Winter Freeze Descends on Nation’s Capital

On January 20, 2017, the Trump administration took a first step toward delaying, reconsidering, and potentially undoing numerous regulations and policies issued by the Obama administration. In order to ensure that “the President’s appointees or designees have the opportunity to review any new or pending regulations,” White House Chief of Staff Reince Priebus issued to the heads of executive departments and agencies a memorandum titled “Regulatory Freeze Pending Review.”

The memo first requests that no regulation be sent to the Office of the Federal Register for publication until a Presidential appointee or designee has reviewed and approved it. Second, the memo states that regulations that were sent to the Office of the Federal Register but that have not yet been published in the Federal Register are to be immediately withdrawn, and then reviewed by a Presidential appointee or designee. Lastly, regulations that have been published in the Federal Register but that have not yet taken effect are to have their effective date postponed for 60 days (from January 20, 2017), after which the agency or department is to “consider potentially proposing further notice-and-comment rulemaking” and, if further action is deemed appropriate, “agencies should notify the OMB Director and take further appropriate action in consultation with the OMB Director.”

The freeze applies not only to final regulations but also to notices of proposed rulemaking, guidance documents, and other “substantive action by an agency . . . that is or is expected to lead to the promulgation of a final rule,” as well as to “any agency statement of general applicability and future effect ‘that sets forth a policy on a statutory, regulatory, or technical issue or an interpretation of a statutory or regulatory issue.’” The memo provides exceptions for “emergency situations or other urgent circumstances relating to health, safety, financial, or national security matters,” and for regulations that are subject to statutory or judicial deadlines.

The implications for industry have the potential to be significant and the freeze may provide an opportunity to further engage with agencies and departments and to influence pending rules and policies. For example:

• On January 13, 2017, FDA reopened the comment period – until February 13, 2017 – requesting data to help the Agency determine whether certain food ingredients should be added to the definition of “dietary fiber”;FDA action could be delayed once the comment period closes.
• On January 9, 2017, FDA published in the Federal Register a final rule to clarify when products made or derived from tobacco are regulated as drugs, devices, or combination products; the rule was scheduled to take effect on February 8, 2017, but that effective date could now be delayed while the new administration reconsiders the regulation.
• On January 5, 2017 HHS published in the Federal Register a final rule implementing the 340B Drug Pricing Program Ceiling Price policy and Civil Monetary Penalty (“CMP”) standards, including the knowledge requirement related to overcharging 340B Covered Entities (which we blogged about here).The rule was scheduled to take effect on March 6, 2017. That effective date could now be delayed, at least as it pertains to the implementation of the Ceiling Price policy, while the new administration reconsiders the regulation. The CMP regulation was required to be promulgated within 180 days of the enactment of the Affordable Care Act, and although HHS missed that statutory deadline, the CMP regulation may still be covered by the memo’s exception for regulations that are subject to statutory deadlines.

It appears that the new administration has already begun withdrawing documents that had been sent to the Office of the Federal Register and were in the pre-publication stage.  The following “Editorial Note” appears on affected docket webpages: “The FDA requested the withdrawal of this document after it was on public inspection.  It will remain on public inspection until the close of business on January 24.  A copy of the withdrawal request is available at the Office of the Federal Register.”