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  • AMCP Format for Formulary Submissions Revision – Comment Period Now Open!

    The Academy of Managed Care Pharmacy (AMCP)’s Format Executive Committee is excited to let you know that after two years of work, version 5.0 of the Format for Formulary Submissions (also known as dossiers) is on the horizon.  And we need your feedback!  We’ve included revisions to the Format in key areas related to digital therapeutics, health disparities, streamlining dossiers, as well as AMCP guidance on Pre-Approval Information Exchange (PIE) decks.

    We want to hear from you!  The evidentiary recommendations and guidelines outlined in the Format  are used by manufacturers and health care decisions-makers to inform coverage, policy, and reimbursement decisions for medical products.  The Format was last updated to version 4.1 in 2020.  Please review the proposed revisions to the Format and provide your comments in this form by June 30.

    CCP Improvements Allow Industry to Track Pre-submissions

    FDA recently released further updates to the Customer Collaboration Portal (“CCP”).  Readers of the blog will know that I am a HUGE fan of the CCP (see our earlier posts here and here).  It has made filing of all premarket submissions much easier by facilitating a direct upload of the submission to FDA.

    The CCP has also allowed industry the ability to track the status of 510(k) submissions.  The CCP identifies the 510(k) date of receipt, and the number of days until a decision/response is due.  It also lists all major 510(k) submission milestones and when they are complete.

    The most recent updates to the CCP allow sponsors of Pre-submissions to track their status just as they are able to do for 510(k)s.  Just like the 510(k) tracker, the pre‑submission tracker shows the official correspondent the date on which the submission was received and the major milestones.  As shown in the screenshot below, the milestones include (i) acceptance decision, (ii) setting the meeting date, (iii) providing written feedback, and (iv) holding the meeting.  Sometimes pre-submissions do not follow as predictable a path as 510(k)s.  By providing standard pre-submission timelines, we hope it will provide greater transparency to sponsors as to the status of their pre‑submission review.

    We look forward to continuing to see the expansion of the CCP.

    Categories: Medical Devices

    CMS Publishes Grab Bag of Proposed Changes to the Medicaid Drug Rebate Program

    Last Friday, May 26, CMS published in the Federal Register an assortment of proposals to change the regulations governing the Medicaid Drug Rebate Program.  Most are new or revised definitions and administrative changes, but several proposals represent new policies that should be of concern to drug manufacturers.  It is not our purpose to describe all of the nearly 20 changes proposed in this regulation, but the most noteworthy are described below, roughly in order of importance.

    1. Price Transparency Surveys

    The MDRP statute requires manufacturers to submit only three prices: average manufacturer price (AMP), best price, and nominal prices.  Absent from the statute is any requirement to report information on manufacturer costs and price setting.  Nevertheless, riding on the wave of drug price transparency legislation in several states and similar legislative proposals in Congress, CMS is proposing to expand the MDRP into the realm of drug price transparency reporting.  For 10 high-cost single source covered outpatient drugs selected annually by CMS, manufacturers would be required to respond to a so-called “price verification survey” by providing not only clinical and utilization information about the drug, but also costs of production, distribution, research, and marketing; revenue and profit; and ex-U.S. pricing.  Non-proprietary information disclosed in the survey would be posted on a public web site.

    To select drugs for the annual survey, CMS would identify single source covered outpatient drugs that have the highest (top 5th percentile) Medicaid drug spend per claim; the highest (top 0.5%) total Medicaid drug spend; the highest (top 1%) WAC increase over 12 months; or the highest (top 5th percentile) launch price where the annual treatment price exceeds $500,000.  From this list would be removed drugs of manufacturers that have participated in a program of price negotiation with CMS, and those that have negotiated supplemental rebates with at least half the states totaling a specified aggregate amount.  If the resulting list exceeded 10 covered outpatient drugs, CMS would narrow the list by eliminating drugs subject to manufacturer price reduction programs offered to states, such as value-based purchasing arrangements or subscription models, and/or by considering cost.  A manufacturer that refused to respond to a survey would be subject to civil monetary penalties.

    As authority for this dramatic expansion of manufacturer reporting requirements under the MDRP, CMS cites its authority to survey “manufacturers that directly distribute their covered outpatient drugs, when necessary, to verify manufacturer prices and manufacturers’ average sales prices (including wholesale acquisition cost) ….”  42 U.S.C. § 1396r-8(b)(3)(B).  However, the survey is not limited to manufacturers that directly distribute their drugs and its purpose goes well beyond verifying prices.

    1. Best Price Stacking

    We previously blogged about the 4th Circuit Court of Appeals decision in United States Ex Rel. Sheldon, v. Allergan Sales, which affirmed a lower court decision in a Federal False Claims case involving best price stacking.  “Stacking” refers to aggregating discounts provided by a manufacturer to different customers on the same unit of drug – for example a discount to a pharmacy and a rebate to a third-party payor – when determining best price.  In the Allergan case, the relator claimed that Allergan knowingly failed to stack discounts on the same drug unit to two different customers when determining best price.  The Maryland Federal District Court found for Allergan, holding that the government could not establish the requisite intent because Allergan had not been warned by authoritative guidance from CMS and CMS had failed to clarify the stacking issue.  Now CMS proposes to rectify this shortcoming, and short-circuit any similar lawsuits in the future, by unambiguously requiring the stacking of discounts on the same unit of drug to different best-price eligible entities – regardless of whether the entities are affiliated or not.

    1. “All In” Manufacturer Definition

    CMS believes that the National Rebate Agreement (NRA) requires a “manufacturer” to report to Medicaid all of its covered outpatient drugs, under all of its labeler codes.  Some multi-affiliate manufacturers have withheld the drugs of a corporate affiliate from the MDRP on the ground that the affiliate is a different manufacturer with a different labeler code and does not have an NRA.  CMS proposes to eliminate this practice by reviving the substance of a 1995 proposed rule that was never finalized: CMS would add to the definition of “manufacturer” a requirement that “all associated entities of the manufacturer that sell prescription drugs, including but not limited to, owned, acquired,  affiliates, brother or sister corporations, operating subsidiaries, franchises, business segments, part of holding companies, divisions, or entities under common corporate ownership or control, must each maintain an effectuated rebate agreement.”  This includes newly acquired labeler codes and newly formed subsidiaries.  In CMS’s terms, manufacturers must be “all in” for all of its drugs or “all out.”  If a manufacturer terminates the NRA for one of its labeler codes, CMS will terminate all of the manufacturer’s NRAs for all labeler codes.

    1. Penalties for “Misclassification”

    The Medicaid Services Investment and Accountability Act of 2019 added new penalties to the Medicaid rebate statute for knowingly misclassifying a covered outpatient drug.  See 42 U.S.C. § 1396r-8(b)(3)(C)(iii).  The CMS regulation (unlike the statute) would expansively define a “misclassification” to include, not only misclassifying the drug category (e.g., misclassifying a single source drug or innovator multiple source drug as a non-innovator multiple source drug), but also reporting other “drug product information . . . that is not supported by the statute and applicable regulations.”  The preamble provides an example of reporting an incorrect baseline AMP, which reduces the unit rebate amount.  Under this contrived definition, an error in reporting any of the numerous drug and pricing data fields in the Medicaid Drug Programs reporting system would potentially be considered a “misclassification” subject to the new penalties – even if it did not result in any financial harm to Medicaid.  The new penalties (over and above the payment of any underpaid rebates) include a civil monetary penalty of 23.1% of the AMP of the drug multiplied by the number of misclassified units paid for under Medicaid, and suspension of the drug from federal payment under Medicaid.

    1. Best Price Exemptions for Patient Savings Programs Restored

    Under CMS regulations before December 2020, best price and AMP excluded patient savings programs in the form of manufacturer discount cards, coupons, copayment assistance, patient rebates, and free product vouchers, provided that the full value of the benefit provided is received by the consumer.  As we previously blogged, a final CMS regulation issued on New Year’s Eve 2020 added that the manufacturer must “ensure that” the full value is received by the patient, effectively requiring manufacturers to verify for each individual patient whether the patient’s health plan had an accumulator adjustment program, which would effectively prevent the patient from receiving the full value of the benefit.  PhRMA successfully challenged that amendment, and on May 17, 2022, the United States District Court for the District of Columbia ordered that the 2020 rule be vacated and set aside.  To implement the court order, CMS now proposes to eliminate the offending text and revert to the original exclusions.

    1. Suspension of NRA for late submissions

    The MDRP statute imposes per-day penalties for late pricing submissions, and also provides for suspension of the manufacturer’s NRA if the submission is over 90 days late.  42 U.S.C. § 1396r-8(b)(3)(C)(i).  CMS proposes a suspension procedure under which CMS would provide written notice to the manufacturer of a failure to submit a timely report.  If the information were not reported within 90 calendar days after the notice, the manufacturer’s NRA would be suspended for all of its covered outpatient drugs after the 90-day period, and federal payment would be unavailable for the drugs.  The NRA could be reinstated when the information is ultimately reported, but not until at least 30 days after the date of suspension.  The preamble clarifies that a suspension of the NRA would not affect the manufacturer’s obligations under the 340B drug discount program or reimbursement under Medicare Part B.

    1. Internal Investigations

    Under the MDRP, manufacturers must restate incorrect AMPs and best prices and may do so without CMS involvement going back three years from the current quarter.  Restatements of periods before the three-year window require CMS approval of a request, and one of the grounds for such a request is to address specific rebate adjustments as required “under an internal investigation.”  CMS now proposes to define an “internal investigation” as a manufacturer’s investigation of its AMP, best price, customary prompt pay discounts, or nominal prices previously certified to CMS that results in a finding of fraud, abuse, or a violation of law or regulation.  What is noteworthy about this proposed definition is that it adds a new requirement that “[a] manufacturer must make data available to CMS to support its finding.”  Presumably, the data referred to are the support for the recalculated values, which CMS heretofore has not required in the typical recalculation submission.  There is no limitation on the amount of detail CMS may require under this definition.

    1. Diagnosis in prescriptions

    The statutory definition of a “covered outpatient drug” excludes a drug used for an indication that is not a “medically accepted indication,” which is in turn defined as an indication that is approved by FDA or that is favorably noted in specified drug compendia.  42 U.S.C. §§ 1396r-8(k)(3) and 1396r-8(g)(1)(B)(i).  This limitation is virtually unenforceable because prescriptions and Medicaid claims for drugs do not identify the patient’s diagnosis or condition.  For this reason, CMS requests information (but proposes no rule yet) on whether prescriptions should be required to identify the diagnosis.  The preamble notes that this information would help ensure that drugs are being used for approved or otherwise medically accepted indications.

    1. Definitions

    Apart from the definitions of “manufacturer” and “internal investigation” discussed above, CMS proposes to add other definitions:

    • “Market Date”: Largely consistent with the definition in existing subregulatory guidance, this term would be defined as the date on which the drug was first sold by any manufacturer.
    • “Vaccine”: Because vaccines are excluded from the MDRP, CMS proposes to define them solely for purposes of the MDRP.  Vaccines would be defined as a product that is administered prophylactically to induce active, antigen-specific immunity for the prevention of one or more specific infectious diseases and that is licensed by FDA.  The preamble clarifies that the definition does not include a therapeutic vaccine.

    *    *    *

    Several of the changes described above – most notably the price transparency surveys, the best price stacking policy, the control group definition of “manufacturer”, and the expansive definition of a “misclassification” warranting penalties – represent substantial but questionable expansions of CMS authority under the Medicaid rebate statute.  These, at least, are deserving of comments, which are due by July 25, 2023.

    Another Mystery Solved: DEA Issues a Final Decision Revoking Morris & Dickson’s Registration: Or Has It?

    CBS News caused a bit of commotion last week in reporting that after a four-year delay, DEA issued a final order revoking Morris & Dickson’s DEA registration.  However, until today there had been no public information about this decision. This morning, the Federal Register published two DEA notices on the Morris & Dickson matter (here and here).

    The first notice is a Final Decision and Order revoking the Morris & Dickson registration, but not effective until 90 days after publication. Usually, a Final Decision and Order is effective 30 days from publication. The second notice solved that mystery. In the second notice the DEA Administrator is issuing an Order granting the 90-day effective date from publication of the Final Decision. According to that Order, Morris & Dickson had requested a stay of the Final Decision to renew settlement negotiations. The government, while opposing the stay, stated it was willing to enter settlement discussions.  Thus, the DEA Administrator has given the parties 90 days to work something out.

    Those of us tracking DEA matters had wondered about the long delay in publication of a Final Decision in this matter. On May 24, 2019, Morris & Dickson paid a $22 million civil penalty related to the failure to report suspicious orders and ignoring certain red flags in the distribution of controlled substances.  However, at the time the parties were unable to settle the pending administrative show cause action based on the same violations.  DEA held an administrative hearing on the alleged violations in May 2019 and, according to the proposed Final Decision and Order, the DEA Administrative Law Judge transmitted his Recommended Decision to revoke the DEA registration to the DEA Administrator on November 26, 2019.

    The Recommended Decision has sat through three (3) DEA Administrators and more than 3 (three) years before notice of the current proposed actions. There have been other cases where Final Decisions and Orders have taken more than a year, but 3 ½ years is as long as we can remember. It also highlights how such delays are a disservice to the industry and public interest.

    While this decision was pending, Morris & Dickson remained an authorized DEA registrant to continue to handle controlled substances.  It has continued to serve customers who have relied on the distributor to supply controlled substances and other medicine. But such activity has operated under a cloud which affected both suppliers and customers of Morris & Dickson given that the DEA registration was not issued a new registration but nor was it revoked. Except in the case of an immediate suspension, a DEA registrant remains authorized to handle controlled substances during the course of a show cause proceeding.  We also speculate that if DEA had any new evidence that Morris & Dickson was not otherwise complying with its regulatory responsibilities it would/should have taken further action during this time, otherwise the delay in issuing the Final Order would have been contrary to the public interest. For its part, during these four years, Morris & Dickson has had the opportunity to demonstrate the effectiveness of its remedial measures.

    Neither the CSA nor regulations promulgated by DEA provide any deadline for issuing a Final Order and Decision.  But given that the issue for granting or revoking a DEA registration is whether the registration is in the “public interest” the delay does raise issues about the reasonableness of revoking a DEA registration more than 3 years later, having let Morris & Dickson continue to actively handle controlled substances during that time.

    The resolution to the conundrum appears to be a potential settlement that could result in Morris & Dickson obtaining a new DEA registration, likely subject to a Memorandum of Agreement.  DEA was unwilling to settle the matter four years ago, so the Agency’s willingness to discuss a settlement now would have to be based on findings that Morris & Dickson’s recent compliance efforts justify granting a new registration at this time.

    HP&M to Co-Chair the Host Committee for the IBA World Life Sciences Conference

    ONE WEEK AWAY! Join attendees from around the globe at the IBA’s World Life Sciences Conference in Washington, DC.  We are honored to have keynote addresses from DOJ and FDA officials.  The conference will highlight hot topics affecting the healthcare and life sciences industries.

    Hyman Phelps & McNamara, P.C. Director, Anne Walsh, will moderate a panel that addresses what companies should consider when in the crosshairs of a government investigation.  She will bring together speakers to discuss the wide variability in the penalties that can be brought against a company and any responsible individuals, particularly in light of the different frameworks available globally for making prosecutorial decisions.  Register here.

    Categories: Miscellaneous

    FDA Releases Draft CPG on Major Food Allergen Labeling and Cross-Contact

    On May 16, the U.S. Food and Drug Administration (FDA) released a draft update to its Compliance Policy Guide (CPG) for FDA staff on the Agency’s enforcement of major food allergen labeling and cross-contact.  The draft CPG reflects the three major laws and regulations that form the foundation of FDA’s regulatory framework for major food allergens and which became effective since the issuance of the current CPG, CPG Sec 555.250 Statement of Policy for Labeling and Preventing Cross-contact of Common Food Allergens, which was first issued in 2001 and last revised in 2005.  Since then, the science and legal and regulatory framework for food allergens have evolved considerably:  Congress enacted the Food Allergen Labeling and Consumer Protection Act (2004) and the Food Safety Modernization Act (2011), and FDA implemented the regulatory requirements set forth in 21 C.F.R. Part 117, and the Food Allergy Safety, Treatment, Education and Research Act (2021).

    The draft CPG describes FDA’s enforcement policy and cross-contact controls for major food allergens, including:

    • The labeling requirements for major food allergens identified in the Federal Food, Drug and Cosmetic Act;
    • FDA’s position on the proper use of the ingredient list and “Contains” statement for major food allergen declarations:
      • Major food allergens unintentionally incorporated into a food may not be declared in the ingredient list or the “Contains” statement;
      • When a “Contains” statement is used on a food label, then the food source of all major food allergens present in the food must be declared in the “Contains” statement, even if they are also declared in the ingredient list;
    • Requirements for firms to implement controls that prevent or significantly minimize allergen cross-contact and a note that the allergen advisory statement does not relieve the manufacture from the obligation to minimize or prevent allergen cross contamination; and
    • Additional allergen labeling violations (e.g., the product label declares “tree nut” or “fish” but fails to declare the type of tree nut or species of fish in either the ingredient list or in a separate “Contains” statement).

    The draft CPG directs FDA field staff to examine possible food product adulteration due to labeling related to allergen cross-contact.  Specifically, field staff are advised to pay close attention to situations where allergen cross-contact may occur because of poor current good manufacturing practices (cGMPs), inadequate preventive controls, or inadequate controls under the juice or seafood HACCP regulations.

    In the announcement of the release of the draft CPG, FDA acknowledged that “some manufacturers are intentionally adding sesame to products that previously did not contain sesame and are labeling the products to indicate its presence” to avoid implementing difficult and costly practices to prevent cross-contamination.  FDA noted that it “does not support” intentionally adding sesame as a regulatory compliance strategy, because it “may make it more difficult for sesame-allergic consumers to find foods that are safe for them to consume.”  Although the draft CPG does not address this industry practice, FDA commented that it is engaged with stakeholders on this issue.

    The Center for Science in the Public Interest publicly condemned FDA’s “tepid” and “not adequate” statements regarding this practice—a practice which began shortly after the addition of sesame to the major food allergen list, and which has faced mounting criticism from other consumer advocacy groups and lawmakers.

    To be considered, comments to the draft CPG must be submitted to the docket by July 17, 2023.  We expect to see comments urging FDA to act against the industry practice of intentionally adding sesame to foods, but it is unclear what actions FDA could take without interfering with manufacturers’ choice over the ingredients in their products.  We will have to wait and see whether FDA will add sesame-specific guidance addressing this issue (which seems to be limited to sesame) to its CPG for major food allergens.

    The End of the Road for the Skinny Label?

    Well, it’s official: The Federal Circuit decision in GSK v. Teva stands, as the Supreme Court has decided not to hear the case on appeal.  While the statistics were against the Supreme Court taking up the case given the limited number of cases heard per year, it’s definitely disappointing for those of us who have been watching the case for the last 7 years.  And, for generics, the Federal Circuit decision will be looming large behind any carve-out proposals, keeping open the possibility of liability for induced infringement even if compliant with the statutory scheme permitting such carve-outs.

    We previously noted that “the skinny label may be dead” and, while we still can’t be sure if it’s truly gone (but not forgotten), we now know that the Supreme Court won’t hear this case at this time.  As a result, the case goes back to the Delaware District Court where additional issues not decided in the original 2017 trial will be presented to the court.  Among the issues to be presented in a bench trial is whether GSK should be prevented from asserting its patent on the use of carvedilol to treat congestive heart failure because of representations it made to the FDA as to which uses of the drug that patent covers.  So GSK may not see any money yet, but the Federal Circuit’s position on induced infringement—that a carve-out, even if legally permissible under the FDCA, can still be the basis of an induced infringement claim— stands firm.  In the Federal Circuit rehearing decision, the Court did state that “[w]e do not hold that an AB rating in a true section viii carve-out (one in which a label was produced that had no infringing indications) would be evidence of inducement,” but whether a carve-out is a “true carve-out” may be unclear and may only be clear once a carve-out is challenged in patent litigation.  Each patent carve-out, therefore, will be subject to a fact-specific inquiry as to infringement.

    Due to the subjectivity of a fact-specific inquiry, whether in the hands of a jury or a District Court judge, the carve-out is now, from a practical perspective, fraught with peril.  If the sufficiency of a carve-out can be assessed only by a court, there is a risk that any carve-out could be the subject of litigation.  Indeed, we’ve already seen some of these cases being brought.  The subjectivity of that assessment makes all carve-outs liable for litigation, which significantly increases the risk of a tool that’s supposed to be used precisely to avoid litigation.  This leaves generic manufacturers with a real concern that any carve-out will be brought to court, which may significantly reduce the number of carve-outs by risk-averse generic companies.

    Further, FDA, in its ministerial role, only looks at the use code and approves a carve-out based on the use code.  But the decision here suggests that the use code really doesn’t do enough.  Generic manufacturers, as they always have before, must review the patents and carve-out information in accordance with that patent.  But generic manufacturers are hamstrung because FDA will only permit them to carve-out the use code.  Consequently, RLD sponsors now have an incentive to include a narrower use code, walking a potential carve-out into an induced infringement claim.  In other words, where before there was incentive to have use codes that were too broad to prevent carve-outs in the first place, now there are incentives to have use codes that are too narrow to permit an induced infringement claim.  And the only practical way to address an overly broad or overly narrow use code is in the throes of patent litigation!

    So, while the skinny label may not actually be dead, there will certainly be a reluctance to use it.  Perhaps Congress will weigh in, but until then, we’ll say that the skinny label is on life-support.

    Categories: Hatch-Waxman

    REMINDER: HP&M’s Webinar “Demystifying DEA Inspections: Accountability Audits, Mirror Reviews and Mock Inspections”

    Accounting for controlled substances, maintaining complete and accurate records/reports and employing effective, compliant security do not alone guarantee a successful Drug Enforcement Administration (“DEA”) inspection.  A negative DEA inspection can plague registrants for years.

    Hyman, Phelps & McNamara, P.C. (“HP&M”) invites you to join Director Larry Houck for a free webinar demystifying DEA inspections by providing an understanding of controlled substance accountability audits, the importance of conducting mirror reviews, and mock DEA-style internal inspections.  The webinar, scheduled for Wednesday, May 24, 2023 from 12:00-12:45 (Eastern), will share additional valuable inspection tips.

    Registrants are far from powerless when DEA investigators inspect their controlled substance operations.  This webinar will provide insight on how to prepare for and manage inevitable DEA inspections to help ensure favorable results.

    Before joining HP&M in 2001, Mr. Houck conducted numerous scheduled cyclic and targeted inspections and investigations as a DEA Diversion Investigator in the field for ten years.  He later served as Staff Coordinator in Diversion Control’s Liaison and Policy Section at DEA headquarters.

    We hope that you will be able to join us!  Please see the attached flyer that includes a link to register for the webinar.

    By the Thinnest of Margins, State-Based Animal Welfare Requirements Move Forward

    In a dense, multi-part opinion, the Supreme Court affirmed 5-4 the lower courts’ dismissal of a challenge to California’s Proposition 12. That law bans the knowing sale of eggs, uncooked pork, or veal derived from farm animals that are housed under conditions that do not meet certain minimum requirements – regardless of whether the animals are raised in California or out-of-state. Our colleagues at SCOTUSblog have penned a helpful analysis that examines the basis for the Court’s opinion, as well as its multiple parts and concurring opinions. Our focus is on the decision’s practical impact, which could be felt almost immediately.

    The California Department of Food and Agriculture (CDFA) issued regulations implementing Proposition 12 on September 1, 2022, but their implementation was enjoined until July 1, 2023, pending the Supreme Court’s decision. With that out of the way, implementation of CDFA’s regulations can be expected to go forward, barring any further judicial or legislative intervention. CDFA has established a web page with multiple resources for producers and distributors, including links to the regulations and guidance documents.

    California is not the only state to have established animal welfare requirements affected by the Supreme Court’s decision. Voters in Massachusetts approved a ballot initiative (Question 3) in 2016 that imposed requirements similar to those imposed under Proposition 12. The Massachusetts Department of Agricultural Resources (MDAR) subsequently issued implementing regulations that were partly enjoined pending the Supreme Court’s decision. Those regulations are now expected to take effect on June 10, 2023, barring any further judicial or legislative intervention.

    Given consumer interest in farm animal welfare generally, it seems certain that additional states will seek to establish their own requirements similar to those in California and Massachusetts. To the extent that those requirements differ from one another, pressure may build for federal legislation to establish uniform national standards.

    Well Isn’t that Special: An Assessment of the Special Control Associated with Simple Point of Care COVID-19 Antigen Tests

    As we noted in our previous blog post available here, Quidel’s Sofia 2 SARS Antigen+ FIA, Sofia 2 SARS Antigen+ FIA Control Swab Set’s De Novo, now opens the door for follow-on 510(k) submissions that declare this product as their predicate, if the product meets the established Special Controls as noted in the reclassification order.  In this blog we examine the Special Controls put in place to mitigate false results, incorrect interpretation of results, and incorrect operation of the device.

    Design Verification and Validation Special Controls

    Analytical testing includes many of the same tests already required for an EUA:

    • Limit of Detection (LoD)
    • Inclusivity, including relevant variants
    • Cross-reactivity
    • Microbial interference
    • Interfering substances
    • Hook effect
    • Inclusivity of relevant circulating variants
    • Specimen stability
    • Reagent stability
    • Flex studies

    However, there are some additional studies noted, specifically site-to-site reproducibility, within-lab precision, carryover and cross contamination, and competitive inhibition.  Previously, the EUA template only required these studies for Multiplex Respiratory panels in which a new instrument was used with the proposed device; however this De Novo was for a simple point-of-care device to detect SARS-CoV-2 viral targets only.

    Final Release Criteria Special Controls

    Sponsors will need to provide the final manufacturing release criterion with evidence that lots released at the extremes of the specification will still meet the claimed device performance (i.e., analytical, clinical and stability).  The Special Controls are silent on what would constitute appropriate levels of evidence necessary to satisfy this criterion.

    Collection Device Special Controls

    Sponsor will need to select a collection device that is either FDA-cleared, -approved, or -classified as 510(k) exempt (either as a standalone collection device or as part of a system) or alternatively the collection device can be cleared within the premarket submission for the POC test.

    Clinical Testing Special Controls

    In the Special Controls, there are two different criteria a sponsor can meet for their clinical study, each resulting in different indications for use:

    If your clinical study establishes a lower bound of the two-sided 95% confidence interval of…


    Greater than or equal to 80% PPANegative results are considered presumptive
    Greater than or equal to 70% PPANegative results are considered presumptive, and sponsors need to include serial testing requirements in the indications for use.

    Serial testing was defined as testing symptomatic individuals twice over three days with at least 48 hours between tests, which is in accordance with study findings from the National Institute of Health referenced here and current EUA labeling for serial testing.

    The other requirements, listed below, for the clinical study are similar to previous recommendations included in the Antigen EUA template with some important subtle nuances to consider:

    • prospective multi-site clinical study,
    • geographically diverse intended use population,
    • consistent with the intended use population and intended operators,
    • conducted in a representative intended use setting,
    • performance estimates derived for each claimed specimen, and
    • compare results of the candidate device to an” FDA accepted” molecular comparator method.

    For EUAs, FDA recommended the clinical evaluation be done at one to two sites; however, the Special Controls explicitly states the testing should be done in geographically diverse intended use populations, to ensure the device results represent “all present, circulating strains of the SARS-CoV-2.” It is not clear how sponsors are to meet this special control as prospective studies are executed in the months prior to the FDA review, given the time necessary to prepare for and submit a 510(k) in addition to the FDA’s premarket review timelines.  Even though only two sites are required, sponsors should consider including a sufficient number of sites to ensure geographic diversity and ability to capture all circulating strains in the study.

    The selection of operators is another critical component of the study design and should be operators that would be typically expected to run simple tests in a POC environment and are not hired just to execute a clinical study.  We note the Special Controls indicated that the POC study needs to be conducted in the representative intended use setting so consider incorporating the testing into the operator’s existing workload.

    Notably absent are details regarding what is considered an “FDA accepted” molecular method.  In the EUA template the FDA indicated sponsors should use a “RT-PCR which used chemical lysis step followed by phase extraction of nucleic acid (e.g., silica bead extraction) and reports cycle threshold values and be one of the more sensitive RT-PCR assays.”  We note the FDA has granted a De Novo and subsequent clearance for SARS-CoV-2 RT-PCR test which would seem to be the logical comparator of choice, however discussing the proposed comparator or even the use of a composite comparator with the FDA prior to initiating a clinical study is highly recommended.  Sequencing can be an important tool to understand the distribution of variants in the clinical study especially given the fact sponsors will be required to include a statement in their labeling regarding the predominant strain in the study.

    Software Special Controls

    If the device includes software or is an instrument with software, the software required under the special controls is consistent with the typical software documentation provided in 510(k) submissions.  In addition, similar to what was required for an EUA, sponsors should evaluate cybersecurity of their system to ensure user and patient safety in the intended use environment.

    Continuous Monitoring and Post Market Reporting Special Controls

    Within the Special Control for Risk Analysis are details regarding continuous monitoring.  The submission will need to include a “detailed description of a protocol for continuous monitoring, identification, and handling of genetic mutations and/or novel isolates or strains.”  The Special Controls provides the examples on what sponsors might do to monitor:

    • regular review of published literature, and
    • periodic in silico analysis of target sequences to detect possible mismatches.

    Is this really as straightforward as reviewing literature and doing periodic in silico analysis? When reviewing FDA’s Policy for Evaluating Impact of Viral Mutations on COVID-19 Tests (Revised) dated January 12, 2023, the agency previously stated monitoring the impact on antigen tests is not as straightforward as monitoring the impact on molecular tests because antigen tests do not directly target the genetic sequence.  The Special Controls seem to leave it up the sponsor to determine if monitoring is required for all new circulating variants or only if they reach a threshold level of prevalence in the United States.  It is unclear what specific testing would be done to demonstrate the impact on established performance.  We know that FDA has asked sponsors to conduct Limit of Detection Studies with specific variants, but it is not clear what FDA’s expectations are for demonstrating equivalence.

    The monitoring protocol also needs to include plans to update labeling with the additional performance data.  This data and any additional FDA-directed data analysis must be provided to the FDA, when requested or be made available during a routine evaluation.  FDA can request that sponsors provide this data within 48 hours of the Agency making said request.  While it is true sponsors will have the data on file, responding and providing the data within a 48-hour time-period can create stress in any organization.  And if you think a 48-hour turn-around time is fast, if novel respiratory pathogen strains or isolates impact the stated performance of the device, the data needs to be sent to the FDA immediately (although the specific trigger for such “immediate” notification is “unclear”).  While immediately is not defined, it could suggest a shorter turnaround time than the previously stated 48 hours.  The Special Controls is silent on defining to what extent a reduction in performance would require immediate reporting to the FDA.  In the prior FDA EUA guidance, a reduction of test performance of 5% or more from the established performance or a drop below the stated performance recommendation in the EUA templates were identified as thresholds for impact on performance, however it is unclear if this same threshold would be applied.

    Emergency Analytical Reactivity Post Market Obligations Special Controls

    Interestingly the Special Controls also add details regarding post market obligations if a new public health emergency is declared for the analyte detected and if FDA has characterized samples available for testing.  In this case, sponsors will have 30 days to complete testing in accordance with an FDA protocol.  Within 60 days and continuing for 3 years, sponsors will be required to include the results of that testing in the device’s labeling along with details about the samples used for the testing.

    Labeling Special Controls

    The labeling may seem like the easiest Special Control for demonstrating compliance.  Here we have broken out the requirements for the Indications for Use, Quick Reference Instructional Sheet, and Device Labeling.

    Indications for Use

    The indications for use should include the following:

    • analytes detected,
    • specimen types tested,
    • indication for testing of respiratory specimens,
    • clinical indications for which the test is used,
    • specific intended population(s),
    • intended use locations including testing location(s),
    • statement regarding positive results,
    • for symptomatic, number of days of symptom onset,
    • statement regarding negative results,
    • statement regarding the predominant strain during performance testing, and
    • depending on the results of the clinical study serial testing requirement.

    Quick Reference Instruction

    The Quick Reference Instructions (QRI) should include, at a minimum, the following:

    • name of the test,
    • intended use of the test,
    • easy to follow step-by-step instruction for controls,
    • easy to follow step-by-step instructions for each sample type,
    • graphic illustrations of each step,
    • results interpretation guidance,
    • warning and limitations,
    • toxicology information and safety considerations for any hazardous materials,
    • troubleshooting or frequently asked questions, and
    • how to get technical assistance (e.g., Customer Support Help line).

    Labeling Instructions for Use

    The labeling should include the following:

    • detailed device description,
    • detailed description of performance characteristics,
    • detailed descriptions of the test procedure(s), interpretation of results, and acceptance criteria for QC testing,
    • statement regarding positive results and patient management decisions,
    • detailed instructions on how to minimize exposure to infectious reagents included in the device,
    • detailed instructions on how to minimize false positive results, and
    • limiting statements regarding results and performance characteristics with the predominant strain.

    As we stated previously, this submission took well over nine (9) months to review and develop the Special Controls.  After reviewing the Special Controls, we understand what took so long.  Unlike like the definition of “simple test,” the Special Controls are anything but simple.  Since the De Novo reclassification order on March 8, 2023, the FDA has recently posted the Quidel’s decision summary, which happed at warp speed as compared to this De Novo from July 2022, which still has yet to have its decision summary posted.  Stay tuned for a future post evaluating the details of the Quidel’s decision summary.

    Categories: COVID19 |  Medical Devices

    AAFCO Publishes Proposed Common Food Index of 72 Foods; Requesting Feedback

    For those readers unfamiliar with the regulation of animal food ingredients in the United States, below is a brief background.

    In the United States, animal food (feed) regulations are enforced by state and federal regulatory officials.  At the federal level, the Center of Veterinary Medicine (CVM) of FDA regulates food for animals, including livestock and pets.  As part of its regulatory responsibilities, CVM reviews the safety of new or modified animal food ingredients.  Such reviews may be in response to food additive or color additive petitions, or notifications that a substance is generally recognized as safe (GRAS).  In addition, CVM, on its own initiative, may propose an animal food additive or color additive regulation.

    States frequently review labels (and labeling) for animal food products.  Part of this review involves the status of the ingredients included in the product.

    The Association of the American Feed Control Officials (AAFCO) is a group of state, federal, and international regulatory officials that partner to support uniform animal food regulatory systems.  AAFCO develops model regulations, that serve as model for the states.  The goal is to create uniformity to facilitate interstate commerce.

    A major component of AAFCO is its work on ingredient definitions, specifying what ingredients may be use in animal feed under what conditions.  AAFCO’s ingredient definitions are not federal regulations and do not have the force or effect of federal law. However, most states incorporate the ingredients listed in the AAFCO Official Publication (OP) into their state laws, so the AAFCO feed ingredient definitions facilitate the interstate marketing of animal food ingredients.  The AAFCO OP includes FDA approved feed and color additives, substances that are subject to GRAS notifications (AGRNs), etc.  Most states treat the OP as a “positive list” of ingredients that may be included in animal foods.  The absence of “common foods” in the OP has resulted in uncertainty as to whether such common foods can be used in animal foods.

    On May 2, AAFCO announced that it had published its first installment of a common food index (CFI).  AAFCO defines “common food” as a food item “commercially available and suitable for use in animal food but [which is] not defined by AAFCO, including but not limited to certain whole seeds, vegetables, or fruits.” The CFI includes a list of common foods that “may be appropriate for use in animal food and serve as a tool for use during review of ingredients on an animal food label.”  The goal of this positive list is to provide harmonization, consistency, and transparency.

    The first installment includes 72 foods. AAFCO is requesting stakeholders, such as veterinarians, animal nutritionists, consumer groups, and the public, to provide feedback on the initial CFI by June 2, 2023.  Comments may be submitted using a virtual form.  AAFCO has developed procedures for further review and determination as to what products will be included or removed from the CFI.  This document also describes an appeal procedure.

    This by no means constitutes the complete list of common foods.  AAFCO has developed a process for submitting applications to add additional products to the CFI.  However, while AAFCO is receiving feedback on this first proposed list of products, applications for additional common foods are not accepted.

    Inclusion on the CFI does not mean that the common food is safe.  Manufacturers are responsible for determining that the common food is safe and has utility for its intended use prior to commercial distribution as animal food.

    Skinny Label and Induced Infringement: The Saga Continues

    Well, we’re a little late to blogging about this, but the significance of the ongoing Teva v. GSK litigation to Hatch-Waxman aficionados makes this case still ripe for blogging.

    Six months after the Supreme Court asked the Solicitor General to submit a brief on behalf of the U.S. government in the now-infamous (at least in FDA circles) Teva v. GSK skinny label case, the U.S. Government submitted an Amicus Brief—not only signed by the Solicitor General, but also the lead attorneys representing the USPTO, HHS, and FDA—encouraging the Supreme Court to grant Teva’s Petition for Certiorari to address whether a generic company can be held liable for induced infringement where its label carves out a patent-protected method of using a product.

    In the brief, the Government takes a strong position, stating “[t]he court of appeals’ holding that respondents presented sufficient evidence of petitioner’s intent to induce infringement is erroneous and warrants this Court’s review.”  Specifically, the Government explained, “[t]he section viii pathway cannot function properly if FDA and generic manufacturers cannot rely on an NDA holder’s representations to the agency regarding which portions of the brand-name drug’s labeling teach patented methods of use.”  Concerned about the uncertainty of the future of the skinny label after the Federal Circuit decision in this case and the potential for that decision to deter reliance on the skinny label, the Government asks the Supreme Court to grant a writ of certiorari and reverse the judgement of the Federal Circuit.

    Agreeing with Judge Prost’s dissents in the Federal Circuit’s initial and rehearing decisions in this case, the Government argues that a generic’s labeling should not be treated as evidence of intent to induce infringement where that generic “plays by the rules of the section viii pathway” (internal citations omitted).  The Government’s concern goes far beyond this case: Like many generic drug sponsors, the Government raises concerns of the implications of the outcome of this case on the skinny label pathway itself.  The issue, according to the Government is that:

    [A] jury may conclude that a generic manufacturer’s engagement in the precise conduct that the Hatch-Waxman Amendments contemplate—namely, marketing an FDA-approved generic version of a brand-name drug with labeling that carves out those indications that the brand-name manufacturer has identified to FDA as claimed by a method-of-use patent—is itself evidence of intent to induce infringement of the patented method.

    If an FDA-approved carve-out could support an intent to induce infringement claim, the use of the “section viii pathway would be substantially deterred.”  To maintain the legitimacy of the section viii pathway and mitigate the effects of this decision, the Government urges the Supreme Court to hear this case.

    While the Government’s concerns in this case are geared more towards the decision’s downstream effect on the skinny-label and generic competition, the Government does not mince words when talking about the facts at issue in Teva v. GSK.  Plainly, the Government brief states “The decision below is incorrect. No reasonable jury could have concluded that the carved-out labeling for petitioner’s generic carvedilol from 2007-2011 was itself evidence of intent to induce infringement.”  Where the generic sponsor has carved-out the specific indication identified in the Orange Book as covered by the method of use patent, the Government argues, the generic labeling “cannot provide the requisite evidence of specific intent to induce infringement . . . .”  Other communications may suffice to show infringement, but carved-out labeling more accurately reflects an intent not to encourage infringement, reasons the Government, extensively citing Judge Prost’s Federal Circuit dissent.  Here, the Government explained, the carved-out labeling was insufficient to show intent to infringe, as that labeling was dictated by FDA regulatory requirements and GSK’s use code.  Instead, the Government takes the position that, to support an inference of intent to induce infringement, independent evidence that the generic sponsor understood its carved-out labeling to encompass patented uses and proof that petitioner expected and encouraged doctors to rely on the labeling should be necessary.

    The Government’s brief puts a lot of faith in the existing regulatory system rather than the patent system.  Because FDA cannot review patent claims, the Agency must rely on the brand-name manufacturer’s use code description to permit carve-outs, and the generic sponsor is limited to the use code in proposing use code carve-outs.  Allowing induced infringement claims based on the carve-out, which is governed by the use code, allows for some serious gamesmanship; so rather than sue for induced patent infringement, the Government points to the pathways for resolution under the regulatory system.  The Government suggests that GSK should have submitted a Citizen Petition regarding the carve-out or request that FDA stay the approval of the ANDA for further administrative review.  The Government chastises GSK for failing to use these options (though the availability of these options in this circumstance is questionable, and, more generally, the utility of these options also is questionable).

    The Government urges the Supreme Court to take this case because of FDA’s concern that the potential for liability “may discourage manufacturers from invoking the section viii pathway, thereby decreasing the availability of lower-cost generic drugs” even if that liability is rarely imposed.  Further, despite the insistence by the Federal Circuit and GSK that the case is limited to the fact pattern at issue here, the Government is concerned that the facts at issue here—particularly the background facts—are likely to be present in most skinny label cases.  In short, the Government, like Judge Prost, is concerned that the Federal Circuit decision in this case is so extrapolatable that “generics simply won’t play” and “the section viii pathway will be seriously jeopardized.”

    It’s important to note here that the Government’s brief was signed by both FDA and the USPTO.  The two have long been encouraged to collaborate more, and it seems that this case has presented a prime opportunity.  That the USPTO, charged with furthering effective IP protection, agrees with FDA with respect to the application of the induced infringement scheme should not be overlooked.  FDA’s signature here is also significant.  The Agency delegated with authority to execute the skinny label pathway is concerned about the viability of the skinny label.  That should legitimize generics’ concerns about the death of the skinny label after this case—particularly if the background facts are similar across skinny label cases, as the government portends.

    However, the Government’s suggestion that the facts will be similar across skinny label cases is flatly denied by GSK in the pleadings.  GSK filed a supplemental brief in response to the Government’s brief.  That brief criticizes the government brief for “rewrit[ing]” the “facts of this case and the documented history of the section viii ‘carve-out’ process” in order “to reach the result it wants.”  GSK goes through the factual history of the matter in great detail, arguing that FDA’s regulatory alternatives simply were not available here.   GSK appears to be encouraging the Court to focus only on the specific facts at hand rather than the parade of horribles the government and other amici have represented.  This case, in other words and according to GSK, will not destroy the skinny-label statutory scheme by leaving it open to induced infringement issues; the holding will be limited to the facts of this case because the facts of this case are so special.  But even if it were that significant, GSK points out that “Congress is the proper forum for the government’s policy-driven argument.”

    Whether the Court takes up Teva v. GSK is still up in the air.  Given that the Supreme Court takes so few cases, chances are low that the justices ever hear it.  Nevertheless, we’re optimistic that we’ll be hearing more about the case and the skinny label in the near future, whether from the Supreme Court or the inevitable battle in Congress.

    May 11, 2023: The End of the COVID-19 Pandemic Emergency’s DEA Telemedicine Exemption? “Not So Fast,” Say DEA and SAMHSA

    We blogged earlier this week here that DEA is reconsidering its proposed rules for telemedicine prescribing of controlled substances and buprenorphine. Today is indeed the official “end” of the COVID-19 pandemic Public Health Emergency (PHE) Declaration, and DEA, jointly with the Substance Abuse Mental Health Services Administration (SAMHSA), have announced the issuance of a temporary rule extending the PHE telemedicine exemptions, as described below.  DEA states the temporary rule will take effect today, and “extends the full set of telemedicine flexibilities adopted during the COVID-19 public health emergency for six months – through November 11, 2023.”  In addition, concerning any practitioner-patient telemedicine relationships that have been or will be established up to November 11, 2023, all telemedicine flexibilities concerning prescribing of controlled substances established during the COVID-19 PHE will also be extended for one year – through November 11, 2024.  

    This much welcomed — and needed — extension of the telemedicine flexibilities is a result of DEA’s receipt of over 38,000 comments on its set of proposed telemedicine rules for controlled substances and for buprenorphine treatment. We applaud DEA’s and SAMHA’s recognition that:

    [T]he goal of this temporary rule is to ensure a smooth transition for patients and practitioners that have come to rely on the availability of telemedicine for controlled medication prescriptions, as well as allowing adequate time for providers to come into compliance with any new standards or safeguards that DEA and/or SAMHSA promulgate in one or more final rules.

    88 Fed. Reg. 30,038 (May 10, 2023).

    This time around, DEA is acting jointly with SAMHSA, which agency “concurs” with the temporary rule, and has advised DEA that no additional rulemaking is necessary at this time other than the temporary rule, nor are amendments required to 21 U.S.C. § 802(54)(G) (which references CMS’s statutory definition of “practice of telemedicine”). DEA’s preamble sets forth the temporary rule’s purpose:

    • Facilitates continuity of care;
    • Prevents backlogs concerning in-person medical evaluations in the months before and after the expiration of the COVID–19 PHE declaration;
    • Ensures the availability of telemedicine for practitioners and patients that have come to rely on it;
    • Addresses the urgent public health need for continued access to the initiation of buprenorphine for opioid use disorder in the context of the continuing opioid crisis;
    • Allows patients, practitioners, pharmacists, service providers, and other stakeholders sufficient time to prepare for future regulations;
    • Enables DEA and SAMHSA to review the 38,369 comments in response to the proposed rules; and
    • Permits time to consider regulatory alternatives that may effectively expand access to telemedicine, which “alternatives may be consistent with public health and safety, while maintaining effective controls against diversion.”

    More specifically, the temporary rule adds new regulatory sections 21 C.F.R. §1307.41and 42 C.F.R. 12.1, effective May 12, 2023 through November 11, 2024,  Telemedicine relationships that are included in this period must be “in effect” as of November 11, 2023.  It is extremely important to keep in mind that telemedicine relationships that are in effect or that are established for the prescribing of controlled substances including buprenorphine must include all of the following:

    • First, the prescription must be issued for a legitimate medical purpose by a practitioner acting in the usual course of professional practice.

    • Second, the prescription must be issued pursuant to a communication between a practitioner and a patient using an interactive telecommunications system referred to in CMS requirements for telemedicine services set forth at 42 C.F.R. § 410.78(a)(3). More specifically, it must be issued using audio and video  equipment permitting “two-way, real-time interactive communication or, for prescriptions to treat a mental health disorder—which include, but are not limited to, prescriptions for buprenorphine for opioid use disorder—a two-way, real-time audio-only communication if the distant site physician or practitioner is technically capable of using an interactive audio-video telecommunications system, but the patient is not capable of, or does not consent to, the use of video technology.”

    • Third, the practitioner must be authorized by DEA to prescribe the basic class of controlled medications specified on the prescription or otherwise exempt

    • Fourth, the prescription must be consistent with all other requirements of 21 C.F.R. part 1306 (which include DEA’s general requirements for prescribing controlled substances);

    88 Fed. Reg. at 30,039 (emphasis added).

    By any measure, prescribers that handle controlled substances and  have engaged actively in a telemedicine practice since the onset of the pandemic, and patients that have come to rely on needed telemedicine relations and resulting controlled substance prescriptions, have been granted a reprieve from an imminent retraction in services and the potential for DEA enforcement activity. The plain message here is that citizens and industry commented — loudly, and both DEA and SAMHSA are listening.  We hope that prudent use of the practice of telemedicine continues during this longer transition period while both DEA and SAMHSA meaningfully evaluate the more than 38,000 comments received.

    How Soon Until the Kochava Geolocation Case Catches Up to Medical Device Companies?

    We were listening to a radio interview last week with Lina Khan, the Chair of the Federal Trade Commission (“FTC”).  In the interview, Khan spoke about the Commission’s efforts to regulate geolocation data trackers so that they don’t abuse their abilities. The risks she described caught our attention because two of the risk profiles she cited included things that touched on FDA-related entities, such as medical devices that transmit data. See, e.g., here.

    “We have taken several actions that just in the last few months that have been making sure we’re protecting people’s sensitive information via geolocation data that people can buy to track with great precision” said Khan, “whether people are going to addiction facilities or places of worship or seeking reproductive health service.”

    Khan was referencing a suit that FTC and DOJ filed against Kochava, a prominent location data broker, in August 2022.  The interview aired on Monday, May 1.  The rest of Khan’s week didn’t go as well.

    On Thursday, a District Court judge in Idaho issued a pair of mixed rulings relating to the FTC’s case against prominent location data broker Kochava.  The news wasn’t all bad for the government, but FTC’s now has some decisions to make.

    Back in the Summer of 2022, FTC approached Kochava about its contemplated suit against the company for violations of the FTC Act.  Kochava decided to strike first and sued the FTC, hoping to preempt the pending enforcement suit.  Undeterred, FTC moved ahead with its case.

    When FTC brings data privacy cases against tech companies, it does so under the provisions of the FTC Act that prohibit “unfair or deceptive” practices.  Deceptive practices are the frequent bedrock legal theory for these cases.  Tech companies that don’t live up to their promises to safeguard consumer data are frequent targets of the FTC.

    The case against Kochava is a little different.  The complaint does not describe deceptive practices, instead alleging that Kochava was acting unfairly.  According to the FTC and DOJ, the sale of consumers’ geolocation data to publicly accessible on-line data marketplaces is unfair because it potentially puts those consumers at risk.  Advertisers, the complaint says, aren’t the only digital entities hoping to make use of data showing where people go.  Those with more malevolent—unfair?—intent may also exploit that information.  This is what Khan was describing in her interview.

    On Thursday, the judge overseeing the parallel cases made two, mixed rulings.  To the benefit of the FTC, the judge permanently dumped the company’s pre-emption suit.  He ruled that it was a “race-to-the-courthouse declaratory action” that Kochava filed without the purpose of “seeking any real affirmative declaratory relief . . . .”  In the court’s opinion, Kochava was asking it to “pre-determine that the FTC anticipated lawsuit would fail.”  While there are some cases where seeking to preclude agency action might work, it would be a remarkable decision for a federal judge to rule on the merits of an enforcement suit before it was filed, as Kochava was asking here.

    But the judge also dealt a blow to the government, dismissing its suit against Kochava.  Khan is correct in that one can easily envision how the sale of location data might unfairly put consumers at risk, but the judge in Idaho ruled that the FTC had not effectively alleged facts that show a likelihood of substantial consumer injury.  FTC’s case did not rely on specific instances of realized consumer unfair harm related to the sale of geolocation information.  In this case, the potential for harm was not enough to sustain the suit.

    However, FTC may get another crack at this.  The ruling left open the door for FTC to file an amended complaint that relies more on specific factual evidence.  So, the government here has a choice to make.  FTC will need to investigate further and put together some data specific to Kochava, it seems, since they didn’t include it in the first suit. If the parade of horribles they envision isn’t as evincible as it is imaginable, then pressing the suit against Kochava looks to be more challenging.

    As a final note, we would note that it doesn’t seem difficult to envision this case affecting many FDA-regulated companies.  We’ve written before (see here too) about how medical device companies are truly data companies to the extent they promote software or are otherwise connected to the internet. By their very nature as regulated medical products, they traffic in data that is similarly sensitive to the geolocation information at issue in the Kochava case.  As FDA continues to both build its cybersecurity and digital health infrastructure and strengthen its cross-agency relationship with FTC, we can’t help but wonder how soon we’ll see an action like this against a device company.

    Change is Inevitable – Plan Ahead: An Assessment of FDA’s Draft Guidance on Predetermined Change Control Plans for Artificial Intelligence/Machine Learning-Enabled Device Software Functions

    FDA recently published a long-awaited draft guidance aimed at reducing the need for prior FDA authorization of modifications to artificial intelligence/machine learning (AI/ML)-enabled device software functions (ML-DSFs).  The draft guidance, “Marketing Submission Recommendations for a Predetermined Change Control Plan for Artificial Intelligence/Machine Learning (AI/ML)-Enabled Device Software Functions,” describes the information on planned modifications that should be included with an initial premarket submission to enable FDA to prospectively evaluate a manufacturer’s process for implementing software changes.

    History of the Development of Predetermined Change Control Plans

    Traditionally, manufacturers seeking to make improvements or updates to their software device functions have needed to consider whether a new marketing submission is required, based on criteria specified in FDA regulations that focus on the potential impact of the proposed modifications on safety and effectiveness.  See 21 CFR 807.81(a)(3) and 21 CFR 814.39(a), and related guidance documents (e.g., here for a 510(k) device and here for a PMA device).  The purpose of a predetermined change control plan (PCCP) is to avoid the need for such post-market assessments – and the delay and expense entailed when it is determined that a new submission is needed – through prospectively defining a process for making post-market changes.

    The draft guidance follows the December 2022 enactment of the Food and Drug Omnibus Reform Act of 2022 (FDORA).  FDORA added section 515C, “Predetermined Change Control Plans for Devices” to the Federal Food, Drug, and Cosmetic (FD&C) Act.  Section 515C authorizes FDA to approve a PCCP submitted as part of a PMA or 510(k) submission and to require that such PCCP include (a) labeling required for safe and effective use of the device as it changes; (b) notification requirements if the device does not function as intended pursuant to the plan, and (c) performance requirements for changes made under the plan.  Once FDA has cleared or approved a PCCP, that statute states that a supplemental application “shall not be required” to make a change consistent with such PCCP.

    Although FDORA gave FDA express authority to allow PCCP , FDA had already been considering creating a mechanism for manufacturers to prespecify modifications for AI/ML-based software subject to 510(k) premarket notification and de novo classification for several years.

    The 2019 discussion paper, “Proposed Regulatory Framework for Modifications to Artificial Intelligence/Machine Learning (AI/ML)-Based Software as a Medical Device (SaMD) – Discussion Paper and Request for Feedback,” introduced the PCCP principle as a means to “enable responsible performance enhancements in AI/ML technologies.”  The discussion paper described a PCCP as including (1) the types of anticipated modifications (SaMD Pre-Specifications or SPS) based on the retraining and model update strategy and (2) the associated methodology  (Algorithm Change Protocol or ACP) being used to implement those changes in a controlled manner to manage patient risks.

    In February 2020, FDA granted a de novo classification request (DEN190040) for software intended to assist medical professionals in the acquisition of cardiac ultrasound images and that included a PCCP for future software modifications.  The reclassification order established a Special Control requiring the inclusion of a “detailed protocol that describes, in the event of a future, change, the level of change in the device technical specifications or indications for use at which the change or changes could significantly affect the safety or effectiveness of the device and the risks posed by these changes.”  Additionally, it stated that the “assessment metrics, acceptance criteria, and analytical methods used for the performance testing of changes that are within the scope of the protocol must be included.”

    In January 2021, as part of its “Artificial Intelligence/Machine Learning (AI/ML)-Based Software as a Medical Device (SaMD) Action Plan,” FDA committed to issuing a draft guidance on PCCPs that would address the content of SPSs and ACPs and identify the types of modifications appropriate under a PCCP.  That draft guidance has now been issued.

    Overview of the Draft Guidance

    The draft guidance describes a PCCP as a “plan that includes device modifications that would otherwise require a premarket approval supplement, De Novo submission, or a new premarket notification.”  It states that FDA will review a PCCP for a ML-DSF as part of the initial marketing submission and “authorize” it in whole or in part, i.e., permit either all of the proposed modifications or only some of them.

    Proposed modifications should be consistent with the device’s intended use and indications for use and be “intended to maintain or improve the safety and effectiveness of the device.”  Manufacturers should be able to verify and validate the proposed modifications within their existing quality system.

    Post-market, manufacturers can make modifications consistent with the PCCP and document the modification in accordance with their quality system, without the need for a new marketing submission.  Modifications that are not consistent with the authorized PCCP, however, must be evaluated in accordance with the traditional regulatory process described in applicable regulations and guidances referenced above.

    The draft guidance provides examples of modifications that may be included in a PCCP, including:

    • modifications related to quantitative measures of the ML-DSF performance specifications, including improvements to analytical and clinical performance resulting from re-training the ML model based on new data from the same type of input signal;
    • modifications related to device inputs to the ML-DSF which may involve including new sources of same signal type; and
    • modification related device’s use and performance for use within a specific subpopulation that was part of the originally indicated population.

    Components of a PCCP

    The draft guidance describes the sections that should be included as part of a PCCP and the specific information that should be included under each section.  The sections are: (1) description of modifications; (2) modification protocol; and (3) impact assessment.

    Description of Modifications

    The PCCP should include a detailed description of the changes to “device characteristics and performance” that are expected to result from proposed modifications.  FDA recommends that PCCPs specify only a “limited number” of modifications but does not provide a limit on the number of modifications that can be included.

    Both automatic and manual modifications can be included in a PCCP, so manufacturers should indicate the proposed implementation strategy for each modification.  In addition, manufacturers should identify whether the modifications will apply to all devices in the field (referred to as global adaptations) or will be implemented based on a specific clinical site or individual patients” (referred to as local adaptations).  For local adaptations, information should be included addressing what “local factors or conditions warrant a local change.”

    FDA recommends manufacturers submit each modification, associated labeling changes and specific performance evaluation in the Modification Protocol (MP).

    Modification Protocol

    The modification protocol (MP) describes the methods that will be followed when “developing, validating, and implementing those modifications, to ensure the device remains safe and effective.” For each proposed modification, the MP should describe:

    1. Data management practices: The MP should address how new data will be “collected, annotated, curated, stored, retained, controlled and used”; identify any relationship between the new data and the original data used for training and testing the initial device; define any data sequestration strategies and explain how the data are separated into training and testing dataset; and ensure that access to the testing datasets is restricted to prevent the use of that data for training.
    2. Retraining practices: The MP should state whether the model will need to be re-trained. If retraining applies to only certain parts of the ML-DSF, manufacturers will need to demonstrate that re-training does not affect other functions or software components.  The MP should also discuss how the manufacturerr will address risks associated with overfitting and model bias when re-training.
    3. Performance evaluation protocols: The MP should include plans to verify and validate modifications. If the proposed performance evaluation methods are different from the original methods used, the manufacturer should describe the differences and provide a justification for the changes.  Just like any other verification or validation activity, the protocol should include pre-defined acceptance criteria and any statistical tests used.  Since the manufacturer will be implementing the change without FDA premarket review, this section of the MP will need to include a statement that if there is a failure in performance, the failure will be recorded and the modification will not be implemented.
    4. Update procedures: The MP should describe how the manufacturer will update the software and any associated labeling that will be required for the modifications. Updates performed automatically will face a “higher bar” for demonstrating safety and effectiveness.  For automatic updates, the MP will need to describe how the software will be updated; how legacy users may be affected by the modification;  how users will be made aware of the modification; and any impact on performance that could be caused by the modification (e.g., whether clinically meaningful differences may be observed in patient results before and after the modification).  Further, the MP should address how version information will be presented to the user for the modified device.  In addition, manufacturers may need to establish a device monitoring plan that will address how they will monitor post market device performance of the modifications, including monitoring real-world device performance or justify why that device monitoring is not necessary.

    The draft guidance includes an appendix with example elements that may be required in a MP depending on the size, scope, complexity, and risk associated with each proposed modification.

    Impact Assessment 

    A PCCP should include an impact assessment that evaluates the risks and benefits of the modifications and how any risks will be mitigated.  The impact assessment can be included with the MP or provided as a stand-alone document, and should include:

    1. a comparison of the version of the device without modification to the version of the device with the modifications implemented;
    2. risks and benefits of the modifications;
    3. how the MP will continue to reasonably ensure safety and effectiveness;
    4. how the implementation of one modification affects the implementation of another; and
    5. the cumulative impact of all modifications.

    Things to Consider When Deciding Whether to Include a PCCP

    PCCPs provide a new mechanism for introducing certain significant changes to an ML-DSF.  The use of a PCCP is not required; a manufacturer can continue to implement significant device changes via supplemental submissions to FDA.  However, including a PCCP can speed up the process of making post-market software modifications and potentially reduce costs by avoiding additional marketing submissions.

    Once authorized, a PCCP is considered a technological characteristic of the authorized device.  Consequently, details of the PCCP would be included in the 510(k) Summary, De Novo decision summary, or PMA Summary of Safety and Effectiveness.  Manufacturers seeking to modify a PCCP once it has been authorized will need to submit the modified PCCP as part of a marketing submission for FDA’s review.  The PCCP is applicable only to the device that was the subject of the market authorization in which it was included, which means that, if the manufacturer makes other changes to the device before implementing the modifications outlined in the PCCP, a new submission for the modified device will be needed to reestablish the PCCP.

    The Agency recommends that manufacturers discuss the PCCP strategy with FDA through the Q-Submission program before submitting a marketing submission with a PCCP.  We note that FDA has already updated the eStar template to include a separate section indicating whether the sponsor is including a PCCP with the submission and a mechanism to attach it to the submission.

    Industry stakeholders seeking to provide feedback to FDA can submit comments to  Docket: FDA-2022-D-2628 by July 3, 2023.

    Categories: Medical Devices