On April 29, 2019, the Food and Drug Administration (FDA) convened a public meeting entitled “Patient Perspectives on the Impact of Rare Diseases: Bridging the Commonalities.” This meeting was attended by people with rare diseases, their caregivers and family members, patient advocates, industry representatives and FDA staff. FDA had proposed this meeting as part of its ongoing efforts to broaden the inclusion of voices of patients with rare diseases into all phases of drug development and review. The specific focus of this meeting was to try and ascertain how rare diseases may share commonalities in their symptomatology and challenges. Dr. Janet Maynard, the Director of the FDA Office of Orphan Products Development, said in her opening remarks:

While the differences between diseases are critically important, it is also important to assess commonalities to synergize product development in rare diseases.

On May 29, 2019, Hyman, Phelps, & McNamara, P.C.’s (HP&M’s) James Valentine and Larry Bauer submitted a comment to FDA’s docket for the meeting that summarized their  analysis of the 16 externally-led Patient Focused Drug Development (PFDD) meetings that HP&M has been involved in helping to plan and moderate. After each PFDD meeting, a Voice of the Patient report is written that summarizes the findings from the meeting. These reports are in the public domain and can be accessed by anyone wanting to learn about how specific rare diseases affect patients and families. HP&M systematically reviewed the 12 reports that were currently available to explore what commonalities might exist between rare disease patient groups and what symptoms are unique.

The Voice of the Patient reports nicely capture patients’ experiences by directly quoting them.

A man in his fifties with pachonychia congenita (PC) used the analogy of a bank account to describe the careful planning required for daily activities due to limited mobility-how the plantar pain of PC controls his life: “This one (bank account) isn’t one filled with money, but instead it’s filled with a number of steps that I can physically walk each day before tremendous pain sets in for me. And just like a checking account filled with money, I spend it very wisely or try my best.

The themes that emerged as commonalities mirrored, in large part, the themes that were heard at the FDA meeting. While each rare disease has a different etiology and disease course, it was surprising how many core symptoms are shared across diseases. The main areas of shared symptoms and disease burden included fatigue, sleep disturbance, pain, mobility impairment, and decreased ability to perform activities of daily living (ADLs). Further exploration of these commonalities will potentially support future medical product development by informing trial designs and endpoint development that can be used across rare diseases.

As we discussed in a prior posting, U.S.-based hemp production took a giant leap forward with passage of the 2018 Farm Bill, which directed USDA to establish a regulatory framework for the production of “hemp” as defined in that law.  USDA had signaled its intent to engage in notice-and-comment rulemaking (proposed rule followed by a comment period and then a final rule) in the Fall of 2019, with the goal of having a framework in place for the 2020 planting season – see here.  Evidently, the agency is now having second thoughts about that strategy and the associated delays.  The latest unified regulatory agenda states that USDA intends to issue an interim final rule (IFR) in August 2019 – see here.  

Essentially, an IFR is a rule issued without notice-and-comment that can be made effective upon publication.  The issuing agency can then modify the rule based on comments received after the rule’s issuance.  Absent Congressional authority to issue an IFR, an agency that wishes to do so must find “good cause” – meaning that adherence to the notice-and-comment rulemaking procedures otherwise mandated under the Administrative Procedure Act would be impracticable, unnecessary, or contrary to the public interest.  Such a finding is subject to judicial review, and judges tend to construe the “good cause” exception narrowly.  At this point, it’s not clear that any parties with a stake in the future of hemp production would be willing to challenge the validity of USDA’s presumptive finding of good cause to issue an IFR.  Absent such a challenge, it’s conceivable that USDA’s framework could be in place in the Fall of 2019 – at lightning speed in the world of rulemaking. 

In the interim, USDA is advising stakeholders that “all rules and restrictions must be followed per Section 7606 of the 2014 Farm Bill. In other words, no one should try to implement the 2018 Farm Bill production provisions before the final USDA rule is established. USDA cannot help with interpretation and implementation of the laws related to your state permitting and interstate commerce.  For those questions, please seek advice from your legal counsel or state.”

FDA’s Software Pre-Certification (Pre-Cert) Program is intended to create a new streamlined regulatory process for software as a medical device (SaMD) (see our earlier blog posts on the program here, here, here, and here).  In January of this year, FDA released version 1.0 of Developing a Software Precertification Program: A Working Model (Working Model) and an accompanying Software Precertification Program: 2019 Test Plan (Test Plan).  On May 21, 2019 the Agency announced in the Digital Health Software Precertification (Pre-Cert) Program: Participate in the 2019 Test Plan (Announcement) that it now is seeking test cases for prospective testing of the Pre-Cert Program.

For testing, FDA is looking for software organizations of all sizes that plan to submit a De Novo Request or 510(k) for their SaMD in 2019 or shortly thereafter.  They also are looking for software developers that develop both low- and high-risk SaMDs as well as those that intend to develop a SaMD but are not considered a traditional medical device manufacturer.  Participants should not have any outstanding FDA compliance actions and should have an “existing track record in developing, testing, and maintaining software products demonstrating a culture of quality and organizational excellence measured and tracked by key performance indicators or other similar measures.”  Announcement at 2.  In our review of the initial Test Plan, issued in January 2019, it was not clear whether only those companies pre-certified as part of the pilot program would be eligible to participate.  The current Announcement clarifies that non-pilot companies can participate in this phase of testing.

The Pre-Cert program, as outlined in the Working Model, has four key components following a Total Product Lifecycle (TPLC) approach:

• Demonstrate a culture of quality and organizational excellence through an Excellence Appraisal (pre-certification).
• Determine the SaMD’s required review through Review Determination.
• Conduct a Streamlined Review, and
• Verify a SaMD’s continued safety, effectiveness and performance and the organization’s commitment to culture of quality through post-market Real-World Performance.

As part of the testing, participants must be willing to undergo evaluation for all four components of the TPLC approach, but their submission’s review will not be streamlined.  FDA will conduct an Excellence Appraisal of the participating organization as part of the testing.  However, they do not intend to provide any new precertifications during the testing phase and there is no information regarding whether the Excellence Appraisal might be used in the future, after completion of the Pre-Cert pilot and testing phase.  In addition to undergoing an Excellence Appraisal, participating companies must provide access to their unique key performance indicators that are used to monitor internal processes, collect real-world postmarket performance data and make it available to FDA, be available for consultation with FDA and provide information on the company’s quality management system.  This is all in addition to preparing and submitting the De Novo Request or 510(k) submission and undergoing a standard review.  Other than stating that the testing will occur in 2019, the Announcement does not provide clarity in whether these activities will take place before, during or after review of the marketing application or discuss how long these activities, especially review of postmarket performance data, might last.

Although the Announcement does not describe any potential benefit to participants to offset the additional company time and resources needed for the Excellence Appraisal and additional FDA interactions, testing this new model’s ability to achieve an equivalent basis for SaMD product evaluation is important so we hope some companies will consider it.  If the program is successful, participating companies could see future benefits of shortened review times.  However, given what appear to be significant efforts to participate, we remain concerned that there may not be enough volunteered submissions to adequately validate the program.  For those companies that meet the criteria and want to participate, a statement of interest should be submitted to FDAPre-CertPilot@fda.hhs.gov.

On May 24, 2019, FDA approved Avexis’s BLA for its gene therapy, Zolgensma (onasemnogene abeparvovec-xioi), for treatment of spinal muscular atrophy (SMA).  This represents the first approval of a systemically-administered somatic gene replacement therapy.  (The first gene therapy approved by FDA was Luxturna in Dec. 2017, which is administered locally as a subretinal injection) (see previous coverage here).  Hyman, Phelps & McNamara, P.C.’s  Frank Sasinowski and James Valentine are honored to have aided AveXis in this development program and approval.

This approval is a monumental milestone in the history of personalized, targeted medicine because NOW these therapies that target the root causes of genetic diseases using gene replacement have a proven path to the market.  This is not to say that all issues related to the development and regulation of gene therapies have been solved, but the Zolgensma approval is a demonstration that these issues can be navigated and the goal post of approval can be reached.

This approval comes on the shoulders of FDA regulators in the Center for Biologics Evaluation and Research (CBER).  CBER director, Dr. Peter Marks, has consistently and strongly encouraged the development of gene therapies, while at the same time, as recently as the April 15^th Muscular Dystrophy Association annual scientific meeting, exhorting sponsors to pay keen attention to their manufacturing. CBER officials, and In particular, those in the Office of Tissues and Advanced Therapies (OTAT) which is led by Dr. Wilson Bryan, a neuromuscular expert, deserve acknowledgment for their efforts on both this condition, SMA, and on gene therapies, generally.   As for SMA, OTAT has paid special attention to the Voice of the SMA Patient as witnessed by Dr. Bryan giving opening remarks at the April 18, 2017 externally-led patient focused drug development meeting on SMA, and Dr. Lei Xu, an OTAT neurologist who participated in that meeting.  As for OTAT’s commitment to advancing regulatory science in the arena of gene therapies, Dr. Bryan, for example, at the September 13, 2018 scientific workshop convened by the EveryLife Foundation for Rare Diseases, exhorted gene therapy developers in the rare disease space to employ “efficient development” programs (presentation available here).  One suggestion he noted was for sponsors to “try to hit a home run!” by designing their very first-in-human study to provide evidence of effectiveness because, if it is a home run, it could be the basis for approval.  It is this type of forward-thinking that has allowed the first gene therapies to reach patients in the United States!

All those CBER officials involved in this BLA review, and especially those in the OTAT review team, including Dr. Andrew Bynes, manufacturing review team lead, and Dr. Lei Xu, medical review team lead, worked tirelessly on this and merit special public recognition.

We look forward to contributing to the field of regenerative medicine development.  Prior posts on this topic, including recent FDA guidance documents and policies related to gene therapy, can be found here:

• CBER’s Learnings on Regenerative Medicine Development Reflected in Guidance Updates (Feb. 19, 2019)
• Commissioner Gottlieb and CBER Director Marks Deliver “State of Cell and Gene Therapy” Joint Statement (Jan. 30, 2019)
• FDA Issues Draft Guidance Documents on Expedited Programs & Devices Used with RMATs (Part II of “The FDA’s Comprehensive Regenerative Medicine Policy Framework”) (Dec. 7, 2017)

Yes, FDA’s upcoming public hearing on cannabis is important – and if you registered in time to get a spot in the room, we’ll see you there.  But as stated in the agency’s Federal Register notice announcing the hearing, “FDA does not intend for this hearing to produce any decisions or new positions on specific regulatory questions.”  Rather, the hearing “is expected to be an important step in [FDA’s] continued evaluation of cannabis and cannabis-derived compounds in FDA-regulated products.”  In other words, those who are expecting some significant development on May 31 with respect to the agency’s current stance on issues such as the use of CBD in conventional foods or dietary supplements are bound to be disappointed.

Nonetheless, the hearing is a big deal for at least two reasons.  First, although CBD has taken center stage in the past few months, the hearing is not just about CBD – or even hemp, for that matter.  It’s about cannabis; thus, the hearing includes in its scope both hemp and marijuana.  Second, the hearing will give different stakeholders a very public forum in which to plant their respective flags, and to draw attention to the issues they view as critically important.  Potential benefits of cannabis and its derivatives?  Check.  Potential safety concerns?  Check. Protection of investments in pharmaceutical development?  Check. Consumer access to safe and beneficial dietary supplements?  Check. That alone would be worth the price of admission (if admission weren’t free).

Those coming late to the party can still join in remotely by registering for the online webcast here.

On June 26, 2016, NuTek Food Science, LLC (NuTek) petitioned FDA to recognize “potassium salt” as an optional name for potassium chloride.  Petitioner claimed (and presented evidence) that consumer acceptance of potassium chloride (as alternative to salt or sodium chloride) is hindered by consumers’ association of chloride in the word “potassium chloride” with chlorine or other chemicals.  To improve the acceptance of potassium chloride, Petitioner requested that “the commissioner . . . issue guidance recognizing ‘potassium salt’ as an additional common or usual name for potassium chloride as that ingredient is defined in 21 C.F.R. § 184.1622.”  As discussed in the Petition, potassium has several health benefits; it helps lower blood pressure, reduces the adverse effects of sodium chloride intake on blood pressure, and reduces the risk of recurrent kidney stones.  In fact, as recognized by FDA, potassium is an essential and widely under-consumed nutrient; potassium chloride (or potassium salt) could be used to enhance the amount of potassium in food.  The requirement to identify the ingredient as potassium chloride, however, stands in the way of broader acceptance of the ingredient.

As evidenced by the number of supportive comments, NuTek’s Petition was supported by many in the industry and public interest organizations, such as CSPI.

In FDA’s May 17, 2019 Constituent Update FDA announced the availability of a draft guidance titled “Use of an Alternate Name for Potassium Chloride in Food Labeling.”  In the draft guidance, FDA advises the industry that the Agency has decided to exercise enforcement discretion for declaration of the name “potassium chloride salt” in the ingredient statement on food labels as an alternative to the common or usual name “potassium chloride.”  In the federal register notice, FDA explains that it has concluded that potassium salt (rather than potassium chloride) would be inappropriate because the Agency has no evidence that potassium salt is recognized as the common or usual name for potassium chloride.  FDA also mentions concerns that consumers would confuse the term potassium salt with salt (sodium chloride) or other potassium (non-chloride) salts.  FDA speculates that allowing the addition of the word salt after “potassium chloride” may help consumers better understand the similarities between potassium chloride and sodium chloride (usually identified as “salt”) with respect to taste and function.  The Agency reasons that, because “potassium chloride salt” includes the entire common or usual name of the ingredient, it is unlikely that consumers would confuse it with other potassium-containing salts.  Of course, the term still includes the word “chloride.”  FDA has not addressed NuTek’s claim that consumers shy away from potassium chloride because of the term “chloride.” However, it requests input whether the term potassium chloride salt has benefits over potassium chloride.  Specifically, FDA requests input on two issues:

1. How the name “potassium chloride salt” in the ingredient statement as an alternative to “potassium chloride” will improve consumer understanding and suggestions for other methods to improve consumer understanding. Respondents are asked to provide data or information to support answers.
2. Suggestions and support for names other than “potassium chloride salt.”

To be considered by FDA in finalizing the guidance, comments should be submitted to FDA by July 16, 2019.

Historically, the Food and Drug Administration has called its decisions not to pursue enforcement against or prosecution of legal violations an exercise of “enforcement discretion,” which is a misnomer.  In reality, such decisions are an exercise of “nonenforcement discretion.”  But, whatever it is called, rarely do federal courts rule that FDA must take enforcement actions against violative products.

There have been some exceptions.  See, for example, the decision by Judge Leon of the federal district court in the District of Columbia about FDA’s failure to ban imports of a lethal drug (thiopental) used in prisoner executions, which we blogged about here, and which was affirmed by the D.C. Circuit Court of Appeals.  Beaty v. FDA, 853 F. Supp. 2d 30 (D.D.C. 2012), aff’d, 733 F.3d 1 (D.C. Cir. 2013).  In the same current, but bucking a tidal wave of contrary decisions refusing to order FDA to take enforcement action, comes a recent decision by Judge Grimm in federal court in Maryland, holding that FDA cannot delay or relax enforcement requirements mandated by the Tobacco Control Act, and holding that FDA must require manufacturers of tobacco and other nicotine products (with grandfathered exceptions) to submit applications to market those products before FDA’s announced deadline of 2021 and 2022.  Mem. Op., Am. Acad. of Pediatrics v. FDA, No. PWG-18-883 (D. Md. May 15, 2019) [hereinafter “Grimm Mem. Op.”].

At issue was an FDA August 2017 Guidance that postponed deadlines until at least 2021 or 2022 for manufacturers and distributors of e-cigarettes (and other types of nicotine-containing products) to submit applications for marketing approval, pursuant to the “Deeming Rule” that we blogged about here.  Judge Grimm held that the plain language of the Tobacco Control Act prohibits relevant products “from entering the market without the FDA’s approval,” and that FDA’s “‘wholesale suspension’ of the application filing and approval requirements constitutes a rule amendment or revocation that is subject to review by this Court.”  Grimm Mem. Op. at 32.  Judge Grimm’s opinion went on to hold that “the FDA ‘must’ require filings from manufacturers and approve or deny those filings, that is, it must take actions that are ‘necessary to fulfilling the purposes of the [Tobacco Control] Act.’”  Id. at 33.  FDA’s announcement “in the August 2017 Guidance that certain products that had been deemed to be tobacco products could remain on the market for five years or more without premarket review” was a “‘definitive legal position’ regarding its statutory authority . . . that certain products that had been deemed to be tobacco products could remain on the market for five years or more without premarket review.”  Id. at 40.  He held that FDA’s position “defeats, rather than furthers, the purpose of the Tobacco Control Act by allowing unapproved tobacco products to be manufactured, advertised, and sold for five years or longer.”  Id. at 44.

Judge Grimm noted that “the Supreme Court ‘has recognized on several occasions over many years that an agency’s decision not to prosecute or enforce, whether through civil or criminal process, is a decision generally committed to an agency’s absolute discretion.’”  He cited the decision in Heckler v. Chaney, 470 U.S. 821 (1985), the landmark case on unsuccessful efforts to secure a court order requiring FDA to ban allegedly violative products (Chaney was brought by prison inmates seeking administrative action banning drugs used to administer lethal injections).  But, said, Judge Grimm, Chaney stands only for the proposition that “FDA may decide not to enforce the provisions of the Tobacco Control Act with regard to specific products,” and does not support FDA’s “decision to hold in abeyance” for five or more years “enforcement of mandatory provisions of a statute that Congress viewed as integral to address public health dangers [especially from e-cigarettes and other vaping products] that the agency itself acknowledges are alarming.”  Grimm Mem. Op. at 45-46.  Judge Grimm said that it is not sufficient for FDA to claim it needs “five or more years while it tries to figure out how it will implement the statute, all the while affording those manufacturers responsible for the public harm a holiday from meeting the obligations of the law.”  Id. at 46.  In other words, Judge Grimm said, the assertion of “enforcement discretion” in this case is a “red herring.”  Id. at 45.

FDA had argued to Judge Grimm that the August 2017 Guidance was a policy statement and therefore not a final agency action, so the court had no business considering whether it was legal.  Judge Grimm rejected that argument, holding that “the August 2017 Guidance is not a policy statement; it is tantamount to an amendment to the Tobacco Control Act.”  Id. at 52.  The “August 2017 Guidance implements ‘changes to the statutorily established process,’” he continued, and “[t]hose changes have ‘legal consequences.’”  Id.

This blogpost is not a law review article.  But it bears mentioning that Judge Grimm’s decision brooks a large number of cases in which a court has refused to order FDA to enforce the law.  Years ago, our firm tried to convince a court to order FDA to decide whether to pull generic drug marketing exclusivity from Ranbaxy for its serious data integrity and other manufacturing violations, a request that was denied.  Mylan Pharms. v. FDA, 789 F. Supp. 2d 1 (D.D.C. 2011).  Curiously enough, our firm then represented a different client, allied with FDA, when FDA decided to pull exclusivity on esomeprazole manufactured by Ranbaxy for the same reasons (see here).  Mem. Op., Ranbaxy Labs, Ltd. v. Burwell, No. 14-1923 (BAH) (D.D.C. Mar. 11, 2015).  In addition to Chaney, the following are selected cases that upheld FDA inaction:

• The D.C. Circuit Court of Appeals in Community Nutrition Institute v. Young, 818 F.2d 943, 950 (D.C. Cir. 1987), refused to order FDA to take action against the blending of “contaminated corn with uncontaminated corn,” saying that “FDA enjoys complete discretion not to employ the enforcement provisions of the FDC [Food, Drug, and Cosmetic] Act, and those decisions are not subject to judicial review.”
• The same court ruled in Cutler v. Hayes, 818 F.2d 879, 892 (D.C. Cir. 1987), that it could not order FDA to take enforcement action against “an OTC [over-the-counter] drug that is safe but demonstrably ineffective for its intended use.”
• A court in the Western District of Michigan (Judge Bell) refused a request from Pan American Pharmaceuticals, Inc. that FDA be required to “enforce the pre-approval provisions for new animal drugs against all persons.” Order, Pan Am. Pharms., Inc. v. Kessler, No. 90-1063 (W.D. Mich. Mar. 4, 1991).
• K-V Pharmaceutical Co. tried, and failed, to secure a court order that FDA should pursue pharmacy compounders that were making copies of its approved drug Makena. K-V Pharm. Co. v. FDA, 889 F. Supp. 2d 119, 137 (D.D.C. 2012). (the decision was vacated and remanded, citing Cook v. FDA, 733 F.3d 1 (D.C. Cir. 2013) (the appellate decision on Beaty), and the Drug Quality and Security Act, Pub. L. No. 113-54, 127 Stat. 587 (2013); the case was eventually dismissed with prejudice in July 2014).
• Reversing a district court decision, Natural Resources Defense Council v. FDA, 760 F.3d 151 (2d Cir. 2014), held that a court could not order FDA to renew proceedings to determine whether FDA should withdraw approval of use of penicillin and tetracycline in livestock for subtherapeutic purposes.
• In a case we blogged about here, a court in California held that FDA would not be ordered to require egg producers to label commercial eggs as being from “free range” or “cage free” hens, or from “caged hens.” Compassion over Killing v. FDA, No. 13-cv-01385-VC (N.D. Cal. Dec. 19, 2014).

Judge Grimm has ordered the parties to submit briefs about what remedy he should order, and that process starts within a couple of weeks.

We should also note that our firm has represented clients that manufacture or distribute products that contain tobacco or nicotine.  Our practice is more fully described here.

In a document as interesting for the “why” as the “what,” the Department of Justice, Office of Legal Counsel (“OLC”) recently issued a memorandum legal opinion concerning “Whether the Food and Drug Administration Has Jurisdiction over Articles Intended for Use in Lawful Executions.”

The issuance of an OLC opinion related to the FDC Act, while notable is not, in itself, surprising.  As the DOJ website explains:  OLC “drafts legal opinions of the Attorney General and provides its own written opinions and other advice in response to requests from the Counsel to the President, the various agencies of the Executive Branch, and other components of the Department of Justice.  Such requests typically deal with legal issues of particular complexity and importance or those about which two or more agencies are in disagreement.”

In the past OLC has, for example, offered opinions solicited by FDA’s Chief Counsel, the HHS Acting General Counsel, and joint EPA and FDA requests.  In the present opinion, there is no indication that FDA requested an opinion.  In a footnote, the opinion notes that OLC “solicited and considered the views of FDA and of the Office of the Associate Attorney General.”  What the opinion does not say is why OLC is opining on FDA’s jurisdiction.  The Agency regularly makes jurisdictional determinations and DOJ represents FDA in court when those determinations are challenged.  The opinion notes a current injunction and an FDA position articulated in 2017, but if FDA had re-evaluated the FDC Act, as the opinion notes, the Agency could have simply explained why it did so.  Under Supreme Court precedent, FDA’s interpretation of ambiguous jurisdictional statutory authority is entitled to deference.   Instead, OLC issued an opinion.

OLC concluded that articles intended for use in executions carried out by a state or the federal government cannot be regulated as “drugs” or “devices” under the Federal Food, Drug, and Cosmetic Act (“FDCA”) and that FDA therefore lacks jurisdiction to regulate articles intended for that use.  The OLC opinion may allow states to begin importing a drug used in lethal injection protocols that is no longer available in the US, contrary to a permanent injunction that has banned its import.

In concluding that FDA cannot regulate articles intended for use in lawful executions, the OLC cites to FDA v. Brown & Williamson Tobacco Corp.  In Brown & Williamson (here), the Supreme Court held that Congress had not given the FDA the authority to regulate tobacco products, because if tobacco products were subject to FDA regulation, the FDCA would require their prohibition because they are not safe or effective or any intended use.  FDA v. Brown & Williamson Tobacco Corp, 529 U.S. 120, 137–39 (2000).  The OLC is extending the same reasoning to the FDA regulation of articles intended for use in lawful executions.  OLC’s opinion is not limited to drugs used in lethal injection, a common method of capital punishment, but is broad and covers articles intended for use in lawful executions generally (e.g., electric chairs, gas chambers, gallows, firearms used by firing squads).

The OLC opinion begins with a summary of the regulatory structure of the FDCA and the history of its intersection with capital punishment.  OLC explains that an article may be a “drug” or “device” for some uses but not for others, depending on whether the product is intended to be used to treat disease or other conditions, or to otherwise affect the structure or function of the body.  For example, FDA regulates “medical gases,” but not industrial gases that are chemically identical because the latter do not have a medical purpose.  OLC also explains that FDA does not regulate the “off-label” prescribing of a drug or device for a use not approved by FDA, as off-label prescribing is considered the practice of medicine, which is beyond FDA’s regulatory purview.  According to OLC, state use of FDA-approved drugs in lethal injection essentially amounts to off-label use.

In recent years, many states have had difficulty accessing drugs used in lethal injection protocols from US suppliers.  Many pharmaceutical companies that manufacture drugs used in lethal injection protocols, as well as wholesalers that distribute said products, have publicly objected to their drugs being used in capital punishment and will not sell them to states for that purpose.  In 2009, the only US manufacturer of sodium thiopental, a barbiturate commonly used in multi-drug lethal injection protocols, ceased production of the drug entirely.  When states were no longer able to access sodium thiopental domestically, they then began to import it from international suppliers.  A group of death row inmates challenged the state import of sodium thiopental for lethal injection and the court issued a permanent injunction requiring FDA to block the importation of sodium thiopental on the grounds that it was unapproved and misbranded.  Beaty v. FDA, 853 F. Supp. 2d 30 (D.D.C. 2012) (here; see our previous post here).

After setting forth a history of the FDCA and capital punishment, OLC turns to the aforementioned Brown & Williamson, which established that FDA lacks jurisdiction to regulate articles intended for a use not traditionally regulated by FDA, when those articles cannot be safe and effective for such intended use, and Congress has otherwise made clear its expectation that at least some of those articles shall remain lawful and available for that use.  OLC then extends the same analysis to articles used in capital punishment and comes to three main conclusions:

1. If FDCA applied to electric chairs, gallows, gas chambers, firearms used in firing squads, and substances used in lethal-injection protocols, the statute would effectively ban those articles
2. The Constitution and laws of the United States allow for the continued availability of capital punishment
3. FDA did not expressly assert the authority to regulate articles intended for use in executions at any time before 2017 and that such an assertion cannot be reconciled with the FDCA and other federal law.

In several spots, the OLC opinion notes the limits of its analysis.  For example, it notably declines to discuss whether this analysis of FDA jurisdiction extends to drugs used in physician assisted suicide, stating that “In marked contrast with capital punishment and tobacco products, at the time of the FDCA’s enactment, there was not—so far as we are aware—any history of federal or state laws authorizing human euthanasia.”  OLC Opinion at 25.

Despite these disclaimers, substantively, the OLC opinion provides potential fodder for future jurisdictional fights with FDA. Procedurally, it is a reminder of an additional agency with the executive branch that can opine on FDC Act questions.  As for the “why”, the opinion never explains who requested it.  The Attorney General, White House Counsel?  Was it the result of a dispute between FDA and another agency?  The opinion raises other questions.  Will DOJ and FDA use the opinion in the Beaty litigation?  If so, will the court give it Chevron deference?  We’ll be watching and posting about further developments.

On May 6, 2019, the United States District Court for the District of Columbia issued a Memorandum and Opinion concerning the remedy available to Plaintiffs following the same court’s earlier decision (see our previous post regarding the court’s earlier decision here) invalidating a final rule issued by the Centers for Medicare and Medicaid Services (CMS) that would have altered the methodology for Medicare hospital outpatient payment rates for 340B drugs. In accordance with D.C. Circuit precedent, the court remanded the matter to CMS to remedy the unlawful change to the 340B drug payment methodology under the final rule. See Am. Hosp. Ass’n v. Azar, No. 18-2084, 2, 22 (D.D.C. May 6, 2019).

As background, under the Social Security Act, CMS must set reimbursement rates for certain separately payable hospital outpatient drugs, including 340B drugs, under the Medicare Part B hospital outpatient prospective payment system (OPPS). Since 2005, CMS has set those rates based on average sales price (ASP) plus 6%. However, in 2017, CMS proposed to revise the reimbursement formula for 340B drugs effective January 1, 2018. Concluding that hospital Covered Entities profited too much from reimbursement for 340B discounted drugs, CMS reduced the payment amount for hospital outpatient separately payable 340B drugs to ASP minus 22.5%. The American Hospital Association (AHA) and various other hospital associations and non-profit hospitals submitted comments opposing this change to the calculation methodology, arguing that CMS was not authorized to make the change. Despite these comments, CMS asserted that it had the statutory authority to set the rate based on the average price for the drug “as calculated and adjusted by the Secretary” and finalized the rule.  The AHA, along with other hospital associations and non-profit hospitals, filed a lawsuit against CMS seeking to enjoin the final rule from further effect and to remedy the use of the unlawful payment methodology in determining 340B drug payments.

In its December 2018 ruling, the court granted Plaintiffs’ motion for a permanent injunction, holding that CMS had “fundamentally altered the statutory scheme,” thereby exceeding its authority to “adjust[]” the reimbursement rate. However, the court did not rule on the appropriate remedy for CMS applying the 2018 revised payment methodology rule. Among other relief, Plaintiffs sought a retroactive increase in payment rates for 340B drugs to ASP plus 6% for 2018. However, because of a statutory requirement that all OPPS payment rates be budget neutral, increasing hospital reimbursement rates for 340B drugs retroactively for 2018 would also require retroactive offsets in payments for other items and services paid under the Medicare program. Therefore, the court decided to postpone a decision on an appropriate remedy, ordering the parties to provide supplemental briefing on this issue.  In the meantime, CMS issued a rule to continue the ASP minus 22.5% payment rate reduction through 2019. 83 Fed. Reg. 58818, 58822 (Nov. 21, 2018). Plaintiffs supplemented their Complaint to petition the court to vacate both the 2018 and 2019 rules, order CMS to reimburse Plaintiffs for the difference in payments between the 2017 (i.e., ASP + 6%) and 2018/2019 (i.e., ASP – 22.5%) rates, and order CMS to use the ASP + 6% methodology for claims not yet paid. CMS, however, sought to have the 2018 and 2019 OPPS rules remanded to CMS without vacating them or imposing specific duties on CMS.

The court, in the May 2019 ruling, concluded that “[r]emand, rather than injunction is the better course of action here.” The court cited to numerous precedential cases in the D.C. Circuit where, upon setting aside unlawful agency action, the agencies were given the initial task to fashion an appropriate remedy. In fact, the D.C. Circuit has held that a district court order to an agency to take specific action in such circumstances is reversible error. The court also noted that Plaintiffs have the option to seek judicial review of an agency’s remedy if they are not satisfied with it.

In deciding whether to remand or vacate the 2018 and 2019 OPPS rules, the court applied the Allied-Signal standard in which the court must weigh the seriousness of the agency’s deficiencies against the disruptive consequences of vacating the agency’s action. Id. at 16 (citing Allied-Signal, Inc. v. U.S. Nuclear Regulatory Comm’n, 988 F.2d 146, 150-51 (D.C. Cir. 1993). On the one hand, the court found that CMS’s “deficiencies here were substantial” and that CMS “patently violated the Medicare Act’s text.” But, on the other hand, vacating the 2018 and 2019 OPPS rules would be “highly disruptive,” given the budget neutrality requirement. Vacating the 2018 and 2019 OPPS rules would likely require CMS to retroactively recoup payments made to providers for non-drug items and services whose rates were increased because of the reduction in reimbursement rates for drugs; CMS estimated that to recoup such payments would take a year and result in administrative costs between $25 and $30 million. Furthermore, retroactive recoupment would also negatively affect Medicare beneficiaries because of the impact on amounts they paid under their cost-sharing obligations during that period. In addition, the court noted that the Plaintiffs themselves conceded that there were multiple ways CMS could remediate the underpayments for drugs under the violative 2018 and 2019 OPPS rules. Finally, the court determined that “no amount of reasoning on remand will allow [CMS] to re-implement the 340B rates in the same manner” as the unlawful 2018 and 2019 OPPS rules. For these reasons, the Court granted, in part, the Plaintiffs’ motion for permanent injunction and ordered the parties to submit, by August 5, 2019, a status report on the progress to remedy the unlawful payment methodology implemented by CMS in 2018 and 2019.

We will continue to track developments in this case.

FDA recently finalized its guidance document intended to assist protein biosimilar manufacturers in demonstrating interchangeability, Considerations in Demonstrating Interchangeability With a Reference Product.  Interchangeability, as of now, is nothing more than a pipe dream; no biosimilar has been declared interchangeable and therefore fully substitutable for its reference product.  But FDA is hoping that this guidance will help address that.  This guidance finalizes FDA’s expectations and updates the draft version of the guidance to provide more clarity.  Of note, this guidance document is directed specifically toward proposed therapeutic protein products, which include those products scheduled to transition from drug products to biologic products on March 20, 2020 under the “deemed to be a license”  provision of the Biologics Price Competition and Innovation Act.

The draft version of this guidance was published in January 2017 and triggered over 50 separate (mostly substantive) comments from a variety of stakeholders arguing the merits of each recommendation made in the guidance.  Some, for instance, suggested that interchangeability should be established individually for all conditions of use while others contend that extrapolation across intended uses is sufficient; similarly, some argued that immunogenicity in product switches must be robustly assessed while others contend that immunogenicity is a “hypothetical concern”.  Comments also provided line-by-line analyses of the text, often requesting clarity, as well as concerns about the specific testing parameters set forth in the guidance.

In the almost 2.5 years since the publication of the draft, FDA has made some changes but not many significant ones.  Indeed, even though the 2019 version clocks in at 7 pages less than the draft, the final version is largely the same as the draft.  Though much of the language has been revised, the two versions differ mainly in detail and clarity.  For example, while the concepts remain, terminology like “fingerprint-like” demonstrations of biosimilarity and “residual uncertainty” has been scrapped.  More substantively, the final guidance omits discussion of the specific analyses FDA expects for product presentation, design, and administrative characteristics.  For that reason, the Appendices also differ between the draft and the final, with the draft’s appendix detailing considerations in Comparative Use Human Factors Studies replaced by an example of switching study design in the final.

The meat of the guidance document remains largely unchanged.  As in the draft, the final provides an overview of the important scientific considerations in demonstrating interchangeability with a reference product.  A product is interchangeable if it is biosimilar to the reference product and can be expected to produce the same clinical result as the reference produce in any given patient.  To demonstrate interchangeability, the risks involved in switching from the reference to the biosimilar may not be any greater than the risk of solely using the reference product when a biological product is intended to be administered more than once to an individual.  To meet this standard, the guidance discusses the:

• Data and information needed to support a demonstration of interchangeability;
• Considerations for the design and analysis of a switching study or studies to support a demonstration of interchangeability;
• Considerations regarding the comparator product in a switching study or studies; and
• Abbreviated considerations for developing presentations, container closure systems, and delivery device constituent parts for proposed interchangeable products.

FDA also provides a list of factors that may be required for demonstrating interchangeability but emphasizes that the data necessary may vary based on the nature of the proposed interchangeable product, as not all factors may be necessary.  The product’s degree of structural and functional complexity may influence the data required.  Clinical experience with the reference product may also affect the data and information needed to support a demonstration of interchangeability.  In such cases, FDA will require a scientific rationale for extrapolation of data and other information to support interchangeability.

FDA applies a presumption that switching studies are required for demonstrations of interchangeability.  Again, when a sponsor believes that switching studies are not necessary, the sponsor must provide a justification for not needing such data to demonstrate interchangeability.  Switching studies should be designed based on clinical practice and risk-based treatment scenarios, and FDA therefore has outlined a flexible approach regarding study design.  Primary endpoints should assess the impact of switching on PK and PD (if available), as well as descriptively assess immunogenicity and safety.  Assessments of efficacy endpoints can be used as supportive information, as may postmarking data of a product previously licensed as biosimilar (rather than interchangeable).  The guidance provides significant detail on suggested study design and analysis.  The final guidance also reiterates the need for “bridging” studies should the study use a comparator that is a non-U.S. version of the reference product.

Though the initial publication of this guidance was welcomed by industry, its impact remains unclear.  In the years since the publication of the draft, FDA still has not determined that a single drug is interchangeable to its reference product.  There is no telling when FDA will license its first interchangeable product, and it is clear that reference product sponsors will not make acceptance of biosimilars – interchangeable or not – an easy feat.  But if this now-final guidance has its intended effect, reference product sponsors will not be able to cast doubt on the sameness of biosimilars anymore.  Interchangeability should make the notion that “anything a biosimilar can do, the reference product can do better” a thing of the past, but this is all conjecture until a sponsor can actually demonstrate interchangeability.

On April 26, 2019, CDRH released the final guidance, Recommended Content and Format of Non-Clinical Bench Performance Testing Information in Premarket Submissions (“Final Guidance”).  We previously blogged on the draft version (“Draft Guidance”) here.  Overall, the Final Guidance is much the same as the Draft Guidance, though FDA has added more detailed descriptions of the recommended information.

Like the Draft Guidance, the Final Guidance provides recommendations for Test Report Summaries and Complete Test Reports to be submitted in premarket submissions, including “premarket approval (PMA) applications, humanitarian device exemption (HDE) applications, premarket notification (510(k)) submissions, investigational device exemption (IDE) applications, and De Novo requests.” Final Guidance at 3.  Test report summaries should include the following elements:  tests performed; objective(s) of the test(s); a brief description of the test methods, including sample size, device(s), and any consensus standard(s) utilized; pre-defined pass/fail criteria (when applicable); results summary; discussion/conclusions; location of complete test report and summary table (optional).  Complete test reports should include:  test performed; objective of the test; description of test methods (test sample information, test sample size/selection, test methods); pass/fail criteria; data analysis plan; test results (data, data analysis, protocol deviations); and discussions/conclusions.

There are a few notable differences, first of which is the title.  The Draft Guidance included “Complete Test Reports” in the title whereas the Final Guidance’s title covers “Information” more broadly than just complete test reports.  That being said, the overall guidance does not broaden in scope and the name change appears a more appropriate description as the guidance covers both complete test reports and summary information included within a premarket submission.

The Final Guidance also adds clarity to several points, including:

• The recommendations are applicable for non-clinical testing performed by either a device manufacturer or a third-party testing facility.
• Bench tests using ex vivo, in vitro, and in situ animal or human tissue are within the scope of a non-clinical bench performance test. A new footnote is also added where FDA states their support of reducing, refining, and replacing animal testing when feasible and alternate methods are “suitable, adequate, validated, and feasible.” at 3.
• For testing excluded from the scope of the guidance, reprocessing validation, human factors validation, software verification and validation, and computational modeling studies are added in addition to biocompatibility evaluation and sterilization validation.
• Test report summaries should be provided either within an executive summary section of the premarket submission or provided as a separate document within the premarket submission. An example summary table has been added including columns for test performed, device description/sample size, test method/applicable standards, acceptance criteria, unexpected results/significant deviations, and results.  Complete test reports, when submitted, should be provided as separate attachments.
• A complete test report means the “entirety of the testing documentation submitted for a study” which may be included in a single document or within multiple documents in the premarket submission. at 8.
• There are situations where pre-defined pass/fail criteria may not be applicable, such as tests conducted for characterization purposes. In these situations, a description of the acceptance criteria used to allow for interpretation of the data should still be provided.
• A data analysis plan used to analyze results, including all planned quantitative and/or qualitative assessments, is recommended in the test report.
• When recommended information comes from an FDA guidance document or FDA-recognized consensus standard, the full information can be replaced with the full reference to the cited document. If there are options or choices within the referenced document, the options selected or choices made should be included.

The Final Guidance no longer recommends including information in test reports justifying why the test methods or results support substantial equivalence.  As we noted in the prior blog, the test report is not the place for this information as the connection between an engineering test and a planned 510(k) submission may not be known by an engineer performing testing and writing a test report.  This information is certainly important within a 510(k) and the Final Guidance now more broadly states “[y]our premarket submission should also discuss how the non-clinical bench performance test results support the overall submission” and that the “information can be provided in the test report summary or another location in your premarket submission.” Id. at 5.

The Quality System Regulation (QSR), in 21 C.F.R. § 820.30 Design Controls, includes requirements for design verification and validation, yet these requirements are not mentioned anywhere within the guidance.  While the Final Guidance may appear on its surface to provide a comprehensive list of information to include within “complete test reports,” it fails to identify some information required for verification and validation results by the QSR (e.g., the date, and the individual(s) performing the tests).  Also, as we noted in the prior blog, the Final Guidance still recommends that test reports state whether the test sample is a final, finished device though this may not be known at the time many test reports are written during product development.  With the recently announced CDRH reorganization and creation of a new Super Office, Office of Product Evaluation and Quality (OPEQ), we hope to see better alignment in the future between what is expected in a premarket submission and what is already required of device manufacturers in the QSR.

The Final Guidance may be helpful to companies in writing or revising their design controls procedures as it does provide useful descriptions of information to include within test reports.  However, it is important to ensure the procedures cover QSR requirements as well as the recommendations of the guidance to ensure the resulting test reports are considered complete for both a premarket submission and in an FDA inspection.

On May 8, 2019, the FDA published a new draft guidance for industry titled “Submitting Documents Using Real-World Data and Real-World Evidence to FDA for Drugs and Biologics.”

This draft guidance was produced as a joint effort from CDER and CBER and is intended to provide guidance about how to use Real World Data (RWD) and Real World Evidence (RWE) in regulatory submissions to the agency.

The use of RWD and RWE is an area of great interest yet has little regulatory precedent. The Agency was mandated by section 3022 of the 21^st Century Cures Act to, among other things, provide guidance to industry on how RWE might be used to support drug development and new drug and biologic approvals (see previous coverage of the 21^st Century Cures Act and this provision here). Section 3022 required the Agency to track submissions to INDs, NDAs, and BLAs that use RWE to support regulatory decisions related to safety and efficacy.

The draft guidance clearly defines the terms RWD and RWE which is helpful. One of the most significant parts of the draft guidance is that it clearly states that RWE may be used in single arm studies that use RWE as an external control. This is a paradigm shift for the Agency and opens doors to many potential, as of yet unexplored and untested, approaches to drug development.  On the topic of external controls, FDA similarly discussed the use of natural history data as historical controls in a recent draft guidance, which the Agency does not view as RWE (see coverage here).  Beyond use as an external control, the draft guidance also notes that RWE may be captured through (1) conduct of randomized clinical trials, (2) observational studies to support an efficacy supplement, and (3) studies to fulfill postmarketing requirements to further evaluate safety and effectiveness.

The draft guidance does not provide much detail on how RWE might be used and barely mentions any caveats.  Therefore, this draft guidance should be viewed in combination with FDA’s December 2018 “Framework for FDA’s Real-World Evidence Program” (available here), where the Agency began to articulate how it will assess fitness of RWD for use in regulatory decisions.  Existing precedent has been limited to using data on historical response rates drawn from chart reviews and expanded access, primarily in cancer and rare diseases; however, FDA seems to instead be promoting the generation of RWE through randomized trial designs that take place in “pragmatic clinical trial” settings that more resemble real-world care and use. This seems to be the most promising “type” of RWE to support evidence of safety or effectiveness for a new product approval, which the draft guidance notes is a potential use for this evidence.

It is well known that there is an enormous amount of RWD in existence but there are also many challenges to figuring out how to use that data. There are issues related to getting informed consent from the people who are the source of the data, issues of statistical analysis and the introduction of bias, issues of data quality, lack of comparability between the RWE control arm and the study population, and generally the potential for making flawed conclusions.  In the words of FDA’s past Principal Deputy Commissioner:

Thus, although we are optimistic about long-term prospects for the evolution of mature, robust methodologic approaches to the incorporation of real-world evidence into therapeutic development and evaluation given the intensive efforts now under way, caution is still needed, and expectations of “quick wins” resulting from the use of such evidence should be tempered accordingly.

Sherman, et al. Real-World Evidence – What Is It and What Can It Tell Us? 375 NEJM 23, at 2295 (December 8, 2016)

Much of this will have to be figured out by trial and error and lots of conversation. This area of development holds a lot of promise but will require a lot of scientific thought and evaluation to find a path forward.

Colorado and Florida have joined Vermont in the list of states seeking to combat high prescription drug prices by establishing programs to import drugs from Canada.  On April 29, 2019, the Florida legislature passed CS/HB 19, which directs the state’s Agency for Health Care Administration to establish the Canadian Prescription Drug Importation Program.  On May 6, 2019, the Colorado legislature passed SB19-005 to create the “Colorado Wholesale Importation of Prescription Drugs Act.”  Neither bill has been signed into law yet, but the Governors’ signatures are expected.

Similar to the Vermont law passed last year (see our summary here), the Colorado and Florida bills require the states to develop Canadian drug importation programs that comply with federal drug importation laws (21 U.S.C. § 384), including limitations on eligible drugs.  Each state’s program must meet the federal requirements that the imported drugs will not pose additional risk to public health and will generate cost savings for consumers.  By July 1, 2020, Florida’s Agency for Health Care Administration must submit a request to the U.S. Secretary of Health and Human Services (HHS) for approval of the state’s program.  The Colorado Department of Health Care Policy and Financing must submit its request for program approval to the Secretary of HHS by September 1, 2020.

Florida’s bill also allows for the development of an “International Prescription Drug Importation Program,” which will permit the state to import drugs from “foreign nations with which the United States has current mutual recognition agreements, cooperation agreements, memoranda of understanding, or other federal mechanisms recognizing their adherence to current good manufacturing practices for pharmaceutical products.”  FDA currently has a “Mutual Recognition Agreement” in place with the European Union and Cooperation Arrangements for drug products in place with Australia, Canada, Japan, Russia and Sweden.

Under the Florida bill, drugs imported under the Canadian Prescription Drug Importation Program will be limited to use for Medicaid and certain institutions owned, operated, or supported by the state or county governments.  However, Florida’s International Prescription Drug Importation Program will not be restricted to state and county purchasers, nor will the Colorado program have such limitations on use.

Federal law requires that drug importation programs generate substantial cost savings for American consumers.  Donald Trump recently said that his administration will allow states to import drugs if they can be purchased at a lesser price.  However, it is unclear whether a lesser purchase price will equate to substantial cost savings for American consumers.  Despite public opinion that drugs can be purchased at significantly lower costs from Canada and other countries, proving that importation results in cost savings may be a difficult hurdle for states to overcome.  As we previously reported (see here), Vermont’s Agency of Human Services, in designing that state’s “Canadian Rx Drug Import Supply Program,” issued a report suggesting that it may cost more to implement and operate a drug importation program than the amount of savings the state would recognize from such a program.  Vermont’s formal request for approval of the state’s drug importation program is due to the Secretary of HHS by July 1, 2019.

Although state drug importation programs seem to have gathered some steam, it still remains to be seen whether these programs can be designed to meet the federal requirements and whether the Secretary of HHS will approve such programs.  We will continue to monitor and report on federal and state developments and actions related to regulating drug pricing.

The Centers for Medicare & Medicaid Services (CMS) has finalized its proposed rule requiring pharmaceutical manufacturers to disclose the Wholesale Acquisition Cost (WAC) in Direct-to-Consumer (DTC) television advertisements for certain prescription drugs and biological products (the Final Rule). The Final Rule will appear in the Federal Register on May 10, 2019 and will become effective on July 9, 2019.  It is largely unchanged from the proposed rule, which we previously blogged on here.

The Final Rule requires that any advertisement on TV (including broadcast, cable, streaming, or satellite) for a prescription drug or biological product for which reimbursement is available under Medicare or Medicaid must include the following statement:

“The list price for a [30-day supply of] [typical course of treatment with] [name of prescription drug or biological product] is [insert price]. If you have health insurance that covers drugs, your cost may be different.”

The “list price” to be inserted is the WAC, which is defined as the manufacturer’s published list price for the most recent month available, not including discounts or rebates. The list price should reflect the WAC for a typical 30-day regimen or typical course of treatment, as appropriate, and as determined on the first day of the quarter during which the advertisement is being aired on television or otherwise broadcast. For a drug with multiple indications, the list price to be used is the one for the course of treatment associated with the indication advertised. The statement must appear at the end of the advertisement in legible text with a style, font, and duration that allows it to be read easily. The preamble to both the Proposed Rule and the Final Rule (though not the regulation itself) states that manufacturers would also be permitted to include truthful and non-misleading information about a competing product’s current WAC, so long as the provision of such information is consistent with current law.

The Final Rule applies to prescription drugs for which payment is available, directly or indirectly, under Medicare or Medicaid, with the exception of products with a WAC of less than $35 per month for a 30-day supply or typical course of treatment. The only penalty for a failure to provide the statement would be inclusion of the manufacturer on a publicly available “shame” list on CMS’s web site. However, CMS states in the preamble to the Final Rule that it believes the primary enforcement mechanism will be the threat of private actions under the Lanham Act for false or misleading advertising, asserting optimistically that the threat of meritless lawsuits is “acceptably low.”

According to CMS, the Final Rule seeks to address the rising prices of prescription medicines and the impact that such costs have on the Medicaid and Medicare programs. It also seeks to address over-utilization of prescription drugs caused by patients requesting “costly drugs and biological products seen on television.” Finally, CMS asserts, in the Final Rule, that DTC advertising lacking information about a drug’s price is potentially misleading. CMS states that if patients better understand the costs associated with prescription drugs or biological products, they will make “good health care choices,” which will in turn promote efficiency in the Medicaid and Medicare programs. CMS rejected arguments that the WAC itself is misleading because it does not reflect actual out-of-pocket costs paid by consumers.  CMS cited a 2019 study published in the Journal of the American Medical Association as support for the proposition that consumers are better able to estimate their out-of-pocket costs knowing the WAC than without knowing it.

We will continue to report on drug pricing regulations and legislation at the federal and state level.

Responding to objections from New Jersey healthcare practitioners, hospitality and restaurant businesses, and the pharmaceutical industry, the New Jersey Attorney General published an amendment to the state’s rules restricting the acceptance of remuneration by prescribers from pharmaceutical manufacturers.  The final amendment, which appeared in the May 6 New Jersey Register and immediately became effective, relaxes some of the restrictions in the original rule (see our post on that rule here.)  Following are the significant changes from the original rule:

• Meals at Education Events: The original regulation permitted prescribers to accept “modest meals” provided through the event organizer at an education event, and a “modest meal” was defined as one with a fair market value of $15 or less.  The $15 limit has been removed.  In addition, the amendment clarifies that an education event includes an event that focuses on disease states and treatment approaches, and also includes an event that that meets the rule’s definition of “education event” even if FDA classifies that event as promotional.
• Promotional Programs: The prior rule on accepting modest meals provided by drug manufacturers during promotional activities remains in place and is still capped at $15 for lunch, but the cap on dinners has been increased from $15 to $30 (adjusted for inflation after 2018).  Also, the previous limit of four such meals per year has been removed.
• Bona Fide Service Fees: The Attorney General rejected recommendations that the existing cap on bona fide service fees accepted from all pharmaceutical manufacturers during any year be increased from the current $10,000.  Fees for research and for speaking at education events continue to be exempt from this cap, and the preamble clarifies that research includes both pre-market and post-market research.
• No application to devices: The regulation continues to apply only to gifts and payments from pharmaceutical manufacturers, but a helpful clarification has been added that the rules do not apply to prescribers’ interactions with pharmaceutical manufacturers that also manufacture medical devices if the interactions are directly solely to medical devices.