened here?

    What happened is likely FDA’s concerns that the Neulasta promotion misleadingly sought to sow doubt about the efficacy of biosimilars.  While not a specifically stated priority for OPDP, FDA has prioritized biosimilar development to encourage innovation and competition among biologics.  As part of its initiatives on this front, FDA issued a Draft Guidance in February 2020 on Promotional Labeling and Advertising Considerations for Prescription Biological Reference and Biosimilar Products (Biologics Promotional Guidance).

    The Neulasta promotion identified in the Untitled Letter is an animated banner that compares the rates of febrile neutropenia (FN) between “pegfilgrastim” pre-filled syringes (PFS) and Neulasta Onpro.  The banner presents claims that PFS resulted in a 31% increase in the rate of FN compared to Onpro.  This claim is based on a real world, retrospective study of 11,000 patients, comparing Neulasta PFS and Neulasta Onpro.  While the study evaluated Neulasta products in both arms, the banner refers to the PFS arm as “pegfilgrastim PFS,” NOT Neulasta PFS.  OPDP called out the use of this terminology in its letter:

    The above misleading claims and presentations are particularly concerning from a public health perspective because they could undermine confidence not just in Neulasta delivered via PFS but also in FDA-licensed biosimilar pegfilgrastim products, which are only delivered via PFS. The above claims prominently present “Pegfilgrastim PFS” (emphasis added) as the comparator arm vs. “Neulasta Onpro” and “Onpro.” The use of the proper name (i.e., nonproprietary name) of Amgen’s PFS product, on the one hand, and the proprietary name of its OBI product, on the other, could result in healthcare providers failing to understand that Amgen’s Neulasta was used in both arms of the study. Healthcare providers could conclude that a biosimilar pegfilgrastim product delivered via PFS is not as effective as Amgen’s OBI product (i.e., Neulasta Onpro). As noted above, the study cited is inadequately designed and precludes the drawing of conclusions regarding the comparative risk of FN in patients taking Amgen’s pegfilgrastim products depending on delivery method. It likewise does not support conclusions about any other FDA-licensed pegfilgrastim products.

    The Untitled Letter’s discussion about the name used aligns with FDA’s position, as articulated in its Biologics Promotional Guidance, on clearly identifying biological products in promotion:

    Firms should carefully evaluate the information presented in promotional materials for reference products or biosimilar products to ensure that in each instance where the promotional materials address a product or products, the materials correctly and specifically identify the product or products to which the information applies (e.g., the reference product, the biosimilar product, or both the reference product and the biosimilar). . . Clearly and correctly identifying the relevant biological product or products in promotional materials can help prevent presentations that are inaccurate because they attribute data or information to the wrong product. It can also help the audience identify which product or products are the subject of a particular promotional presentation.

    Biologics Promotional Guidance at 4.

    Notwithstanding the name used, OPDP pointed out the following inadequacies with the study that render the claims misleading.  The study

    • was not designed to ensure that patients with FN were appropriately identified;
    • had no control to ensure the study populations were adequately balanced; and
    • selection bias was possible given the small absolute difference in rates between the arms.

    FDA also stated that the disclosure of study limitations in the last two frames of the animation did not mitigate the misleading claims and presentations in the banner.

    Interestingly, while FDA focused on an animated banner, it also called out its receipt of complaints through the FDA Bad Ad Program “regarding promotional communications with similar claims and presentations as the one discussed in this letter.”  The statement seems to suggest that this may be a course of conduct by Amgen with regard to Neulasta promotion.  Twenty years ago, FDA’s Warning Letter to AstraZeneca sent a strong message to industry that FDA would not tolerate brand messaging that suggested generic drugs were somehow less safe or effective than reference products.  We are interested to see whether OPDP will continue this approach through the strategic use of enforcement letters to protect biosimilars.

    Time is (Not) on Your Side: January 1, 2022 Bioengineered Food Disclosure Deadline is Fast Approaching

    While some of us are just starting to recover from graduations, ends of fiscal years, or just looking forward to a summer vacation and listening to the Rolling Stones, time is decidedly not on your side if you have not yet determined if your food or dietary supplements need to be labeled under the National Bioengineered Food Disclosure Standard (BE standard).

    With the approach of the January 1, 2022 mandatory compliance deadline for the BE standard, manufacturers and importers of food and dietary supplements should work to develop strategies for compliance and evaluating each product’s bioengineered (BE) status if they have not already done so. For those still in the process of doing so, or those who want a refresher on the requirements, we just authored an article for the Regulatory Affairs Professionals Society outlining the requirements under the BE standard. Prior posts on the BE Standard and its implementing regulations can be found here, here, and here.

    The mandatory disclosure requirement of the BE standard applies to human food, including dietary supplements, that is subject to the labeling requirements under the Federal Food, Drug, and Cosmetic Act, as well as some products under the jurisdiction of the USDA’s Food Safety and Inspection Service. There are several express exemptions to the disclosure requirement in the regulations, including an exemption for very small manufacturers, a threshold for inadvertent or technically unavoidable presence of BE substances of up to 5% for each ingredient, and food and supplements certified under AMS’s National Organic Program. The BE standard and its implementing regulations require food containing any amount of a bioengineered substance that is not inadvertent or unintentional to bear a disclosure.

    While our article was written for the dietary supplement industry, the requirements are the same for foods.

    Biden “Promoting Competition” Executive Order Falls In Behind Drug Importation

    On Friday, President Biden issued a wide ranging Executive Order seeking to address overconcentration, monopolization, and unfair competition in the U.S. economy.  Using an aptly named “whole-of-government” approach, the Order calls on the Department of Justice, the Federal Trade Commission, the Agriculture Department, the Treasury Department, the Department of Commerce, the Department of Health and Human Services (DHHS), and other agencies to implement wide-ranging policies to combat the “excessive concentration of industry, the abuses of market power, and the harmful effects of monopoly and monopsony – especially as these issues arise in labor markets agricultural markets, Internet platform industries, healthcare markets (including insurance, hospital, and prescription drug markets) . . . .”

    Among the Order’s mandates for DHHS are several relating to prescription drugs.  The Secretary of Health and Human Services is directed to submit to the White House, by August 23, a plan to “combat excessive pricing of prescription drugs and enhance domestic pharmaceutical supply chains, to reduce pries paid by the Federal Government for such drugs, and to address the recurrent problem of price gouging.”  DHHS is also called upon to implement existing laws and initiatives supporting the development, approval, and Medicare and Medicaid payment for generics and biosimilars.

    But the Order’s most specific mandate relating to prescription drugs pertains to the importation of drugs from Canada.  The Order calls on FDA “to reduce the cost of covered products to the American consumer without imposing additional risk to public health and safety, [by working] with States and Indian Tribes that propose to develop section 804 Importation Programs . . . .”  Section 804 was added to the Federal Food, Drug, and Cosmetic Act in 2003 to authorize the importation of prescription drugs from Canada under certain conditions, but until 2020, no administration had made the statutorily required certification that an importation program will pose no additional risk to the public’s health and safety and will result in a significant reduction in the cost of covered products to the American consumer.  On September 20, 2020, HHS under the Trump Administration made the required certification for the first time, and concurrently issued a final rule to permit states, and, in certain circumstances, pharmacies or wholesale distributors, to seek authorization from FDA to import certain drugs from Canada.  (See our blog post on the rule.)  However, the rule places the burden of demonstrating consumer savings on the sponsors of importation plans.  Two states have submitted importation plans to FDA for approval, but the rule and the certification were promptly challenged in federal court by the Pharmaceutical Research and Manufacturers of America (PhRMA) and other interest groups.

    Prior to this Executive Order, the Biden Administration seemed to be ambivalent about drug importation.  The Justice Department recently filed a motion to dismiss the PhRMA lawsuit for lack of subject matter jurisdiction, or alternatively, for failure to state a claim, which would indicate that the Administration wanted to retain at least the option to implement drug importation through the 2020 regulation.  On the other hand, the Justice Department’s brief went into detail about how difficult it will be to pass the statutory hurdle and obtain FDA approval to import drugs from Canada, and also pointed out that Canada’s Minister of Health has issued an order restricting Canadian sellers from distributing drugs outside of Canada.

    The Executive Order places the Biden Administration firmly behind drug importation.  Although the Order is careful to repeat Section 804’s requirement that importation may not impose additional risk to public health and safety, it calls on FDA to work with states and Indian Tribes to find a way to make importation work.

    Despite the measures described above, the Order’s provisions relating to drug pricing are, on the whole, relatively modest.  In contrast to Donald Trump, President Biden apparently does not intend to address drug pricing primarily through this or other Executive Orders, or even through regulations.  Instead, the Order announces the President’s intention “to support aggressive legislative reforms that would lower prescription drug prices, including by allowing Medicare to negotiate drug prices, by imposing inflation caps, and through other related reforms.”  This statement (and a similar statement in the President’s FY 2021 budget) reflects Biden’s strategy of leaving the bulk of the work on drug price reduction to Congress.

    DEA To Mobile Narcotic Treatment Programs: “Hit the Road, Jack, But You Better Come Back”

    The Drug Enforcement Administration (“DEA”) recently issued its final rule authorizing the use of mobile narcotic treatment programs (“MNTPs”) to allow registered Narcotic Treatment Programs (“NTPs”) employing mobile units to dispense medication for maintenance or detoxification treatment remotely.  Registration Requirements for Narcotic Treatment Programs with Mobile Components, 86 Fed. Reg. 33,861 (June 28, 2021).  DEA had issued a notice of proposed rulemaking in February 2020 (see our post here).  We note that the Centers for Disease Control and Prevention reported in December that over 81,000 drug overdose deaths occurred in the year ending May 2020, the highest number ever recorded during a twelve-month period.  Overdose Deaths Accelerating During Covid-19 (Dec. 17, 2020).  Kudos to the Drug Enforcement Administration (“DEA”) for recognizing the increased demand for treatment by patients with opioid use disorder in underserved and remote areas and, most important, for taking steps to improve access.

    DEA authorizing NTPs to operate MNTPs as a coincident activity waives the requirement that NTPs obtain a separate registration for each mobile unit.  DEA previously authorized MNTPs to dispense remotely on an ad hoc basis, and placed a moratorium on new authorizations in 2007.  The agency opined that the final rule allows the use of MNTPs “to be expanded more extensively, more consistently, and with greater protections against theft and diversion than was possible before.”

    While increasing access to treatment, the final rule imposes a number of requirements that minimize risk of controlled substance diversion, including that the MNTP’s must “come back” to the registered location each day.

    An MNTP, as defined, is an “NTP operating from a motor vehicle…that serves as a mobile component (conveyance)…operating under the registration of the NTP, and engages in maintenance and/or detoxification treatment with narcotic drugs in schedules II–V, at a location or locations remote from, but within the same State as, its registered location.”  MNTPs are motor vehicles propelled under their own motive power lawfully on public streets and roads; more than three wheels must be in contact with the ground.  The final rule expressly excludes trailers from qualifying as MNTPs.

    NTPs must notify the local DEA office in writing of their intent to operate an MNTP and must receive explicit written approval from DEA before operating an MNTP.  NTPs must also provide local and state licensing and registration information to DEA investigators during inspections and prior to transporting controlled substances.

    MNTPs can operate at any remote location or multiple locations, including correctional facilities, as long as it is consistent with applicable federal, state, tribal, and local laws and regulations, and the local DEA office does not direct otherwise.

    Only the registered NTP can supply narcotic drugs to their MNTPs.  MNTPs may only dispense approved medication for treatment.  They cannot conduct any other controlled substance activities such as sharing, transferring or reverse distributing while away from their registered location.  MNTPs cannot act as controlled substance collectors, function as hospitals, long-term care facilities, or emergency medical service vehicles.  They cannot transport patients.

    Also, an MNTP can only operate in the state where the registered NTP is located and registered.  DEA registrations are based on state licenses so DEA registrations cannot authorize controlled substance activities outside that state.

    For good reason, because MNTPs will transport and dispense methadone and other controlled substances, the mobile units are subject to enhanced security requirements.  Authorized personnel must retain control over controlled substances during transfer between the registered location and the MNTP, transporting to and from remote dispensing sites, and at the dispensing sites.  Narcotic drugs must be stored in an installed safe.  MNTPs must also be protected by an alarm system that transmits signals directly to a central monitoring station or police agency.

    The controlled substance storage area cannot be accessible from outside the vehicle.  Patients must wait in an area physically separate from the storage and dispensing area.  Patients must wait outside if the MNTP does not have seating or a reception area separate from the storage and dispensing area.

    NTPs must also establish procedures in the event an MNTP becomes disabled.  The procedures must require that the controlled substances be accounted for, removed from inoperable MNTPs, and secured at the registered location.

    As noted above, while there are no mileage limits on the range that MNTPs can travel and dispense, the requirement that MNTPs return to the registered location upon completion of dispensing at the conclusion of each day dictates distance.  Controlled substances must be removed and secured at the registered location after daily operations.  DEA has concluded that requiring MNTPs to return to their registered location and securing the controlled substances reduces the risk that controlled substances will be diverted.

    However, NTPs can apply to DEA for a waiver to the requirement that MNTPs return to the registered location at the end of each day.  NTPs must submit with their waiver request a proposed alternate return period for the MNTP, enhanced security measures and other factors the agency should consider for waiving the requirement.  DEA will evaluate each request on a case-by-case basis to determine whether the NTP has “demonstrated exceptional circumstances that warrant the exception.”  DEA will also consider whether the MNTP’s security, recordkeeping and other relevant effective controls will be maintained if it grants the waiver.  DEA promised to evaluate the final rule within in a year to determine whether to allow all MNTPs to be excepted from having to return at the end of the day without requiring NTPs to apply for a waiver.

    MNTPs may park at their registered location or in any secure, fenced area after its controlled substances have been removed at the end of a day.  The NTPs must notify the local DEA office where the MNTP will park.

    MNTPs are subject to the same recordkeeping requirements as NTPs, including maintaining a dispensing log at the registered site.  As an alternative to maintaining a paper dispensing log, the final rule allows MNTPs and NTPs to use an automated/computerized data processing system for storage and retrieval of the dispensing records, if:

    1. The automated system maintains all required information;
    2. The automated system is capable of producing a hard copy printout of the dispensing records;
    3. The MNTP or NTP prints a hard copy of each day’s dispensing log initialed by each person who dispensed medication;
    4. DEA approves the automated system;
    5. The MNTP/NTP maintain an off-site back-up of all computer-generated program information; and
    6. The MNTP/NTP can produce accurate summary reports for any time-frame DEA personnel select during an investigation; summary reports in hard copy must be in a maintained systematically organized file at the registered site of the NTP.

    NTPs must retain required MNTP records for two years unless the state requires records be retained for a longer period.

    The final rule takes effect on July 28, 2021, and not a moment too soon.

    A VALID Argument: Proposed Legislation Would Reshape Regulation of Diagnostics

    For many years, one of the most controversial topics in device regulation has been the dual-track oversight of in vitro diagnostics (IVDs) and laboratory developed tests (LDTs).  Distributed IVD products are regulated by FDA, while laboratories that perform LDTs are regulated by the Centers for Medicare & Medicaid Services (CMS).  At various points and in various ways, FDA has sought – mostly unsuccessfully – to regulate LDTs (see here).  Most recently, the Department of Health and Human Services (HHS) under the previous administration said FDA could not regulate LDTs in the absence of notice-and-comment rulemaking (see our prior post here).  Given how hard rulemaking is, that decision – if left standing by HHS – could significantly deter FDA from regulating most LDTs.

    Enter Congress, and the introduction on June 24 of newest incarnation of the Verifying Accurate, Leading-edge IVCT Development (VALID) Act.  If enacted, the VALID Act would completely reshape the regulation of all diagnostic products in the United States.  Running 245 pages, the Act would create a new framework that would encompass both distributed IVD products and LDTs.  This approach stands in sharp contrast to the Verified Innovative Testing in American Laboratories Act of 2021 (VITAL Act), introduced on May 18, 2021.  In 7 short pages, this bill would give CMS exclusive jurisdiction over LDTs.  The VITAL Act would largely preserve the dual-track regulatory approach; the VALID Act would upend it.

    Both approaches have their proponents and detractors.  Critics of the current system assert, for example, that it makes no sense for a diagnostic test for Condition X to be subject to FDA’s comprehensive regulatory framework if distributed and another test for the same condition to be subject to a different, and (some would argue) lower level of regulation as an LDT.  They argue that, from the patient’s perspective, the requirements for, and quality of, a test should not vary depending on whether it relies on a distributed IVD or is developed in a laboratory.  Proponents of the current dual-track approach assert that laboratories that develop and perform LDTs are in fact highly regulated – just not by FDA – and that LDTs have an excellent track record and are essential to the current health care system.

    The COVID-19 pandemic has only highlighted and deepened the split.  LDT advocates assert that FDA’s blocking of LDTs at the start of the pandemic hindered the country’s response to the pandemic by delaying test availability.  FDA, however, claims that nearly two-thirds of COVID LDT EUAs submitted to the agency for review had design or validation issues.  Critics also note FDA’s struggle to cope with the large influx of EUA submissions for COVID tests (both IVDs and LDTs), and question FDA’s capacity to regulate a large influx of LDTs.  According to Concert Genetics there are currently an estimated 160,000 genetic tests – which is only one type of LDT.  The number of LDTs is certain to grow in the upcoming years.

    Thus, both sides view the COVID pandemic as confirming their pre-pandemic positions; the need for greater FDA oversight of LDTs to ensure test quality, on the one hand, versus the detrimental impact of FDA regulation to the timely availability of LDTs, especially in response to new public health threats, on the other.

    VALID comes down squarely on the side of the need for greater FDA regulation.  The bill creates a new category, called In Vitro Clinical Tests (IVCTs), which encompasses both distributed IVD products and laboratory tests.  Once the legislation is fully in effect, the distinction between LDTs and distributed products would largely vanish.

    While completely revamping diagnostic regulation, VALID was not crafted in a vacuum.  Some elements, such as technology certifications, are new.  Many other concepts in the legislation are familiar, such as premarket review by FDA, breakthrough designations, pre-submissions, and risk classifications (albeit only in two categories).  Thus, many provisions will feel familiar, even if not identical.

    And yet, the devil will lie in the details.  For instance, under VALID, IVCTs that are “low risk” and IVCTs that are “high risk” will be subject to very different requirements.  The former will enter the market without FDA review, while the latter will need FDA approval.  Thus, drawing the line is critically important.  A low risk IVCT is one that:

    (A) would cause minimal or no harm, or minimal or no disability, or immediately reversible harm, or would lead to only a remote risk of adverse patient impact or adverse public health impact, taking into account the degree to which the technology for the intended use of an in vitro clinical test or category of tests is well characterized and the criteria for performance of the test or category of tests are well-established for the intended use, the clinical circumstances under which the in vitro clinical test or category of tests is used, and the availability of other tests (such as confirmatory or adjunctive tests); or (B) would cause a serious adverse health consequence, harm that is reversible, a delay in necessary treatment that is not life-supporting or life-sustaining, or would lead to a serious risk of adverse patient experience or adverse public health impact, but applied mitigating measures have the capacity to ensure the test meets the standard described in subparagraph (A).

    These criteria are by and large different from the ones found in the language of the Federal Food, Drug, and Cosmetic Act for determining device classification.  The concepts here are ones that are often used by FDA, but the aggregation of concepts – risk + well-characterized + well-established performance criteria + clinical circumstances + confirmatory tests – represent a new statutory equation.  And because of the imprecision of many of the terms and how they are weighed, it will give FDA very wide latitude in classifying IVCTs.

    This is just one example.  As one dissects VALID, there are numerous other instances where it is predictable that confusion and debate will ensue as to exactly what the law means.  FDA will have a gargantuan task in creating the guidance documents trying to provide greater clarity as to how the law would be implemented.  And, notwithstanding the drafters’ goal of developing new criteria for IVCTs, FDA may largely apply these concepts along the lines of its existing device framework.  Or, perhaps not.  How the law will be implemented is a large unknown.

    FDA has, of course, dealt with similar challenges of assessing multiple factors in reviewing a submission.  For example, the agency has issued multiple guidance documents relating to device review which direct a multi-factorial analysis.  Those documents, though, represent FDA’s perspectives informed by years of evaluating devices under a fairly static framework.  At a minimum, these new statutory terms and concepts will lead to a protracted transitional period of great uncertainty.  Under section 5 of VALID, most provisions would not take effect for four years.  Given the scope and complexity of the law, FDA and stakeholders would need all of that time – and probably more – to prepare for implementation of the legislation.  Even then, it will take time to see how these terms are actually implemented in practice.

    Ultimately, the most important provisions of any LDT legislation, if enacted, may not be what the legislative drafters expected.  That happened with the 1976 Medical Device Amendments.  The sponsor of the legislation wrote a detailed, lengthy section creating a pathway to market called “Product Development Protocols,” which was clunky, complex, and cumbersome, and quickly became irrelevant. Conversely, an obscure provision, added to create parity with pre-Amendment products – section 510(k) – became one of the most important provisions of all.

    Whether VALID will be enacted is unknown.  Prior legislation to address IVCTs has died.  Perhaps this bill will have a different fate.  Gamblers can place their bets on the likelihood of passage.

    One sure bet, though, is that despite the herculean efforts to craft this legislation, if VALID is enacted, an even more powerful law will kick in: the law of unintended consequences.  In transforming the field of diagnostic regulation in the United States, VALID will have impacts that will not be foreseen or contemplated.

    Categories: Medical Devices

    FDA Medical Device Ban Overturned For the First Time

    In the first challenge ever brought against FDA’s rarely used power to ban a medical device, a court found FDA overstepped its authority and overturned the ban.  In March 2020, FDA issued a final rule that banned the use of Graduated Electronic Decelerators (GEDs) to treat patients with severe self-injurious and aggressive behaviors (SIB/AB), but did not restrict the use of these same devices for other purposes, like smoking cessation.

    The only place in the country that uses GEDs for SIB/AB is the Judge Rotenberg Educational Center in Massachusetts (JRC), and the patients it treats suffer from severe behaviors, such as head-banging or self-biting, that have not been resolved using conventional treatments.  FDA cleared 510(k)s for GEDs in the 1990s.  The use of GEDs by JRC is subject to extensive regulation by Massachusetts, including the need for a judge to authorize the treatment for any patient.  In 2018, a Massachusetts court upheld the use of GEDs in treating patients with SIB/AB, finding the device to be effective in treating refractory patients.

    In April 2020, JRC and the parents and guardians of its patients petitioned the D.C. Circuit Court of Appeals to overturn the ban.  (Hyman, Phelps & McNamara helped represent JRC in this matter.)  Petitioners argued that the banning statute did not provide FDA authority to issue a use-specific ban, and that FDA’s ban on GEDs used for certain conditions, but not others, interfered with Congress’ explicit mandate in the Federal Food, Drug, and Cosmetic Act that “nothing in this chapter shall be construed to limit or interfere with the authority of a health care practitioner to prescribe or administer any legally marketed device to a patient for any condition or disease . . . .”  21 U.S.C. § 396.  Petitioners also argued that the ban violated the Administrative Procedure Act in multiple respects, including the failure to consider all relevant information and the agency’s unexplained reversals in position.

    In a 2-1 decision issued on July 6, 2021, the court granted the petitions for review and vacated FDA’s rule on the ground that FDA did not have legal authority to ban an otherwise legal device for a particular use.  Senior Circuit Judge Sentelle, who drafted the opinion, found determinative the statutory restriction prohibiting FDA from interfering in the practice of medicine:

    When Congress has spoken in a statute, we assume that it says what it means and that the statute means what it says.  In this case, the statute says that the FDA is not to construe its statute so as to interfere with the practice of medicine.  That means that the FDA may not enact the regulation at issue before us.

    The court clearly distinguished FDA’s authority to ban a device from being marketed at all, as compared to a ban on particular uses of a device that could continue to be marketed.

    The court asked during oral argument, and mentioned again in its opinion, why FDA did not argue that Chevron deference applied to its action, as is typical in cases involving an agency’s interpretation of its statute.  The court noted, however, that even if the banning statute and the practice of medicine statute are unambiguous, “this does not mandate the FDA’s conclusion that the statute authorizes it to take this action,” i.e., banning GEDs only when used for the treatment of SIB/AB.

    Noting that states have traditionally regulated the practice of medicine, the court also applied principles of federalism to support its conclusion: “Choosing what treatments are or are not appropriate for a particular condition is at the heart of the practice of medicine . . . . .  Therefore, before we would permit the FDA to dictate whether practitioners may administer electrical stimulation therapy to self-injuring and aggressive patients, we would require an explicit statement from Congress to that effect.”  Thus, the court concluded that FDA has no authority to choose what medical devices a practitioner prescribes or administers to its patients, which is what the ban did.

    In his dissent, Chief Judge Srinivasan wrote that FDA could exercise its banning authority in a more tailored fashion and that it was counterintuitive to read the statute as an “all-or-nothing banning power.”  Applying Chevron, Judge Srinivasan concluded that the practice of medicine statute does not unambiguously foreclose FDA’s position, and therefore the court must defer to FDA’s interpretation as long as it is reasonable and consistent with the statute’s purpose.

    Given that FDA has only sought to ban devices two other times (prosthetic hair fibers and powdered gloves), the court’s construction of the relationship between the ban provision and section 396 may have limited effect.  Nevertheless, between its interpretation of the practice of medicine provision in section 396 and its strong invocation of federalism to protect the practice of medicine, the decision may curb FDA’s authority to regulate how clinicians treat their patients.

    Categories: Medical Devices

    Can a CRL Be Final Agency Action: One Step Closer to Finding Out

    FDA has long taken the position that a Complete Response Letter (“CRL”)—a letter sent when FDA has determined that it “cannot approve” a New Drug Application (“NDA”) or an Abbreviated New Drug Application (“ANDA”) “in its present form”—is not a final agency action and thereby not subject to challenge in Court.  Instead, the Agency argues, sponsors can either resolve the requested deficiencies and resubmit the application, withdraw the application, or request a hearing on the CRL pursuant to 21 C.F.R. § 314.110(c).  This position leaves sponsors with very few options for timely resolution of a CRL dispute: The sponsor can file a Request for Reconsideration or a Formal Dispute Resolution Request, to which FDA has no obligation to respond in a timely fashion (only a goal of 30 days), or that sponsor can request a hearing to ask FDA to hold an optional hearing that would take FDA at least another 120 days to grant or deny, making the sponsor potentially to await both the hearing and/or a decision published in the Federal Register.  The legitimacy of that position was undercut in a recent decision of the D.C. Circuit Court of Appeals.

    FDA’s position that sponsors must request an administrative hearing prior to challenging in court a CRL as a final agency action adds about six months until the sponsor can even commence a judicial challenge to any CRL deficiencies.  And while the Agency evaluates the Request for a Hearing on the CRL deficiencies, the one-year time period to respond to the CRL deficiencies ticks away; and at the end of that period, FDA can deem the application withdrawn (or, at its discretion, award a six-month extension, which, in turn, would extend the Agency’s review goal date).  21 C.F.R. § 314.110(c).  Essentially, FDA’s position postponing the reviewability of CRLs can push an applicant into regulatory purgatory so that it may take years to see any recourse from courts.  In other words, by postponing the ripeness of a CRL, FDA effectively may render the CRL too stale to challenge.

    Though challenging CRL deficiencies in Court is often fruitless given that courts almost always defer to FDA on matters of scientific judgment under Chevron, potentially rendering this policy inconsequential, there are a few circumstances in which a Court may actually look at the merits of a CRL.   Under FDCA § 505(j)(3)(C), for example, “any agreement regarding the parameters of design and size of bioavailability and bioequivalence studies” reduced to writing cannot be changed after testing begins without the sponsor’s agreement unless FDA identifies “a substantial scientific issue essential to determining the safety of effectiveness of the drug . . . .”  If FDA violates this provision (or any similar provision) by forcing sponsors to perform studies after agreeing to their proposed studies based on scientific information long available to the Agency, it makes sense that the sponsor would want to challenge the decision both as soon as possible and prior to determining its next steps.  And in an effort to provide sponsor access to judicial review, the FDCA permits, under FDCA § 505(h), appeal “by the applicant from an order of the Secretary refusing or withdrawing approval of an application under” FDCA § 505.  But FDA’s position is that a CRL is not an “order” and is therefore not eligible for judicial review unless and until the sponsor requests a hearing, FDA makes a determination on that hearing, potentially holds a hearing, then issues a Federal Register notice denying approval.

    In a recent case that Hyman, Phelps & McNamara, P.C. and Upadhye Tang LLP filed against FDA in the D.C. Circuit, their client Nostrum Laboratories sought judicial review after FDA agreed to allow a certain type of study to establish bioequivalence for generic theophylline, Nostrum conducted those studies, and then FDA issued a CRL asking for new, time-consuming, expensive studies of a different sort.  The CRL was issued on July 21, 2020 on Nostrum’s Prior Approval Supplement ANDA seeking approval to move its manufacturing facilities.  In support of the PAS, at FDA’s instruction and pursuant to a Product Specific Guidance, Nostrum performed what is referred to two-way crossover bioequivalence studies, only for FDA to issue a CRL asking for four-way crossover studies, a totally different study design.  After repeated outreach to various officials at the Agency and several Requests for Reconsideration, the latest of which remained pending five months after submission, Nostrum filed suit under FDCA § 505(h) challenging the CRL as an “order” refusing approval of its ANDA.

    The Government swiftly moved to dismiss, arguing that the CRL is not an order but an interlocutory action “that does not constitute a final decision by the agency” about whether an application will be approved or disapproved.   The Government further refused to produce the Administrative Record, preventing Nostrum from determining whether there are documents that are not in Nostrum’s possession that could bolster its arguments.  FDA raised other arguments about the pending Requests for Reconsideration that challenged whether judicial review was premature.

    In response, Nostrum argued that a CRL is final agency action under both the plain language of the FDCA and FDA’s implementing regulations.  Because Nostrum refused to make the changes required by the CRL, Nostrum argued, the Agency inherently has refused to approve that application.  Nostrum noted that FDA regulations define a CRL as a determination that FDA “will not approve the application or abbreviated application in its present form.”  Nostrum argued that, if the sponsor will not make the changes FDA demands to approve the application, and because the CRL states that the application cannot be approved in “its present form,” the CRL constituted an Order of FDA subject to review by the D.C. Circuit Court.  Nostrum further argued that the Request for Hearing is optional because the FDCA states only that the applicant can “elect[] to accept the opportunity for hearing. . . ” upon receipt of a CRL.

    After a series of a briefings, the D.C. Circuit motions panel declined to grant the FDA Motion to Dismiss.  Instead, the decision will allow FDA to raise the argument again before a merits panel of the same court, allowing Nostrum’s standing argument to live to see another day.  While the Court has not decided whether a CRL is final agency action, the decision suggests that appealing a CRL will not automatically lead to dismissal without any evaluation of the merits of the case.  Importantly, in this case, where FDA refused to provide the Administrative Record which would reflect any underlying determinations by the Agency with respect to the Nostrum PAS and the necessary bioequivalence testing, Nostrum now gets to review that Administrative Record in order to establish that the underlying CRL decision is final agency action, and was unlawful.

    Admittedly, this decision does not determine that the CRL is a final agency action, but it does give litigants a fighting chance to challenge a CRL without jumping through all the bureaucratic hoops that the Agency insists upon and that can delay judicial review of a CRL indefinitely.  It also provides access to the Administrative Record, even over FDA’s delay, so that the litigant can more effectively make its case.  Maybe, just maybe, a CRL can be final agency action, but it’s going to take another round of briefings, and a decision of the D.C. Circuit Court, to find out.

    Minnesota Proposes to Reduce Opioid Product Registration Fees Related to Hospitals

    A recent proposed amendment to Minnesota’s Opiate Product Registration Fee appears intended to ensure continued availability of certain opiate products at hospitals.  On June 26, 2021, during the Minnesota legislature’s special session, the Minnesota House of Representatives passed HF33, an omnibus health and human services bill.  If enacted, Article 5, Section 6 of HF33 would provide for a reduction to the State’s opiate product registration fee.  Under current Minnesota law enacted in May 2019, manufacturers that sell, deliver, or distribute into or within Minnesota 2 million or more units of an opiate are required to pay an annual product registration fee of $250,000.  For the purposes of assessing the annual opiate product registration fee, a “unit” means “the individual dosage form of the particular drug product that is prescribed to the patient. One unit equals one tablet, capsule, patch, syringe, milliliter, or gram.”  Minn. Stat. § 151.066, Subd. 3(f).

    The amendment proposed by HF33 would exempt “any injectable opiate product distributed to a hospital or hospital pharmacy” from the determination of the opiate product registration fee.  Manufacturers would still be required to report sales of these products to the Board of Pharmacy, but they would not be factored into the determination of the opiate product registration fee.  If a manufacturer already paid its annual opiate product registration fee, which was due June 1, 2021, and said manufacturer would not have been required to pay the fee based on the proposed exemption for injectable opiates distributed to a hospital or hospital pharmacy, then the Board of Pharmacy would refund the fee to the manufacturer.

    The companion bill was already passed by the Minnesota Senate and has a presentment date of today, June 28, 2021.  If HF33 is signed by Minnesota Governor Tim Waltz, the opiate registration fee reduction would be effective the day following final enactment.

    We speculate that this amendment is intended to ensure that the significant product registration fees   would not cause potential shortages of certain opiate injectables for hospitals.  Whether HF33 is enacted or not, state legislative initiatives aimed at combatting the opioid epidemic continue to be a moving target for opioid manufacturers.  As it currently stands, no products are excluded from Minnesota’s determination of the opiate product registration fee.  However, we note that the Maine opioid medication product registration fee, which uses a very similar statutory framework, excludes units of opioid medications prescribed for the “purpose of medication-assisted treatment of substance use disorder.”

    I Hear You Knockin’… Preparing for and Managing DEA Inspections (Part 3)

    This is the third in a series of posts on what DEA registrants can expect during cyclic and on-site inspections.  Our series focuses on the background of such inspections, how investigators conduct them and how registrants should proactively prepare for and manage them.  Part 1, posted May 3rd, examines the purpose, background and scope of DEA cyclic and on-site inspections.  We posted Part 2 on May 21st, explaining how diversion investigators conduct on-site inspections and what registrants must do before, during and after each inspection to minimize negative findings.

    The link to Part 1 is here and Part 2 is here.

    Part 3 below lists DEA inspection do’s and don’ts for registrants. They are intended to help DEA registrants be prepared for a DEA inspection.  In our experience, unpreparedness can lead to confusion or misunderstandings during an inspection, and potentially cast a negative light on an  otherwise compliant facility.

    Inspection Do’s and Don’ts

    Registrants should implement the following to prepare for and manage DEA cyclic inspections:

    1. Designate a specific employee as the contact/liaison for any DEA inquiries or inspections. Also, ensure at least one contact/liaison back-up given that regulatory inspections always seem to occur at the worst time, i.e., the designated employee is on vacation or out that day.  The designated contact/liaison should greet the investigators immediately upon commencement of a DEA inspection, and be available at all times while investigators are on-site.
    2. Ensure DEA registrations and state licenses are current and active and copies maintained in an easily accessible file.
    3. Maintain an updated copy of all controlled substance policies and procedures. These should be routinely reviewed and ensure that they comply with the current federal Controlled Substance Act (“CSA”) and regulatory requirements.  We also suggest that a DEA registrant have a specific protocol or policy that details responsibilities during a DEA inspection.
    4. Conduct periodic random audits and mock DEA inspections comprising accountability audits, and record/report and security reviews. These should be performed by third-parties or independent staff without day-to-day controlled substance responsibilities. Periodic random internal audits disclose losses and deter internal theft. Mock internal inspections help ensure compliance and instill familiarity and confidence in employees during actual DEA inspections. Review prior DEA inspection documents and notes.  Ensure past deficiencies have been remedied.
    5. Compile and maintain an updated inspection binder to provide to investigators comprised of: (a) Copies of current DEA registration and state license certificates; (b) List of controlled substances handled for prior two years; (c) Corporate structure; (d) Hours of operation; (e) Officers, management and responsible employees’ name, home address, date of birth and social security numbers; (f) Employees with access to warehouse, cage and vault; (g) Security system component literature with specifications; (h) Alarm test results; and (i) Central station alarm monitoring contracts.
    6. Consult with Human Resources and employment counsel on requests from DEA for personal employee information.
    7. Maintain all required records and reports in a manner that they can be readily identified, produced or retrieved (in the case of electronic records).  For paper records this means  having them organized and stored in a location that can be easily retrieved.  Be clear on designation of official records that will be produced during any inspection.
    8. Maintain required records and reports for at least two years unless state law requires they be maintained for a longer period of time. Maintain records and reports on-site unless the registrant has notified DEA of off-site storage.
    9. Maintain controlled substances in secure areas at all times except during receiving, processing, packaging, labelling or conveying to the secure loading area. Return controlled substances to secure areas as soon as possible at the end of the activity or workday.
    10. Ensure controlled substances awaiting return or destruction are properly secured and documented. Remember that such products must still be included in any current inventory until they are removed from the facility.
    11. Regularly dispose of expired or unusable controlled substances. Although DEA regulations do not require expired or damage drugs to be disposed of in a certain time, keeping excessive inventories of drugs to be destroyed can be viewed by DEA as a security risk.
    12. Change locks or keycard access, and update lists of authorized employees with access to the warehouse, cage and vault after every relevant personnel change.
    13. Inspect security system components at least quarterly. Repair broken or inoperable components immediately.  (Investigators also appear when a security component is not working properly).  Maintain documentation and literature related to the security system and its components for future reference.
    14. Test every alarm sensor with the central monitoring station at least twice a year.
    15. Evaluate and understand the scope of the DEA inspection. Review each investigator’s credentials and request copies of their business cards.  Understand the differences between a Notice of Inspection, Administrative Inspection Warrant (“AIW”), or Search Warrant.  Corporate counsel should always be notified in the event of an AIW or Search Warrant
    16. Ensure that investigators have an area to work that does not interfere with operations.
    17. Keep accurate notes of all requests for information and/or observations, criticisms or recommendations by DEA investigators. Request clarification from investigators on any areas or requests that are unclear.
    18. Employees should assist investigators with any routine questions about operations or records/reports. However, any requests to interview employees should be referred to senior management and counsel.
    19. Make sure that investigators have all records and reports to conduct their audit and that they understand the registrant’s recordkeeping, reporting and security. Inform the investigators immediately if they do not have accurate counts and inventories of every drug they are auditing, or if they are missing relevant records or reports. Understand the methodology the investigators use to conduct their accountability audit.
    20. For the final audit count, do not overlook drugs in the morgue awaiting destruction or elsewhere on the premises.
    21. Photocopy or set aside in a separate file all records and reports that investigators review, make copies of, take or specifically raise questions about during the investigation.
    22. If the investigators take drugs or original records or reports off-site, obtain a DEA receipt (“DEA Form-12”) listing each item.
    23. Correct deficiencies found by investigators while they are on-site or as soon as possible thereafter.
    24. Provide unavailable information and records or reports requested by the investigators as soon as possible if appropriate to do so.
    25. Do not surrender a DEA registration without consulting an attorney.
    26. Although not required by DEA regulations, request a final discussion or exit interview with the investigators at the conclusion of their on-site activities.
    27. Conduct a post-inspection mirror audit to identify/anticipate any issues DEA may raise in the future and be prepared to address or where necessary take remedial action.


    Implementing the recommendations above will help registrants proactively prepare for and manage DEA inspections.  Preparing for and managing successful DEA inspections require preparation, organizing and maintaining complete and accurate records/reports but also employee familiarity with what to expect.  Knowledge of DEA cyclic inspections provided in our three posts will put registrants in the best position to achieve those goals.

    FDA Issues Draft Guidance Distinguishing Remanufacturing from Servicing

    On June 18th, FDA published a draft guidance document titled Remanufacturing of Medical Devices, which has been several years in the making.  The draft guidance distinguishes between “remanufacturing” and “servicing” of devices.  This distinction can be critical, due to the significantly increased regulatory requirements that apply to a device remanufacturer compared to a device servicer.

    In 2016, FDA opened a docket seeking comments on “service, maintenance, refurbishment, and alteration of medical devices” by third parties (see our blog post here).  Two years later, in 2018, FDA issued a Report on the Quality, Safety, and Effectiveness of Servicing of Medical Devices (see our blog post here).  The 2018 report listed several planned actions by the Agency, one of which was to clarify the difference between servicing and remanufacturing.  The new remanufacturing draft guidance appears to be the result of this action item in the 2018 servicing report.

    A remanufacturer is defined in FDA’s Quality System Regulation (QSR) as “any person who processes, conditions, renovates, repackages, restores, or does any other act to a finished device that significantly changes the device’s performance or safety specifications, or intended use.”  21 C.F.R. § 820.3(w).  “Remanufacturing” is also included in the definition of “manufacturer” in the regulations.  Id. § 820.3(o).  Because a remanufacturer is defined as a type of manufacturer in the QSR, a remanufacturer must comply with all of the stringent regulatory requirements that apply to a device manufacturer including design controls, production and process controls, complaint handling, and more.

    In contrast, a device servicer is not a device manufacturer and, therefore, need not comply with the QSR.  “Service” is defined in the draft guidance as “repair and/or preventive or routine maintenance of one or more parts on a finished device, after distribution, for purposes of returning it to the safety and performance specifications established by the [original equipment manufacturer (OEM)] and to meet its original use.”  According to the draft guidance, servicing excludes activities that significantly change a finished device’s safety or performance specifications or intended use, which would instead fall within the definition of remanufacturing.

    Both the 2018 servicing report and the draft guidance note that the majority of complaints and comments received by FDA on inadequate “servicing” that caused or contributed to adverse events or deaths were actually remanufacturing activities.  The draft guidance includes a framework and decision-making flow chart that can be used to distinguish servicing from remanufacturing, and in turn, properly identify the regulatory requirements that apply to the activity.

    The draft guidance begins with several “guiding principles” that FDA recommends applying in assessing whether an activity is remanufacturing or servicing:

    1. assessing whether there is a change to the intended use;
    2. determining whether the activities, individually or cumulatively, significantly change the safety or performance specifications of the finished device;
    3. evaluating whether any change to a device would otherwise require a new marketing submission (e.g., in accordance with FDA’s guidance on Deciding When to Submit a 510(k) for a Change to an Existing Device);
    4. assessing changes to dimensional and performance specifications, including to components, parts, or materials;
    5. employing a risk-based approach (e.g., in conformance with ISO 14971) to assess whether an activity is significantly changes performance or safety specifications and therefore should be considered remanufacturing; and
    6. adequately documenting decision-making to help justify decision-making in the event that an inspection is conducted by FDA or the entity’s rationale is otherwise requested by FDA.

    FDA defines a “significant change to device performance or safety specifications,” which would be considered remanufacturing, to be a change that, “based on verification and validation testing and/or a risk-based assessment, results in a finished device that is outside the OEM’s performance or safety specifications or introduces new risks or significantly modifies existing risks.”  The draft guidance identifies certain types of activities that FDA believes significantly change the legally marketed device’s performance or safety specifications:  changes to the device’s sterilization methods; changes to the device’s reprocessing instructions; and changes to the device’s control mechanism, operating principle, or energy type.

    The draft guidance includes a decision-making flowchart to assess whether a modification to a finished device would be considered remanufacturing.  The flowchart is meant to be used only after an entity has determined that a modification to a device does not significantly change the intended use of a device, because a significant change to the intended use of a finished device would likely be considered remanufacturing.  The flowchart includes questions on adding, removing, or changing a component, part, or material, and assessing whether there are any new or modified risks or significant changes to performance or safety specifications.  If any modification to a finished device is a significant change to a device performance or safety specification, the modification is considered remanufacturing.

    While the flowchart provides a helpful framework for assessing device modifications, it is very high-level and lacking in detail, so a close read of the illustrative examples and definitions provided in the draft guidance would be required to adequately assess whether a modification constitutes remanufacturing.

    The draft guidance recommends that entities performing servicing activities document their decisions that an activity is not remanufacturing in internal memoranda.  This documentation can be used to justify or explain an entity’s decision-making in the event of an FDA inspection or other request from the Agency.  In an appendix to the draft guidance, FDA provides some helpful examples of the type of information that should be included in such an internal memo.

    Now that there is more specific guidance from FDA on what distinguishes servicing from remanufacturing, though only a draft guidance, entities that routinely perform servicing activities should consider implementing a procedure to assess whether an activity significantly changes a device’s intended use or specifications such that it meets the definition of remanufacturing.  Such a procedure could include the decision-making flowchart in FDA’s draft guidance and a template form for documentation of decision-making consistent with the examples in the draft guidance.

    Interested parties have until August 23, 2021, to comment on the draft guidance.

    Categories: Medical Devices

    Critics Suggest FDA Approving Aduhelm Will Erode the “Public Trust”: What About Patients’ Trust?

    For the last 13 years, this blogger has been at the center of what has now been dubbed “patient-focused drug development.” For 6 years, I served as a patient liaison within FDA in what was then called the Office of Special Health Issues.  This was the office (originally the AIDS Relations Staff) that was established in the 1980’s in response to the HIV/AIDS activism movement, the first function within the Agency with a mission to engage with patient stakeholders.  Over the years, this function expanded to cancer (renamed the Office of AIDS and Special Health Issues) and, ultimately, all serious and life-threatening diseases (dropping the AIDS nomenclature).  As part of this lean and mean team, I worked to incorporate patient viewpoints into study design, results interpretation, and, ultimately, benefit-risk decision-making.  In 2012 we at the Agency, under Dr. Janet Woodcock’s leadership, identified the need for more systematic patient engagement — a way to improve representativeness and be more proactive rather than reactive to interacting with patient communities.  So, we crafted the Patient-Focused Drug Development, or PFDD, a commitment that was agreed to in PDUFA V.  This launched us into a new era where we acknowledged that patients are experts in their lived experience and have important preferences to share. To ignore this wealth of expertise would be a huge missed opportunity to inform drug development and review.  Even since leaving FDA, as the PFDD initiative transitioned to externally-led meetings, my HP&M colleagues and I have helped nearly three dozen patient communities plan externally-led PFDD meetings, and that is only half of the work we do to help facilitate what the 21st Century Cures Act codified as “patient experience data.”

    I have been boots on the ground in watching the culture shift both within FDA and in industry, as the value of the patient voice has been recognized as legitimate.  I have witnessed it inform whether clinical trial results are clinically meaningful (or not) as well as the selection and even development of primary endpoints.  Patient stakeholders have become partners in a decision-making process that serves as the gatekeeper to drugs – including both their benefits and their risks – but also will determine whether the status quo will remain (i.e., the morbidity, oftentimes irreversible and progressive, and mortality associated with their condition).  As someone who studied in the fields of public health, medical sociology, and biomedical ethics, I was impressed with how quickly the pharmaceutical and biotechnology arena caught up with what took many decades to occur in the context of the physician-patient relationship.  For too long, patients’ perspectives and own preferences were not considered in the provision of care by physicians at the patient level.  The practice of medicine was viewed as paternalistic.  Now there is a whole body of research that supports patients as partners in their own care, and the practice of medicine has largely corrected course.

    This is what strikes me as so contradictory about the various critics who are suggesting that FDA violated the public trust when approving Aduhelm (aducanumab-avwa) for Alzheimer’s disease earlier this month (see our previous coverage of the approval here). In the last week, we have seen FDA advisory committee members resign in protest (see coverage here) and consumer advocates call for resignations of FDA officials (see coverage here). These self-proclaimed consumer and public health advocates, all who are physicians, feel they are in a better position to inform and/or judge FDA’s decision than the patients who will ultimately be the ones affected by this regulatory decision.  It harkens to the paternalism in medicine of the past.

    As the ultimate stakeholder when it comes to drug approval decisions, shouldn’t we instead consider whether this builds or erodes patients’ trust in FDA?

    Patient Input in the Approval of Aduhelm: Setting the Context for Accelerated Approval

    While the FDA’s summary basis of approval, including supporting memos from both the Director of the Office of New Drugs (OND) and the Director of the Center for Drug Evaluation and Research (CDER), were just released (as I was writing this very post), FDA previously made clear statements about the role of patient stakeholders. In her closing statement during a press briefing on the date of the approval, CDER Director Dr. Patrizia Cavazzoni stated:

    I wanted to thank the patients living with Alzheimer’s, their caregivers and health care professionals who have reached out to us over the past several months regarding the Aduhelm data. While our decisions are based on science and the data in the application, we have listened to and carefully considered the needs of the people who are living with this devastating, debilitating and incurable disease. The data supports patients and caregivers having the choice to use this drug.

    What Dr. Cavazzoni lays out is the traditional way in which patients have informed drug benefit-risk decision-making: by setting the “clinical context” of the disease.  This clinical context encompasses two major considerations: 1) an analysis of the disease condition, including the severity of the condition, and 2) the degree of unmet medical need. This frames the assessment of benefits and risks, in a way, calibrating the application of the regulatory framework to the specific condition at hand.  For example, we know that cancer patients have a high tolerance for toxicity when offered a chance at improved survival, a risk tolerance that would not be shared by individuals suffering from the common cold.  We have also learned from patients with progressive conditions, like Pompe disease, that slowing progression of their otherwise universally permanently progressive condition would be of tremendous value to them – they do not need to see reduced symptom burden or improved functioning for a treatment to be meaningful.

    However, the scope of patient input goes beyond setting the clinical context.  When a disease is serious or life-threatening and it has an unmet medical need, because there are serious risks associated with not approving a drug (i.e., serious morbidity, oftentimes irreversible and progressive, and risk of mortality), FDA must also balance the risks of making a type 2 error, or false negative conclusion from the data in hand.  Patients also have a role to play in setting the context for how much risk of a type 2 error they are willing to tolerate.  Or, said differently, patients can express their tolerance for less certainty of a treatment benefit.

    Because no data set is completely reliable in establishing a drug’s benefit, and because no drug is universally effective for all patients, there is inherent uncertainty in every drug approval.  The question is: how much uncertainty is acceptable?  The Federal Food, Drug, and Cosmetic Act states that the evidence needs to be that “which it could fairly and reasonably be concluded…that the drug will have the effect…” (Section 505(d)).  Patients with different conditions, or even at different stages/severity of the same condition, may have different tolerance for less certainty (similar to the differences in risk tolerance discussed above).  This is why it is important for relevant patient populations to provide input as to what degree of certainty is needed for there to be a fair and reasonable conclusion of drug benefit for their condition.

    One regulatory pathway that embodies this concept of “less certainty” is Accelerated Approval. These approvals, like with Aduhelm, may be granted when a benefit is demonstrated on a surrogate endpoint that is merely “reasonably likely…to predict clinical benefit” (i.e., it is not established using a validated surrogate endpoint that would support traditional approval, e.g., FEV1 in asthma or serum LDL in hypercholesterolemia).  Instead, the ultimate clinical benefit must be confirmed in a post-approval study.  If Accelerated Approval works to help expedite drugs to the market as it’s intended, then we should not expect all drugs approved on these surrogates to have clinical benefit confirmed.  It is in acknowledgement of this inherent uncertainty that FDA has provisions for expedited removal of these drugs if benefit is not confirmed post-approval.

    We see that FDA considered Alzheimer’s patients’ input on tolerance for less certainty of treatment benefit for Aduhelm when Dr. Peter Stein, OND Director, shared during the press briefing:

    We heard very clearly from patients that they are willing to accept some uncertainty to have access to a drug that could provide meaningful benefit in preventing the progression of this disease which as we all know can have very devastating consequences.

    It is clear that this patient input helped inform the Agency’s conclusion that it was appropriate to consider approval based on an unvalidated surrogate (as long as it could conclude the surrogate was “reasonably likely to predict” clinical benefit), even without the ultimate showing of clinical benefit at the time of approval.  Patients expressed a willingness to take on the risks of a drug, even if benefits were less certain, because this uncertain chance of benefit and the associated risks of the drug was worth it to them compared to the alternative: waiting several years for another study, during which time there will be irreversible, progressive neurodegeneration.  Losing one’s identity, or possibly one’s life.  This input was further acknowledged by Dr. Stein in the concluding paragraph of his Concurrence Memorandum (at 9-10):

    …approval using this pathway requires a tradeoff: patients and physicians who choose to use the drug must be willing to accept some residual uncertainty regarding clinical benefit – and therefore be willing to take a drug that may ultimately prove ineffective – along with the risks of the drug, in order to gain earlier access to a potentially valuable treatment. FDA staff has heard from patients that many would consider this a reasonable tradeoff and would opt to accept the uncertainty and risks for a drug that is likely, but not confirmed, to provide clinical benefit, potentially slowing the progression of their disease. Based upon this, I agree with the Office of Neuroscience that the benefit-risk balance for aducanumab is positive…

    Closing Thoughts: Building Patients’ Trust & Digging into the Aduhelm Summary Basis of Approval

    These statements by FDA officials surrounding the approval of Aduhelm, articulating how patient input set the context for their approval decision, should build trust with all patients.  This transparency surrounding one approval decision exemplifies that patient input matters.  This trust, with patients, is the trust that FDA should be most concerned about.

    While we made some initial reflections of the merits of the Aduhelm approval in our June 8th blog post, we have not yet fully reviewed the SBA that was just released.  However, in the coming days we hope to do so and may provide our thoughts in subsequent posts.  In our work across many sponsors with many therapeutic modalities for many indications, we see how the many FDA review divisions apply the Accelerated Approval “reasonably likely to predict” standard required of a surrogate endpoint and, even more so, the application of the “substantial evidence of effectiveness” standard required of all new drug approvals, accelerated or traditional.  It is through this lens that we hope to evaluate the Aduhelm approval, to consider whether it “erodes” FDA’s standards.  However, as we collectively review these FDA review documents, we should all consider the patient input that FDA has shared with us and have that serve as our context for review as well.

    Further Resources on Patient Input

    For those of you who may now be intrigued about the evolution of patient input in drug development and regulatory decision-making, I would point you to some of our FDA Law Blog posts from over the years on this important topic:

    What’s a Sponsor to Do?: The Curious Case of “Disputes” Over Phase 3 Study Design

    End-of-Phase 2 (EOP2) is, in our view, one of the most critical moments in drug development.  It’s the moment at which a drug sponsor selects, and seeks FDA agreement on, its critical Phase 3 study parameters:  dose, eligibility criteria and endpoints, to name a few.  Errors or miscalculations in choosing these design components can send a safe and effective drug to the very expensive graveyard of failed Phase 3 studies.

    So, what’s a sponsor to do when, at EOP2 and in subsequent interactions, it cannot reach agreement with the FDA review division on a critical parameter; let’s say the primary endpoint?  Submit a formal dispute resolution to bring the decision to the Office level, you say?  While that seems like a reasonable approach before spending millions of dollars on Phase 3, that option is not available to sponsors.  You see, in 2015, FDA revised its 15-year old FDRR guidance document to exclude EOP2 disagreements from the FDRR process (i.e., “Advice communicated in meeting minutes and other correspondences is not a regulatory action taken by CDER or CBER; therefore, it would not be an appropriate subject for a formal dispute resolution request (FDRR) by a sponsor.”).

    In limiting the scope of FDRRs in this way, the Agency comforted itself that meeting minutes and advice letters (regardless of how strongly worded) convey mere “recommendations and/or advice made to a sponsor” and, as such, “[s]ponsors are not bound by such recommendations and/or advice.”  Of course, that’s true – at least as a technical matter.  The practical truth, however, is that failure to follow the Division’s recommendations for Phase 3 design puts the program at significant risk of failure even if the Phase 3 study is successful.  We’ll spare you the countless references to FDA advisory committee briefing documents in which a review division quotes its own earlier minutes or advice, pointing an accusatory finger toward the recalcitrant applicant who didn’t follow that advice.  Suffice it to say that a Phase 3 program that rebuffs FDA advice is a Phase 3 program fraught with peril – which, not surprisingly, is a Phase 3 program that investors will not fund.

    We were so alarmed by the predicament created by the 2015 change to the FDRR guidance that we raised the issue in a comment to the docket.  There, we provided a hypothetical test case in which FDA meeting minutes accurately convey the division’s disagreement with the proposed Phase 3 study endpoint: “No, we do not agree. In order for your studies to provide substantial evidence of efficacy, we strongly recommend that you demonstrate an improvement over placebo in [insert FDA-preferred endpoint].” In our hypo (which, for many clients, reflects reality) further discussions with the division suggest that the disagreement cannot be resolved.  Unable to appeal, the sponsor conducts Phase 3 using its preferred endpoint rather than FDA’s and those studies are clinically and statistically successful.  We observed

    the sponsor is already on notice that the review division will not consider these studies sufficient to demonstrate efficacy. It will request a pre-NDA meeting at which the division is likely to restate its view and refer back to the EOP2 minutes noting that the sponsor failed to follow previous advice. The sponsor, still unable to avail itself of the FDR process, must spend the resources necessary to prepare and submit a marketing application, and pay a user fee in excess of $2,000,000. FDA may issue a refusal to file (RTF) letter, which will restate that the endpoint is not appropriate. Because the FDRR process is not available for RTF actions, the sponsor must file over protest. Whether the application is voluntarily filed by FDA or filed over protest, the sponsor must wait 10 additional months, and face the prospect of an advisory committee which will consume significant additional resources, prior to receiving a complete response letter (CRL) stating for at least the fourth time that the endpoint was inappropriate. An appeal is still not available. The sponsor must instead request and attend another meeting with the division at which it will, for the fifth time, be told (likely with some warranted frustration by the review division) that the endpoint is not appropriate. Only at this point, three to four years after the original disagreement with the division, can the sponsor appeal under the 2015 Draft Guidance. If the appeal is successful in determining that the alternative endpoint is appropriate, the sponsor must assemble an NDA resubmission and undergo another six month review clock.

    Well, despite our comment, FDA chose to finalize the guidance unchanged and since that moment has refused requests for formal appeals of disputes that arise at EOP2.

    But why are we rehashing this 5+ year old history today?  In part, it may be that our egos are bruised or that we fester over having been right every time a potential client approaches us with a failed study that would have succeeded had it been able to convince FDA about a particular design element at EOP2, but mostly, it’s because we have identified a very important loophole.  A loophole so large that we’re not sure why we didn’t see it all along.  You see, what is appealable is a Special Protocol Assessment (SPA) No Agreement Letter.  And while conventional wisdom says that one is most likely to submit a SPA if it is possible to achieve  concurrence with FDA on the adequacy of study design, who’s to say that one can’t submit a SPA request in order to confirm a lack of such concurrence, thereby opening up the route to FDRR.

    The truth is, we continue to believe that efficient development of novel therapies would be best served by changing the FDRR guidance to permit formal disputes of Phase 3 study design issues.  Since that doesn’t seem likely at this point, sponsors facing division-level disagreement on Phase 3 study design at EOP2 should consider whether to invest the time and resources necessary for the SPA and FDRR processes prior to initiating Phase 3.  While this could delay Phase 3 initiation by 4-5 months, it could accelerate (or make possible) time to ultimate drug approval.

    FDA Disease Specific Workshops: Clinical Trial Designs for Progressive Multifocal Leukoencephalopathy

    On June 17, 2021, FDA gave notice of an upcoming public workshop focused on clinical trial designs for progressive multifocal leukoencephalopathy (PML).  PML is a rare disease that occurs when the JC virus (JCV), generally thought to lie dormant in the adult population, takes advantage of immunocompromised individuals.  JCV can cause a variety of devastating neurological symptoms primarily through infection of oligodendrocytes and astrocytes, leading to white matter lesions in the central nervous system.  Although this opportunistic virus appears to have no impact on healthy individuals, PML occurs most often in individuals who are immunocompromised, due to diseases like AIDS and leukemia, as well as in individuals taking strong immunosuppressive or immunomodulatory therapies, as may be the case following organ transplant or when managing an autoimmune disorder.  However, this often fatal and debilitating rare disease lacks targeted PML-specific therapies.

    With this notice, FDA announced that it aims to engage with the public and private sectors, healthcare providers, academic experts, patients, and industry to discuss – (1) the unmet need for PML therapies and (2) issues of clinical trial design, including feasibility, trial populations, selection of control groups, endpoints, adaptive designs, and master protocols.  Public workshops such as this provide crucial opportunities to exchange ideas and expertise on developing therapeutics, gain insight into FDA thinking on clinical trial design and regulatory approaches, and inform the Agency and other stakeholders about the challenges to developing PML therapies.

    The virtual workshop will take place on September 21, 2021, and a public docket seeking comments on the workshop will remain open until November 1, 2021.  Interested parties have until September 3, 2021, to submit requests to present during the workshop.  Our HPM team has extensive experience assisting patient groups, sponsors, and academics with their drug and therapeutic development needs for rare diseases and beyond.  Participation in this workshop is a must for anyone interested in PML, specifically, and an important opportunity to see these workshops in action for those seeking to gain insight into agency thinking around the challenges of rare disease drug development, more generally.