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  • More Kryptonite for Kratom

    Most people think of getting salt water taffy from resort beach town Myrtle Beach, SC. But, apparently, there is more activity going on in Myrtle Beach: a company there was supplying customers with kratom, a substance that the government contends is an illegal dietary supplement. On November 5, 2018, the U.S. Department of Justice, on behalf of FDA, filed a civil forfeiture complaint pursuant to 21 U.S.C. § 334 in the U.S. District Court for the District of South Carolina to seize a large quantity of kratom products, including finished kratom powder and capsule products labeled as supplements, as well as bulk kratom powder and capsules.

    The government’s complaint alleges that there are serious concerns regarding the health impacts of kratom consumption and its potential for abuse. The complaint further alleges that the kratom products are dietary supplements and dietary ingredients within the meaning of the Federal Food, Drug, and Cosmetic Act and are adulterated under 21 U.S.C. § 342(f)(1)(B) because kratom is a new dietary ingredient for which there is inadequate information to provide reasonable assurance that it does not present a significant or unreasonable risk of illness or injury.

    This is not the first time the government filed a complaint for forfeiture of kratom products. As noted in a previous post (here), FDA previously issued an import alert targeting kratom (an import alert is easily imposed by FDA without a requirement for judicial authorization).  The recently announced seizure indicates that FDA also intends to go after products already on the domestic market and it is just the most recent of the problems faced by the kratom industry (see our previous posts here and here). This complaint in Myrtle Beach (which also is the home of a Pinball Museum) indicates that kratom products are still very much on the government’s radar.

    HP&M to Co-Host “DEA Compliance During the Opioid Epidemic” Webinar

    Hyman, Phelps & McNamara, P.C. is co-hosting a complimentary webinar, with Five Rivers Rx, on DEA compliance during the current opioid epidemic. The webinar is scheduled for November 15, 2018 (3:00-4:00 PM ET) and is geared especially towards DEA-registered manufacturers, distributors, importers, exporters and practitioners.

    The webinar will focus on:

    • The Controlled Substances Act and its implementing regulations;
    • DEA’s response to the opioid abuse epidemic;
    • Controlled suspicious order legal and regulatory requirements;
    • DEA enforcement actions for suspicious order violations;
    • The Masters Pharmaceutical decision;
    • The Support for Patients and Communities Act and
    • Suspicious Order Monitoring Programs.

    The webinar will feature HP&M attorneys Karla Palmer and Larry Houck. You can register for the webinar here.  After registering, you will receive a confirmation email containing information about joining the webinar.

    FDA Finalizes One Guidance and Issues a Draft Guidance Related to the Amended Nutrition Labeling Regulations

    Last week FDA published a final guidance and a draft guidance related to the nutrition labeling regulation amendments published in 2016.

    Final guidance

    The Guidance, titled “Nutrition and Supplement Facts Labels: Questions and Answers Related to the Compliance Date, Added Sugars, and Declaration of Quantitative Amounts of Vitamins and Minerals,” replaces FDA’s January 2017 draft guidance.

    The draft guidance prompted more than 1600 comments to FDA. Although the final guidance added some clarification regarding certain aspects, several issues raised in the comments remain unresolved (e.g., the requirement to declare added sugars on single ingredient sources of sugars, such as honey).

    The final guidance is 7 pages longer than the draft guidance. As with the draft guidance, the section on added sugars labeling is by far the largest section.  It is also the section with the most changes.  Among others, the final guidance includes 7 additional Q&As on added sugar declaration.  Also, the order of the Q&As has been mixed up, making it difficult to read; some of the answers refer to answers that come later thus requiring a lot of paging back and forth.  The calculations remain complicated and it remains to be seen if this guidance document provides sufficient clarity.  Likely, FDA inspectors and industry will need further education and examples to make sure that the amount of added sugars declared on a product containing fruit juice concentrate is correct.

    FDA also corrected some of its rounding criteria for minerals and vitamins. Companies would be well-advised to review the revised table and accompanying text.

    Draft guidance

    FDA published a long-awaited draft guidance addressing the new requirements related to single-serving containers, and mandatory and voluntary dual-column labeling. As with other nutrition labeling guidance, the draft guidance uses a Q&A format.  Guidance on this subject is needed: the requirements for single serving containers and dual column labeling for packages that contain at least 200 percent and up to and including 300 percent of the applicable reference amount customarily consumed (RACC), e.g., a 75-g bag of chips that is 250 percent of the RACC of 30 grams for chips, constitute a major amendment to the nutrition labeling requirements.

    Comments must be submitted by January 4, 2019, to be considered by FDA before it begins work on the final guidance document.   Since the compliance date for companies with annual food sales of 10 million or more is January 1, 2020, FDA is on a tight timeline.

    Recruiting Class of 2018 – HP&M Adds Three New Attorneys and Two Regulatory Professionals

    It’s been a busy year at Hyman, Phelps & McNamara P.C. as we’ve added three new attorneys and two regulatory professionals to our ranks.  The five professionals collectively add depth and breadth to our practice with FDA and industry experience.

    Deborah L. Livornese joined HP&M as Of Counsel to the Firm.  Ms. Livornese has extensive experience in a broad range of FDA regulatory issues, particularly in the pharmaceutical industry.   Prior to joining HP&M, Ms. Livornese spent seven years in the Office of Regulatory Policy in FDA’s Center for Drug Evaluation and Research. As a Senior Regulatory Counsel at FDA, she was involved in a wide variety of policy issues in the areas of drug approvals and withdrawals, the regulation of unapproved and over-the-counter drugs, and opioid drugs, and user fee programs.  Prior to joining FDA, Ms. Livornese was Of Counsel with an FDA boutique law firm in Washington DC where she advised drug companies on promotional activities for compliance with FDA, FTC and HHS  requirements, and assisted clients in responding to investigational findings, warning letters, and inquiries from the FDA and other agencies.

    Adrienne R. Lenz joined HP&M as a Senior Medical Device Regulation Expert.  Adrienne Lenz provides consulting to medical device and combination product manufacturers. Ms. Lenz assists clients with a wide range of pre and postmarket regulatory topics including developing regulatory strategy, preparing regulatory submissions, drafting regulatory policies and procedures, reviewing advertising and promotional materials, and addressing enforcement matters.  Prior to joining the Firm, Ms. Lenz worked as an independent regulatory consultant and consultant with Emergo.  She has also held positions in regulatory affairs, quality assurance, and test engineering at GE Healthcare and Smiths Medical.

    Veronique Li joined HP&M as a Senior Medical Device Regulation Expert.  She provides counsel to medical device and in vitro diagnostic (IVD) manufacturers with regard to both premarket and postmarketing issues.   In the premarket area, Ms. Li prepares IDEs, 510(k)s, de novos, and PMAs. She also prepares pre-submissions, and assists clients in preparing for and represents clients at pre-submission meetings with FDA. In the postmarket area, she advises clients on complaint handling, MDRs, field actions, and QSR compliance. Prior to joining HPM, Ms. Li held positions in a medical device company, management consulting firm, and at the FDA in both the Center for Devices and Radiological Health and the Center for Biologics Evaluation and Research.

    Kalie E. Richardson joined HP&M as an Associate Attorney, focusing her practice on FDA regulatory strategy and compliance, primarily for small to mid-sized pharmaceutical companies.  Ms. Richardson was a French translator before becoming a lawyer with a focus on medical and pharmaceutical texts. Prior to joining the firm, Ms. Richardson practiced food and drug law at another law firm.  During law school, Ms. Richardson worked in the Centers for Disease Control and Prevention, and the Office of Regulatory Policy at the Center for Drug Evaluation and Research at FDA.

    McKenzie E. Cato joined HP&M as an Associate Attorney, practicing in all areas of FDA regulatory law. She graduated with honors from the George Washington University Law School this year.  Ms. Cato started at HP&M in 2012 and worked as a Legal Assistant and Law Clerk prior to becoming an Associate Attorney.

    HP&M Takes Home 2019 “Law Firm of the Year in FDA Law” Honors from U.S. News and Best Lawyers

    Hyman, Phelps & McNamara, P.C. (“HP&M”) has once again been ranked as a “Tier 1” law firm in the area of “FDA Law” (both nationally and in Washington, D.C.) by the folks over at U.S. News & World Report, who teamed up with Best Lawyers for the 2019 “Best Law Firms” rankings.

    Actually, it’s better than that! HP&M was handed the “Law Firm of the Year in FDA Law” award by both organizations!  We’re truly honored.

    “This year we reviewed 14,643 law firms throughout the United States – across 75 national practice areas – and a total of 2,118 firms received a national law firm ranking. We are proud that the ‘Best Law Firms’ rankings continue to act as an indicator of excellence throughout the legal industry,” according to U.S. News.  National and metro rankings are based on a rigorous evaluation process.  Evaluators collect client and lawyer evaluations, conduct peer review from leading attorneys in their field, and review additional information provided by law firms.

    Categories: Miscellaneous

    May FDA Regulate Medical Devices As If They Were Drugs?

    In the world of FDA, there is a stark divide between the regulatory treatment of drugs and medical devices. A product intended to diagnose or treat disease, or to alter the structure or function of the body, is within the definition of a drug under the Federal Food, Drug, and Cosmetic Act (FDCA). If, however, the product has these intended objectives but does not achieve its primary intended purposes via chemical action on or within the body, or via metabolization, then it meets the statutory definition of a device.

    The drug/device distinction drives enormous differences in premarket review and postmarket compliance requirements under the FDCA and implementing regulations. The differences are so significant that FDA long ago established separate bureaucratic centers devoted to each category — the Center for Drug Evaluation and Research (CDER) to regulate drugs and the Center for Devices and Radiological Health (CDRH) to regulate devices. Each center administers different statutory provisions (for the most part) and separate sets of implementing regulations.  No one would dispute that a product regulated by CDER must meet very different requirements than one regulated by CDRH.  No one would dispute, either, that user fees charged by FDA for drugs are far higher than for medical devices.  For instance, in fiscal year 2019, a New Drug Application (NDA) for a prescription drug (with clinical data) has a user fee of $2,588,478, while a 510(k) submission for a device has a user fee of $10,953.


    Some may be surprised to learn, therefore, that FDA occasionally regulates devices under the drug authorities. We are not speaking of products where it is a close call scientifically whether it meets the definition of a device.  Nor are we concerned with combination products consisting of both drugs and a devices.  Rather, we are addressing products that unequivocally meet the definition of a device, but FDA regulates them as drugs anyway.

    An example is barium sulfate intended for use as a radiological contrast agent. Barium sulfate is an inert metal salt that absorbs X-rays to improve visualization of the gastrointestinal tract.  It passes through the gastrointestinal tract without being absorbed or altered.  All would agree – including FDA – with the fundamental science which says that the contrast agent function is not performed via either chemical action or metabolization.

    Therefore, barium sulfate as a radiological contrast agent meets the definition of a device. For decades, FDA regulated these products as medical devices, granting 510(k) clearance to several products.  Then, in a dramatic shift, FDA began regulating them as drugs.  There are now numerous barium sulfate products for use as radiological contrast agents that have NDA approval instead of 510(k) clearance.  A warning letter issued just last year said that a barium sulfate product is required to have approval under the drug authorities.

    Another example is over‑the‑counter (OTC) skin protectants. These products are regulated as drugs under a final monograph (codified at 21 C.F.R. Part 347). Many of the permitted active ingredients and indications appear to meet the definition of a device.  For example, consider the monograph-approved use of petrolatum for the permitted indication of preventing chapped or cracked lips due to the drying effects of wind and cold weather.  It seems fairly obvious that this use of petrolatum does not rely upon chemical action or metabolization.  Rather, the petrolatum serves as a barrier that covers the skin against the wind and helps it retain moisture.  That is a classic device function.


    There is plenty of administrative history and lore explaining how FDA assigned barium sulfate and skin protectants to CDER. But the purpose of citing these examples is to spotlight FDA’s general position.  It is the agency’s assertion that any medical device can be regulated under the drug authorities for reasons of administrative policy and convenience.  Yet, it seems clear that Congress has drawn a bright dividing line between drugs and devices, and has decreed that they are to be regulated differently.  On what basis does FDA believe it is authorized to ignore the distinction and regulate devices as if they were drugs?  FDA may only take such actions authorized by Congress, so the agency must establish that it has authority under the FDCA to regulate devices as drugs.

    FDA’s core argument is based on the statutory definition of drugs and devices. FDA observes that the definitions, read literally, are not mutually exclusive.  Rather, the drug definition encompasses any “article” intended to diagnose / treat disease or alter the structure or function of body.  A device is an “article” for the same intended use, per the first part of the device definition.  A device therefore meets the definition of a drug.  It is true, FDA would agree, that the device definition has an added requirement that it may not utilize chemical action or metabolization to achieve its primary intended purposes.  But, that simply means that not all drugs can be devices.  According to FDA, it does not prevent all devices from being drugs.  When it comes to devices, FDA says, the drug and device definitions overlap and FDA therefore has full discretion to classify a device as a drug.  It is, therefore, by the grace of the agency that any particular medical device is not regulated as a drug.


    FDA’s “overlap” argument arguably comports with the literal words of the drug and device definitions. But, once one steps back and looks at the big picture, FDA’s argument is not supported by the basic scheme and operation of the FDCA, and is even contradictory to it.  Let us look at the problems with FDA’s argument:

    The dog that did not bark.  Start with the fact that there is no provision in the FDCA expressly authorizing FDA to regulate products meeting the definition of a device as drugs.  Given the lengths to which Congress went to set up completely separate regulatory schemes for devices and drugs, it is counterintuitive, to say the least, that Congress did not signal a grant of authority to FDA to regulate devices as drugs when it chooses to do so.  If this authority truly had been granted to FDA, one would have expected Congress to set some parameters around it.

    By way of contrast, there is a statutory provision allowing FDA to choose a lead center for combination products (FDCA § 503(g)). If a product combines a device and a drug, FDA is authorized to choose whether to regulate it in CDER or CDRH.  But Congress did not leave the choice to FDA’s unfettered discretion.  Rather, Congress requires that FDA make the decision based upon a determination of the “primary mode of action” of a combination product.  In contrast, according to FDA, the agency has complete discretion for the equally significant decision to regulate a device in CDER.  Why is there no analogous provision specifying the boundaries of FDA’s discretion in this regard?  The most straightforward answer is that Congress did not grant such discretion in the first place and so had no occasion to specify the factors to be considered in making the decision.

    “Congress does not hide elephants in mouseholes.”  In FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120 (2000), FDA had claimed authority under the FDCA to regulate cigarettes and smokeless tobacco, on the ground that nicotine was a drug and cigarettes and smokeless tobacco were drug delivery devices. The Court did not dispute these products literally fit within the FDCA’s definitions of drugs and devices. Nonetheless, the Court concluded that FDA did not have the claimed authority. The Court declared “we are confident that Congress could not have intended to delegate a decision of such economic and political significance to an agency in so cryptic a fashion.” Id. at 160. A year later, in a different case, the Supreme Court put the same thought this way: “Congress … does not alter the fundamental details of a regulatory scheme in vague terms or ancillary provisions — it does not, one might say, hide elephants in mouseholes.” Whitman v. American Trucking Association, 531 U.S. 457, 468 (2001).

    Here, once again, FDA has found an elephant hiding in a mousehole. It finds that a partial overlap in statutory definitions supports the rather spectacular authority to regulate all devices as if they were drugs.  This authority has wide implications for the pathway to market for devices, the attractiveness of investment in device technology, and the cost and scope of life‑cycle regulation of devices.  Surely, Congress would have said something somewhere in the FDCA about the exercise of this momentous decision‑making authority if FDA were intended to have it.  Once again, the rational conclusion is that Congress did not grant FDA this authority and so did not mention it anywhere in the FDCA.

    FDA’s position contradicts the plain language of Section 563. This provision is focused on the very topic under discussion, the classification of products as drugs or devices. It requires FDA, upon request, to uniquely classify each product “as a drug, biological product, device, or a combination product.”  (Emphasis added.)  It is plain from this language that Congress envisions that every product FDA regulates is uniquely either a drug, biological product, device, or a combination product.  There is no option for classifying a product as a device “and” a drug.  Yet, FDA claims that every device is simultaneously a drug.  FDA’s position is contradictory to plain language of Section 563.

    Section 563 also provides that a classification decision is binding on the agency and cannot be altered “except with the written consent of the person, or for public health reasons based on scientific evidence.” That allows a person to reliably know whether the product will be regulated as drug or device (or something else), with all the attendant differences between the two regimes.  Yet, FDA’s position implies that the agency is authorized to override a Section 563 decision classifying a product as a device and to instead regulate it as a drug.  If FDA may disregard a Section 563 classification decision without written consent, it obliterates the protection of Section 563.  Hence, FDA’s position contradicts this aspect of Section 563 as well.

    FDA’s position renders the device definition optional. A basic interpretative canon of statutory construction holds that “[a] statute should be construed so that effect is given to all its provisions, so that no part will be inoperative or superfluous, void or insignificant.” Corley v. United States, 556 U.S. 303, 314 (2009) (internal citations omitted).  FDA’s theory of the overlapping definitions violates this canon.  Under FDA’s approach, when a product meets the specific definition of a device, the agency may still regulate it as a drug.  A decision to regulate a product meeting the definition of a device as if it were a drug renders the device definition inoperative in that case.

    More generally, FDA’s position renders the device definition superfluous in all cases, by treating it as merely a suggestion from Congress, a starting point for decision‑making, while retaining for the agency discretion to disregard it. This construction of the statute should be rejected in favor of one that gives full meaning and effect to the device definition.  Congress has made it clear that a product that does not utilize chemical action or metabolization to realize its primary intended purposes is to be regulated very differently than one that does.  FDA does not have authority to breach this dividing line with a contrary decision.

    FDA’s reliance on Bracco Diagnostics v. Shalala is misplaced.  Finally, FDA sometimes supports its position by quoting Bracco Diagnostics v. Shalala, 963 F. Supp. 20, 28 (D. D.C. 1997).   FDA always quotes the district court’s statement that:  “The MBI products and plaintiffs’ products all likely meet both the definition of a drug and the definition of a device under the Federal Food, Drug and Cosmetic Act, and the FDA therefore has discretion in determining how to treat them.” Id. at 28.

    FDA never quotes the next sentence, which states the court’s authority: “See 21 U.S.C. § 353(g) (‘The Secretary shall designate a component of the Food and Drug Administration to regulate products that constitute a combination of a drug, device, or biological product.’)” The court’s reliance on Section 503(g), relating to the assignment of combination products to a lead center, suggests that the district court viewed the products in question as “likely” combination products, with both device and drug modes of action.  In fact, the specific holding of the court in Bracco Diagnostics was that FDA was required to treat functionally similar combination products the same way – putting them all in either CDER or CDRH.  The court was not called upon to rule whether FDA may regulate devices under the drug authorities.  Even if the statement could be read to support FDA’s position, it would be dicta, i.e., an incidental expression of a judge’s opinion, not essential to the decision and not establishing precedent.


    FDA’s position that it may regulate devices as drugs is plainly not authorized under the FDCA. To the contrary, if a product is within the definition of a device, Congress has decreed that it must be regulated under the device authorities.  That is so even when it would be administratively convenient to do otherwise.  Only an amendment to the FDCA could give FDA the authority it claims.  FDA should act promptly to bring itself into conformity with the statute.

    Categories: Medical Devices

    Trump Administration Takes a Turn at Medicare Part B Payment Reform

    On October 30, 2018, the Centers for Medicare and Medicaid Services (CMS) issued an Advanced Notice of Proposed Rulemaking (ANPRM) soliciting public feedback on a potential International Pricing Index (IPI) Model for payment of certain drugs covered under Medicare Part B. 83 Fed. Reg. 54546 (Oct. 30, 2018).  This is not the first time that CMS has attempted to test a new Part B payment model during recent years. In 2016, the Obama Administration proposed a rule to test a two-phase Part B payment reform model, which we blogged about here.   After receiving 1,350 comments on the proposed model, CMS scrapped the proposed rule in 2017 following the change in administration (see our follow up blog post here).

    This ANPRM was issued to further the objectives of the Trump Administration’s goal of reducing drug prices and patient out-of-pocket costs. CMS states that it is considering issuing a proposed rule for the IPI Model in the Spring of 2019 and implementing the IPI Model beginning in the Spring of 2020. The IPI Model would run for five years, through the Spring of 2025.

    Generally, the proposed IPI Model seeks to ensure that the federal government is paying prices for drugs that are comparable to those paid by other countries. CMS refers to a Department of Health and Human Services (HHS) analysis that compared acquisition costs for 27 separately payable Part B physician-administered drugs to the prices of those drugs in sixteen other developed economies (Austria, Belgium, Canada, Czech Republic, Finland, France, Germany, Greece, Ireland, Italy, Japan, Portugal, Slovakia, Spain, Sweden, and United Kingdom). The HHS analysis found that, on average, the cost of those drugs in the U.S. was 1.8 times higher than in the cost for those drugs in the comparison countries and that the United States paid the highest prices for 19 of the 27 products.

    The IPI Model focuses on drugs covered by Medicare Part B, which are administered in a physician’s office or hospital outpatient setting, rather than drugs covered by Part D, which covers outpatient drugs dispensed by pharmacies.  Most Part B drugs are currently covered through a “buy and bill” system under which healthcare providers buy Part B drugs first and then bill for the drug after it is administered to the patient. Medicare’s statutory reimbursement for Part B drugs is currently the average sales price (ASP) plus 6% (under sequestration, the actual payment is ASP plus 4.3%). The 6% add-on payment is intended to help physicians and hospitals cover the costs of drug ordering, handling, and storage, but CMS has long been concerned that a percentage-based add-on payment may encourage overutilization of high-cost drugs.

    The proposed IPI Model draws from the former Competitive Acquisition Program (CAP). A physician participating in CAP would place a patient-specific drug order with a CAP vendor that would provide the drug to the physician and then bill Medicare and collect the cost-sharing amount from the patient. The CAP was operational from 2006 through 2008 but has been suspended since January 1, 2009.

    The IPI Model would be tested under the umbrella of the Center for Medicare and Medicaid Innovation (CMMI).  The CMMI was created by an amendment to the Social Security Act (SSA) by the Affordable Care Act. See SSA Sec. 1115A; 42 U.S.C. § 1315a. The purpose of the CMMI is to “test innovative payment and service delivery models to reduce program expenditures under [Medicare or Medicaid] while preserving or enhancing the quality of care furnished to individuals under such [programs].” 42 U.S.C. § 1315a(a)(1). CMMI is a vehicle for CMS to test novel payment methodologies that meet certain statutory selection and implementation criteria. See 42 U.S.C. § 1315a(b)(2), (d).

    The IPI Model participants would include all physician practices and hospital outpatient departments that supply the included drugs in the selected model geographic area. Model participation would be mandatory for these providers. CMS is also considering whether to include other Part B providers that furnish the included drugs, such as durable medical equipment suppliers and ambulatory surgical centers. The IPI Model would, for those geographic locations and providers selected for implementation, eliminate the “buy and bill” drug acquisition system and replace it with drug acquisition through CMS-selected model vendors. CMS would pay the model vendors for included drugs, based on international pricing benchmarks. Physicians and hospitals would pay the model vendor for distribution costs associated with included drugs and would collect beneficiary cost-sharing, including billing supplemental insurers. Model vendors’ responsibilities would include negotiating acquisition prices with manufacturers and submitting claims for included drugs to Medicare in accordance to model billing instructions established by CMS.

    Under the proposed IPI Model, model vendors would purchase and take title to the included drugs, but would not be required to take physical possession. Medicare would pay the vendor for the included drugs based on international prices, rather than the current payment rate of ASP plus 6%. Unlike the CAP, where only specialty pharmacies could serve as vendors, the IPI Model would permit group purchasing organizations, wholesalers, distributors, specialty pharmacies, individual or groups of physicians and hospitals, manufacturers, and Part D sponsors to serve as model vendors. Model vendors would be selected by CMS based on a competitive selection process. CMS is proposing to select three model vendors so as to facilitate competition among the vendors based on “customer service and cost,” but is soliciting feedback on whether three vendors is an appropriate number for the model.

    The IPI Model would initially focus on single source drugs and biologics that encompass a high percentage of Part B drug spending. CMS plans to prioritize single source drugs and biologics, which accounted for most drugs used by most physician specialties and represented over half of Part B drug spending in 2017. Certain drugs would be excluded from the IPI Model, including drugs on the FDA drug shortage list, drugs paid under miscellaneous or “not otherwise classified” codes, compounded drugs, radiopharmaceuticals, drugs to treat end-stage renal disease, and drugs dispensed by a hospital outpatient department.

    Instead of paying ASP plus 6%, Medicare would pay model vendors for included drugs based on international pricing. CMS has proposed the following calculation steps in the ANPRM:

    • CMS would calculate an average international price for each Part B drug included in the model based on a standard unit that is comparable to that in the drug HCPCS code.
    • CMS would then calculate the ratio of Medicare spending using ASP prices for all Part B Drugs included in the model to estimated spending using international prices for the same number and set of drugs. In order to do this calculation, CMS would multiply Part B volumes by the ASP prices and then by the international prices. The resulting ratio of Medicare spending under ASP to Medicare spending under the international prices, holding volume and mix of drugs constant, would represent the IPI.
    • CMS would also establish the model Target Price for each drug by multiplying the IPI by a factor that achieves the model goal of more closely aligning Medicare payment with international prices, which would be about a 30 percent reduction in Medicare spending for included Part B drugs over time, and then multiplying that revised index (IPI adjusted for spending reduction) by the international price for each included drug. CMS would calibrate the revised index to account for any drugs with ASP below the Target Price. The percentage reduction between ASP and Target Price would vary for each drug. CMS would monitor price changes and recalibrate as needed.
    • CMS would phase-in the Target Price over the 5 years of the model, as a blend of ASP and the Target Price. For each calculation, if ASP is lower than the Target Price for an included drug, the model would set the payment amount to ASP for that drug.

    In making price calculations, CMS is considering using pricing data from the following countries: Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, Netherlands, and the United Kingdom. CMS proposes to use data provided by private companies or obtained through review of publicly filed materials by manufacturers in other countries. CMS also proposes requiring manufacturers to report to CMS quarterly their international drug sales data to support the calculation of the IPI and the Target Price for each drug. The quarterly reporting of international sales data would be in addition to existing ASP reporting requirements. For newly approved drugs that may not have any international pricing data, CMS could still calculate a model payment amount by applying a standard factor. For example, CMS may assume the same ratio for the new drug as the IPI, which would be the average volume-weighted payment amount across all Part B drugs included in the model.

    CMS anticipates that model vendors would negotiate drug purchase prices that are lower than the IPI-based Medicare payments in order to avoid financial loss. These lower prices would have a cascade effect on other government discounting requirements. Although CMS could use its Medicare waiver authority under Social Security Act § 1115A to exclude prices offered to model vendors from ASP, the waiver authority does not extend to Medicaid. Therefore, manufacturer prices to model vendors would have to be taken into account in Medicaid rebate best price. Since foreign prices are generally lower than U.S. prices, best price would often be reduced, resulting in higher Medicaid rebates and lower ceiling prices under the 340B drug discount program.

    Comments on this ANPRM are due to CMS no later than 5:00 pm on December 31, 2018. We will be tracking developments regarding this rule-making and other federal drug pricing legislation and rule-makings.

    Categories: Uncategorized

    HP&M Director Larry Houck Receives NASCSA President’s Award

    Last week during the 34th annual National Association of State Controlled Substances Authorities (“NASCSA”) conference in Scottsdale, Arizona, Hyman, Phelps & McNamara, P.C. (“HP&M”) Director Larry Houck was honored with the organization’s 2018 President’s Award. NASCSA provides a forum for state, federal and local regulators, healthcare professionals, law enforcement and industry to address the misuse, abuse and diversion of controlled substances. NASCSA presents the President’s Award annually for notable service contributions to NASCSA’s mission.  Larry is a longtime member of NASCSA’s Resolutions and Bylaws Committee.

    Larry, along with the rest of HP&M’s Controlled Substances team, provides counsel on a wide-range of controlled substance issues, including regulatory and enforcement actions by the DEA, along with helping clients navigate federal and state licensing, registration, and compliance issues.

    NASCSA will hold next year’s conference in Richmond, Virginia, on October 21-24, 2019.

    HRSA Releases Proposed Rule to Move Up Effective Date of 340B Final Rule

    On November 2, 2018, the Health Resources and Services Administration (“HRSA”) released a proposed rule to move up to January 1, 2019 the effective date of implementation and enforcement of the previously delayed final rule implementing the 340B Drug Discount Program (“Final Rule”). The Final Rule, which was originally published on January 5, 2017, established the methodology for calculating the 340B ceiling price (including the so-called penny pricing policy) and civil monetary penalties (“CMPs”) for knowing and intentional overcharges of 340B covered entities. (See our original post regarding the Final Rule here.) There were five delays of the effective date of the Final Rule, the most recent of which delayed the effective date until July 1, 2019 (see our post here). However, if the rule is finalized, the implementation date and the effective date would both be January 1, 2019. The proposed rule requests comments on the new effective date by November 23, 2018.

    In its most recent decision to delay the effective date, HRSA attributed the need for the delay to the fact that the government was developing comprehensive policies “to address the rising costs of prescription drugs . . . in government programs, such as Medicare Parts B & D, Medicaid, and the 340B Program.” 83 Fed. Reg. 25943, 25944 (June 5, 2018). In explaining the decision to now move up the effective date, HRSA stated that the Department of Health and Human Services (“HHS”) “has determined that the finalization of the 340B ceiling price and civil monetary penalty rule will not interfere with the Department’s development of these comprehensive policies. Accordingly, the Department no longer believes a delay in the effective date is necessary and is proposing to change the effective date of the rule from July 1, 2019, to January 1, 2019.” 83 Fed. Reg. 55135 (Nov. 2, 2018).

    HHS’s decision to advance the effective date of the Final Rule was likely influenced by a lawsuit filed on September 11, 2018 by the American Hospital Association (“AHA”) and other organizations. See American Hospital Association et al. v. the Department of Health and Human Services et al., Case 1:18-cv-02112 (D.C.D.C. 2018). The plaintiffs allege that HRSA’s repeated delays in finalizing the Final Rule are arbitrary and capricious and constitute unreasonably delayed agency action under the Administrative Procedure Act. Plaintiffs request injunctive relief to require HHS to make the Final Rule effective within 30 days after judgment on the suit. On October 15, 2018, HHS moved to stay the suit on the basis that it intended to propose advancing the effective date to January 1, 2019. However, on November 2, 2018, the Court issued an order declining to stay the case, reasoning that HHS cannot guarantee that the proposed new January 1 effective date will be finalized, nor is it certain that, even if it is finalized, it will become final by that date. Order at 3. If the Final Rule does become effective on January 1, 2019, as proposed, the lawsuit will likely be withdrawn or dismissed. However, for now, the parties have been ordered to brief the case.

    Categories: Health Care

    The Obesity Epidemic: FDA’s Waistline Continues to Expand!

    Waaaaayyyy back in 2012, when life (and practicing food and drug law) was simpler, something caused us to study and evaluate the year-over-year change (i.e., the change in girth by the number of pages) in Title 21 of the Code of Federal Regulations (“CFR”) from 1999-2012 and the year-over-year change in Title 21 of the United States Code from 1994-2011.  Our data showed that between the period of 1999 and 2012, the CFR grew by a total of 423 pages (10%), and that between 1994 and 2011, the FDC Act grew by a whopping 324 pages (83.72%).

    Well, here we are in Fall 2018, a little more than 6 years after our original “waistline” post, and the world has changed a lot (according to BuzzFeed at least).   Practicing food and drug law – and just keeping track of FDA’s day-to-day actions – has become more difficult and complicated.  (But that’s what keeps things fresh and exciting for us!)  So when we pulled up a copy of the most recent version of the FDC Act published by the House of Representatives (as amended through Public Law No. 115-234, enacted on August 14, 2018), and realized that the statute was once again changed with the President’s recent enactment of the “Substance Use–Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act” (“SUPPORT for Patients and Communities Act”), we decided to revisit and update our old “waistline” post numbers.

    With all of the legislation enacted over the past 6 years and with the number of rules promulgated by FDA (and notwithstanding the Trump Administration’s so-called “2-for-1” Executive Order), we knew before our reassessment that there would be growth in both the CFR and the FDC Act. But by how much remained to be answered.

    As shown in the tables below, between 1999 and 2018, the CFR grew by a total of 760 pages (18.68%); and between 2012 and 2018, the CFR grew by 337 pages (7.5%). Meanwhile, between 1994 and 2017, the FDC Act grew by 499 pages (128.94%); and between 2011 and 2017, the FDC Act grew by 175 pages (24.61%).  It is no wonder, then, that food and drug law is such a hot area of the law!  While most of the CFR volumes had modest growth between 2012 and 2018, and a couple that decreased in size, Volume 2 (foods) experienced the greatest growth percentage-wise (20%), while Volume 8 (medical devices) experienced the greatest growth in pagination-wise (131) (by just by a single page over the page growth in Volume 2).

    We noted back in 2012 that “our study shows that although there has been significant growth in the FDC Act, the CFR, which implements the law, has not kept up,” and that there’s “a theory for this seemingly odd result: FDA has been issuing far fewer regulations, and instead, has been implementing the law through guidance and other policy documents.” That’s still true today; however, there’s a twist.

    We don’t have enough time on our hands to count the number of pages of FDA guidance documents; but we can look into the total number of guidance document FDA has issued over the years. According to our data (obtained through the Internet Archive), in January 2015, FDA’s “Search for FDA Guidance Documents” webpage, identified 2,995 entries. Today that same website lists only 2,672 entries to search through.  That’s a 10.78% decrease in the number of guidance documents in nearly 4 years.  We’re not entirely sure why there’s been an apparent drop in the number of guidances, but it may be the case that FDA has withdrawn old and no longer relevant guidances (and perhaps as a result of the “2-for-1” Executive Order – see here).

    We’ll probably revisit all of these numbers again in several years. And just as we look back on 2012 from the vantage point of 2018 and reminisce about a simpler time, we’ll probably look back on 2018 as a simple time from the vantage point of . . . let’s say 2024.

    Categories: FDA News |  Miscellaneous

    HP&M Weighs in on FDA’s “Technical Assistance” to Proposed IVD Legislation

    It’s been about two months since FDA issued its Technical Assistance (TA), and the buzz around FDA’s draft legislation has not died down. In fact, FDA has continued to promote the proposal, including a speech by Commissioner Gottlieb’s Chief of Staff, Lauren Silvas, in late September at the Precision Medicine World Conference, in which she said the proposal came “from a thoughtful exercise where we carefully considered what works well for diagnostics.”  After having received many questions as to what we thought of the draft, we thought it was about time that we weighed in again.

    As we noted in our original blog post (here), a legislative approach holds promise.  With some of the large labs and IVD manufacturers having bought into the concept of LDT/IVD reform, it is now more likely (more so than back in 2014 with the draft guidances) that we will see sweeping changes for the IVD regulatory framework.  That said, we agree with ACLA and AdvaMed that additional, significant clarity is needed before this or any other legislation is passed.

    While most commenters have focused on why are there no longer moderate risk tests and how will Pre-Cert work and a few larger topics, we wanted to highlight a few smaller issues that could also present significant confusion. This underscores a key concern over any legislation that is enacted: details matter.  The nuts-and-bolts of regulation will have a critical impact on the real-world impact of any legislation.  A few of these issues we observed in the TA are noted below, but these same concepts would apply to any future legislation.

    Test Platforms

    The proposed TA provides little to no information as to how general purpose test platforms will be regulated. Test systems, like DNA genetic analyzers, liquid chromatography, and mass spectrometry, are the hardware on which most LDTs are run.  These platforms are typically analyte/test agnostic and are, therefore, currently 510(k)-exempt.  If and when these instruments are bundled with reagents for a specific clinical application they typically become subject to premarket clearance or approval requirements.  Test platforms are included within the new definition of an in vitro clinical test, and there appears not to be any exemption from pre-market review for these systems.  There are limited premarket exemptions for components and 510(k)-exempt devices, but these exemptions specifically exclude test platforms.

    So what does this mean for instrument manufacturers under the draft TA? Must they obtain premarket approval for their instrument and would the standard for approval of a generic instrument be different from a full test? It is unclear.  The TA implies that test platforms may require premarket approval.  In one of the final sections of the TA, it states that test developers using test platforms that “was not cleared, authorized, or approved” by FDA may continue to do so for five years after enactment of the legislation.  (Section 4(f)).  Beginning five years after enactment, test developers must use test platforms that comply with the Act.  Again, what it will mean to comply is unclear.  If the intention is that the current exemption for test platforms would satisfy the “cleared, authorized, or approved” requirement, that should be explicitly stated.

    Components, Parts, and Accessories

    Like test platforms, many components, parts, and accessories are currently 510(k)- exempt because they, themselves, are not the test – they are merely the building blocks that a developer could use to build a test. The TA appears to acknowledge this fact and included an exemption for “components, parts, and accessories” that are subject to further development (Section 3, Section 587A(b)).  The definition of an in vitro clinical test appears to specifically carve out certain components, parts, and accessories in Section 201(ss)(1)(F).  In the pertinent section of the proposed regulations, however, the definition of “components, parts, and accessories,” points to Section 201(ss)(1)(E) (not F), which according to the draft TA, is limited to software only.  It is possible that this is a typographical error, but it might also be a signal that FDA would like to take a more limited approach to the types of components, parts, and accessories that would be exempt from the premarket requirements.

    Research Use Only

    FDA has not been fond of the way some RUO products have been promoted and used. While FDA specifically excludes other non-clinical products, such as tests for law enforcement, from the proposed requirements, there is no similar exemption for RUO products.  The TA’s labeling provision (Section 2, Section 587K(d)(4)) does include an exemption from the labeling requirements and performance standards (21 C.F.R. Part 861) only for RUO products.  This section also notes that FDA should modify the applicable regulations as needed.  It is unclear how or why the RUO regulations would need updating if FDA’s position regarding RUOs is not changing.  The limited exemption and the statement that FDA will update the regulations leave open the question of whether and how FDA may modify its position regarding RUOs.  RUOs are important elements of in vitro clinical tests and it could be detrimental to the industry if FDA were to begin over-regulating RUOs.

    Grandfathered Tests

    Grandfathering may be one of the most important concepts in the entire draft. The provision is somewhat awkwardly worded, however, and limited.  An LDT is exempt, under the proposal, if (1) it was developed by a CLIA-certified high-complexity lab; (2) it is “for use only within that certified laboratory;” (3) it has not been cleared or approved; (4) it was offered more than 90 days before enactment of the legislation; and (5) it has not been modified within 90 days prior to enactment.  (Section 2, Section 587A(c)(2)).  Criteria one and two align with FDA’s definition of an LDT.  The problem with these two criteria, however, is that FDA has acknowledged that many important LDTs may not meet these narrow, strict criteria (See FDA’s draft LDT Guidance at 5-6).  For example, a company that developed a test in its small development lab and then moved to a commercial lab for validation prior to commercial launch would not meet FDA’s criteria (1) and (2).  We have not, however, seen FDA object to such a test that was developed and owned by a single company as not being an LDT, but according to the draft statute such a test would not be grandfathered.  Criterion 5 could also be particularly far-reaching, by seemingly freezing any changes.  Given the nature of laboratory assays, that criterion may be difficult to meet, and also counter-productive if it allows no flexibility to labs to make any adjustments.  What would happen to these tests is an important question which should be clarified prior to enactment.

    While we view the draft TA as a creative approach, significant additional clarification is needed. Even if additional clarification is added to the legislation, even more detail will be needed in the form of regulations and guidance.  While these are developed, there should be a significant phase-in time for companies to come into compliance.  As worded, the draft TA would take effect immediately and encompasses tests that entered the market within 90 days prior to enactment.  (Section 2, Section 587A(c)(2)(A)).  This could potentially remove important tests from the market as they will have inadequate time to come into compliance with the new requirements – in fact, they may not even understand what those requirements are.  It is important to recall that FDA’s draft LDT guidance included phase-in requirements that lasted years, similarly the Quality System Regulation had a two-year phase in to allow for companies to come into compliance.  Any proposed LDT legislation should include ample time to allow labs and manufacturers to come into compliance.

    What will ultimately happen to the TA or other IVD legislation is uncertain. Clearly, a new law will not be enacted this year.  Given the competing perspectives on IVD regulation and the different stakeholders, the fate of future legislation is a large question mark.  But what should not be a question mark is that if legislation does emerge, the details will be critically important.

    Relief At Last? DC Circuit Rules on Rx PEG-3350 ANDAs

    Only ten years after initiating the withdrawal process, FDA approval for prescription PEG-3350 is officially withdrawn. The D.C. Circuit issued an unpublished opinion this week affirming FDA’s April 2018 Order withdrawing approval for several PEG-3350 ANDAs and denying requests for a hearing by the affected ANDA holders. While FDA initially aimed to withdraw all prescription ANDAs for PEG-3350, which is indicated for use as a laxative, by May 2, 2018, FDA issued a stay extending the withdrawal date to November 2, 2018 to give sponsors time to wind down their sales programs. This D.C. Circuit decision comes just before this deadline – right in time for the withdrawal to take effect as scheduled.

    As we explained in a 2014 blog post, FDA initiated these proceedings in 2008 with a Notice for an Opportunity for a Hearing on its proposal to withdraw approval of ANDAs for PEG-3350 due to FDA’s policy prohibiting simultaneous marketing of the same drug as prescription and OTC. FDA approved an OTC version of PEG-3350, MiraLAX, in October 2006, and subsequently sent letters to ANDA sponsors of PEG-3350 stating that section 503(b)(4) of the FDC Act “does not permit both Rx and OTC versions of the same drug product to be marketed at the same time.” As such, the letters state that the prescription PEG-3350 products are misbranded and may not be legally marketed. In 2008, FDA issued its Notice for an Opportunity for a Hearing on the issue, which explained FDA’s position that the same drug product may not be marketed as both a prescription and an OTC drug product unless some meaningful differences between the two products exist. FDA specified that a meaningful difference includes differences in the active ingredient, dosage form, strength, route of administration, indications, or patient population. With no “meaningful difference” between the prescription and OTC version of PEG-3350, FDA determined that the prescription version is now considered misbranded (based on the inclusion of the “Rx Only” statement in its labeling, as is legally required for prescription drug products).

    FDA issued its Notice of Opportunity for a Hearing and several sponsors requested a hearing, but FDA did nothing until May 2014. In May 2014, FDA denied the requests for a hearing and issued an order withdrawing approval of the PEG-3350 ANDAs. But FDA didn’t finalize that Order for another 4 years. That’s why this constipation controversy didn’t reach the courts until 12 years after the OTC drug was approved.

    In April 2018, FDA issued a final Order denying the requests for a hearing and withdrawing approval for the PEG-3350 ANDAs, and the ANDA holders promptly challenged that Order in the D.C. Circuit.   Hyman, Phelps & McNamara, P.C. represented one of the ANDA holders. The ANDA holders challenged FDA’s determination that “no meaningful difference” exists between the prescription and the OTC versions of the PEG-3350, as well as the procedures FDA used to adopt such an order. The ANDA holders argued that differences in dose duration constitute meaningful differences. The OTC version recommends a one-week period of use while the prescription version recommends a two-week period. The ANDA holders argued that there are safety differences between these two periods of use resulting from misdiagnosis or the masking of more serious conditions, but because patients should be in a doctor’s care by day 8, the Court upheld FDA’s determination that it is not a meaningful difference. The ANDA holders also urged the Court to consider off-label use of the OTC product (i.e. use for more than a week), but the Court held that FDA “properly carried out its analysis within the context of on-label use.”

    With respect to the procedural issues raised, the Court held that FDA did not arbitrarily or capriciously decline to give weight to sponsors’ submissions and that they were not entitled to a hearing. Further, the “meaningful difference” standard did not need to be set forth through rulemaking. Indeed, FDA had given petitioners adequate notice of the standard through the initial 2008 Notice.

    While the unpublished per curiam decision is not precedential, it does—to our knowledge— represent the first federal appellate court consideration of FDA’s meaningful difference standard. Other issues, such as whether FDA’s interpretation of the prescription and OTC labeling provisions to preclude simultaneous marketing may have First Amendment implications, were not raised in this litigation and may continue to arise and move through the court system. Fortunately, we probably won’t be providing many more laxative puns—at least with respect to this issue—for a while.

    Cybersecurity Déjà Vu

    On October 18, FDA issued a new draft guidance document, Content of Premarket Submissions for Management of Cybersecurity in Medical Devices (“Draft Guidance”). When final, it will supersede the 2014 guidance document of the same name (“Current Guidance”). The guidance comes shortly after release of the MITRE’s  Medical Device Cybersecurity Regional Incident Preparedness and Response Playbook, a document FDA contributed to intended to guide healthcare delivery organizations in preparedness and response related to medical device cybersecurity incidents.

    We previously posted on the Current Guidance here, here and here. The topics we blogged about back then, including premature enforcement of a draft guidance and heightened requirements for establishing substantial equivalence of software devices reviewed in the 510(k) program, are concerns we have again with release of the Draft Guidance.

    Back in 2013, we wrote that FDA appeared to be requesting cybersecurity information for software devices while the guidance was still a draft. We are again aware of recent additional information requests asking for more detailed cybersecurity information, beyond that described in the Current Guidance, and similar to that recommended in the Draft Guidance.  We also previously wrote that, for 510(k) devices, regardless of the predicate device’s design or supporting documentation, FDA would expect to see substantial documentation related to the device’s cybersecurity.

    The Draft Guidance expands significantly the recommendations for cybersecurity design expectations, level of detail used in describing a device’s cybersecurity considerations and the amount and type of documentation required in a premarket submission. It appears that 510(k) devices may again need to start meeting an even higher standard of cybersecurity to be considered substantially equivalent.

    The Draft Guidance clarifies that it is applicable for “devices that contain software (including firmware) or programmable logic as well as software that is a medical device.” Draft Guidance at 5. It further defines two tiers of devices according to the cybersecurity risk, noting that the device’s cybersecurity risk is different from the device’s overall risk in determining its classification. Tier 1 is for devices with higher cybersecurity risk, defined as devices where the following criteria are met:

    1) The device is capable of connecting (e.g., wired, wirelessly) to another medical or non-medical product, or to a network, or to the Internet; AND

    2) A cybersecurity incident affecting the device could directly result in patient harm to multiple patients.

    Id. at 10.

    A Tier 2 device is one that does not meet the Tier 1 criteria. For Tier 2 devices, the Draft Guidance recommends that sponsors include the documentation discussed for Tier 1 devices or “provide a risk-based rationale for why specific cybersecurity design controls” are not appropriate. Id. at 11.  The concept of an incident resulting in harm to “multiple patients” is new and not provided with any discussion.  It will be interesting to see if FDA and sponsors reach different conclusions in terms of identifying types of cybersecurity incidents that could directly result in patient harm to multiple patients and thus whether a rationale will be acceptable or detailed design documentation will be needed in their premarket submission.

    Like the Current Guidance, the Draft Guidance provides definitions, discussion of general principles related to cybersecurity controls and cybersecurity functions and cybersecurity documentation to be submitted in a premarket submission. However, the Draft Guidance expands in pages (from 7 to 24) and in detail related to device cybersecurity design, perhaps even being considered prescriptive. Likewise, new information is recommended in device labeling related to cybersecurity and more detailed design and risk management documentation related to cybersecurity should be submitted in a premarket submission.

    While there is a lot of new information in the Draft Guidance that could be discussed, two areas stand out: (i) the cybersecurity bill of materials (CBOM) and (ii) system diagrams.

    The Draft Guidance defines a CBOM as “a list that includes but is not limited to commercial, open source, and off-the-shelf software and hardware components that are or could become susceptible to vulnerabilities” and recommends that the CBOM be included in the device labeling and submitted in premarket applications. The Draft Guidance further recommends that the “device design should provide a CBOM in a machine readable, electronic format to be consumed automatically.” Id. at 17.  It is not clear whether some sponsors may consider this a disclosure of proprietary design information.

    The Draft Guidance recommends that premarket submissions include:

    System Diagrams sufficiently detailed to permit an understanding of how the specific device design elements (from section V) are incorporated into a system-level and holistic picture. Analysis of the entire system is necessary to understand the manufacturer’s threat model and the device within the larger ecosystem.

    Id. at 21.

    For a large, complex software system, the amount of documentation will be extensive. Diagrams, however, may not necessarily be the best method of communicating the information. Unlike many recent guidance documents, the Draft Guidance does not include examples of diagrams to show what they should look like or how they might be used.  Such examples might have been helpful to sponsors evaluating how best to incorporate the recommendations into their design control procedures and design documentation.

    As the recommendations in the Draft Guidance apply to the design of the device, sponsors will hopefully be provided a transition period to implement and validate recommended design expectations once the Draft Guidance is finalized. Unfortunately, no such transition is mentioned.  To the contrary, as noted above, we are already aware of requests for more detailed cybersecurity information in premarket submissions.  On that note, one recommendation in the Draft Guidance that sponsors may want to implement immediately is use of the pre-submission process to “discuss design considerations for meeting adequacy of cybersecurity risk management throughout the device life-cycle.” Id. at 11.

    * Senior Medical Device Regulation Expert

    Categories: Medical Devices

    FDA Issues Two New Guidance Documents on Voluntary Consensus Standards, Consolidating and Replacing Earlier Guidance

    On September 14, 2018, FDA issued two new guidance documents on voluntary consensus standards used in medical device premarket submissions: (1) a draft guidance titled “Recognition and Withdrawal of Voluntary Consensus Standards” (Draft Guidance); and (2) a final guidance titled “Appropriate Use of Voluntary Consensus Standards in Premarket Submissions for Medical Devices” (Final Guidance).

    Voluntary consensus standards are standards developed by voluntary consensus standards bodies, such as the International Organization for Standardization (ISO) or the International Electrotechnical Commission (IEC).  The Food and Drug Administration Modernization Act of 1997 (FDAMA) (Pub. L. No. 105-115) and the 21st Century Cures Act of 2016 (Pub. L. No. 114-255) amended section 514(c) of the Federal Food, Drug, and Cosmetic Act (FDC Act), requiring FDA recognition of voluntary consensus standards.

    The purpose of FDA’s formal recognition of consensus standards is to streamline the premarket review process for medical devices. FDA-recognized consensus standards are standards that FDA has vetted and determined are appropriate to support clearance or approval of a device. This formal recognition allows companies to submit a declaration of conformity with a recognized standard in a premarket application, rather than submit complete data and test reports demonstrating conformity with a standard.

    These guidance documents consolidate and supersede earlier guidance documents on the topic of voluntary consensus standards.  The Draft Guidance, when final, will supersede a document titled “CDRH Standard Operating Procedures for the Identification and Evaluation of Candidate Consensus Standards for Recognition,” issued in September 2007.  The Final Guidance supersedes three earlier guidance documents: “Recognition and Use of Consensus Standards” (issued in September 2007), “Frequently Asked Questions on Recognition of Consensus Standards” (issued in September 2007), and “Use of Standards in Substantial Equivalence Determinations” (issued in March 2000).

    Draft Guidance

    The Draft Guidance describes FDA’s process for choosing to recognize voluntary consensus standards and to withdraw recognition of standards.

    The 2007 document the Draft Guidance is intended to replace, “CDRH Standard Operating Procedures for the Identification and Evaluation of Candidate Consensus Standards for Recognition,” is more akin to an internal FDA procedure, even though it is labeled as “Guidance for Industry.”  The 2007 document described FDA’s internal workflow for identifying standards for recognition and reviewing proposals by outside persons for FDA recognition.

    The Draft Guidance shifts the focus, addressing FDA’s recognition and withdrawal processes from the perspective of industry.  It is largely simplified compared to the 2007 document, and describes industry’s interaction with FDA regarding FDA-recognized consensus standards.

    The Draft Guidance outlines the process for requesting recognition of a standard. It lists certain elements required to be included in a request for recognition, such as the title of the standard, a proposed list of devices for which a declaration of conformity should routinely apply, and identification of the testing, performance, or other characteristics of the device that would be addressed by the declaration of conformity.

    Notably, the list of required elements in the Draft Guidance includes a “basis for recognition, e.g., including the scientific, technical, regulatory, or other basis for such request.” The 2007 document does not require requests for recognition to include an explanation of the basis for the request.

    The Draft Guidance notes that when FDA receives a request for recognition of a standard, it will send an acknowledgment letter to the requester. The letter will identify a contact person at FDA who is assigned to oversee the recognition request. As FDA conducts its assessment of the recognition request, it may contact the requester for clarification or additional information about the request. The 2007 document, in contrast, did not describe any mechanism for follow-up or additional communication with the Agency about a request.

    The Draft Guidance states that FDA’s goal is to issue a decision of complete recognition, partial recognition, or non-recognition no later than 60 calendar days after a request is received. The Agency will then issue a decision letter to the requester and announce decisions to recognize a standard in the Federal Register.  The list of recognized consensus standards is also reflected in FDA’s online database: Recognized Consensus Standards.

    The Draft Guidance explains that there are two “primary situations” where FDA may decide to withdraw recognition of a standard: (1) when a new edition of the standard is issued; and (2) when FDA determines that the recognized standard is “no longer appropriate for meeting a requirement regarding devices” (as stated in section 514(c)(2) of the FDC Act). The Draft Guidance does not provide any detail about the criteria FDA may use to determine when a recognized standard is “no longer appropriate.”

    Final Guidance

    The Final Guidance describes appropriate use of voluntary consensus standards in device premarket submissions, largely consolidating the information in the three superseded guidances. It describes the appropriate use of both FDA-recognized and non-recognized consensus standards in device premarket submissions.

    The guidance outlines two appropriate uses for voluntary consensus standards in premarket submissions: (1) submission of a declaration of conformity (DOC) and (2) “general use” of the standard. A DOC may only be submitted for FDA-recognized standards. “General use” of a consensus standard refers to “situations where a submitter chooses to conform to a consensus standard, in part or in whole, but does not submit a DOC.”

    The guidance lists the required elements of a DOC. The list of required elements is shortened compared to list in the superseded guidance, “Recognition and Use of Consensus Standards.” It only requires a statement of conformity with the standard and information about the sponsor, standard, and device. The list of required DOC elements also includes information about any limitation on the validity of the DOC, such as how long the declaration is valid, what was tested, and/or concessions made about testing outcomes.

    The superseded guidance included in its list of required DOC elements descriptions of alternative testing performed, inapplicable portions of the standard, and deviations from the standard. The Final Guidance does not include these elements in its list of required DOC elements.

    The Final Guidance states: “A DOC to a consensus standard may be used when a submitter certifies that its device conforms to all of the requirements of a consensus standard that FDA has recognized . . . . In a DOC, the submitter may not deviate from the consensus standard that FDA has recognized or decided to recognize.” This seems to indicate a change in approach from the superseded guidance, in that a DOC is no longer appropriate if there are any deviations from the standard, whereas under the previous guidance such deviations could be included in the DOC itself.

    The Final Guidance includes a helpful chart outlining when a sponsor should submit supplemental information with a DOC, such as a summary of acceptance criteria, results, or a complete test report. Generally, the guidance indicates that supplemental information is necessary when the standard does not include specific acceptance criteria or when the standard is too general or broad in scope for FDA to determine whether conformance to the standard is sufficient support to make a regulatory decision. The guidance provides ISO 14971 (Medical devices – Application of risk management to medical devices) as an example of a consensus standard that would require submission of supplementary information, because this standard is broad in scope, process-oriented, and does not include specific acceptance criteria.

    The Final Guidance explains that “general use” of a consensus standard, instead of submission of a DOC, is appropriate when FDA has not recognized a standard or the submitter deviates from a recognized standard. FDA recommends that sponsors, when citing general use of a standard, include the basis for the use of the standard, along with the underlying data and documentation that supports conformance with the standard. The guidance does not provide any information about the utility of citing general use of a standard in a premarket submission, given that a sponsor would cite general use of a standard in situations where FDA has not recognized a standard or the sponsor has deviated from a recognized standard.

    The Final Guidance describes the transition period when FDA has withdrawn an older consensus standard that has been replaced with a new edition. This is a common issue that sponsors face while drafting device premarket submissions. The guidance explains that FDA’s online recognized consensus standard database includes a “Supplemental Information Sheet” (SIS) for each recognized standard. In situations where a recognized standard is replacing an earlier recognized standard, the SIS will include information about the transition period. If a transition period expires before submission, a sponsor will need to retest to the new standard prior to submission. The guidance notes that if a standard changes during active review of a premarket submission, the Agency will continue to review the submission based on the previously recognized standard. Similarly, if a standard changes after clearance, the sponsor will not have to retest to the new standard.

    The Final Guidance describes the use of promissory statements (i.e., a statement in which a sponsor indicates that it is not yet known whether a device conforms to a consensus standard, but that the device will conform to the standard prior to marketing). FDA indicates in the guidance that promissory statements are usually not appropriate to support a premarket submission, and a promissory statement cannot be submitted along with a DOC.

    Finally, the Final Guidance discusses the limitations of consensus standards. The guidance cautions that a device may raise issues not addressed by consensus standards. A premarket submission may require animal or clinical studies, additional performance specifications, and other additional information to support clearance or approval, even if it conforms to relevant consensus standards.

    The new Draft Guidance and Final Guidance provide condensed and consolidated information about voluntary consensus standards. These two guidances cover the two major areas where industry interacts with the Agency on the topic of voluntary consensus standards: requests for recognition of standards and use of standards in premarket submissions. At the very least, sponsors will likely be grateful that they can find the key information about voluntary consensus standards in two guidance documents that was originally spread across four separate guidances.

    Categories: Medical Devices

    CDRH Introduces Third 510(k) Pilot in Less than Two Months – This Time on OCT Devices

    The Food and Drug Administration’s (FDA) Center for Devices and Radiological Health (CDRH) recently announced a new voluntary pilot program to streamline review of 510(k) submissions for ophthalmic optical coherence tomography (OCT) devices.

    OCT devices are devices that are used for viewing, imaging, measurement, and analysis of ocular structures and may be used to aid in the detection and management of various ocular diseases. These Class II devices require premarket notification (510(k)) prior to marketing and must demonstrate substantial equivalence to a legally marketed predicate.  However, there are no currently available FDA-recognized standards or published guidance that describe performance testing for OCT devices.  Consequently, 510(k) applicants have a hard time knowing what information FDA wants, resulting in FDA requests for additional information.

    The pilot program aims to improve consistency and predictability in 510(k) submissions for OCT devices. FDA intends to use the program to evaluate whether, through the pre-submission process, individual testing recommendations, regarding non-clinical and clinical evaluation of OCT devices, and increased interactive engagement improve the process and reduces overall total time to decision.

    Requests for participation in the voluntary OCT 510(k) Pilot Program will remain open for one year or until a total of nine participants have been enrolled. Participants must intend to submit a traditional 510(k) within one year of acceptance into the program, commit to supporting an interactive review process, and commit to incorporating FDA feedback, including recommendations provided on the testing plan. Participants will have to state how or where in the 510(k) this prior feedback was addressed. FDA will notify manufacturers of their eligibility and enrollment status.

    Upon completion of the program, manufacturers will have the opportunity to provide individual feedback on the voluntary OCT 510(k) Pilot Program.

    This marks at least the third 510(k) focused pilot introduced in the last several weeks (we previously blogged about the Special 510(k) Program and the Quality in 510(k) Review Program.) and eighth pilot in four years. It is hard to predict whether there will be any other new initiatives to keep up with as we close 2018, but we look forward to seeing whether this OCT 510(k) pilot will yield a consistent and predictable process that results in lower overall total time to decision and, if so, whether it can be translated to other devices that lack clear testing recommendations.

    * Senior Medical Device Regulation Expert

    Categories: Medical Devices