We’ve previously posted some summaries of the 21st Century Cures Act (Cures Act), which the President signed into law on December 13, 2016 (Public Law No. 114-255).  (Those summaries are available here, here, and here.)  This post focuses on only one section of the new law: Cures Act Section 3038, titled “Combination Product Innovation.”  We did not cover Section 3038 in great detail in our  prior summaries.  Instead, given the significant changes made to the law and the potentially wide-ranging effects, we knew that a stand-alone post would be necessary.

Section 3038 spans roughly 15 pages of text and revises Section 503(g) of the Federal Food, Drug, and Cosmetic Act (FDC Act) concerning the regulation of combination products.  It has a number of interesting new features.  Perhaps most striking is the importation of the FDC Act’s Hatch-Waxman provisions concerning drugs into the review of drug-device combination products.

Our summary:

1.  Definition of PMOA

Section 3038 reaffirms FDA’s task of choosing a lead center (CDER, CBER, or CDRH) to regulate combination products based upon their “primary mode of action” (PMOA).  The PMOA is “the single mode of action of a combination product expected to make the greatest contribution to the overall intended therapeutic effects of the combination product.”  FDA by regulation had already promulgated this definition of PMOA.  Section 3038 incorporates the regulatory definition essentially unchanged into the statute.

Section 3038 also directs FDA to “conduct premarket review of any combination product under a single application, whenever appropriate.”  This statutory provision is a nudge and not a change in existing law, because FDA already has this authority and often requires only a single application for a combination product.  The “whenever appropriate” qualifier plainly continues FDA’s discretion to use separate applications in appropriate situations.  21 CFR 3.4(c).

2.  Impact of Chemical Action

A new provision is the instruction to FDA that it “shall not determine” that the PMOA is “that of a drug or biological product solely because the combination product has any chemical action within or on the human body.”  Under this new directive, the presence of chemical action is insufficient by itself for the Office of Combination Products (OCP) to find that the primary mode of action is that of a drug.  It is left unexplained what additional evidence is required.  Presumably, there would need to be evidence that the chemical action makes the greatest contribution to the therapeutic effects.

Absent such evidence, presumably the OCP would revert to the portion of the algorithm in its regulations applicable to cases in which it cannot be determined with “reasonable certainty” which mode of action makes the greatest contribution.  21 CFR 3.4(b).  The algorithm requires the OCP to determine which center has regulated similar combination products or is best equipped to handle the relevant safety or effectiveness questions raised by the combination product.

If this interpretation is correct, Section 3038 seems likely to move the OCP away from more formalistic inquiry as to the presence (or absence) of chemical action and its putative role in achieving therapeutic effects, and toward a more practical inquiry as to which center is best suited to review a particular combination product.  That would be an improvement.

A similar issue sometimes arises when the OCP must determine whether a single entity product is a drug or device.  In practice, the OCP places the burden of proof on a sponsor to show that its product does not achieve its primary purposes via chemical action if any is present.  If the sponsor cannot meet this often difficult evidentiary burden, the OCP will likely classify the product as a drug.  Section 3038 does not address the regulation of single entity products.

3.  Meetings and Studies

Once a combination product is assigned to a lead center, a sponsor who disagrees may require the OCP to provide a substantive rationale and scientific evidence underlying the decision.  The provision also spells out a collaborative process by which a sponsor and the OCP are to reach agreement within 90 days on the design of proposed studies (preclinical, clinical, or both) to establish the relevance of chemical action in achieving the primary mode of action.  The OCP is then required to reconsider its decision in light of the data from such studies.

It remains to be seen how useful this provision is.  Conducting clinical studies simply to establish product jurisdiction (as opposed to demonstrating safety and efficacy) will add yet another costly burden to the approval process.  On the other hand, some products will not survive inappropriate placement in CDER.  If that occurs because of a lack of data about the role of chemical action, it may be worth trying to save them by conducting studies that would answer this question.

After a PMOA is determined, there is a new procedure for requesting a meeting with the OCP within 75 days to clarify and reach written agreement upon what standards and requirements for clearance or approval of the combination product will apply and what postmarket requirements relating to manufacturing and product modification will apply.

4.  Hatch-Waxman Rules Apply for Certain Combination Products

Section 3038 addresses the thorny issue of combination products that incorporate an already approved constituent.  For example, it is not uncommon for new devices to be invented that improve upon the delivery of approved drugs, or provide a new route of administration for otherwise approved drugs.

Under Section 3038, FDA is instructed that “[f]or purposes of conducting the premarket review of a combination product that contains an approved constituent part,” FDA “may require that the sponsor of [the] combination product submit . . . only data or information . . . necessary to meet the standard for clearance or approval, . . . including any incremental risks and benefits posed by such combination product, using a risk based approach and taking into account any prior finding of safety and effectiveness or substantial equivalence for the approved constituent.”  As a general matter, this provision should relieve sponsors of the burden re proving the basic safety or effectiveness of the approved constituent.  It allows focus on the new constituent plus the incremental risk created by a new use of the approved constituent.

But there’s a flip side to this benefit.   If a combination product has a device primary mode of action (PMOA) and the other constituent is an approved drug, then Section 3038 essentially imports the familiar panapoly of Hatch Waxman requirements applicable to 505(b)(2) NDA applicants into the device clearance and approval processes.  Here’s what new FDC Act § 503(g)(5) says:

(A)  If an application is submitted under section 515 or 510(k) or a request is submitted under section 513(f)(2), consistent with any determination made under paragraph (1)(D), for a combination product containing as a constituent part an approved drug—

(i) the application or request shall include the certification or statement described in section 505(b)(2); and

(ii) the applicant or requester shall provide notice as described in section 505(b)(3).

(B)  For purposes of this paragraph and paragraph  (4), the term ‘approved drug’ means an active ingredient—

(i) that was in an application previously approved under section 505(c);

(ii) where such application is relied upon by the applicant submitting the application or request described in subparagraph (A);

(iii) for which full reports of investigations that have been made to show whether such drug is safe for use and whether such drug is effective in use were not conducted by or for the applicant submitting the application or request described in subparagraph (A); and

(C)  The following provisions shall apply with respect to an application or request described in subparagraph (A) to the same extent and in the same manner as if such application or request were an application described in section 505(b)(2) that referenced the approved drug:

(i) Subparagraphs (A), (B), (C), and (D) of section 505(c)(3).
(ii) Clauses (ii), (iii), and (iv) of section 505(c)(3)(E).
(iii) Subsections (b) and (c) of section 505A.
(iv) Section 505E(a).
(v) Section 527(a).

To translate this statutory language: the sponsor of the combination product must submit a certification with respect to any patent information identified in the Orange Book for the listed drug identified, and, in the case of a Paragraph IV certification, provide notice that the challenged patent(s) is invalid, unenforceable, or not infringed.  If the NDA holder or patent owner timely brings suit, then approval of the 510(k) or PMA for the proposed combination product can be delayed up to 30 months while patent infringement is litigation.  After that, clearance or approval could be granted, but if patent infringement litigation is not finally resolved, then a combination product sponsor will need to decide whether or not to market its product “at risk.”

New FDC Act § 503(g)(5) also imports various exclusivity provisions into the device clearance and approval processes.  Subsection (C) above says that 5-year new chemical entity exclusivity, 3-year new clinical investigation exclusivity, 6-month pediatric exclusivity, 7-year orphan drug exclusivity, and any 5-year add-on exclusivity as a result of the 2012 Generating Antibiotic Incentives Now Act apply to prevent use of the drug in the combination product.

It appears that the Hatch-Waxman provisions are triggered only if the combination product is reviewed under the device provisions of the FDC Act and there is an approved drug constituent.  They can be avoided if separate marketing applications are submitted (one for the device and the other for the drug), and Section 3038 expressly provides that nothing prevents the sponsor for doing so, unless FDA determines that a single application is necessary.

These statutory changes clearly have an impact on combination products in which a device and drug are physically combined or are packaged together.  In such cases, the sponsor can control the labeling and make it harmonious with the intended use of each constituent, and FDA’s premarket data requirements now must focus only on the unapproved device and the incremental risk of the combination product as a whole.

Section 3038 apparently does not address the thornier issue of combination products created by cross labeling.  In such cases, a new device and an approved drug would be sold separately, and changes are needed for the drug labeling to make it compatible with the new device.  Such products have been stymied by lack of cooperation from the drug sponsor.  It does not seem that Section 3038 provides any relief from the necessity to obtain such cooperation.  Section 3038 only provides a solution when the combination product sponsor is in full control of all relevant labeling.

Curiously, although Section 3038 incorporates Hatch-Waxman into the device approval/clearance process, the provision makes no mention of combination products containing a proposed device with a biological constituent already licensed under the Public Health Service Act.  Will a future bill or amendment reference the 2009 Biologics Price Competition and Innovation Act and, in particular, the statute’s 12-year (and pediatric) exclusivity provisions and complex patent resolution process?

On December 9, 2016, FDA released a guidance document addressing its Drug Supply Chain Security Act (DSCSA) implementation: “Identification of Suspect Product and Notification.”  The Federal Register Notice announcing the release of this (partially, as explained below) final guidance explains that it is the result of review of comments on FDA’s draft guidance issued back in June of 2014 (see our previous post here). FDA intends that the guidance will aid certain trading partners along the prescription drug distribution chain, including manufacturers, repackagers, wholesalers, and dispensers in their identification of suspect and illegitimate products. If you recall the 2014 draft, it set forth several helpful examples and specific scenarios of how trading partners in the pharmaceutical supply chain should identify, notify trading partners and report to FDA suspect or illegitimate products (as defined by the DSCSA) in their possession or control. The new final guidance does not deviate from the draft guidance in its provision of examples and scenarios addressing what trading partners should consider, look for, notify and report (and how to terminate notifications) to the Agency. It does, however, add at page 12 (bullet 5) that in addition to notifying FDA, if a trading partner determines it has an illegitimate product in its possession or control, it must notify all immediate trading partners that it has reason to believe may also possess the drug (and lists reasonable methods of communication). FDA will assign an incident number to the matter to be used on all future communications.

A new, important part of the guidance, however, seeks to impose requirements on drug manufacturers, and is set forth at pages 8-11 (in grey shading). This addition is specific to manufacturers and sets forth scenarios dealing with “High Risk of Illegitimacy Notifications.” FDA states that section 582(b)(4)(B)(ii)(II) (“High Risk of Illegitimacy”) requires manufacturers to notify (1) FDA, and (2) its immediate trading partners (that the manufacturer has reason to believe may have in the trading partner’s possession a product manufactured by, or purported to be a product manufactured by, the manufacturer) in three general scenarios:

Within 24 hours after determining or being notified by FDA or a trading partner that:

1. there is a high risk that a product that the manufacturer has reason to believe is in an immediate trading partner’s possession is an illegitimate product;
2. there is a specific high risk that could increase the likelihood that illegitimate product will enter the U.S. pharmaceutical distribution supply chain;
3. there exists an “other high risk” as determined by FDA in guidance pursuant to subsection 582(h). Under this somewhat vague scenario, the manufacturer would be required (but recommended) to notify FDA but not other immediate trading partners.

FDA provides specific examples for each of these three high risk scenarios and non-exclusive lists of circumstances where they may occur. The Agency explains that it believes that Congress intended this statutory section to “leverage the surveillance systems that many manufacturers already have in place to detect counterfeit and otherwise violative versions of their product.” As FDA points out, manufacturers may learn about such high risk products from trading partners, FDA, their own company, or other regulatory authorities, “even when a product may not be in the manufacturer’s possession or control.” Thus, whether or not the manufacturer has possession or control of the product, FDA provides certain examples that would require the manufacturer to notify FDA and its immediate trading partners of certain “high risk” scenarios. This obligation would be broader than that of other trading partners because notification of suspect or illegitimate product is typically only required when the product is one’s custody or possession. FDA also sets forth in the draft guidance (page 12) steps manufacturers should follow to notify FDA and trading partners of products with a high risk of illegitimacy.  Comments on the new, draft, guidance provisions are due to FDA by February 7, 2017.  

Your friendly neighborhood bloggers were tempted to headline this post with a Buzzfeed worthy headline such as “When FDA pointed out THIS ONE THING, industry was SHOCKED!” or “FDA issues flood of letters – 25% of 2016 output in a single day.  What happened next will leave you breathless!”  But we restrained ourselves for we are models of decorum, substance, and gravitas.  No, really.

On December 12, 2016, demonstrating that they’re not dead yet, the Office of Prescription Drug Promotion (OPDP) issued two letters relating to television ads, one to Sanofi-aventis relating to TOUJEO (insulin glargine injection) U-300, for subcutaneous use (here), and one to Celgene for OTEZLA (apremilast) tablets, for oral use (here).  TOUJEO is indicated to improve glycemic control in adults with diabetes mellitus and OTEZLA is approved for the treatment of adult patients with active psoriatic arthritis and for patients with moderate to severe plaque psoriasis who are candidates for phototherapy or systemic therapy.  Both drugs carry serious contraindications and risks.

OPDP had similar objections to both of the advertisements, namely that the presentation of risk information was false or misleading. Why was it false or misleading?  Did the companies lie about the risks?  Was the presentation of the risk information inadequate?

In a word, no. FDA had no objections to the substance of the risk communication.  Rather, FDA objected to the presentation of the risk information.  Specifically, FDA objected to the fact that the visuals changed fairly quickly and the background music was distracting.

The presentation of these compelling and attention-grabbing visuals and SUPERs, all of which are unrelated to the risk message, in addition to the frequent scene changes and the other competing modalities such as the musical interjections, compete for the consumers’ attention. As a result, it is difficult for consumers to adequately process and comprehend the risk information.

In other words, playing Katrina and the Waves (OTEZLA), or Earth, Wind & Fire (TOUJEO) while rapidly shifting between distracting images can render otherwise appropriate risk information inappropriate and misbranding in nature.  While your bloggers, as children of the ‘80s, applaud the musical choices, the takeaway from these letters is that OPDP still has what to say, and that in crafting the type of slick DTC ads we’ve grown to know and love, one must be careful to keep the viewer’s attention focused on the risk information when presenting such information, rather than distracting them with music and images that are unrelated to the presentation of risk information.  Perhaps Men Without Hats’ “Safety Dance” would be more appropriate music?

As we previously reported, the President signed into the law the 21^st Century Cures Act (Act) on December 13, 2016 (find the full text here). This post is part two of a two-part post that summarizes the relevant provisions related to development of drugs and biologics. Part one of this summary (covering Subtitles A-D of Title III of the Act) can be found here.

In addition, Hyman, Phelps & McNamara, P.C.’s summary of Subtitle F of Title III of the Act pertaining to medical device development provisions can be found here. We expect to publish additional posts, including a post summarizing the combination product provision and a post summarizing relevant health care provisions.

Here is a summary of Subtitles E, G-I of Title III of the Act pertaining to drug development.

TITLE III—DEVELOPMENT

Subtitle E—Antimicrobial Innovation And Stewardship

Sec. 3041. Antimicrobial resistance monitoring.

Section 3041 amends the Public Health Service Act (PHS Act) to require HHS to encourage reporting on aggregate antimicrobial drug use and antimicrobial resistance to antimicrobial drugs and implementation of antimicrobial stewardship program by the DoD, VA, and the Indian Health Service. The section also directs HHS to provide technical assistance to the DoD and VA as appropriate and upon request.

The section requires HHS to publish a report on antimicrobial resistance in humans and use of antimicrobial drugs, including qualified infectious disease products under section 506(h) of the Federal Food, Drug, and Cosmetic Act (FDC Act). The report is required within one year of the date of enactment of the Act. In addition, HHS is directed to disseminate, as appropriate, guidance and educational materials related to development and implementation of evidence-based antimicrobial stewardship programs or practices at health care facilities.

The section requires HHS to work with State and local public health departments on programs related to antimicrobial resistance.

To fulfill the purposes of this section, HHS is directed to provide a mechanism for facilities to report data related to their antimicrobial stewardship activities.

Sec. 3042. Limited population pathway.

Section 3042 amends the FDC Act to allow FDA to approve an antibacterial or antifungal drug, along or in combination with other drugs, as a limited population drug if:

• The drug is intended to treat a serious or life-threatening infection in a limited population of patients with unmet needs;
• The standards for NDA or BLA approval/licensure are met; and
• FDA receives a written request from the sponsor to approve the drug as a limited population drug.

FDA then must make its determination of safety and effectiveness of the drug to reflect the benefit-risk profile of the drug in the intended limited population, considering the severity, rarity, or prevalence of the infection and the available or lack of alternative treatment. FDA may approve the drug even though there is a lack of evidence to fully establish a favorable benefit-risk profile in a broader patient population.

A drug approved under this section is subject to the following requirements:

• Labeling and advertising of the drug must contain the statement “Limited Population” in a prominent manner;
• Inclusion of the statement “This drug is indicated for use in a limited and specific population of patients” in the prescribing information; and
• Submission to FDA copies of all promotional materials at least 30 days prior to dissemination of the materials.

These postapproval requirements can be removed if a broader indication for the drug is approved under an NDA or BLA.

The section also requires FDA to issue draft guidance describing criteria, processes, and other considerations for demonstrating safety and effectiveness of limited population antibacterial and antifungal drugs. FDA has 18 months to issue the draft guidance document, and another 18 months after the public comment period on the draft guidance ends, to issue a final guidance. However, FDA may still approve antibacterial and antifungal drugs under this section prior to issuing such guidance.

The section requires FDA to provide prompt advice to the sponsor of a drug seeking approval under this section.

In addition, FDA must report to Congress at least every other year the number of requests for approval and the number of approvals of drugs under this section. No later than December 2021, GAO must also provide Congress a report on the coordination of activities of the Antimicrobial Resistance Task Force and the approval pathway under this section.

Sec. 3043. Prescribing authority.

Section 3043 specifies that nothing in Subtitle E of the Act restricts the prescribing of antimicrobial drugs and other products, including qualified infectious disease products, by health care professionals, or otherwise limits the practice of health care.

Sec. 3044. Susceptibility test interpretive criteria for microorganisms; antimicrobial susceptibility testing devices.

Section 3044 amends the FDC Act to clarify FDA’s authority to update susceptibility test interpretive criteria for antimicrobial drugs (i.e., to determine how much of a drug to use and which infections a drug is useful in treating) when necessary for public health, due to, among other things, the constant evolution of microorganisms that leads to the development of resistance to drugs. Unique management of such drugs is necessary to delay or prevent the development of further resistance. The section requires FDA to identify appropriate susceptibility test interpretive criteria for such drugs at the time of approval, if available, or at some later date that they become available. The bases for initial identification of these criteria must be based on available and relevant:

• Preclinical and clinical data;
• The relationship of the susceptibility test interpretive criteria to morbidity and mortality associated with the disease or condition for which the drug is used; and
• Other evidence as appropriate.

The section also requires FDA, within one year of the date of enactment of the Act, to establish and maintain on FDA.gov a dedicated website that contains a list of any appropriate new or updated susceptibility test interpretive criteria standards, including those established by nationally or internationally recognized standards development organizations (referred to as the Interpretive Criteria Website). In addition, FDA must post a list of any interpretive criteria that the Agency has determined to be appropriate regarding legally marketed antimicrobial drugs where:

• FDA does not recognize, in whole or in part, an interpretive criteria standard from the first list;
• FDA withdraws recognition of a standard, in whole or in part;
• FDA approves an NDA or BLA with respect to marketing such a drug for which there are no relevant interpretive criteria included in a standard; and
• Because the characteristics of such a drug differ from other drugs with the same active ingredient, the interpretive criteria with respect to such drug differ from otherwise applicable interpretive criteria and are determined by FDA to be appropriate for the drug.

FDA must announce the creation of the Interpretive Criteria Website containing this information in the Federal Register. Furthermore, once the Interpretive Criteria Website is established, and every 6 months thereafter, FDA evaluate the lists for new or updated susceptibility test interpretive standards, as well as for approved NDAs and BLAs, and make necessary changes. Each year, FDA must compile all of changes to the lists and publish this information in the Federal Register and provide for public comment.

The section also requires, within one year of the establishment of the Interpretive Criteria Website, a holder of an approved NDA or BLA to remove susceptibility test interpretive criteria, if any, and related information from the approved drug labeling and replace it with a reference to the Interpretive Criteria Website. This can be accomplished through an annual report. Drugs approved after the establishment of the Interpretive Criteria Website must include reference to the website.

In addition, the section creates special conditions for marketing of antimicrobial susceptibility testing devices if those devices meet the following conditions:

• The device is used to make a determination of susceptibility using susceptibility test interpretive criteria that are either included in a standard recognized by FDA or otherwise listed on the Interpretive Criteria Website;
• The labeling of such device conveys
  • Information about the in vitro susceptibility of microorganisms, as applicable to antimicrobial drugs,
  • That the safety and efficacy of such drugs in treating clinical infections may or may not have been established in adequate and well-controlled clinical trials for the device to report susceptibility and that the clinical significance of such susceptibility information in those instances is unknown;
  • That the approved labeling for drugs tested using such a device provides the uses for which FDA has approved such drugs; and
  • Any other information FDA finds appropriate to adequately convey the meaning of the data supporting the standards and criteria;
• The device meets all other requirements to be cleared under section 510(k), classified under section 513(f)(2), or approved under section 515.

The section requires within 2 years of enactment of the Act that FDA submit to Congress a report on the progress of implementing this section.

Subtitle G—Improving Scientific Expertise And Outreach At FDA

Sec. 3071. Silvio O. Conte Senior Biomedical Research and Biomedical Product Assessment Service.

Section 3071 amends the PHS Act to expand the Silvio O. Conte Senior Biomedical Research Service from a maximum of 500 members to 2000 members, which allows the recruitment of additional qualified scientific and technical experts in biomedical research, clinical research evaluation, and biomedical product assessment across HHS. The section also increases the maximum salary of the members to now not exceed the amount of annual compensation of the President (currently $400,000 per year).

The section also directs GAO to study the effectiveness of these reforms on all agencies or departments within HHS that must be provided to Congress as a report within 4 years of the date of enactment of the Act. The GAO study and report must address:

• Total number of members recruited and retained, and the effect of increasing the number of members;
• The number of members hired with a doctoral level degree in biomedicine or related field, and the number of members hired with a doctoral or master’s level degree in engineering, bioinformatics, or related emerging field; and
• The number of members that have been hired by each agency or department within HHS, and how HHS assigns such members.

Sec. 3072. Hiring authority for scientific, technical, and professional personnel.

Section 3072 amends the FDC Act by allowing FDA to appoint scientific, technical, or professional positions that support the development, review, and regulation of medical products within the competitive service. In addition, the section provides that such appointments may have a maximum salary to now not exceed the amount of annual compensation of the President (currently $400,000 per year).

The section requires FDA to provide to Congress, within 18 months of the date of enactment of the Act, a report on workforce planning that examines FDA’s need for qualified individuals for scientific, technical, or professional positions. The report must address:

• An analysis of workforce needs at FDA and the strategic plan for addressing such needs, including through use of this section; and
• A recruitment and retention plan for hiring qualified candidates.

In addition, GAO is directed to conduct a study of the ability of FDA to hire, train, and retain qualified scientific, technical, and professional staff, not including contractors, needed to fulfill its missions. The GAO study and report must address:

• Information about the progress of FDA in recruiting and retaining qualified scientific, technical, and professional staff outstanding in he field of biomedical research, clinical research evaluation, and biomedical product assessment;
• Any critical staffing needs at the FDA, and any barriers to hiring, training, and retaining qualified staff;
• An examination of FDA recruitment and retention strategies; and
• Recommendations for potential improvements that would address FDA staffing needs.

The GAO report must be sent to Congress by January 1, 2022.

Sec. 3073. Establishment of Food and Drug Administration Intercenter Institutes.

Section 3073 amends the FDC Act to require FDA to establish one or more “Intercenter Institutes” within FDA for a major disease area or area. Such Intercenter Institute is directed to develop and implement processes for coordination of activities, as applicable to the disease area(s), among CDER, CBER, and CDRH, including:

• Coordination of staff from Centers with diverse product expertise in the specific diseases;
• Streamlining, as appropriate, the review of medical products for specific diseases;
• Promotion of scientific programs within the Centers;
• Development of programs and strategies to recruit, train, and provide continuing education opportunities for the personnel of the Centers;
• Enhancement of interactions of the Centers with patients, sponsors, and the external biomedical community; and
• Facilitation of collaborative relationships of the Centers with other HHS agencies.

FDA must establish at least one Intercenter Institute within one year of the date of enactment of the Act, and must provide for a period of public comment during the time that each institute is being implemented. The section also allows for FDA to terminate any institute with 60 days public notice. FDA has already established an “Oncology Center of Excellence” that largely mirrors the structure and activities of an Intercenter Institute; it is unclear if the Agency will attempt to satisfy the requirement to establish an Intercenter Institute by converting it the Oncology Center of Excellence to an “Oncology Intercenter Institute” under the process set out in this section.

Sec. 3074. Scientific engagement.

Section 3074 establishes that scientific meetings that are attended by HHS professionals for whom attendance is directly related to their professional duties and the mission of HHS (a) are not considered conferences for the purposes of complying with Federal reporting requirements contained in annual appropriations Acts and (b) are not considered conferences for purposes of a restriction contained in an annual appropriations Act or any other regulation restricting travel to such a meeting.

The section requires each operating division of HHS to post an annual report on scientific meeting attendance and related travel spending for each fiscal year no later than 90 days after the end of the fiscal year.

Sec. 3075. Drug surveillance.

Section 3075 amends the FDC Act to make targeted revisions to FDA’s drug surveillance program. FDA will have more flexibility related to existing requirements that it screen the Adverse Event Reporting System database and evaluate its REMS program. The section also directs FDA to make publicly available best practices for drug safety surveillance using the Adverse Event Reporting System and criteria for public posting of adverse event signals.

Sec. 3076. Reagan-Udall Foundation for the Food and Drug Administration.

Section 3076 amends the FDC act to amend the governance of the Board of Directors in the following ways:

• Allows the Board of Directors of the Reagan-Udall Foundation, through amendments to the bylaws, to provide for more than 14 voting members on the Board of Directors and provides procedures for appointing such Directors;
• Clarifies that a Special Government Employee is not considered an “employee of the Federal Government” for purposes of being allowed to serve on the Board;
• Provides for staggered terms of Directors; and
• Eliminates the restriction that the Executive Director’s compensation may not exceed that of the FDA Commissioner.

The section also amends how funds received from entities other than the U.S. Treasuring (e.g., from private entities) must be managed with regard to accounting practices.

Subtitle H—Medical Countermeasures Innovation

Sec. 3081. Medical countermeasure guidelines.

Section 3081 amends the PHS Act to require HHS to ensure timely and accurate recommended utilization guidelines for qualified countermeasures, qualified pandemic and epidemic products, and security countermeasures, including for such products in the Strategic National Stockpile.

The section also requires HHS, no later than March 1 of each year in which HHS determines that the amount of funds available for procurement of security countermeasures (i.e., in the BioShield Special Reserve Fund) is less than $1.5 billion, to submit to Congress a report detailing the amount of such funds available for procurement and the impact of such amount on:

• Meeting security countermeasure needs; and
• The annual Public Health Emergency Medical Countermeasures Enterprise and Strategy Implementation Plan.

Sec. 3082. Clarifying BARDA contracting authority.

Section 3082 amends the PHS Act to direct Biomedical Advanced Research and Development Authority (BARDA) to carry out programs funded by the special reserve fund (e.g., for procurement of security countermeasures), specifically including the execution of procurement contracts, grants, and cooperative agreements.

Sec. 3083. Countermeasure budget plan.

Section 3083 amends the PHS Act to direct HHS to develop a five-year budget plan based on medical countermeasures priorities, including addressing novel or emerging infectious diseases and the efforts to development medical countermeasures for such threats. Finally, the section specifies that the plan must be provided to Congress no later than March 15 of each year and must be made publicly available.

Sec. 3084. Medical countermeasures innovation.

Section 3084 amends the PHS Act to direct BARDA to enter an agreement with an independent, nonprofit entity (a Medical Countermeasures Innovation Partner) to:

• Foster and accelerate development and innovation of medical countermeasures and technologies that may assist advanced research and development of qualified countermeasures, including using strategic venture capital practices;
• Promote the development of new and promising technologies that address urgent medical countermeasure needs, as identified by HHS;
• Address unmet public health needs relating directly to medical countermeasure requirements; and
• Provide expert consultation and advice to foster viable medical countermeasure innovators.

Under the agreement, BARDA must provide direction to the partner, including by communicating the medical countermeasure needs, requirements, and problems to be addressed. The section requires that BARDA provide Congress quarterly reports from the partner on the progress being made toward meeting the needs set out in the agreement. In addition, the section directs GAO within 4 years of the date of enactment of the Act to conduct an independent evaluation and report to Congress on the activities conducted under this section. This section sunsets after September 30, 2022.

Sec. 3085. Streamlining Project BioShield procurement.

Section 3085 amends the PHS Act to remove certain steps from the BioShield Special Reserve Fund, which is intended to reflect current execution of the fund. The section also requires HHS to notify Congress of each decision to make special reserve funds for procurement of a security countermeasure. Finally, the section makes available payments from the special reserve fund to a vendor for procurement of a security countermeasure.

Sec. 3086. Encouraging treatments for agents that present a national security threat.

Section 3086 amends the FDC Act to establish a priority review voucher program for a “material treatment medical countermeasure application,” which is

• A human drug application intended for use:
  • To prevent, or treat harm from a biological, chemical, radiological, or nuclear agent identified as a material threat; or
  • To mitigate, prevent, or treat harm from a condition that may result in adverse health consequences or death and may be caused by administering a drug or biological product against such agent;
• Determined by FDA to be eligible for priority review;
• Approved after the date of enactment of the Act, and
• For a human drug, no active ingredient of which has been approved under section 505(b)(1) of the FDC Act or section 351(a) of the PHS Act.

The section specifies that a priority review voucher is to be awarded for such an application upon approval by FDA. It also allows for the sponsor that receives the priority review voucher to transfer the voucher (and subsequently be transferred) prior to its use.

The section also provides specific requirements regarding notice of use of the priority review voucher: at least 90 days notice to FDA prior to submission of the application, which serves as a legally binding commitment to pay the user fee. A sponsor may transfer the voucher after such notice is given, provided that the application has not yet been submitted.

Furthermore, the section requires FDA to publish notice in the Federal Register and on FDA.gov within 30 days of (a) issuing a voucher under this section and (b) approving a drug that used a voucher issued under this section. The section limits the eligibility of applications from receiving more than one priority review voucher under the various voucher programs. The awarding of vouchers under this section sunsets after October 1, 2023.

Sec. 3087. Paperwork Reduction Act waiver during a public health emergency.

Section 3087 amends the PHS Act by allowing HHS to make a determination that waives voluntary collection of information from the Paperwork Reduction Act requirements during the period of a public health emergency or the period of time necessary to determine if a disease or disorder will become a public health emergency, or for a reasonable period of time during the immediate postresponse review regarding the public health emergency. If HHS determines that a waiver is necessary, it must promptly post on the HHS website a brief justification for the waiver, the anticipated timeframe, and the HHS agencies and offices that the waiver applies to; this must be updated, as applicable.

Sec. 3088. Clarifying Food and Drug Administration emergency use authorization.

Section 3088 amends the FDC Act to explicitly allow for emergency use authorizations for animal drugs.

Subtitle I—Vaccine Access, Certainty, And Innovation

Sec. 3091. Predictable review timelines of vaccines by the Advisory Committee on Immunization Practices.

Section 3091 directs the Advisory Committee on Immunization Practices, as appropriate, upon licensure of any vaccine or any new indication for a vaccine, to consider the use of the vaccine at its next regularly scheduled meeting. If the Advisory Committee does not make a recommendation regarding use of the vaccine, it must provide an update on the status of its review.

The section also directs the Advisory Committee to make recommendations with respect to use of certain vaccines in a timely manner, including those that are designated as Breakthrough Therapies or could be used in a public health emergency.

Sec. 3092. Review of processes and consistency of Advisory Committee on Immunization Practices recommendations.

Section 3092 requires the Centers for Disease Control and Prevention (CDC) to conduct a review, with input from vaccine stakeholders, of the processes used by the Advisory Committee on Immunization Practices in formulating and issuing recommendations pertaining to vaccines, including with respect to consistency. Such review must include an assessment of:

• The criteria used to evaluate vaccines, including any areas for which flexibility is necessary and the reason for it;
• The Grading of Recommendations, Assessment, Development, and Evaluation (GRADE) approach to the review and analysis of scientific and economic data, include the scientific basis; and
• The extent to which the processes used by the work groups of the Advisory Committee are consistent among such groups, including the reasons for any variation.

The section requires CDC within 18 months after the date of enactment of the Act to provide Congress a report on the results of the review, including any recommendations on improving consistency of the processes.

Sec. 3093. Encouraging vaccine innovation.

Section 3093 directs CDC to ensure that its staff within the Office of Infectious Diseases coordinate with respect to public health needs, epidemiology, and program planning and implementation considerations related to immunizations, including with regard to meeting with stakeholders.

Specifically, the section requires HHS, in collaboration with NIH, CDC, FDA, and BARDA, and in consultation with the DoD, VA, and stakeholders, to submit to Congress and post on the HHS website a report on ways to promote innovation in the development of vaccines that minimize the burden of infectious diseases. The report must include:

• The current status of vaccine development;
• Consideration of the optimal process to determine which vaccines would be beneficial to public health and how information on such vaccines is disseminated to key stakeholders;
• Examination and identification of whether obstacles exist that inhibit the development of beneficial vaccines; and
• Recommendations about how best to remove any obstacles in order to promote and incentivize vaccine innovation and development.

The section also amends the PHS Act to require HHS to revise the Vaccine Injury Table as part of the vaccine injury compensation program to include vaccines recommended by CDC for routine administration in pregnant women. The section further amends the PHS Act, for purposes of petitions for compensation for vaccine-related injury or death, to explicitly include both a woman who received a covered vaccine while pregnant and any child who was in utero at the time such woman received the vaccine.

If you have questions or need more information, contact:

• Frank J. Sasinowski, fsasinowski@hpm.com, 202-737-4287
• Josephine M. Torrente, jtorrente@hpm.com, 202-737-7554
• David B. Clissold, dclissold@hpm.com, 202-737-7545
• James E. Valentine, jvalentine@hpm.com, 202-724-1745
• Michelle L. Butler, mbutler@hpm.com, 202-737-7551

On December 7, 2016, the U.S. Department of Health and Human Services Office of Inspector General (“OIG”) published a Final Rule amending the safe harbor regulations under the Federal health care program antikickback statute (“AKS”) (42 U.S.C. § 1320a-7b(b)) and established exceptions to the Civil Monetary Penalty (“CMP”) prohibiting remuneration to Medicare and Medicaid beneficiaries (42 U.S.C. § 1320a-7a).  This Final Rule changes existing safe harbors and adds new ones, while also adding new exceptions to the beneficiary inducement CMP.  We previously discussed the Proposed Rule issued by OIG in 2014 here.  All of the proposed AKS safe harbor regulations and beneficiary inducement CMP exceptions were finalized (some with modifications), with the exception of the gainsharing CMP regulation. The Final Rule is effective January 6, 2017. We describe the finalized changes to the regulations below, with particular focus on those of most interest to drug and device manufacturers.

Proposed Changes to the AKS Safe Harbors

Cost-sharing waivers by pharmacies:  In the Final Rule, the OIG added a safe harbor to protect the waiver or reduction by a pharmacy of cost sharing under a Federal health care program if: (1) the waiver or reduction is not advertised or part of a solicitation; (2) the pharmacy does not routinely waive cost-sharing; and (3) the pharmacy either makes a good faith determination of the patient’s financial need or fails to collect the cost-sharing after a reasonable effort to do so.  The Proposed Rule, consistent with the statutory provisions of section 101 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (“MMA”) (see 42 U.S.C. § 1320a-7b(b)(3)(G)), originally limited this safe harbor protection to Part D cost sharing, but OIG expanded the scope to all Federal health care programs in the Final Rule. This safe harbor protects the waiver of co-insurance, copayments, or deductibles by a pharmacy under any Federal health care program as long as such waivers are unadvertised, not routine, and made after an individualized determination of financial need (or reasonable effort to collect the cost-sharing amount).  OIG declined, in the Final Rule, to provide specific guidelines as to the method in which pharmacies must determine financial need, but it is expected that pharmacy guidelines would be “reasonable and applied uniformly.” 81 Fed. Reg. at 88,374.

OIG received a comment that proposed restrictions on advertising and solicitation impinged on pharmacies’ protected commercial speech under the First Amendment. OIG defended this safe harbor requirement by explaining that advertising is not a per se violation of the AKS. Rather, programs that advertise a cost-sharing waiver are ineligible for protection under the safe harbor and would be evaluated on a case-by-case basis under the AKS. Furthermore, OIG stated that Congress explicitly included an advertising prohibition in the Health Insurance Portability and Accountability Act of 1996 (see 42 U.S.C. § 1320a-7a(i)(6)(H)(i)), which OIG cannot ignore. Finally, OIG concluded that “interpretation of the statutory prohibition on advertising is no broader than necessary to preclude communications that create a high risk of abusive steering arrangements under the fraud and abuse laws.” 81 Fed. Reg. at 88,372.

We note that subsidization of a patient’s copayment or co-insurance by a third party, such as a drug manufacturer, will not be protected under the safe harbor and there was no indication in the Final Rule or its preamble that the OIG would interpret the safe harbor broadly to protect third party subsidies. The OIG has previously made clear that co-pay subsidies provided by drug manufacturers to Federal program beneficiaries are problematic under the AKS.

Medicare Coverage Gap Discount Program:  To implement another existing exemption in the AKS—one that was added in 2010 by section 3301 of the Patient Protection and Affordable Care Act (“ACA”)—the OIG added a safe harbor protecting brand drug discounts provided by drug manufacturers to Part D enrollees in the coverage gap under the Medicare Coverage Gap Discount Program.  We previously described this Program here. As originally proposed, this safe harbor regulation would protect “a discount in the price of an ‘applicable drug’ of a manufacturer that is furnished to an ‘applicable beneficiary’ under the Medicare Coverage Gap Discount Program . . . as long as the manufacturer participates in and is in full compliance with all requirements of the Medicare Coverage Gap Discount Program.” 81 Fed. Reg. at 88,378 (emphasis added). OIG revised this provision of the safe harbor in the Final Rule so that mere technical noncompliance with the Medicare Coverage Gap Discount Program by the manufacturer will not remove the arrangement from safe harbor protection.

Local transportation:  The OIG established a new safe harbor protecting free or discounted local transportation made available by an “Eligible Entity” to “Established Patients” for the purpose of obtaining “medically necessary items or services.”  Id. at 88,379. Eligible Entities do not include individuals or entities that primarily supply health care items, such as pharmaceutical companies, pharmacies, and durable medical equipment (“DME”) suppliers. OIG explained that free or discounted transportation services provided by a pharmaceutical manufacturer to a physician who is a referral source for the manufacturer’s products could influence the physician’s decision-making to use the manufacturer’s products, which may increase costs to Federal health care programs. The Proposed Rule excluded laboratories from the definition of “Eligible Entity,” however, this exclusion was not maintained in the Final Rule. To be protected under this safe harbor, Eligible Entities cannot provide air, luxury, or ambulance transportation services. Vouchers or other reimbursement for transportation services can be provided by Eligible Entities who do not provide transportation directly to their Established Patients. The Final Rule also adds protection for shuttle transportation services, in certain circumstances.

Under the safe harbor, free or discounted transportation services cannot be used as a marketing tool. Therefore, while Eligible Entities can inform their patients that free or discounted transportation services are available, such services may not be advertised or marketed. If the transportation services are provided through donations to the Eligible Entity, acknowledgements of the donation are prohibited if the donor is a health care provider or supplier or an entity that “makes, markets, or sells health care items or supplies.” Id. at 88,387.

Other safe harbors:  In addition, the OIG made a technical correction to the referral services safe harbor and:

• Established a new safe harbor protecting waivers of cost-sharing or deductible amounts owed to ambulance services owned and operated by a state or political subdivision of a state;
• Implemented an existing statutory exemption protecting remuneration between a federally qualified health center and a Medicare Advantage organization (see 42 U.S.C. § 1320a-7b(b)(3)(H)).

Changes to the Beneficiary Inducement CMP Statute

The beneficiary inducement CMP (Id. § 1320a-7a(a)(5)) prohibits an individual or entity from offering or transferring remuneration to a Medicare or Medicaid beneficiary that such individual or entity knows or should know is likely to influence such beneficiary to order or receive from a particular “provider, practitioner, or supplier” any item or service for which payment may be made, in whole or in part, under Medicare or Medicaid.  The Final Rule provided interpretive guidance to a beneficiary inducement CMP statutory exception and added several exceptions to that CMP as well.

Access to care/low risk of harm:  The CMP statute provides an exception for remuneration “which promotes access to care and poses a low risk of harm to patients and Federal health care programs.” Id. § 1320a-7a(i)(6)(F). If an activity or arrangement is not protected under a more specific statutory exception or regulatory safe harbor, an individual or entity may assert this as a defense. As in the Proposed Rule, OIG provided its interpretation of “promotes access to care” and “low risk of harm” in the Final Rule.

OIG clarified its interpretation of the term, “promotes access.” In the preamble, OIG stated that promoting access means “giving patients the tools they need” to remove socioeconomic, educational, geographic, mobility, or other barriers to receiving items and services covered by Medicare or Medicaid. OIG explicitly stated that this would not include rewards or inducements to receive care. As an example, OIG indicated that a health care provider could offer free childcare to a patient so that the patient could attend a smoking cessation program. However, according to OIG, movie tickets or other rewards for attending the smoking cessation program would not be protected under OIG’s interpretation of “promotes access.”

The preamble also explained that remuneration that promotes compliance with a treatment plan may promote access to care, as long as there is no reward for accessing care (as discussed above). OIG gave several examples of items that promote access to care: programs that promote adherence to medication therapy, such as an item that dispenses medication at specific times; a web-based food and activity tracker for diabetic patients; reimbursement for parking; and free child care.

It is important to note that, in conjunction with the publication of the Final Rule, OIG has increased the limits applicable to providing nominal gifts to Medicare or Medicaid beneficiaries. In its 2002 Special Advisory Bulletin, OIG stated that it would exercise enforcement discretion for inexpensive gifts or services provided to Medicare or Medicaid beneficiaries as long as such items or services had a retail value of no more than $10 individually, and no more than $50 in the aggregate annually per patient. On December 7, 2016, OIG issued a notice increasing those amounts, based on inflation, to no more than $15 individually, and no more than $75 in the aggregate annually per patient. In the Final Rule preamble, OIG explained that the exception for items or services that promote access to care may protect remuneration that exceeds these nominal value thresholds.

The preamble cautions that, “if a pharmaceutical manufacturer offered rewards or incentives for treatment compliance (without regard to any provider or supplier furnishing treatment), it might not implicate the beneficiary inducements CMP because the rewards would not incentivize the beneficiary to receive items or services from a particular provider or supplier, but it would implicate the [AKS] because the remuneration could induce the beneficiary to purchase a federally reimbursable item.” 81 Fed. Reg. at 88,395. The beneficiary inducement CMP would not be implicated by an inducement to use a particular manufacturer’s drug because OIG’s long-standing interpretation of the CMP is that pharmaceutical manufacturers are not “providers, practitioners, or suppliers” for purposes of the CMP.

To qualify for this exception, items or services must not only “promote access,” but also must also “pose a low risk of harm” to Federal programs and beneficiaries. Consistent with the Proposed Rule, the Final Rule defines a “low risk of harm to Medicare and Medicaid beneficiaries and the Medicare and Medicaid programs” as meaning that the remuneration: (1) is unlikely to interfere with, or skew, clinical decision-making; (2) is unlikely to increase costs to Federal health care programs or beneficiaries through overutilization or inappropriate utilization; and (3) does not raise patient-safety or quality-of-care concerns.  The preamble cautions that an incentive to use a higher cost brand drug instead of a lower cost generic would not be low risk.  In addition, OIG explained that it does not consider educational items or informational materials alone to fall within the definition of remuneration.

Coupons or rewards from a retailer:  To implement another exception to the beneficiary inducement CMP added by the ACA, the OIG would exclude from the definition of “remuneration” a coupon, rebate, or other reward offered by a retailer, if it is offered on equal terms available to the general public regardless of health insurance status, and if it is not tied to the provision of other items or services reimbursed under Medicare or Medicaid.  OIG considers a retailer to be any entity that sells items directly to consumers. “Other rewards” may be, for example, gasoline discounts, frequent flier miles, or other items purchased from the retailer, but may not be earned by the purchase of federally reimbursed items, or redeemed for such items. OIG noted that coupons offered to patients who transfer their prescriptions from another pharmacy would not be protected under this statutory exception.

Free or discounted items or services where financial need exists:  To implement a statutory provision added by the ACA (see 42 U.S.C. § 1320a-7a(i)(6)(H)), the OIG proposed and finalized a CMP exemption for “the offer or transfer of items or services for free or at less than fair market value after a determination that the recipient is in financial need and meets certain other criteria.”  These “items or services” cannot include cash or instruments convertible to cash (i.e., cash equivalents).  The Final Rule sets out four requirements that must be met:  (1) the items or services may not be offered as part of any advertisement or solicitation; (2) they may not be tied to the provision of other items or services reimbursed in whole or in part by Medicare or Medicaid; (3) there must be a reasonable connection between the items or services and the medical care of the individual; and (4) there is a good faith determination of financial need.  To be protected under this provision, providers and suppliers may not advertise the free or discounted item or service in the media or via some other public display, such as a website, but may inform patients that a such an item or service is available on a “targeted” basis.

The “reasonable connection” requirement includes both a medical and a financial component. Free or discounted items or services must be reasonably connected to the patient’s medical care, which may include treatment or prevention of illness or injury. In addition, although OIG declined to provide a threshold retail value, items or services with a value that is disproportionate to the benefit—for example, a smart phone loaded with an app for management of blood sugar levels—would not be considered to have a “reasonable connection” to medical care.  Financial need is not defined, but the preamble explains that a good faith determination requires use of a reasonable set of income guidelines, uniformly applied.  Financial hardship need not be limited to indigence.

The preamble provided examples of items or services that may qualify as reasonably connected to medical care under this proposed exception. These included:

• protective helmets and safety gear to hemophiliac children
• pagers to alert patients with chronic medical conditions to take their drugs
• free blood pressure checks to hypertensive patients
• free nutritional supplements to malnourished patients with end-stage renal disease
• provision of air conditioners to asthmatic patients

Nothing in the Final Rule or preamble suggests that items or services provided by a drug or device manufacturer would be ineligible for this exclusion, as long as the four conditions of the rule were met.  Note, however, that free or discounted items conditioned on the use of a particular manufacturer’s drug or device would probably be considered to violate requirement (2), above (no tie to other reimbursable items).

Other CMP provisions:  In addition, the Final Rule implemented:

• A statutory exception to the definition of “remuneration” in the beneficiary inducement CMP for a waiver by a Part D Plan sponsor of the copayment owed by enrollees for the first fill of covered generic drug.
• Another statutory exception to the definition of “remuneration” for reductions in copayment amounts for covered hospital outpatient department services.

OIG, in the Proposed Rule, sought to implement a statutory prohibition on gainsharing arrangements (see 42 U.S.C. § 1320a-7a(b)), but the OIG could not finalize this exception in the Final Rule because section 512(a) of the Medicare and CHIP Reauthorization Act of 2015, Pub. L. No. 114-10, 129 Stat. 170, (“MACRA”) amended the gainsharing CMP statutory language. Since MACRA amended the statute before the proposed regulatory changes were finalized, OIG was unable to finalize these provisions in the Final Rule.

The 21st Century Cures Act (Act) was passed by the House on November 30, 2016 and the Senate on December 7, 2016. The President signed it into law on December 13, 2016.  The Act contains three primary titles that address acceleration of medical product discovery, development, and delivery.  This post is part one of a two-part post that summarizes the relevant provisions related to development of drugs and biologics.  Hyman, Phelps & McNamara, P.C. previously blogged on the medical device development provisions here .  We expect to publish additional posts, including part two of the summary of drug and biologic provisions, a post summarizing the combination product provision, and a post summarizing relevant health care provisions.

Here is a summary of Subtitles A-D of Title III of the Act pertaining to Development.

TITLE III—DEVELOPMENT

Subtitle A—Patient-Focused Drug Development

Sec. 3001. Patient experience data.

Section 3001 amends the Federal Food, Drug, and Cosmetic Act (FDC Act) to require FDA to make public a brief statement regarding the patient experience data and related information, if any, submitted and reviewed as part of an approved NDA or BLA. This includes the following information:

• Data that are collected by any persons (e.g., by patients and caregivers, patient advocacy groups, drug manufacturers) that are intended to provide information about the patients’ experiences with a disease or condition, including related to the impact of the disease on patients’ lives and patient preferences with respect to treatment;
• Information on patient-focused drug development tools (e.g., Patient-Reported Outcome measures); and
• Other information FDA determines to be relevant.

This section is effective 180 days after the date of enactment of the Act.

Sec. 3002. Patient-focused drug development guidance.

Section 3002 builds on the previous section, requiring FDA to develop a plan to issue draft and final guidance documents, over the following 5 years, on the collection of patient experience data, as well as the use of such data and related information in drug development.

The section lays out a few different categories of information the guidance documents must address. First, the guidance documents must address the methodologies for collecting patient experience data, including:

• Methodological approaches for collection of relevant, objective, accurate, representative, and meaningful patient experience data throughout the drug development process for submission to and use by FDA;
• Methodological approaches for identification of what is most important to patients with respect to:
  • Burden of disease;
  • Burden of treatment; and
  • Benefits and risks in the management of the patient’s disease;
• Approaches to identification and development of methods to measure impacts to patients that will help facilitate collection of patient experience data in clinical trials; and
• Methodologies, standards, and technologies for collection and analysis of clinical outcome assessments as part of FDA regulatory decision-making;

Second, the guidance documents must address how patient experience data will be used by FDA, including:

• The format and content required for submissions of patient experience data;
• How FDA will respond to such submissions, including a timeframe for response when such a submission is made outside of a regulatory application; and
• Importantly, how FDA anticipates using relevant patient experience data, including as part of its structured benefit-risk assessment framework, to inform its decision-making.

Lastly, the section includes a requirement for establishing, via guidance, a process for the public to propose draft guidance to FDA relating to patient experience data.

FDA has 18 months to issue the first such draft guidance document, and another 18 months after the public comment period on the draft guidance ends, to either issue a revised draft guidance or final guidance.

Sec. 3003. Streamlining patient input

Section 3003 attempts to reduce the administrative burden on FDA in collecting voluntarily-submitted patient experience data by exempting it from the Paperwork Reduction Act requirements (under Chapter 35 of title 44, United States Code).

Sec. 3004. Report on patient experience drug development.

Section 3004 requires FDA in June of 2021, 2026, and 2031 to put out a report that assesses the use of patient experience data and patient-focused drug development tools in NDA and BLA approvals.

Subtitle B—Advancing New Drug Therapies

Sec. 3011. Qualification of drug development tools.

Section 3011 amends the FDC Act by directing FDA to establish a process for the qualification of drug development tools (i.e., biomarker, clinical outcome measure) for a proposed context of use (e.g., for clinical trials in a particular disease or condition), specifically to include a letter of intent submission and review process, development and acceptance procedures for a qualification plan, and review of qualification packages. Drug development tools qualified under this section may be used for obtaining approval under an NDA or BLA, or supporting investigational use of a drug or biologic under an IND.  The section also allows for FDA to rescind or modify a qualification determination based on new information that calls into question the basis for such qualification; however, it provides the sponsor of the drug development tool the opportunity to request a meeting to discuss the basis of the decision prior to the effective date of the rescission/modification.

This section requires FDA to post publicly and update at least twice a year on FDA.gov the stage of the review process for submissions, the date of the most recent change in status, whether external scientific experts were utilized by FDA in the development or review of the package, and the submissions themselves, including any data and evidence contained in such submissions and updates to them. FDA must also post its formal written determinations in response to submissions and summary reviews.  Finally, FDA must post a list of all drug development tools qualified and all surrogate endpoints which were the basis of an NDA or BLA approval.

The section requires FDA, within 2 years of the date of enactment of the Act, to host a public meeting to solicit input from stakeholders on the qualification process. Then, FDA is required, in consultation with biomedical research consortia and other stakeholders, no later than 3 years after the date of enactment, to issue guidance to implement this section.  The guidance must contain a framework that provides standards and scientific approaches to support the development of biomarkers, as well as the requirements and process for the qualification program.  Finally, a report on the qualification program is required within 5 years of the date of enactment.

Overall, this section provides FDA and stakeholders an opportunity to assess and reform the drug development tools qualification program that CDER has already developed and for which CDER has  issued guidance.

Sec. 3012. Targeted drugs for rare diseases.

To facilitate the development, review, and approval of genetically targeted drugs to meeting unmet medical needs in rare diseases that are serious and life-threatening, Section 3012 amends the FDC Act to allow FDA, consistent with its existing approval standards, for a genetically targeted drug (i.e., a drug that modulates function of a gene) or a variant protein targeted drug to rely on data and information that was previously developed by the same sponsor and that was submitted by that sponsor in support of one or more previously approved NDAs or BLAs if the new drug relies on the same or similar technology as the approved drug.

Sec. 3013. Reauthorization of program to encourage treatments for rare pediatric diseases.

Section 3013 amends the FDC Act to extend the authorization of the Rare Pediatric Disease Priority Review Voucher program (see FDA webpage here).  This allows a drug that is designated as a drug for a rare pediatric disease prior to September 30, 2020 to receive a priority review voucher upon approval of an NDA or BLA prior through September 20, 2022.  The program was set to expire December 31, 2016.

This section also removed the mandate for a GAO report on the effectiveness of the program at incentivizing the development of rare to treat or prevent rare pediatric diseases, which was previously required under Section 3 of the Advancing Hope Act.

Sec. 3014. GAO study of priority review voucher programs.

Section 3014 requires GAO to conduct a study and issue a report that evaluates all three priority review voucher programs: tropical disease, rare pediatric disease, and medical countermeasure. The report must cover the following topics:

• For each voucher that has been issued, whether the voucher impacted the sponsor’s decision to develop the drug and to what extent the drug addressed an unmet need;

• For each voucher that has been used, the value of the voucher, if transferred (i.e., sold), and the length of time between voucher issuance and use;
• The resource burden on FDA to review drugs for which vouchers were used, including its impact on the review of other applications;
• Whether there are improvements to the programs that would appropriately incentivize drugs that would not otherwise be developed, or developed in as timely a manner; and
• Whether the sunset of the rare pediatric disease and medical countermeasure programs has an impact on the programs, including any potential unintended consequences.

This report must be submitted to Congress by January 31, 2020.

Sec. 3015. Amendments to the Orphan Drug grants.

Section 3015 amends the Orphan Drug Act to expand the Orphan Drug Grant program so that prospectively planned and designed observational studies and other natural history analysis can qualify, so long as the studies/analyses are used to (a) develop or validate a drug development tool related to a rare disease or condition or (b) understand the full spectrum of disease manifestations, including genotypic and phenotypic variability and identifying and defining distinct subpopulations affected by a rare disease or condition. Previously the Orphan Drug Grant program was limited to clinical and preclinical studies in rare diseases.

Sec. 3016. Grants for studying continuous drug manufacturing.

Section 3016 authorizes HHS to award grants to academic institutions and nonprofit organizations to study and recommend improvements to the process of continuous manufacturing of drugs and biologics.

Subtitle C—Modern Trial Design And Evidence Development

Sec. 3021. Novel clinical trial designs.

Section 3021 requires FDA to conduct a public meeting and, subsequently, issue or update guidance that addresses the use of complex adaptive and other novel trial designs for the development and regulatory review of NDAs and BLAs. The guidance document must include:

• Use of such clinical trial designs, including how these designs can satisfy the substantial evidence of effectiveness standard under the FDC Act;
• How sponsors can obtain feedback from FDA on technical issues related to modeling and simulations;
• The types of qualitative and quantitative information that should be submitted for review; and
• Recommended analysis methodologies.

The public meeting must be held within 18 months of the date of enactment of the Act and the draft guidance must be issued within 18 months of the public meeting. FDA must also finalize the guidance no later than one year after the public comment period on the draft guidance closes.

Sec. 3022. Real world evidence.

Section 3022 amends the FDC Act to establish a program at FDA to evaluate the potential use of real world evidence to (a) help support the approval of new indications for an approved drug and (b) help support or satisfy postapproval (i.e., Phase 4) study requirements. The section defines real world evidence to mean “data regarding the usage, or the potential benefits or risks, of a drug derived from sources other than clinical trials” but is contemplated to potentially include ongoing safety surveillance, observational studies, registries, claims data, and patient-centered outcomes research activities.  The primary purpose of the program is to development a framework that provides for:

• The sources of real world evidence;
• Gaps in data collection activities;
• Standards and methodologies for collection and analysis; and
• Priority areas, challenges, and potential pilot opportunities.

In developing the framework, FDA must consult with stakeholders through various approaches. A draft framework must be established within two years of the date of enactment of the Act.

In addition, within 5 years of the date of enactment, FDA must issue draft guidance on the circumstances under which sponsors of drugs may rely on real world evidence and the appropriate standards and methodologies for collection and analysis for such purposes. FDA must also finalize the guidance no later than 18 months after the public comment period on the draft guidance closes.

Importantly, the provision states that it does not alter the current approval standards under the FDC Act and the Public Health Service Act (PHS Act) or the authority to require postapproval studies or clinical trials or the standards of evidence under which studies or trials are evaluated.  For some insights into how FDA may approach implementation of this section, last week FDA leadership published an article in the New England Journal of Medicine on the use of real world evidence.

Sec. 3023. Protection of human research subjects.

In an attempt to simplify and facilitate compliance by researchers that are subject to human subjects protections regulations, Section 3023 seeks to harmonize the difference between and modernize HHS and FDA regulations in a number of ways, including reducing regulatory duplication and modernizing to account for multisite and cooperative research projects, while still incorporating local considerations through communication engagement mechanisms. The section also directs HHS and FDA to allow researchers to use joint or shared IRB review, including relying upon an independent IRB or the IRB of another entity other than the sponsor of the research.  In harmonizing and modernizing their regulations and guidance, HHS and FDA must consult with stakeholders.

Such harmonization must occur within 3 years of the date of enactment of the Act. In addition, within 2 years from the date of enactment, HHS must submit a progress report to Congress.

Sec. 3024. Informed consent waiver or alteration for clinical investigations.

Section 3024 amends the FDC Act to alter the informed consent requirements for both drugs and medical devices such that a waiver of informed consent may now be granted for “proposed clinical testing [that] poses no more than minimal risk to…human beings and includes appropriate safeguards…”

Subtitle D—Patient Access To Therapies And Information

Sec. 3031. Summary level review.

Section 3031 amends the FDC Act to allow FDA to rely upon “qualified data summaries” to support the approval of a supplemental application if (a) there are existing data available and acceptable to FDA to demonstrate safety of the drug and (b) all data used to develop the qualified data summaries are submitted to FDA as part of the supplemental application.

The section also requires FDA to, annually, to post on FDA.gov:

• The number of applications reviewed under this provision;
• The average time for completion of review under this provision;
• The average time for completion of review of supplemental applications where FDA did not use this review flexibility; and
• The number of applications reviewed under this provision where FDA still made use of full data sets in addition to the qualified data summary.

Sec. 3032. Expanded access policy.

Section 3032 amends the FDC Act to require the manufacturer or distributer of an investigational drug for a serious or life-threatening disease to make available (e.g., on its website) its policy regarding evaluating and responding to requests for expanded access. Such policies must include:

• Contact information to facilitate communication about requests for expanded access;
• Procedures for making expanded access requests;
• The general criteria used to evaluate such requests for individual patients, and for responses to such requests; and
• A hyperlink or other reference to the clinical trial record (i.e., on ClinicalTrials.gov) containing information about the expanded access for the investigational drug as required under the PHS Act.

Manufacturer or distributor may revise its policy at any time.

The provision states that the posting of a policy “shall not serve as a guarantee of access to any specific investigational drug by an individual patient.” The section applies to a manufacturer or distributor with respect to an investigational drug on the later of (a) 60 days after the date of enactment of the Act or (b) the first initiation of a phase 2 or phase 3 study for that investigational drug.

Sec. 3033. Accelerated approval for regenerative advanced therapies.

Section 3033 amends the FDC Act to create a process and requirements for designation of a drug as a regenerative therapy. A drug is eligible for this designation if:

• It meets the definition of a regenerative advanced therapy: “ cell therapy, therapeutic tissue engineering products, human cell and tissue products, and combination products using any such therapies or products, except for those regulated solely under section 361 of the [PHS Act] and part 1271 of title 21, Code of Federal Regulations”;
• The drug is intended to treat, modify, reverse, or cure a serious or life-threatening disease or condition; and
• Preliminary clinical evidence indicates the drug has the potential to address an unmet medical need.

The sponsor of drug may request such a designation concurrently with or any time after submission of an IND. FDA has 60 days after the receipt of a designation request to determine if the drug meets the criteria.  The effect of designation is that FDA must take actions to expedite development and review of the drug, including early interactions to discuss the potential for accelerated approval.  In addition, a designated drug may be eligible for priority review or accelerated approval under current FDA regulatory standards, and if approved under accelerated approval would be subject to a confirmatory study.

Sec. 3034. Guidance regarding devices used in the recovery, isolation, or delivery of regenerative advanced therapies.

Section 3034 requires FDA to issue guidance clarifying how, for regenerative advanced therapies, FDA will evaluate devices used in the recovery, isolation, or delivery of regenerative advanced therapies. The guidance must address:

• How FDA intends to simplify and streamline regulatory requirements for combination device and cell or tissue products;
• What, if any, intended uses or specific attributes would result in a device used with a regenerative therapy product to be classified as a class III device;
• When FDA considers it necessary, if ever, for the intended use of the device to be limited to a specific intended use with only one particular type of cell; and
• The least burdensome approach to demonstrate how a device may be used with more than one cell type.

The section requires FDA to issue draft guidance within one year from the date of enactment of the Act. FDA must also finalize the guidance no later than one year after the public comment period on the draft guidance closes.

Sec. 3035. Report on regenerative advanced therapies.

Section 3035 requires HHS, annually before March 1^st of the calendar year, to report to Congress on the previous calendar year:

• The number and type of applications for approval of regenerative advanced therapies filed, approved/licensed, withdrawn, or denied; and
• How many such applications were granted accelerated approval or priority review.

Sec. 3036. Standards for regenerative medicine and regenerative advanced therapies.

Section 3036 amends the FDC Act to require HHS to consult with the National Institute of Standards and Technology (NIST) and stakeholders to coordinate and prioritize the development of standards and consensus definition terms, to support the development, evaluation, and review of regenerative medicine products, including with respect to manufacturing processes and controls.  Specifically, the section directs HHS to:

• Identify opportunities to advance development of these therapies; and
• Identify opportunities for the development of laboratory regulatory science research and documentary standards that would help support development and review.

In addition, within one year after the development of standards, HHS must review relevant regulations and guidance and, through a public process, update them as appropriate.

Sec. 3037. Health care economic information.

Section 3037 amends the FDC Act to clarify the scope of permissible manufacturer communications regarding health care economic information to certain entities. Health care economic data consists of any analysis that identifies, measures, or describes the economic consequences (e.g., based on separate or aggregated clinical consequences of the represented health outcomes) of the use of a drug.  Such analysis may be compared to the use of another drug or health care intervention, or to no intervention.  The provision expands the safe harbor in response to issues identified with FDAMA 114, which should reduce the risk to manufacturers associated with disseminating health care economic information.

Sec. 3038. Combination product innovation.

Section 3038 will be the subject of a separate blog posting.

If you have questions or need more information, contact:

• Frank J. Sasinowski, fsasinowski@hpm.com, 202-737-4287
• Josephine M. Torrente, jtorrente@hpm.com, 202-737-7554
• David B. Clissold, dclissold@hpm.com, 202-737-7545
• James E. Valentine, jvalentine@hpm.com, 202-724-1745
• Michelle L. Butler, mbutler@hpm.com, 202-737-7551

As we previously reported, in April 2016, the FTC announced several settlements regarding all natural claims for cosmetic products.  In addition, the FTC filed an administrative complaint against California Naturel, Inc., (the Company) for falsely advertising its sunscreen product as “all natural” in violation of Sections 5 and 12 of the FTC Act.  On December 12, 2016, the FTC issued an opinion granting summary decision in favor of Complaint Counsel, FTC staff, against California Naturel. The Final Order bars the Company from misrepresenting its products as all natural.

The facts of the case are not complicated. The FTC’s complaint alleged that California Natural, Inc. marketed its sunscreen product as all natural whereas the product was not all natural. In fact, in its answer to the complaint, California Natural Inc. admitted that its “all natural” sunscreen contained 8% synthetic dimethicone.

The standard for review for a summary decision in an administrative proceeding is the same as for summary judgment in a federal case; a motion will be granted only if there is no issue as to any material fact. In this case, the defendant did not dispute that its sunscreen product contained 8% synthetic ingredients. Thus, Complaint Counsel moved for a summary decision.

Although California Naturel admitted that its product included synthetic material, it argued that the claim was not misleading because, after the FTC had initiated its investigation, California Naturel included a disclaimer on its website alerting consumers to the presence of the synthetic dimethicone.  Although the FTC acknowledged that this “recent addition . . . of a disclaimer on its website does not excuse deception that has already occurred,” the FTC decision nevertheless addressed the effectiveness of the disclaimer.

The FTC concluded that the disclaimer was not effective because the disclaimer, was at the bottom of the webpage and thus far removed from the prominent “all natural” claims – and, allegedly, not visible at all without scrolling down. The FTC concluded that the disclaimer did not negate the net impression conveyed to consumers that the product is “all natural.”

Commissioner Ohlhausen dissented in part and issued a separate statement because she disagreed with the FTC’s decision to address the disclaimer in the summary decision.

Having found liability for false and misleading advertising, the FTC entered a Final Order to address California Naturel’s alleged unlawful conduct. The core substantive provisions of the Final Order prohibits California Naturel from misrepresenting (a) whether a product is all natural or 100% natural; (b) the extent to which a product contains any natural or synthetic ingredient; (c) the ingredients or composition of a product; and (d) the product’s environmental or health benefits. The Order will terminate in twenty years.

California Naturel may appeal the summary decision and final order within 60 days to a United States Court of Appeals.

This week, FDA announced (here and here) that it is making available adverse event information for foods (including dietary supplements, food additives, and color additives) and cosmetics the Agency has received through its Center for Food Safety and Nutrition (CFSAN) Adverse Event Reporting System (CAERS).

CAERS contains information on adverse event and product complaint reports submitted to FDA for foods and cosmetics. These adverse event reports come from consumers, health care providers, and food, cosmetic, and dietary supplement manufacturers. Since 2007, dietary supplement manufacturers have been required to report serious adverse events associated with the use of a dietary supplement. FDC Act § 761. Food manufacturers, cosmetic companies and others may submit reports voluntarily. CAERS includes any adverse events or complaints, including minor to major medical events, but also complaints about non-medical issues such as off-taste or color of a product. Information in the database includes demographic (e.g., age, gender) and administrative information regarding the adverse event; the date of event; the product role (“suspect” or “concomitant”); reported brand/product name; industry code/name; reported symptom(s); and outcome information. Unless it is included as part of the brand name, the data do not include the name of the manufacturer or distributor of the product.

Until now, the CAERS data have not been readily available to either industry or consumers. Anyone interested in obtaining such data on a specific product or ingredient had to submit a freedom of information (FOI) request (which may take months or longer before information is made available). However, FDA has decided to make available all of the data FDA has extracted from adverse event reports since January 2004 through September 2016, and, according to the announcement, FDA plans to issue quarterly reports going forward. There will be a lag phase of 1 month, i.e., the first quarterly report will be issued in Feb. 2017 and will cover data submitted to CAERS during Oct.-Dec. 2016. The second quarterly report will be issued in May 2017 and will cover reports submitted in Jan-Mar. 2017, and so on.

From now on, CAERS data are available to the public in three different ways:

• CAERS Data Files: provides raw data consisting of individual case safety reports extracted from the CAERS database.
• openFDA: provides an application program interface (API) for automated querying of the adverse event reports.
• by sending a FOI request to FDA

FDA has used and will continue to use CAERS data for activities such as looking for new safety concerns that might be related to a marketed product, evaluating a manufacturer’s compliance with reporting regulations. The Agency’s clinical reviewers evaluate the report to identify signals of potential safety concerns (which may result in further action). FDA posted an interview with Linda Katz that specifically discusses FDA’s use of adverse event reports concerning cosmetics.

As FDA clarifies, CAERS data that FDA will make available are not evaluated before FDA releases them. The reports reflect information submitted. FDA does not edit the information (other than removing duplicates) and the reports do not represent any conclusion by FDA about whether the product actually caused the adverse events (e.g., the event may have simply occurred by chance at that time); it is information – not proof. The information submitted may not include all relevant data, such as whether an individual also suffered from other medical conditions or used other products or medications at the same time.

According to the notice, FDA is making “this information available for the purpose of improving transparency by providing the public, including researchers and health care professionals, with online access to information from adverse event reports about CFSAN-regulated products.” Apparently, FDA “anticipates that this increased transparency will help to spur the submission of more detailed and complete reports from consumers, health care providers and other members of the public” and “will help [FDA] to more rapidly identify red flags about a possible safety issue with products [FDA] regulate[s].”  It remains to be seen if this will be a result. We are at least somewhat concerned that, despite the limitations identified by FDA, the information will be used by consumer class action plaintiff’s lawyers to identify the next potential targets for litigation.

Way back in June 2016, the United States Supreme Court invited the Solicitor General to file a brief in two cases – Docket No. 15-1039 and Docket No. 15-1195 – expressing the views of the United States as to two provisions of the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”): (1) PHS Act § 351(l)(8)(A) (42 U.S.C. § 262(l)(8)(A)), which states that a biosimilar (or aBLA or subsection (k)) “applicant shall provide notice to the reference product sponsor not later than 180 days before the date of the first commercial marketing of the biological product licensed under subsection (k);” and (2) PHS Act § 351(l)(2)(A) (42 U.S.C. § 262(l)(2)(A)), which governs the information exchange procedures under the BPCIA’s patent dance provisions and states that an aBLA applicant “shall provide to” the reference product sponsor a copy of the biosimilar application and information about the product’s manufacturing processes.

The Supreme Court’s request stems from a highly fractured July 21, 2015 opinion handed down by the U.S. Court of Appeals for the Federal Circuit in a dispute between Amgen Inc. (“Amgen”) and Sandoz Inc. (“Sandoz”) involving Sandoz’s ZARXIO (filgrastim-sndz), a biosimilar version of Amgen’s NEUPOGEN (filgrastim) (see our previous post here).  Earlier this year, both Sandoz and Amgen requested Supreme Court review (see our previous posts here and here), resulting in the following questions presented to the Court:

The questions presented in the [Sandoz] certiorari petition are (a) whether notice of commercial marketing under Subsection (l )(8)(A) is legally effective if it is given before Food and Drug Administration (FDA) approval of the biosimilar application, and, if not, (b) whether Subsection (l )(8)(A) is a stand-alone requirement that may be enforced by means of an injunction that delays the marketing of the biosimilar until 180 days after FDA approval.

The question presented in the [Amgen] conditional cross-petition is whether Subsection (l )(2)(A) creates a binding disclosure obligation that a court may enforce by injunction, or whether the sponsor’s sole recourse for the applicant’s failure to disclose the information is the right, prescribed elsewhere in the BPCIA, to commence an immediate action for patent infringement.

On December 7, 2016, the Acting Solicitor General of the United States responded to the Supreme Court’s request and filed a brief urging the Court to grant a writ of certiorari with respect to Sandoz’s petition and Amgen’s conditional cross-petition.  According to the Big Molecule Watch Blog, “[t]he Court will consider the petition at its private conference on January 6, [2017,] and a cert grant could be announced as soon as that afternoon.”  If certiorari is granted, then we may see a decision by June 2017.

Whereas the Federal Circuit ruled that the notice of commercial marketing under PHS Act § 351(l)(8)(A) can be provided only after aBLA licensure, and that the patent dance process initiated under PHS Act § 351(l)(2)(A) is optional; the government says that the Federal Circuit “erred in interpreting Subsection (l )(8)(A), but it correctly construed Subsection (l )(2)(A),” thus coming out in favor of the interpretations advocated by Sandoz.

With respect to PHS Act § 351(l)(8)(A), the government says that the provision:

allows the applicant to give the requisite 180-day advance notice of the first commercial marketing of its biosimilar before FDA has approved the applicant’s biosimilar application.  But in any event, no federal cause of action exists under which a sponsor could obtain injunctive relief if the applicant fails to give notice as specified in Section 262(l )(8)(A).

The text and purpose of Section 262(l )(8)(A)’s notice provision and the BPCIA’s broader statutory context demonstrate that the provision permits an applicant to give advance notice of the first commercial marketing of its biosimilar before FDA has licensed the biosimilar. . . .

The Federal Circuit imposed an injunction to enforce its reading of Section 262(l )(8)(A)’s notice requirement. Although respondents state that the court had authority under Rule 8(a) to extend its “injunction pending appeal,” that rationale makes little sense because the court had resolved that appeal.  The Federal Circuit thus reads its decision here as holding more generally that “an injunction [i]s proper to enforce” Section 262(l )(8)(A).  That holding is incorrect.   [(Emphasis in original; internal citation omitted)]

With respect to PHS Act § 351(l)(2)(A), the government says that the Federal Circuit was correct in holding that while the provision states that an aBLA applicant “shall provide” a copy of the aBLA and manufacturing process information to the reference product sponsor within 20 days of FDA’s acceptance of the aBLA for review, failure to do so results in other consequences under the BPCIA (i.e., the aBLA applicant’s submission of its application is deemed an artificial act of infringement and the reference product sponsor may bring a declaratory judgment action based on “any patent that claims the biological product or a use of the biological product”) that “are exclusive and that, when a sponsor brings its patent action, it may obtain information from the applicant in discovery.”

Respondents’ conditional cross-petition argues that the Federal Circuit erred in concluding that Section 262(l )(2)(A)’s use of “shall” “does not mean ‘must.’ ” The government agrees that the Federal Circuit misconceived the relevant inquiry in that respect.  But Section 262(l )(2)(A) may properly be understood as imposing a mandatory condition for invoking Subsection (l )’s patent-dispute framework without concluding that an injunction is available to compel compliance with that condition.

Even if the term “shall” is understood as mandatory, the only consequences for failing to satisfy that condition are those expressly set forth by Congress in the BPCIA. That conclusion flows logically from essentially the same reasons discussed above in connection with Section 262(l )(8)(A).  And as petitioner explains, a sponsor can, after conducting a diligent investigation, file an infringement suit as contemplated by the BPCIA based on any patent it reasonably believes has been infringed, and it may seek additional information regarding that patent claim through discovery.

Given the government’s strong recommendation to grant certiorari to both the Sandoz and Amgen petitions, we’re guessing that it will happen.  Hold on to your hats; 2017 could be an important year for biosimilars!  (There’s also the threat in 2017 of a repeal of the BPCIA if the Affordable Care Act is repealed; however, Republican and Democratic lawmakers recently quelled those fears, saying that the BPCIA would likely be carved out from any Affordable Care Act repeal.)

Amid the partisan gridlock of the past few years, one of the few things Democrats and Republicans have agreed on is the need to reform FDA!  Accordingly, Congress has just passed, and the President has indicated he will sign, the 21st Century Cures Act (Cures Act) (H.R. 34).  The numbers were lopsidedly in favor of the bill (392-26 in the House and 94-5 in the Senate).  A copy of the final version that is expected to be signed by the President is available here.

The Cures Act has a host of provisions intended to improve how the FDA reviews and approves drugs and medical devices.  The following is a quick summary of the device related provisions:

Section 3051.  Breakthrough Devices.  This section requires FDA to establish a program to provide priority review and management attention for devices that provide “more effective treatment or diagnosis of life threatening or irreversibly debilitating human disease or conditions” and that represent “breakthrough” technologies for which no cleared or approved alternatives exist, that offer significant advantages over existing alternatives, or “the availability of which is in the best interest of patients.”

This section would allow a sponsor to request priority review designation from FDA at any time prior to the device submission.  FDA would be required to respond within 60 days of receiving the request for priority review designation.

This program will no doubt build on FDA’s already-established Expedited Access Pathway (EAP). Unlike the EAP program, the legislation opens priority review to device types subject to 510(k) clearance and not just PMA approval or de novo requests.

Section 3052.  Humanitarian Device Exemption. FDA’s existing HDE program allows approval of devices addressing rare diseases or conditions with relaxed effectiveness data (a showing of “probable benefit” rather than “effectiveness”).  The existing HDE program is limited to disease or conditions affecting up to 4,000 persons annually.  This provision doubles the ceiling to 8,000.

Section 3053.  Recognition of Standards.  This provision allows any party to obtain a ruling from FDA within 60 days on recognition of a standard, and requires FDA to make the ruling public in a manner deemed appropriate by FDA.  It also has some other modest improvements, such as periodic training of FDA employees in the use of standards in premarket review.

Section 3054.  Certain Class I and Class II Devices.  FDA will now be required in early 2017 and once every 5 years to review class I and class II devices and consider whether they may be declared 510(k) exempt with reasonable assurance of safety and effectiveness.  Instead of amending the classification regulations, which can take a long time, FDA will accomplish the exemption by publishing a list of newly exempted device types.  The class II exemptions will require a proposed list, public comment, followed by a final list.  Both the class I and class II lists will be deemed to amend the pertinent classification regulations.  This provision is an excellent house cleaning measure that will now allow FDA to more easily prune the list of device types that require 510(k) clearance.

Section 3055.  Classification Panels.  This section would require FDA to ensure that any classification panel has “adequate expertise” to assess “the disease or condition which the device is intended to cure, treat, mitigate, prevent, or diagnose,” and “the technology of the device.”  FDA must also provide an opportunity for the company whose product is being reviewed to provide recommendations on the expertise needed among the voting members of the panel.

“Adequate expertise” is defined to include “two or more voting members, with a specialty or other expertise clinically relevant to the device under review” and “at least one voting member who is knowledgeable about the technology of the device.”  FDA must provide an annual opportunity for patients, representatives of patients, and sponsors of medical device submissions to provide recommendations for individuals with appropriate expertise to fill voting member positions on classification panels.

This provision will hopefully fix past problems with panels that do not have the right expertise.

Section 3056.  Institutional Review Board Flexibility.  This provision allows for a single IRB to oversee a multicenter device trial (rather than an IRB at each center).  This additional flexibility should make IRB oversight more efficient.

Section 3057.  CLIA Waiver Improvements.  This provision takes aim at a section of FDA’s 2008 guidance on Clinical Laboratory Improvement Amendment (CLIA) waivers for in vitro diagnostic devices.  FDA has a year to revise the 2008 guidance to allow demonstration of accuracy through comparable performance between a waiver user and a moderately complex laboratory user.  This approach would replace the requirement to demonstrate accuracy based upon a gold standard.  This provision will make it easier for some IVD tests to be exempted from routine inspections and most CLIA requirements.

Section 3058.  Least Burdensome Device Review.  This section is intended to address the device industry’s long-held position that CDRH does not comply with the statutory requirement to review only the data necessary to make a determination of substantial equivalence or device effectiveness, and to determine the “least burdensome means” of establishing substantial equivalence or effectiveness.

Section 3058 would amend section 513 of the FD&C Act by requiring each reviewer at CDRH to receive training “regarding the meaning and implementation of the least burdensome requirements” and would require FDA to assess implementation of the least burdensome requirements to ensure that they are “fully and consistently applied.”

This section also requires the CDRH Ombudsman to conduct an audit of the required training with respect to implementing the least burdensome provisions, and to interview industry representatives to obtain their perspective regarding the application of the least burdensome provisions to “premarket review and decision making.”

This provision also adds section 515(c)(5) to the FD&C Act, stating that whenever FDA requests additional information from a PMA applicant, FDA “shall consider the least burdensome appropriate means necessary to demonstrate a reasonable assurance of device safety and effectiveness.”  “Necessary” is defined to mean “the minimum required information that would support a determination by [FDA] that an application provides a reasonable assurance of the safety and effectiveness of the device.”  FDA is also directed in PMA review to consider the “role of postmarket information in determining the least burdensome means of demonstrating a reasonable assurance of device safety and effectiveness.”

Section 3059.  Cleaning Instructions and Validation Data Requirement.  The recent crisis over disease transmission between patients due to inadequate cleaning of duodenoscopes led to this provision.  FDA had already upped its game in this area as a result of the duodenoscope situation, and this provision solidifies it.  Within 180 days of enactment of the Cures Act, FDA must publish (and revise when appropriate) a list of reusable device types where 510(k) submissions must include validated instructions for use and validation data for cleaning, disinfection and sterilization.

This provision also includes an unrelated requirement for FDA to finalize its draft August guidance (see our previous post here) on when a new 510(k) is required for modifications to a cleared device.  This guidance, of course, is of critical importance to the device industry.

Section 3060.  Clarifying Medical Software Regulation.  There has been a great deal of uncertainty about the degree to which FDA can and should regulate stand alone medical software.  This type of software is steadily increasing in importance and capability.  This provision modifies the definition of a “device” to remove a number of categories of software from FDA’s jurisdiction.  The categories of software removed from the device definition are:

1. Software that provides administrative support of a healthcare facility.  This is non-controversial and arguably was never subject to the device definition in the first place.
2. Software for maintaining or encouraging a healthy lifestyle, and not related to the diagnosis, cure, mitigation, prevention, or treatment of a disease or condition.   This is non-controversial and is consistent with FDA’s General Wellness and Mobile Medical Applications guidance documents.
3. Software that serves as electronic patient records, provided (among other things) that such function is not intended to interpret or analyze patient data or images for the diagnosis, cure, mitigation, prevention, or treatment of a disease or condition.  This codifies policy already implemented by FDA as a matter of enforcement discretion.
4. Software for transferring, storing, converting formats, or displaying data/results and associated findings by a healthcare professional (e.g., medical device data systems (MDDS)), unless intended to interpret or analyze the data, results or findings.  This codifies FDA’s exemption of MDDS technology from regulation.
5. Software for:  (i) displaying, analyzing, or printing medical information about a patient or other medical information (such as practice guidelines); (ii) supporting or providing recommendations to a healthcare professional (i.e., clinical decision support) about prevention, diagnosis or treatment of a disease or condition, AND (iii) enabling the health professional to independently review the basis for such recommendations rather than primarily rely on it when making diagnostic and treatment decisions.  There is an exclusion for medical images, signals from in vitro diagnostic devices and signals or patterns from signal acquisition systems, i.e., they are not part of this carve out from the definition of a medical device.

The last carve out from the device definition is important.  FDA has long regulated image analysis software and IVD technology and wanted to make sure they would continue to regulate these devices, which could arguably be said to provide clinical decision support.  This provision appears to give FDA continued jurisdiction in these areas.  But, importantly, this provision removes FDA from regulating evolving software that uses “big data” and advanced computing capability to provide sophisticated clinical decision support to health care professionals.

This provision has an escape hatch if FDA believes that software of the types described above in C, D, and E, “would be reasonably likely to have serious adverse health consequences.”  To bring this software back under FDA regulation, the agency must issue a final order in the Federal Register providing its rationale based upon the potential for and severity of patient harm if the software does not perform as intended, the extent to which the software is intended to support the judgment of a healthcare professional, whether a healthcare professional has a reasonable opportunity to review the basis of the information or treatment recommendation provided, and the intended user and use environment.

Finally, this section also provides that FDA shall regulate accessories based upon their intended use and not that of the parent device with which they are intended to be used.  This comports with FDA’s 2015 draft guidance on accessories.  FDA historically had taken the position accessories take on the classification of their parent devices.  This position has not worked very well when it comes to recent software products.

If you have questions or need more information, contact:

• Jeffrey K. Shapiro, jshapiro@hpm.com, 202-737-9633
• Jeffrey N. Gibbs, jgibbs@hpm.com, 202-737-4288
• Jennifer D. Newberger, jnewberger@hpm.com, 202-737-4292
• Allyson B. Mullen, amullen@hpm.com, 202-737-9639

There has been a spate of recent news articles about the potential use of the Congressional Review Act (CRA) to overturn final rules issued toward the end of the Obama Administration. That prompted us to see which of FDA’s recently issued final rules might be vulnerable.

By way of background, the CRA established a mechanism for Congress to disapprove a final rule issued by a federal agency. In relevant part, the CRA provides that a final rule submitted to Congress on or after the 60th day before adjournment is subject to review in the next session of Congress. A disapproval resolution requires a simple majority vote, but can be vetoed by the President; thus, as a practical matter, a disapproval resolution requires a supermajority vote for enactment. However, given the pending change in administrations, there is an opportunity for the next Congress to work with President-elect Trump to invalidate rules issued by the Obama administration in the last 60 days of this Congressional session. Because the 60 days are measured not as calendar days, but as days of session in the Senate and legislative days in the house, the Congressional Research Service (CRS) has estimated that final rules submitted to Congress after June 2, 2016 could be subject to disapproval under the CRA.

Below is a list of all FDA final rules issued between May 15 and last Friday, December 2. We opted to go back to May 15 because of uncertainty associated with CRS’s estimation of the date as of which disapproval might be an option. For the sake of clarity, we marked with an asterisk those rules issued between May 15 and June 2. Many of the rules are of interest mainly as an illustration of the many types of FDA actions that require rulemaking. However, some significant rules are potentially affected, such as the rule on safety and effectiveness of OTC topical antimicrobial drug products issued on September 6. Some significant rules – such as FDA’s nutrition labeling rule – were issued before June 2, but might not be entirely out of the woods given the softness of that date.

Food/Supplements:

• Uniform Compliance Date for Food Labeling Regulations
• 21 CFR Part 101 Food Labeling CFR Correction
• Indirect Food Additives: Paper and Paperboard Components
• Food Additives: Permitted in Feed and Drinking Water of Animals; Guanidinoacetic Acid
• Food Additives: Permitted in Feed and Drinking Water of Animals; Feed Grade Sodium Formate
• Indirect Food Additives: Adhesives and Components of Coatings
• Current Good Manufacturing Practice, Hazard Analysis, and Risk-Based Preventive Controls for Human Food and Current Good Manufacturing Practice, Hazard Analysis, and Risk-Based Preventive Controls for Food for Animals; Definition of Qualified Auditor; Announcement of Effective Date
• Food Labeling: Technical Amendments
• The Food and Drug Administration Food Safety Modernization Act; Extension and Clarification of Compliance Dates for Certain Provisions of Four Implementing Rules
• Food Labeling; Calorie Labeling of Articles of Food in Vending Machines; Extension of Compliance Date
• Emergency Permit Control Regulations; Technical Amendments
• Food Additives Permitted for Direct Addition to Food for Human Consumption: Vitamin D2 and Vitamin D3
• Amendments to Registration of Food Facilities
• Food Additives Permitted in Feed and Drinking Water of Animals; Chromium Propionate; Extension of the Comment Period
• Food Additives Permitted in Feed and Drinking Water of Animals; Chromium Propionate
• Substances Generally Recognized as Safe
• Substances Generally Recognized as Safe – Correction
• *Food Labeling: Revision of the Nutrition and Supplement Facts Labels
• *Mitigation Strategies to Protect Food Against Intentional Adulteration
• *Food Labeling: Serving Sizes of Foods that Can Reasonably Be Consumed at One Eating Occasion; Dual-Column Labeling; Updating, Modifying, and Establishing Certain Reference Amounts Customarily Consumed; Serving Size for Breath Mints; and Technical Amendments

Drugs/Biologics:

• Use of Ozone-Depleting Substances
• New Animal Drugs for Use in Animal Feed; Category Definitions; Confirmation of Effective Date
• Food and Drug Administration Review and Action on Over-the-Counter Time and Extent Applications
• Additions and Modifications to the List of Drug Products That Have Been Withdrawn or Removed From the Market for Reasons of Safety or Effectiveness
• Abbreviated New Drug Applications and 505(b)(2) Applications
• New Animal Drugs: Approval of New Animal Drug Applications; Change of Sponsor’s Address
• New Animal Drugs for Use in Animal Feeds: Chlortetracycline and Sulfamethazine; Chlortetracycline, Procaine Penicillin, and Sulfamethazine
• Safety and Effectiveness of Consumer Antiseptics: Topical Antimicrobial Drug Products for Over-the-Counter Human Use
• Requirements for Foreign and Domestic Establishment Registration and Listing for Human Drugs, Including Drugs That are Regulated Under a Biologics License Application, and Animal Drugs
• New Animal Drugs for Use in Animal Feed; Withdrawal of Approval of a New Animal Drug Application
• New Animal Drugs; Approval of New Animal Drug Applications; Withdrawal of Approval of New Animal Drug Applications; Changes of Sponsorship; Change of Sponsor’s Name and Address; Change of Sponsor’s Address
• New Animal Drugs for Use in Animal Feed; Category Definitions
• New Animal Drug Applications; Contents of Notice of Opportunity for a Hearing; Correction
• Standard Preparations, Limits of Potency, and Dating Period Limitations for Biological Products; Confirmation of Effective Date
• New Animal Drugs: Change of Sponsor
• Removal of Review and Reclassification Procedures for Biological Products Licensed Prior to July 1, 1972; Technical Amendment
• New Animal Drugs; Withdrawal of Approval of a New Animal Drug Application
• New Animal Drugs: Approval of New Animal Drug Applications; Withdrawal of Approval of New Animal Drug Applications; Changes of Sponsorship
• Revisions to Exceptions Applicable to Certain Human Cells, Tissues, and Cellular and Tissue-Based Products

Medical Devices:

• Listing of Color Additives Exempt from Certification; Titanium Dioxide and Listing of Color Additives Subject to Certification; [Phthalocyaninato (2-)] Copper
• Medical Gas Containers and Closures; Current Good Manufacturing Practice Requirements
• Medical Devices: Ear, Nose, and Throat Devices; Classification of the Eustachian Tube Balloon Dilation System
• Medical Devices: Physical Medicine Devices; Classification of the Upper Extremity Prosthesis Including a Simultaneously Powered Elbow and/or Shoulder With Greater Than Two Simultaneous Powered Degrees of Freedom and Controlled by Non-Implanted Electrical Components
• Medical Devices; Cardiovascular Devices; Classification of the Apical Closure Device
• Medical Devices: Custom Devices; Technical Amendment
• Medical Devices; Exemption From Premarket Notification: Method, Metallic Reduction, Glucose (Urinary, Nonquantitative) Test System in a Reagent Tablet Format
• Medical Devices: Neurological Devices; Classification of the Evoked Photon Image Capture Device
• Medical Devices; Ophthalmic Devices; Classification of Strabismus Detection Device
• Medical Devices: General and Plastic Surgery Devices; Classification of Magnetic Surgical Instrument System
• Regulatory Hearing Before the Food and Drug Administration; General Provisions; Technical Amendment
• Physical Medicine Devices; Reclassification of Iontophoresis Device Intended for Any Other Purposes
• Medical Devices: Gastroenterology-Urology Devices; Classification of the Metallic Biliary Stent System for Benign Strictures
• Medical Devices; Neurological Devices; Classification of the Thermal System for Insomnia
• Medical Devices: General and Plastic Surgery Devices; Classification of the Electrosurgical Device for Over-the-Counter Aesthetic Use
• Medical Devices; Obstetrical and Gynecological Devices; Classification of the Gynecologic Laparoscopic Power Morcellation Containment System
• Use of Symbols in Labeling
• Medical Devices: Ophthalmic Devices; Classification of Nasolacrimal Compression Device
• *Medical Devices: Ophthalmic Devices; Classification of the Diurnal Pattern Recorder System
• *Cardiovascular Devices: Reclassification of External Cardiac Compressor; Reclassification of Cardiopulmonary Resuscitation Aids

Tobacco:

• Refuse to Accept Procedures for Premarket Tobacco Product Submissions; Withdrawal
• Refuse to Accept Procedures for Premarket Tobacco Product Submissions

Other:

• Amendments to Regulations on Citizen Petitions, Petitions for Stay of Action, and Submission of Documents to Dockets
• Submission of Food and Drug Administration Import Data in the Automated Commercial Environment
• Revision of Organization and Conforming Changes to Regulation
• Maximum Civil Money Penalty Amounts; Technical Amendment
• Change of Address; Technical Amendment
• Administrative Actions for Noncompliance; Lesser Administrative Actions; Confirmation of Effective Date
• Advisory Committee; Transmissible Spongiform Encephalopathies Advisory Committee; Termination

Most of our readers come to the blog to read posts that are well-researched, provide thoughtful analysis, and often practical advice. This is not that post.   This is a post that will be filled with rank speculation, perhaps a little wishful thinking, and a soupçon of advice. The latter may be food for thought; the former almost certainly will not be.

Many writers and analysts who are far more thoughtful and in the loop than this blogger have spilled ink on what will happen to FDA. Will the Trump Administration retain the commissioner and Chief Counsel or will they be replaced?  Will there be dramatic changes or only changes at the margin? Those issues are beyond my ken and beyond the scope of this blogpost. Rather, we will spend a few minutes and a few ones and zeroes across the interwebz to focus in on promotional activities, that is, free speech.

Your faithful blogger can claim no special knowledge or access other than hallway conversations with colleagues and a Twitter feed that is replete with all sides of the spectrum (other than Pepe the frog.  My Twitter feed is a frog-free zone.) And thus, we descend into speculation.

Here’s what we know – when Republican administrations take over from Democrat administrations, there tends to be some relaxation of enforcement taken against industry for promotional activities. In an N=1 situation, for example, when the Bush administration took over from the Clinton administration, the warning letter process was centralized in the hands of the Chief Counsel of FDA, who was, at the time, one of the foremost proponents of the First Amendment protections for industry sponsored speech.  This resulted in a dramatic decrease in the number of warning letters related to promotional activities. We apologize for our N=1 exercise, but your loyal blogger was still in knee pants when President Reagan took over from President Carter – the next most recent such event. Moreover, this is a relatively risk-free area for deregulators to play in – it doesn’t carry the same dangers as say product safety.

But what does that mean in the context of a Donald Trump presidency? As avid followers of such issues know, the First Amendment is already ascending.  Indeed, our friends at FDA have issued only five promotional enforcement letters for pharmaceutical products in 2016 to date, which is a sharp dropoff from years past, and many of them are not the typical letters of days of yore, but are much more circumscribed to speech that is arguably not protected by the First Amendment.

But will the typical progression from a Democratic administration to a GOP one hold true in this instance where Candidate and now President-Elect Trump has made numerous comments on the campaign trail suggesting his view that the First Amendment might not be as fixed in the firmament as it has been in the past. Granted, his targets have been the press and flagburning, neither of which are politically popular, but nevertheless, it gives one pause to think about how aggressive an FDA under President Trump might expand the First Amendment protections given to industry.

Another related area is social media. @realDonaldTrump is an inveterate Twitterer and an avid Facebook user as well. As this blogger has frequently complained, FDA has only barely dipped their toes into the issue of social media.  One area of interest that remains in flux is the ability to use Twitter and other space limited platforms where it may be necessary to communicate safety information. Would a tweet @realDonaldTrump help convince the President-Elect that the time has come for allowing companies with therapeutic products to use Twitter to engage with other users? (We will, of course be tweeting this blogpost to try to catch his attention.) Will tweeting @mike_pence help? Anyone from Eli Lilly (@LillyPad) or other Indiana-based companies want to pass this along to their governor/Vice President-Elect? (Yes, we are attention seekers.)

Ok, enough with the speculation. Here’s the practical bit of advice (not legal advice, this is just a blogpost). Stay the course for now. The First Amendment is already front and center at the Agency. They just held a public meeting about off label information in which the presenters appeared to be evenly divided between those who favored more speech and those who didn’t (see our previous post here).  FDA will have a difficult time threading that needle without offending the courts who seem inclined to permit truthful and not misleading speech.   If you have data that can be presented in a truthful and not misleading manner, it seems that that will not readily draw a letter from FDA. Note, however, that if there is even a whiff of fraud or a kickback or some other hook, that the protected speech aspect may not be enough to protect the entirety of the challenged conduct.

In short, we are not predicting that the floodgates can open and all speech will be unchallenged. This is in part because FDA has already reined itself in to some extent in light of the court challenges. Thus the transition from the Clinton to Bush administrations may not be an apposite example. So proceed as before, but continue to proceed with caution. (In terms of predictions, I also predicted that the New York Jets would take their division, so definitely proceed with caution.)

How about social media? I suppose it depends on how much risk a company is willing to take. FDA has stated:

Regardless of character space constraints that may be present on certain Internet/social media platforms, if a firm chooses to make a product benefit claim, the firm should also incorporate risk information within the same character-space-limited communication. The firm should also provide a mechanism to allow direct access to a more complete discussion of the risks associated with its product.

It would be hard to back off of that without a lot of internal effort. But it will be interesting to see if companies are willing to test this, perhaps by tweeting and including a tinyurl to risk information rather than including it directly.

We appreciate you sticking through to the end of our meanderings and will now return you to our regularly scheduled program of thoughtful analysis and informative blogposts.

Last month, FDA announced the publication of a revised version of the Draft Quality Metrics Guidance that it had published back in July of 2015. We had blogged about the original Draft Guidance at that time (see prior posting here).  Below we provide a brief summary of the some of the more noteworthy changes.

Overall, the document has been substantially revised. That said, the agency’s stated objectives for the quality metrics program have remained pretty consistent, though perhaps they are explained in greater detail in the revised Draft Guidance, namely:

1/ establishing a signal detection program as one factor in identifying establishments and products that may pose significant risk to consumers;

2/ identifying situations in which there may be a risk for drug supply disruptions;

3/ improving the effectiveness of establishment inspections;

4/ improving FDA’s evaluation of drug manufacturing and control operations; and

5/ identifying potential shortage signals and engaging with manufacturers to mitigate the likelihood of their occurrence.

Intriguingly, the Notice of Availability (NOA) for the revised Draft Guidance states that:

After evaluating the results of the voluntary phase of the quality metrics program in 2018, FDA intends to initiate notice and comment rulemaking under existing statutory authority to develop a mandatory quality metrics reporting program.

So it appears that the agency has changed course as, to the best of our knowledge, it had not previously stated its intent to utilize notice and comment rulemaking to implement this program. The program was supposed to be implemented simply upon the finalization of the Quality Metrics Guidance.  This also explains why the Legal Authority section of the document has been removed.

One has to wonder whether the agency’s confidence in its legal authority for this program (i.e., the combination of sections 706 and 711 of FDASIA) has waned somewhat since the initial publication of the original Draft Guidance in July of 2015. After all, the right to request “…any records or other information that the Secretary may inspect under [Section 704 FDCA]…,” together with a firm’s responsibility for “…oversight and controls over the manufacture of drugs to ensure quality [Section 501 FDCA]…” do not necessarily constitute legal authorization to demand that regulated industry create new records in order to satisfy the agency’s curiosity that a firm’s manufacturing process is in a state of control.  Far from it.

Perhaps with an eye to eliminating that legal line of attack, FDA added the following in the revised Draft Guidance section entitled “Quality Metrics that FDA Intends to Calculate:”

FDA used the following selection criteria in developing the set of data that it is inviting covered establishments to submit: (1) objective data to provide consistency in reporting; (2) of the type contained in records subject to inspection under section 704 FDCA; and (3) a valuable component in assessing the overall effectiveness of a pharmaceutical quality system. [Emphasis added]

No doubt the decision to engage in notice and comment rulemaking will strengthen the agency’s hand should industry decide to contest the FDA’s statutory authority to require such quality metrics, as courts generally offer more deference to an agency’s statutory interpretations when they are backed up by an administrative record, and after the agency has sought formal public input.

What is unclear is whether the agency changed course in favor of notice and comment rulemaking before, or after, the November 8^th Presidential election.  While engaging in notice and comment rulemaking strengthens the agency’s hand in the event of litigation, President-Elect Trump has often emphasized his aversion to “excessive regulation.”  For the record, we do not know whether the President-Elect would consider this program to constitute excessive regulation – however that would need to be an agency consideration at this point.

So, by engaging in rulemaking, the agency is likely reducing the probability that the quality metrics reporting program will be dismantled by a court; however, this formal elevation of the program through the rulemaking process also likely increases the probability that it will be placed on the chopping block by the incoming administration.

Back to the changes brought about by this revised Draft Guidance. The document explains that FDA is initiating a ‘voluntary reporting phase’ of the quality metrics reporting program, whereby FDA expects to learn more about a limited set of quality metrics, associated analytics, and to generally improve the FDA quality metrics reporting program.  During this voluntary phase, FDA will accept submissions of data from owners and operators of human drug establishments.  The revised Draft Guidance describes two types of quality metric data reports that can be submitted: product reports and site reports.

The document goes on to add that FDA may not be able to accomplish the overall goals of an FDA quality metrics reporting program (i.e., the five objectives summarized above) from voluntary reporting alone. For example, if, during the voluntary reporting phase, FDA does not receive a large body of data from the establishments that fall within the ambit of the program, the utility of the data obtained will be limited.  Hence, the expectation is that, during the voluntary reporting phase, the information collected will be primarily used for the more narrow purposes of:

1/ working with establishments towards early resolution of potential quality problems and to reduce the likelihood of a disruption in supply (i.e., no signal detection program per se and no commitment to be able to broadly identify situations in which there may be a risk for supply disruptions);

2/ helping to prepare for, and direct, FDA inspections; and

3/ using the calculated metrics as an element of the post-approval manufacturing change reporting program.

The revised Draft Guidance adds that FDA intends to accept reports with quality metrics data that are “inconsistent with the metrics and definitions” in the document, as well as reports about establishments and products that are not the focus of the voluntary reporting phase of the quality metrics program, with the caveat that the agency does not intend to include these inconsistent reports on the quality metrics reporters list (see explanation below), and may not be able to integrate the submission of the report into FDA’s risk-based inspection model.

Furthermore, FDA intends to publish a list of the names of establishments that voluntarily report all, or a subset of, the quality data described in this guidance (i.e., both product reporting establishments and site reporting establishments). FDA believes that there is a public benefit to sharing this information because, through their participation, establishments demonstrate a willingness to proactively engage with the agency in pursuit of the agency’s goals.  Also, participation contributes to improving quality monitoring.  FDA also suggests that such public information might be useful to pharma when selecting contract manufacturers and component suppliers, and the information could also be helpful to healthcare purchasing organizations, healthcare providers, patients and consumers in sourcing drugs.

In the revised Draft Guidance, FDA has reduced the scope of the quality metrics program from the four proposed metrics in the July 2015 Draft Guidance (i.e., lot acceptance rate, product quality complaint rate, invalidated out-of-specification rate, and product quality review on time rate), down to three proposed metrics. It thus proposes to eliminate the product quality review on time rate, which wasn’t likely to provide much useful information to the agency to begin with.  FDA has also removed the three optional metrics from the prior draft, including CAPA effectiveness and the percentage of corrective actions that involve retraining of personnel.

Also, now explicitly included within the ambit of the quality metrics program are both non-recombinant and recombinant versions of plasma derived products, as well as transgenic versions of same, and explicitly excluded from the program are in vitro diagnostics and all biological products that meet the definition of a device under section 201(h) FDCA.

The NOA states that FDA anticipates that the electronic submission platform will be available to test in 2017, and that FDA expects to ‘encourage’ reporting establishments to submit quality metrics data reports where the data is segmented on a quarterly basis throughout a single calendar year. The agency intends to open the electronic portal in January 2018 to receive these submissions of data.

Also new, reporting establishments will be able to submit 300 word text comments to provide an explanation of submitted data, and in order to report improvement plans. The NOA states that FDA may refer to the comments if unusual data or trends are identified, or as preparation for an onsite inspection.

The NOA also states that, in the context of the voluntary reporting phase, FDA is proposing a common timeframe to facilitate publication of the quality metrics reporters list, particularly given the need to identify duplicate data if both the product reporting establishment and the site reporting establishment (for the same product) submit data. FDA had considered supporting flexible data collection timeframes for the purposes of reporting, but the agency concluded that such flexible timeframes would only be feasible in the context of a program that mandated product-based reporting (i.e., under the current scenario, subsequent to the notice and comment rulemaking).

In conclusion, the modifications made to the revised Draft Guidance are substantial (indeed, even the name of the document was changed). It will be interesting to see whether the quality metrics reporting program, a cornerstone of FDA’s framework for building quality into drug products, advances as planned.  The path for the program over the next few years is perilous, whether the agency seeks to finalize it via notice and comment rulemaking or simply via guidance.

On December 1, 2016, FSIS announced its proposal to amend the nutrition labeling regulations for meat and poultry.  The proposed regulations contain few surprises and appear to be identical to FDA’s regulations. In addition, FSIS proposes to remove minor existing differences, such as the option to label stearic acid (according to FSIS, companies rarely would choose to include stearic acid as a nutrient). Although FDA has since 2003 required the declaration of trans fat in nutrition labeling for FDA-regulated food, declaration of trans fat for meat and poultry has been voluntary. Now that it is revising the regulation, FSIS proposes to make trans fat mandatory. The alignment of FSIS requirements with FDA requirements is intended to create uniformity and should help prevent consumer confusion.

As FSIS has done when amending other regulations concerning poultry and meat, the Agency proposes to consolidate the regulations for meat and poultry and move them to a new section, 9 C.F.R. Part 413.

FSIS discusses various alternatives for compliance dates and appears to prefer alternative 2, which would provide all but small businesses two years after the issuance of the final rule to amend their label. Of course, since the FSIS proposal was published more than 6 months after FDA published its final rule, this compliance date would result in a significant period of inconsistency between nutrition labeling of meat and poultry products and nutrition labeling of FDA-regulated products. However, this may be mitigated somewhat by FSIS’s decision to allow use of the FDA Nutrition Facts format on meat and poultry products while FSIS is working on the amended regulations.

Comments to the FSIS proposal must be submitted within 60 days of the publication date.

By Kurt R. Karst –

Wikipedia (oh that font of knowledge and easy reference that it is for us bloggers) describes schizophrenia as a mental disorder characterized by, among other things, “failure to understand what is real.”  That pretty much sums up FDA’s impressions of a September 2016 Citizen Petition (Docket No. FDA-2016-P-2654) submitted by Vanda Pharmaceuticals Inc. (“Vanda”) requesting that the Agency refuse to approve any ANDA referencing Vanda’s FANAPT Tablets, 1 mg, 2 mg, 4 mg, 6 mg, 8 mg, 10 mg and 12 mg, until the expiration of a period of 3-year exclusivity on May 26, 2019 stemming from a May 26, 2016 approval of FANAPT under a supplemental NDA (S-015) for maintenance treatment of schizophrenia. FDA initially approved FANAPT on May 6, 2009 under NDA 022192 for the acute treatment of schizophrenia in adults, and then later removed the word “acute” to make FANAPT’s labeling more consistent with other similar drug products. FDA, in the Agency’s November 28, 2016 Denial Response to Vanda once again discusses the metes and bounds of 3-year exclusivity, but in a rather interesting context. We should also note that on the same day the petition response was handed down, FDA approved Inventia Healthcare Private Limited’s ANDA 207231 for Iloperidone Tablets, 1 mg, 2 mg, 4 mg, 6 mg, 8 mg, 10 mg, and 12 mg. 

As noted above, Vanda’s Citizen Petition is the result of FDA’s May 26, 2016 approval of a supplemental NDA for maintenance treatment of schizophrenia, which supplement contained the results of a clinical study known as “REPRIEVE.” The REPRIEVE study demonstrated that FANAPT “is more effective than a placebo in preventing or delaying relapse when administered for longer than six weeks,” according to Vanda, and “provided valuable new information about the use of Fanapt for treating schizophrenia.”  Because the REPRIEVE supplemental NDA met the requirements for 3-year exclusivity, FDA granted it.  The exclusivity is coded in the Orange Book as “M-180,” which is defined in an addendum to the publication to mean “INFORMATION ADDED TO THE LABELING REGARDING THE ADDITION OF MAINTENANCE TREATMENT IN PATIENTS WITH SCHIZOPHRENIA.”

With the approval of S-015, FDA added information to the labeling of FANAPT concerning maintenance treatment. But other labeling information was removed.  Specifically, the following information in Section 1 (Indications and Usage) and Section 2.3 (Dosage and Administration; Maintenance Treatment) was removed from labeling:

The effectiveness of FANAPT in long-term use, that is, for more than 6 weeks, has not been systematically evaluated in controlled trials. Therefore, the physician who elects to use FANAPT for extended periods should periodically re-evaluate the long-term usefulness of the drug for the individual patient [see Dosage and Administration (2.3)]. 

Although there is no body of evidence available to answer the question of how long the patient treated with FANAPT should be maintained, it is generally recommended that responding patients be continued beyond the acute response. Patients should be periodically reassessed to determine the need for maintenance treatment.

According to FDA, “[t]his language was deleted to make labeling more accurate, given the addition of information about the REPRIEVE study and maintenance treatment, and consistent with FDA’s approach to schizophrenia treatments in general.” Vanda, however, saw things differently, and argued that FDA’s grant of 3-year exclusivity should be a total bar to ANDA approval, both because of the scope of the 3-year exclusivity granted and because of the inability of an ANDA applicant to carve-out protected information.  According to Vanda:

The removal of the limitation on maintenance treatment satisfies the applicable legal standards for eligibility for three-year exclusivity to the same extent as the addition of information about Fanapt’s efficacy for maintenance treatment. Both types of changes “derive[] from” the REPRIEVE study and that study “relate[s] to” those changes because REPRIEVE is the sole source of reliable clinical evidence supporting the efficacy of iloperidone for maintenance treatment.  Without the REPRIEVE results, there would be no basis for statements describing the efficacy of iloperidone for maintenance treatment, nor would there be support for deleting statements describing the lack of such efficacy data. Because “there are no other data available that could support approval of” these labeling changes made in Supplement 15, REPRIEVE is “essential to approval” of the changes. The direct and logical link between REPRIEVE and the labeling changes is the kind of “substantive relationship between new clinical studies and changes in the supplement” that is required for both types of changes to be covered by three-year exclusivity. . . .

Because Fanapt’s three-year exclusivity covers both the addition and omission of labeling information relating to maintenance treatment, no ANDA referencing Fanapt may be approved before the expiration of three-year exclusivity because no generic iloperidone product can bear approvable labeling. Fanapt’s three-year exclusivity precludes ANDA labeling from omitting statements describing the lack of evidence of safety and efficacy for maintenance treatment.  At the same time, however, ANDA labeling may not include those statements because they are now inaccurate, and because their inclusion would violate the “same labeling” requirement. . . .

Carving out information about maintenance treatment from the labeling for a generic iloperidone product would leave the product less safe or effective than Fanapt for the remaining, non-protected condition of use: namely, the treatment of adult patients with schizophrenia. A carve-out would leave prescribers with no information about the safety and efficacy of continued treatment for those patients who respond initially to iloperidone—contrary to the requirement that labeling “contain a summary of the essential scientific information needed for the safe and effective use of the drug.” A labeling carve-out should be denied where, as here, the protected information “is necessary to enable physicians to adequately assess the risks and benefits of” the drug product for “the general population” of patients for whom the drug product is indicated.

Or, said another way (by FDA):

You contend that the 3-year exclusivity FDA granted Vanda for the REPRIEVE study results protects both (1) the addition of information to Fanapt’s labeling about the product’s efficacy for maintenance treatment and (2) the deletion of statements describing a lack of evidence for maintenance treatment (Petition at 1, 7). You argue that this exclusivity bars approval of any ANDA that references Fanapt that either includes the maintenance treatment information added in S-015 or omits the prior statements on maintenance treatment limitations (which are no longer in the RLD labeling) (Petition at 10).  You additionally argue that ANDA labeling may not include statements describing the lack of evidence of safety or efficacy for maintenance treatment because they are now inaccurate and their inclusion would violate the “same labeling” requirement (Petition at 10).  Finally, you contend that the new information about maintenance treatment cannot be carved out of generic iloperidone labeling because doing so would render the generic product less safe or effective than Fanapt for the remaining non-protected conditions of use (Petition at 1, 13).  Thus, you argue that the 3-year exclusivity related to the REPRIEVE study prohibits FDA from approving a generic iloperidone referencing Fanapt for any use, including any unprotected use.

With respect to the scope of the 3-year exclusivity FDA granted, FDA disagreed with Vanda’s characterization of it as having two-way effect (a kind of zen moment in Hatch-Waxman). “We disagree with your argument that 3-year exclusivity can cover the deletion of statements from previously approved labeling.”  Here, wrote FDA, “the addition of labeling describing the REPRIEVE study data is the exclusivity-protected change approved in the supplement envisioned by the Hatch-Waxman Amendments.”  Continuing on, FDA said:

This was the labeling supported by “new clinical investigations” that were “essential” to approval of the supplement, within the meaning of section 505(j)(5)(F)(iv). But as the preamble to the 1989 proposed rule for part 314 made clear, it is only the labeling claims on the approved product that describe the REPRIEVE study that are covered by the 3-year exclusivity, not other accompanying changes.  The fact that when adding these claims to the labeling FDA also approved conforming changes – removal of previous statements that would no longer be accurate and that no longer reflected the standard of care for schizophrenia treatment – does not mean that those conforming changes are swept into the scope of exclusivity, or that no ANDA that omits this outdated information can be approved during the 3-year exclusivity period.  FDA does not believe that such conforming deletions are changes for which new clinical investigations are essential.

We were a bit intrigued by FDA’s general statement that 3-year exclusivity does not  cover the deletion of statements from previously approved labeling.  After all, way back in August 2008, we wrote a post titled “FDA Clarifies that 3-Year Exclusivity can be Granted for the Removal of Labeling Information.” In that post, we discussed an instance involving ACZONE (dapsone) Gel, 5% (NDA 021794), in which FDA granted a period of 3-year exclusivity and coded it in the Orange Book as “M-76.”  That exclusivity code is defined as: “REMOVAL OF SCREEN REQUIREMENT IN PTS WITH G6PD DEFICIENCY PRIOR TO INITIATING ACZONE TREATMENT; REMOVAL OF BLOOD COUNT & RETICULOCYTE MONITORING DURING TREATMENT IN G6PD DEFICIENT PTS AND IN PATIENTS WITH HISTORY OF ANEMIA” (emphasis added).  There’s also a “D-121” exclusivity code defined as “CHANGE TO REMOVE 20 MG MAXIMUM DOSAGE RESTRICTION” (emphasis added) related to the approval of a supplemental NDA in October 2009 for FOCALIN XR (dexmethylphenidate HCL) Extended-release Capsules (NDA 021802).  Of course, an exclusivity code is only shorthand for the scope of exclusivity, and each exclusivity scenario must be considered on a case-by-case basis. 

In any case, FDA does go on to address the situation in which the Agency does recognize exclusivity for the deletion of labeling information. “Even if the Agency were to agree that in certain circumstances deletions of information can be protected by exclusivity when supported by new clinical investigations essential to the approval of the deletion (which it does not),” writes FDA, “in this case, the new clinical investigations that earned exclusivity were not essential to the deletions you identify.”

With respect to Vanda’s ANDA labeling carve-out arguments, they fell on deaf ears. “FDA has determined as a scientific matter that it is not necessary to retain the information about the REPRIEVE study that was added in S-015 in the labeling for generic iloperidone to assure safe use,” writes FDA.  “FDA has also determined that generic iloperidone with the protected REPRIEVE study information carved out remains safe and effective for the remaining non-protected conditions of use.  Accordingly, a carve-out of the REPRIEVE study information is permissible in this case.”