Hyman, Phelps & McNamara, P.C. (“HP&M”), the largest FDA-dedicated law firm, is pleased to announce that Julie Beitz, M.D. has joined the firm as a Principal Drug Regulatory Expert.

Dr. Beitz served in leadership positions in FDA’s Center for Drug Evaluation and Research for nearly three decades.  She is an oncologist/hematologist and at the time she retired from FDA on July 29, 2023, she was the Director of the CDER Office of Immunology and Inflammation (OII) in the Office of New Drugs (OND).

Dr. Beitz was selected by FDA to be the inaugural Director of OII in March 2020 as part of the CDER OND reorganization.  In this position, she had primary oversight for actions taken by the following review divisions:

• Division of Dermatology and Dentistry
• Division of Gastroenterology
• Division of Hepatology and Nutrition
• Division of Rheumatology and Transplant Medicine
• Division of Pulmonology, Allergy and Critical Care
• Division of Pharmacology/Toxicology – Immunology and Inflammation

Prior to the March 2020 creation of OII, Dr. Beitz for 14 years was Director of the Office of Drug Evaluation III (ODE 3) in OND where she oversaw the Division of Gastroenterology and Inborn Errors of Metabolism, the Division of Dermatology and Dental Products, and the Division of Bone, Reproductive and Urology Products.

Other key drug leadership positions that Dr. Beitz served in at FDA include Acting Deputy Director for Clinical Sciences of OND, Director of the Division of Drug Risk Evaluation in the Office of Surveillance and Epidemiology and Acting Deputy Director and Clinical Team Leader in the Division of Oncology Drug Products.

Dr. Beitz earned a Bachelor of Arts (summa cum laude and honors in chemistry) from Barnard College, Columbia University, and a Doctor of Medicine from the College of Physicians and Surgeons, Columbia University.  She completed her residency and a fellowship in medical oncology/hematology at Brown University, Roger Williams Medical Center, and Brown University Affiliated Hospitals.

As a Principal Drug Regulatory Expert, Dr. Beitz joins HP&M’s Drug Development Team, which is comprised of attorneys and regulatory experts who assist companies on a range of drug and biological product legal, regulatory, and policy issues.  Dr. Beitz will be joining fellow former FDA Office Director Dr. Ellis Unger who joined HP&M in February 2022.  “I know Dr. Beitz well from our days as Office Directors at FDA, and I am delighted she is joining Hyman Phelps & McNamara! She made major, and lasting, contributions to public health at FDA. I always found her to be immensely thoughtful, knowledgeable, and insightful, and I am confident our clients will appreciate her approach,” said Dr. Unger.

“HP&M has long respected Dr. Beitz and enjoyed a professional working relationship with her during her distinguished FDA career.  We are thrilled that she is joining the firm and will add her expertise to our already exceptional Drug Development Team,” said JP Ellison, HP&M’s Managing Director.

Drug development attorney Frank Sasinowski commented: “For 20 years I have brought therapies that were needed by patients before Dr. Beitz and her colleagues in OII and ODE 3 and for that long I have admired and respected her sound scientific judgment and regulatory acumen.  Consequently, you can imagine how honored I am that Dr. Beitz would join her former OND Office Director Dr. Ellis Unger and our long-established HP&M drug development regulatory team to assist sponsors and patients in collaboratively working with FDA to bring critical new therapies to those in need.”

As we recently blogged, FDA released three draft guidance documents to help enhance the predictability, consistency, and transparency of the 510(k) program.  One of these documents focuses on “Evidentiary Expectations for 510(k) Implant Devices.”  Implant devices are used in a range of settings such as dental and orthopedic procedures.  Having a clear understanding of FDA’s data expectations for 510(k) applications related to implants is crucial for successful marketing clearance.  In this blog post, we highlight the distinctive data expectations recommended for implant devices in the draft guidance.

Background

The draft guidance addresses the review considerations applicable to all implanted devices undergoing evaluation within the 510(k) program, referred to as “510(k) Implants” in the draft guidance.  Implants subject to premarket approval (PMA), those eligible for the De Novo classification process, or those exempt from the 510(k) requirements fall outside the scope of this draft guidance.  The objectives of the draft guidance are as follows:

• “Serve as a primary resource on expectations for all 510(k) implant devices, generally, while device-specific guidances provide further specificity for a given device type
• Assist industry in design and execution of appropriate performance testing to support 510(k) submissions for implant devices
• Provide recommendations for content and labeling to include in 510(k) submissions for implant devices, and
• Convey that the FDA considers the patient experience to be paramount in improving implant device safety, and encourages the collection, analysis, and integration of patient experience data for implants to support 510(k) submissions for those devices.”

General Considerations: What Makes Implants Unique Compared to Other Device Types?

Implant devices are unique because they are designed for continuous implantation for a period of 30 days or more, as per 21 C.F.R. § 860.3.  This distinct use scenario, combined with new features of such devices, may increase the risks compared to other device types or predicate devices.  For instance, FDA highlights risks associated with everyday activities (e.g., airport security screening), or surgical procedures, as well as the potential for reoperation or revision of the implant.

FDA recommends that applicants of 510(k) devices that are intended to be implanted for fewer than 30 days also consider the recommendations outlined in the draft guidance.

Performance data should be customized to the indications for use, including the specific intended patient population (adult vs. pediatric), disease state, conditions of use, and the target anatomical location.  In the case of 510(k) Implants indicated for use in pediatric patients, FDA recommends consulting two other guidance documents: Pediatrics Guidance and Extrapolation Guidance.

The intended duration of implantation is another crucial factor in performance testing.  Testing should be in line with the device’s intended duration of implantation, but FDA may consider whether testing results for a shorter duration can be extrapolated to provide information about long-term performance.  In cases where devices are expected to be frequently replaced, testing should be guided by the aggregate patient exposure.  Safety and effectiveness evaluations should encompass wear and degradation, taking into account the worst-case implantation conditions.

Non-Clinical Recommendations

The draft guidance highlights non-clinical review areas that are generally relevant across 510(k) Implants and offers recommendations for performance data to include in a 510(k) submission.  It is important to note that the type and amount of performance data required may vary based on the device, device type, and differences from the predicate device.  If a submitter believes that certain testing described in the draft guidance does not apply to their device, they should provide a rationale in the 510(k) submission.

The draft guidance provides an overview of various standard testing areas such as biocompatibility, sterility and shelf life, reprocessing and cleaning, software and cybersecurity, electrical safety and electromagnetic compatibility (EMC), and magnetic resonance (MR) compatibility.  Information about these typical non-clinical tests is generally based on previously released guidance documents for each topic, as linked above.

The draft guidance places emphasis on specific tests, such as acute systematic toxicity and material-mediated pyrogenicity for biocompatibility, pyrogenicity testing for sterility, and the applicability of ISO 14708 for the EMC of certain active implantable medical devices.  For example, the draft guidance outlines a minimum five endpoints for biocompatibility testing (cytotoxicity, sensitization, irritation or intracutaneous reactivity, acute systemic toxicity, and material-mediated pyrogenicity) that should be assessed for 510(k) Implants, plus eight additional endpoints for biocompatibility (e.g., subacute/subchronic toxicity, genotoxicity, implantation, hemocompatibility, chronic toxicity, carcinogenicity, reproductive/developmental toxicity and degradation).  It would be beneficial for the industry to have a clear understanding of which endpoints should be evaluated for specific types of implants and their respective implant locations.

Additionally, FDA has identified eight additional non-clinical performance testing areas unique to 510(k) Implants, as summarized in the table below.  We find that this information is noteworthy for manufacturers to consider.

Animal Testing

When engineering analyses and mechanical tests may not comprehensively address the complexities associated with the clinical use of an implant, the draft guidance suggests that an animal study may be necessary to support SE to the predicate device.  We suggest consulting the draft guidance for a few representative examples of situations in which FDA may recommend animal testing.  FDA encourages manufacturers to submit a pre-submission to discuss the animal study protocol with the Agency before submitting a 510(k) application.

Implant Device Design Considerations

Information regarding raw materials and manufacturing processes can be crucial for certain implants, such as those made of nitinol, implants with unique in vivo wear characteristics, implants composed of degradable materials or biologically-derived materials, and implants manufactured using additive manufacturing processes.  In these cases, it is recommended that a 510(k) submission include details about materials, specifications, design and critical processing information, including reaction parameters and solvents used in processing or cleaning to allow FDA to better understand the final, finished form of the implant and how it compares to the predicate device in evaluating substantial equivalence.

Human Factors/Usability (HF/U) and Clinical Performance Testing

The draft guidance offers general information about HF/U and clinical performance testing.  FDA acknowledges the particular importance of HF/U testing for implant devices with complex interfaces intended for implantation by healthcare practitioners (HCPs) and implants that involve post-implantation management by either the patient or HCP (e.g., programming, monitoring, maintenance).

The FDA notes that, in most 510(k) submissions, clinical data is not typically required to establish SE.  However, there are specific scenarios where clinical data may become necessary to support an SE determination, as explained in another recent draft guidance on clinical data in 510(k), which we will discuss separately in a forthcoming blog post.

Patient Experience Information

As CDRH administers the Patient Science and Engagement Program, the draft guidance includes a separate section to encourage, rather than mandate, submitters to include patient experience data (such as patient preference information and patient-reported outcomes) for implants in a 510(k) submission, if it is relevant to the determination of SE.  Regarding this aspect, FDA refers to three guidance documents: Patient-Reported Outcome Measures, Patient-Reported Outcome Instruments, and Patient Preference Information.

In evaluating substantial equivalence, FDA may consider patient preference information in conjunction with non-clinical and clinical testing.  The totality of information helps inform FDA’s decision when it considers the overall benefit-risk profile of the implant device.  Note that FDA performs a benefit-risk assessment in the 510(k) context when it determines whether the new device is “as safe and effective” as the predicate device after the Agency finds that the intended use of the new device and predicate device are the same and have different technological characteristics that do not raise different questions of safety and effectiveness if there are different technological characteristics.

Labeling and Implant ID Card

Lastly, it is critical that patients are provided with implant information as it pertains to their devices. Manufacturers should create user-friendly instructions for use that facilitate patient understanding of potential risks over the expected lifespan of the implant.  FDA offers a flexible approach to achieve this goal, suggesting that some information may be suitable for inclusion on an implant ID card for the patient or caregiver, while other information may be better communicated in a different format (e.g., separate patient labeling).  Concerning the implant ID card, FDA recommends including basic information such as model name and manufacturer and important details concerning patient contacting materials, including those that may be associated with allergic reactions.  FDA also recommends the implant ID card provide contact information in the event of malfunctions or adverse events.  Finally, for magnetic resonance (MR) conditional implants, FDA recommends identifying those conditions for safe MR use.

Closing Remarks

We encourage sponsors of implant devices to carefully review the draft guidance, participate in the FDA’s webinar scheduled for October 26, 2023, and consider submitting comments on this draft guidance by December 6, 2023, through the provided link.

The U.S. District Court for the District of Columbia has vacated the Notice of Benefits and Payment Parameters (NBPP) rule issued in May 2020 (2020 NBPP Rule) which allowed health insurers and pharmacy benefit managers to use copay accumulators to exclude drug manufacturers’ copay assistance when calculating patients’ out-of-pocket costs and cost-sharing ceilings under the Affordable Care Act (ACA).

We previously blogged about this lawsuit last year.  Three patient advocacy groups sued the Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS), challenging the agencies’ 2020 NBPP Rule as plainly unlawful on the grounds that it conflicts with the definition of “cost sharing” in both the ACA and the agencies’ existing regulations, and is arbitrary and capricious.

The ACA sets an annual cap on the amount that insurers can require insured individuals to pay out of pocket for their medical expenses.  Once an individual reaches this annual cap, the insurer is solely responsible for covering the individual’s remaining medical expenses that year.  To help patients afford the copays and deductibles for specific medications, some drug manufacturers offer direct financial assistance, often as coupons, to subsidize the patient’s purchase of the drug at the point of sale.  This financial assistance directs the pharmacy to bill all or part of the patient’s copayment obligations to the manufacturer instead of the patient.  Insurers have resisted patient assistance programs using copayment accumulator adjustment programs, whereby insurers do not count manufacturer-provided assistance towards patients’ copay obligations, annual deductible, or out-of-pocket maximum.  The insurer still accepts the manufacturer payment, but also collects the full deductible from the patient.  The patient is left high and dry—no closer to meeting the deductible than before, with full benefits and more affordable drugs the same distance out of reach.

The 2020 NBPP Rule permitted insurers to use copay accumulators.  The ACA defines “cost sharing” to include: “(i) deductibles, coinsurance, copayments, or similar charges; and (ii) any other expenditure required of an insured individual which is a qualified medical expense. . .”  The agencies defined the term by regulation as “any expenditure required by or on behalf of an enrollee with respect to essential health benefits; such term includes deductibles, coinsurance, copayments, or similar charges, but excludes premiums, balance billing amounts for non-network providers, and spending for non-covered services.”  As applied to manufacturer assistance, CMS did not adopt a single interpretation of the statutory or regulatory definition of “cost sharing.”  The 2020 NBPP Rule instead allowed insurers to choose whether to include such assistance toward patients’ annual cost sharing cap, and thus whether to include such assistance in the definition of “cost sharing.”

The Court vacated the rule as arbitrary and capricious “based on its contradictory reading of the same statutory and regulatory language and the fact that the agencies have yet to offer a definitive interpretation of this language that would support the rule.”  The Court specifically concluded that the rule “rests on two contradictory interpretations of the statute” and “conflict[s] with the regulatory definition.”  Noting the “interpretive depths. . .that have yet to be plumbed” in the definition of “cost sharing,” the Court remanded the rule to allow the agencies to interpret the term’s meaning.

The decision does not guarantee that the agencies will adopt plaintiffs’ position and force insurers to change their practices, but it is a necessary first step toward doing so.  As of this summer, 20 states and Puerto Rico have enacted legislation to restrict the use of copay adjustment programs.  It remains to be seen whether the use of such programs will be prohibited nationwide.

On Friday, October 6, 2023, DEA announced a second extension of telemedicine flexibilities concerning the prescribing of controlled substances, which were originally set to expire after the end of the COVID-19 pandemic emergency.  As a reminder, back in February 2023, HPM blogged about DEA’s two proposed rules for prescribing (1) controlled substances generally and (2) for buprenorphine use in opioid treatment.  HPM also conducted a  90-minute webinar addressing the “End of the COVID-19 Emergency and the Ryan Haight Act: Telemedicine and Next Steps.”  HPM’s Presentation Deck and recording of the presentation are here, and here (passcode Bv3*o^i5).  DEA received a whopping 38,000 (!) comments on the two proposed rules.

Next, on May 9, 2023 DEA, jointly with the Substance Abuse and Mental Health Services Administration (SAMHSA), issued the First Temporary Rule, which extended the full set of telemedicine flexibilities regarding the prescribing of controlled medications through November 11, 2023. That First Temporary Rule also provided a one-year grace period, through November 11, 2024, for any practitioner-patient telemedicine relationships established on or before November 11, 2023. Thus, under the First Temporary Rule, if a patient and a practitioner established a telemedicine relationship on or before November 11, 2023, the same telemedicine flexibilities that governed the relationship to that point would continue to apply through November 11, 2024. DEA next hosted Telemedicine Listening Sessions on September 12 and 13, 2023, for which it receive over 180 requests to present. DEA noted that industry will have another opportunity for comment once new proposed rules are promulgated.

Based on industry input, DEA and HHS announced in its Second Temporary Rule a further extension of existing telemedicine flexibilities for new practitioner-patient relationships through December 31, 2024. Unlike the first extension back in May 2023, this time around DEA will not require the practitioner-patient relationship to be one that exists prior to on or before November 11, 2023.  Instead, DEA states:

This extension authorizes all DEA-registered practitioners to prescribe schedule II–V controlled medications via telemedicine through December 31, 2024, whether or not the patient and practitioner established a telemedicine relationship on or before November 11, 2023. In other words, the grace period provided in the First Temporary Rule is effectively subsumed by this Second Temporary Rule, which continues the extension of the current flexibilities for all practitioner-patient relationships— not just those established on or before November 11, 2023—until the end of 2024.

Temporary Rule: Second Temporary Extension of COVID–19 Telemedicine Flexibilities for Prescription of Controlled Medications, 88 Fed. Reg. 69,879, 69,880 (Oct. 10, 2023) (emphasis added).

DEA stated its reasons behind the second extension include the need to spend more time considering industry comments and the input it received during its Listening Sessions.  DEA also stated it intends to “ensure a smooth transition for patients and practitioners that have come to rely on the availability of telemedicine for controlled medication prescriptions, as well as allowing adequate time for providers to come into compliance with any new standards or safeguards.”  Id.  DEA also announced that it is working to promulgate these new telemedicine standards or safeguards by the fall of 2024.  This blogger appreciates DEA’s continued deliberative consideration of these new rules as it works through the unprecedented number of comments and extensive Listening Session input received to date.

As we reported last week, FDA has issued a 26 page, single spaced, tiny-font Proposed Rule of Laboratory Developed Tests (LDTs).  There is much to unpack, and we intend to do so in a series of blog posts. In this post, we focus on the proposed changes themselves, and the many questions the agency leaves unanswered.

Change to the IVD definition

First, the mechanics of the change.  The crux of the proposed rule lies in the addition of ten words: “including when the manufacturer of these products is a laboratory.”   These words would be added to the definition of “in vitro diagnostic [IVD] products” in 21 C.F.R. § 809.3(a).

The amended regulation would read as follows (revisions underlined):

In vitro diagnostic products are those reagents, instruments, and systems intended for use in the diagnosis of disease or other conditions, including a determination of the state of health, in order to cure, mitigate, treat, or prevent disease or its sequelae. Such products are intended for use in the collection, preparation, and examination of specimens taken from the human body. These products are devices as defined in section 201(h)(1) of the Federal Food, Drug, and Cosmetic Act (the act), and may also be biological products subject to section 351 of the Public Health Service Act, including when the manufacturer of these products is a laboratory.

The brevity of this change belies the foreseeably seismic impact of FDA regulation of clinical laboratories on the healthcare system.  The practical consequence of adding these words is that LDTs are expressly defined as a type of IVD device, and subject to device regulations, including registration and listing, premarket review, post-market reporting, and quality system regulation.  As we will explore in a subsequent post, FDA has long claimed these regulations implicitly covered LDTs, but many have questioned the basis for this position.

The end of enforcement discretion

The PR proposes to phase out LDT “enforcement discretion” over a period of four years, after which most LDTs will be subject to all applicable medical device regulatory requirements.

The phase out period applies to LDTs currently on the market in reliance on FDA’s enforcement discretion policy (“affected laboratories”).  It does not extend to tests for which FDA has historically not exercised enforcement discretion (e.g., direct-to-consumer tests, tests for use in a public health emergency).  FDA proposes a five-stage transition period for all affected laboratories currently who are not subject to one of the areas of continued enforcement discretion (as discussed later in this post):

• Stage 1 (one year after issuance of the final rule): Begin filing medical device reports (MDR) under 21 C.F.R. Part 803 and notices of correction and removal under 21 C.F.R. Part 806.
• Stage 2 (two years after issuance of the final rule): Register with FDA as a device establishment and list LDTs performed, pursuant to 21 C.F.R. Part 807. Labs must also begin complying with device labeling requirements (21 C.F.R. Part 801) and investigational device exemption requirements (21 C.F.R. Part 812).
• Stage 3 (three years after issuance of the final rule): Comply with the Quality System Regulation (QSR) (21 C.F.R. Part 820).
• Stage 4 (three and a half years after issuance of the final rule): Laboratories offering high‑risk LDTs (i.e., Class III) would be required to submit an application for premarket approval (PMA) to FDA.
• Stage 5 (four years after issuance of the final rule): Laboratories offering low and moderate‑risk LDTs (i.e., Class I or II) would be required to submit a 510(k) premarket notification, unless eligible for exemption.

A few observations are in order:

First, FDA’s timeline is, to put it mildly, wildly ambitious.  The Proposed Rule states that Stage 4 and Stage 5 would not begin before October 1, 2027, and April 1, 2028, respectively, in order to enable laboratories to participate in negotiations preceding user fee reauthorization in 2027 (taking effect in FY2028, which begins on October 1, 2027).  However, meeting this timeline would require FDA to issue a final rule within approximately six months of the PR’s publication date—in other words, by April 2024.  Issuing any final regulation that quickly would be a challenge; given the number of affected stakeholders, the number of questions posed in the PR (see further discussion below in Call for Comment), and the far-reaching effects of the PR, it would be nearly impossible.  Thus, in our view, it is highly unlikely that Stages 4 and 5 would come close to these “not before” dates.

Second, much remains to be done—by both FDA and affected laboratories—before these stages can be implemented.  The PR acknowledges that a proposed rule was issued that, if finalized, will make changes to the QSR.  FDA claims that three years should be plenty of time for labs to come into compliance with the QSR, but the Agency would only aim to have the new QSR rule in effect “before the proposed beginning of stage 3.”  This timing undermines the Agency’s rationale that three years is enough time to come into compliance.  In order for labs to implement a compliant system, they need to know what they are working towards.  Without a final rule, labs cannot be certain that any quality system it puts in place will meet the requirements of the new QSR rule, if finalized.

Third, it’s unclear which tests FDA intends to fall into Stages 4 and 5.  On its face, it seems simple – Class III in Stage 4 and Class I and II into Stage 5.  But, by statute all devices not previously classified are automatically placed into Class III.  LDTs are some of the most novel tests, meaning that a large proportion of them are not classified and would not have a predicate device, even if they are arguably a Class II test, for example.  The PR says that tests going through the De Novo process would fit within Stage 4, but who will ultimately determine whether a test is appropriate for De Novo classification or a PMA and, therefore, either fall into Stages 4 or 5?  Will the responsibility be on the lab?  What will happen if FDA disagrees?

Fourth, The PR does not mention what will happen to the premarket submissions from Stages 4 and 5 that are not cleared/approved.  With regard to both stages, the PR says, that “FDA generally would not intend to enforce against IVDs offered as LDTs after a [510(k), De Novo, or] PMA has been submitted . . . until FDA completes its review of the application.”  This suggests that if the submission is unsuccessful, FDA could take enforcement action, which could include requiring the lab to cease offering the test, among other things.

Remaining Enforcement Discretion

The PR indicates that FDA plans to continue to exercise enforcement discretion, as appropriate for certain kinds of tests.  FDA notes that it would consider issuing enforcement discretion policies for labs developing LDTs during the early phase of any future public health emergencies.  Specifically, FDA states that it plans to issue a draft guidance with an enforcement policy for IVDs for emerging outbreaks offered prior to FDA review to address the immediate public health need.  Ironically, perhaps, FDA cites problems with LDTs for COVID as part of the rationale for FDA regulation of LDTs, so the logic doesn’t quite hold together.

In addition, FDA proposes to continue to exercise enforcement discretion (i.e., to not enforce the new framework) with respect to certain categories of LDTs:

• “1976-Type LDTs,” which FDA describes as “us[ing] manual techniques (without automation) performed by laboratory personnel with specialized expertise; use of components legally marketed for clinical use; and design, manufacture, and use within a single CLIA-certified laboratory that meets the requirements under CLIA for high complexity testing.” As an example, the PR cites immunohistochemistry tests that involve no automation (e.g., preparation or interpretation) and would not include lateral flow tests as they do not, typically, rely on lab personnel expertise;
• Human Leukocyte Antigen (HLA) tests used in CLIA high complexity laboratories;
• LDTs intended for forensic use (over which, we note, FDA already lacks jurisdiction); and
• LDTs intended exclusively for use in public health surveillance where a result is not reported directly to a patient or provider (where, again, FDA lacks jurisdiction).

Call for Comment

Despite the significant potential impact of the PR for a wide array of stakeholders, and the many questions it raises, comments must be submitted no later than December 4, 2023—just 60 days after the PR’s issuance.  The PR itself solicits feedback from the public on a number of complex issues, making the short comment period even more puzzling.  Specifically, FDA asks for comment on:

• “Whether specific enforcement discretion policies would be appropriate for IVDs offered as LDTs for other public health scenarios.” FDA asks that comments provide “a description of those scenarios, an explanation of why enforcement discretion policies with respect to those scenarios would be appropriate, [including how public health interests are served by such a policy], and any relevant evidence to support such policies.”
• “What, if any, unintended consequences may result from the proposed phaseout policy to certain patient populations (for example, Medicare beneficiaries, rural populations, etc.) and what steps could be taken to mitigate those consequences.”
• Whether there is “a public health rationale to have a longer phaseout period for IVDs offered as LDTs by laboratories with annual receipts below a certain threshold (e.g., $150,000).”
• Whether academic medical centers should be treated differently than other laboratories offering LDTs.
• How to leverage “programs such as the New York State Department of Health Clinical Laboratory Evaluation Program (NYSDOH CLEP) or those within the Veterans Health Administration (VHA).”

The PR cites CDC’s report that “70 percent of medical decisions are based on laboratory test results.”  Given the potentially massive impact of the proposed changes on a wide range of stakeholders, and indeed on the healthcare system, we strongly encourage interested parties to submit comments, which can be done using the provided link.

The fate of the PR is far from certain.  Given the number of open questions, we hope that the Agency would consider publishing an amended proposed rule prior to issuing a final rule once it has a firmer stance on these and other important questions.  For context, a quick review of a number of notable CDRH rules in the last ten years shows that most rules take approximately three to four years to be issued as final from the time that they are proposed.  There was one outlier, the hearing aid rule, which went from proposed to final in just under a year.  As readers of our blog will recall, however, the Agency missed its statutory deadline to issue that proposed rule (see prior post here).  During the media call, in response to the question about the timing of publishing the final rule, CDRH Director Jeff Shuren commented, “That is ultimately up to the administration.”

Even if FDA completes rulemaking, a final rule will likely face judicial challenge.  Future blog posts will analyze FDA’s legal authority as well as FDA’s claimed public health need for LDT regulation.

DOJ has issued another “voluntary disclosure” policy intended to encourage companies to disclose misconduct it discovers as part of a merger and acquisition.  Under this new policy, a company will receive a “presumption of declination” of agency action – i.e., a safe harbor – if it discloses misconduct discovered at the acquired company within six months before or after closing.  If the acquiring company cooperates with the government’s investigation of that misconduct, and commits to a full remediation within one year from closing, it can avoid criminal prosecution and payment of fines and penalties that otherwise could follow a full-fledged investigation.

This new policy only applies to the disclosure of criminal conduct, not administrative or regulatory violations.  But it is intended to apply DOJ-wide, meaning it applies to FDA criminal violations prosecuted by DOJ’s Consumer Protection Branch (CPB).  Earlier this year, DOJ’s CPB issued its own voluntary disclosure policy, which applies more broadly to potential criminal violations “involving the manufacture, distribution, sale, or marketing of products,” as well as “misconduct involving failures to report to, or misrepresentations to” regulators.

FDA-regulated entities benefit under the new self-disclosure policy because any misconduct that is discloses will not be factored into whether a future violation by the acquiring company counts as a second violation. As noted in our earlier blog post, the FDC Act contains an automatic escalation clause that promotes a second violation of the Act to a felony, even if there was no intent to defraud or mislead involved in the second violation.  This automatic felony escalation can cause problems for a global company engaged in a multitude of FDA-regulated activities, particularly one that has grown through acquisitions and thus not subject to a consistent corporate culture or global awareness of past conduct.   DOJ’s policy will remove the risk that a company will be considered a recidivist as long as it self-discloses FDC Act violations uncovered during diligence shortly upon closing of the M&A transaction.

As corporate counsel for FDA-regulated companies, we often uncover “red flags” during diligence that we recommend as high risk, potential deal stoppers.  This new policy should now be factored into that calculus, and could give an acquiring company comfort to consummate an M&A transaction knowing that there is a safe harbor afforded for disclosure.  The voluntary disclosure policy also could impact the valuation of the deal, which would necessarily include the costs of remediation required for the safe harbor benefit.  As with the other voluntary disclosure policies DOJ has issued, time will tell whether DOJ honors its stated commitment to prioritize compliance over penalties.

Last week, a federal court in Ohio denied a preliminary injunction motion by four Chambers of Commerce in their lawsuit against the Medicare Drug Price Negotiation Program. The motion was based on the Plaintiffs’ Fifth Amendment due process argument: that absent preliminary relief, Plaintiffs and their members will suffer imminent, irreparable constitutional harm.  The lawsuit was the only one of the challenges to the Negotiation Program that sought preliminary injunctive relief and the only one filed in the Sixth Circuit. Nevertheless, Judge Newman’s decision here gives us our first insights into the merits of the challenges against the Program.

Merits

To issue a motion for preliminary injunctive relief, a court must find that the Plaintiff has a strong likelihood of success on the merits of the underlying case. Here, Plaintiffs had the burden to show that “no set of circumstances exist where the Program would be constitutionally valid under the Fifth Amendment Due Process Clause.” Order at 21. While this standard is different from the standard applicable to the underlying cases, some of the analysis coincides with those cases.

The Plaintiffs argued the unconstitutionality of the Medicare Negotiation Program under the Fifth Amendment by relying on Michigan Bell v. Engler, a 2001 decision by the Sixth Circuit Court of Appeals.  In that case, the court enjoined a Michigan state law that sought to freeze and abolish a customer fee because the law did not adequately safeguard against “confiscatory rates” or ensure a “fair and reasonable rate of return on investment” as required by the constitution. See Motion at 11. However, Judge Newman distinguished Michigan Bell from the present case because the Michigan law, which compelled participation by the plaintiff telephone companies, denied them of their right to a “fair and reasonable rate of return.” Order at 22. As such, that statute was unjust, confiscatory and violated their constitutional due process rights. Id. In contrast, Judge Newman found that Sixth Circuit (and Eighth Circuit) law established that “participation in Medicare, no matter how vital it may be to a business model, is a completely voluntary choice.” Id. at 23. “Because Plaintiffs are not legally compelled to participate in the Program—or in Medicare generally—they have not shown a strong likelihood of success on the merits of their due process case.” According to the court, the Constitution guarantees no right to conduct business with the government, so the consequences of that participation can be “conditioned by regulation” without being considered unconstitutional. Id.

The court did not make much of Plaintiff’s argument that a manufacturer cannot terminate its participation in Medicare for close to two years, see Motion at 8; Complaint at 27-28, potentially dismissing it as a mere administrative matter. See Order at 23 (the Medicare Negotiations cannot be considered confiscatory “because pharmaceutical manufacturers who do not wish to participate in the Program have the ability—practical or not—to opt out of Medicare entirely.”).

Standing

The Defendants questioned, and the court reviewed, Plaintiffs’ standing.  Recall that the Plaintiffs claim associational standing on behalf of their “members that will be directly subject to the IRA’s price controls.” Complaint at 10. The Plaintiffs “expected” their member, AbbVie, to be forced to enter negotiations with the Secretary, disclose competitively sensitive proprietary information about its drug, Imbruvica, and agree to CMS’s prices for it. The drug was indeed selected on August 29, 2023.

The court considered the parties’ arguments as to whether standing should be determined based on the four corners of the complaint or beyond; whether AbbVie or its wholly owned subsidiary, Pharmacyclics, is the “manufacturer” of Imbruvica and therefore the relevant party for litigation; and whether Plaintiffs’ member, AbbVie, could suffer an injury. Eventually, in the interest of justice, the court acknowledged that it could not “tell with certainty whether or not Plaintiffs have standing to raise each of their claims . . . at this early juncture in the litigation,” and asked the Plaintiffs to submit an amended complaint to further clarify with any additional factual developments. See Order at 15, 21.

The Plaintiffs in the remaining five lawsuits (Merck, Bristol Myers Squibb, PhRMA and other trade associations, Janssen pharmaceutical, and Boehringer Ingelheim) might similarly amend their complaints to note that their drugs were in fact selected, and that they were compelled to sign contracts with the CMS. Note that Astellas withdrew its lawsuit after none of its drugs were selected for price reduction in 2026—potentially because that fact cut against its argument for standing.

Harm

The Court reviewed the parties’ arguments on “irreparable harm to Plaintiffs.” This inquiry may not be as relevant to the underlying cases themselves but, as before, brought up some early indications of how a judge will review allegations of legal and constitutional harm. Judge Newman explained that, under Sixth Circuit precedent, “[e]conomic loss does not constitute irreparable harm, in and of itself.” Order at 24. In any case, no Court can provide relief from economic harm that has already occurred because sovereign immunity bars the court from granting damages. Id. at 25. As for future harm, the Court concluded that “the harm alleged is not immediate, and it is too speculative to stop the Program through preliminary injunctive relief.” Id. at 27.

More importantly, the Court noted that the Plaintiffs’ member, AbbVie, does not know what the maximum fair price will be and how it will be determined. “[T]here is no certainty that any harm will occur if the Program continues and Plaintiffs comply with it” and any economic harm “will not occur for years in the future.” Id. at 26. Because the ultimate maximum fair price cannot be predicted with accuracy, and also because of the uncertainty regarding who is affected by the program, the court refused to find “irreparable harm.”

This time last year, we wrote about a long-overlooked FDA statutory authority and wondered if this provision, known colloquially as the “single study plus confirmatory evidence” pathway, was having a moment (previous post here). Two weeks ago, FDA published a draft of its latest drug development guidance explaining how drug and biological product developers can use this pathway to meet the statutory standard for efficacy. The eagerly anticipated guidance, Demonstrating Substantial Evidence of Effectiveness With One Adequate and Well-Controlled Clinical Investigation and Confirmatory Evidence (i.e., the Confirmatory Evidence Guidance, available here) had appeared on CDER’s Guidance Agenda for the past three years.

A brief explainer on confirmatory evidence: how we got here

Before we dive into the specifics of the new guidance, we should explain that the statutory standard we allude to is the requirement that an applicant provide “substantial evidence of effectiveness” to obtain approval of an NDA or BLA. Since 1962, the Federal Food Drug & Cosmetic Act (FDC Act) has given FDA authority to reject a drug application that fails to provide substantial evidence of effectiveness.  The Act defines substantial evidence as that consisting of “adequate and well-controlled [clinical] investigations” upon which qualified scientific experts could conclude that a drug will have its purported effect.  In 1997, the Food and Drug Administration Modernization Act (FDAMA) amended the definition to make clear that substantial evidence could also be demonstrated by “one adequate and well-controlled clinical investigation and confirmatory evidence.”

However, the Act does not define what may constitute such confirmatory evidence. Instead, FDA’s determination of whether a single study plus confirmatory evidence could provide substantial evidence is to be “based on relevant science.” The original 1962 articulation of the efficacy requirement is similarly infused with elements of deference to scientific judgment. The studies constituting substantial evidence are to be conducted “by experts qualified by scientific training and expertise to evaluate the effectiveness of the drug involved.” Those studies must be able to support a “fair[] and responsibl[e]” conclusion by similarly qualified scientific experts that the drug has the claimed effect. Just as the original 1962 efficacy standard makes scientific judgment central to a determination of substantial evidence, the 1997 amendment makes scientific judgment central to a determination of what constitutes sufficient confirmatory evidence to substantiate a single adequate and well-controlled trial.

The new guidance is one of three policy documents dedicated to explaining FDA’s interpretation of this statutory authority and their approach to exercising scientific judgment in evaluating drug effectiveness. However, the two previous FDA guidance documents, released in May 1998 (Providing Clinical Evidence of Effectiveness for Human Drug and Biological Products, available here) and December 2019 (Demonstrating Substantial Evidence of Effectiveness for Human Drug and Biological Products, available here), differ from the new guidance. The May 1998 and December 2019 guidances deal with substantial evidence broadly and include only a small amount of discussion of what constitutes confirmatory evidence. In contrast, the new September 2023 Confirmatory Evidence Guidance is dedicated solely to the single study plus confirmatory evidence pathway.

However, even before publication of this new guidance, we have observed a dramatic uptick in discussions about the confirmatory evidence between FDA and product sponsors. Notably, the discussions have occurred with increasing frequency since publication of the December 2019 Guidance, in both CDER and CBER, and across nearly all review divisions. The timing suggests to us that publication of even that short discussion of confirmatory evidence in 2019 led to a greater willingness on the part of both sponsors and FDA review divisions to engage meaningfully on how to use the single study plus confirmatory evidence pathway. This has coincided with a similar increase in FDA review divisions citing to, analyzing, and applying this authority during their review of and, ultimately, approval of recent NDAs and BLAs. Use of this single study authority has been crucial to breakthroughs in drug development for rare and serious conditions including those with unmet medical needs. Several of these approvals, including examples in which we were directly involved—Relyvrio for ALS and Skyclarys for Friedreich’s Ataxia—expanded upon the examples FDA previously provided to illustrate their interpretation of the single study plus confirmatory evidence statutory standard (see our earlier blog posts here and here).

We are heartened to see that this latest guidance reflects many of the advances we observed in practice since 2019. And, while we were eager, perhaps impatient, to see FDA publish this document, we perceive that more time may have led to a better articulation of FDA policy as more direct experience with the single study plus confirmatory evidence pathway accumulated across review divisions. As we explain in greater detail below, the new guidance elaborates upon certain policy positions that FDA mentions only briefly in their earlier guidance. Although we will also point out where we think the FDA could further improve and clarify their policy, we commend the Agency for this substantial (pun intended) expansion of its current thinking.

The strength the confirmatory evidence is relative to that of the single study

The new Confirmatory Evidence Guidance begins its discussion much like FDA’s previous guidances on substantial evidence with overarching considerations for applying the statutory standard. FDA reiterated its long-held notion that substantial evidence consists of two primary components, the quantity and quality of evidence. While the current guidance does not elaborate on previous guidances’ explanation of how these concepts apply to the single study itself, it instead makes clear that the quantity of confirmatory evidence necessary to provide substantial evidence depends upon both (1) how robust and convincing both the primary source of evidence (i.e., the single trial) is and (2) how robust and convincing the confirmatory evidence is. In a sense, the primary evidence (i.e., the single trial) and secondary evidence (i.e., the confirmatory evidence) exist on something of sliding scale with respect to one another. As articulated by FDA, “[t]he quantity (e.g., number of sources) of confirmatory evidence necessary to support effectiveness may vary across development programs . . . [and] will be impacted by the features of, and results from, the single adequate and well-controlled clinical investigation that the confirmatory evidence is intended to substantiate.” FDA explains further that a more convincing single trial could be supported by a lesser quantity of confirmatory evidence.

The discussion of the quantity and quality of evidence is, however, lacking in significant ways that are particularly important for rare disease drug development. In the December 2019 Guidance, FDA writes that the clinical context for a disease (i.e., its rarity, its seriousness or life-threatening nature, and its unmet medical need) inform how much uncertainty the FDA will accept in terms of what constitutes an adequate and well-controlled trial (see Section V of that guidance available here). We found it to be a significant gap that FDA did not apply the same concepts to considering the quantity and quality of confirmatory evidence. Dedicated discussion of this topic is especially important in the context of a rare disease where there may be greater uncertainty about the single study’s findings due to the common challenges that persist to developing orphan drugs.  In the context of a disease that is all three of those things, that is, rare, serious and with an unmet medical need, FDA has authority to and should apply the maximum degree of flexibility when making determinations about substantial evidence, including in considering confirmatory evidence.

A constellation of confirmatory evidence can be provided

In addition, FDA made several other noteworthy overarching points in the Confirmatory Evidence Guidance. First, FDA clarifies that confirmatory evidence can consist of data from multiple sources. While the December 2019 Guidance provided several examples of potential sources of confirmatory evidence, it lacked any language to indicate whether FDA viewed the different types of confirmatory evidence listed in the previous guidance as being mutually exclusive. This new guidance confirms something we have seen in practice: that confirmatory evidence may consist of “one or more sources (e.g., clinical data, mechanistic data, animal data).” In our words, a constellation of data from multiple sources may constitute the confirmatory evidence that substantiates the results of one adequate and well-controlled clinical investigation.

Potential pitfalls when pursuing this pathway

The Confirmatory Evidence Guidance also includes two notable areas of caution for drug developers interested in pursuing single trial plus confirmatory evidence approvals. The new guidance reiterates statements from the December 2019 Guidance that the statutory standard for approval requires demonstrations of both safety and efficacy in order to inform the FDA’s benefit-risk assessment. However, the new guidance goes further to warn those that a single pivotal trial may not, on its own, provide sufficient safety information to support an indication.

The guidance’s second warning reminds drug developers that FDA regulations (i.e., 21 C.F.R. 314.50(d)(5)(iv)) require that “marketing submissions [include] a description and analysis of all data or information relevant to an evaluation of the safety and effectiveness of the drug product, from any source, foreign or domestic, to avoid selecting only those sources that favor a conclusion of effectiveness.” FDA grimly states that “results of a clinical investigation or confirmatory evidence can be called into question by conflicting evidence unless there is a sufficient scientific justification that may explain the disparate findings” (emphasis added).

Sources of confirmatory evidence expanded

Ultimately, the portion of the Confirmatory Evidence Guidance that represents some of the most informative changes from earlier guidance is in its discussion of the potential types of confirmatory evidence. In the December 2019 Guidance, FDA provides four examples – (1) evidence from existing adequate and well controlled clinical investigation(s) in a closely related approved indication, (2) data that provide strong mechanistic support, (3) compelling results from the single AWC supported by additional data from the natural history of the disease, and (4) support from scientific knowledge about the effectiveness of other drugs in the same pharmacological class. The new guidance not only expands upon these broad categories individually (more on this below) but adds whole new categories, listing them as follows: (1) clinical evidence from a related indication, (2) mechanistic or pharmacodynamic evidence, (3) evidence from a relevant animal model, (4) evidence from other members of the same pharmacological class, (5) natural history evidence, (6) real-world data/evidence, (7) evidence from expanded access use of an investigational drug.

Before we discuss these categories individually, we are compelled to point out that the new guidance states that this list of examples is not intended to be an “exhaustive list.” In other words, the new Confirmatory Evidence Guidance makes clear that other types or sources of confirmatory evidence exist beyond those which are listed in the guidance. Although the December 2019 Guidance described its four types of confirmatory evidence as “examples,” it has been our experience that some FDA review divisions viewed the list in the December 2019 Guidance as being an exhaustive list and the only acceptable sources of confirmatory evidence. The new guidance both explicitly and implicitly confirms that the guidance’s examples are meant to be illustrations of possible sources of confirmatory evidence and not the exclusive list of acceptable options.

Clinical evidence from a related indication

FDA elaborated significantly upon their earlier discussion of when and how confirmatory evidence could come from clinical evidence in a related indication. FDA has dropped the notion that the closely related indication must be an approved indication. The new guidance adds that the clinical evidence from two related, unapproved indications could provide confirmatory evidence for one another in the setting of concurrent approvals for both indications.

However, we believe that there are also circumstances in which confirmatory evidence could come from an adequate and well-controlled trial in a related indication even if a sponsor is not seeking approval for that indication. The same underlying factors that make an adequate and well-controlled trial a robust and reliable source of evidence in the setting of an approved indication or indication submitted for concurrent approval would also be present even if the indication is not currently under review. Fore example, the new guidance notes that there are at least three factors will be considered when deciding whether evidence from a related indication could be confirmatory evidence; the degree of similarity between (1) the indications, (2) the drug’s mechanism of action [“MOA”] in each indication, and (3) the efficacy endpoints.

Mechanistic or pharmacodynamic evidence

FDA also provides significant new explanation of mechanistic confirmatory evidence. At first, this discussion sets a rather high bar stating that “strong mechanistic evidence . . . may be appropriate to use as confirmatory evidence” if (1) the pathophysiology of the disease is well understood, (2) the drug’s MOA is clearly understood, and (3) that MOA directly targets the major driver(s) of the disease. Where these connections between the drug’s MOA and the disease pathophysiology are either less direct or less clear (e.g., when the disease pathophysiology is not well understood) “mechanistic data may not provide sufficient confirmatory evidence . . . and additional evidence from other sources may be needed.” While FDA continues to indicate a preference for “relevant and well-understood” pharmacodynamic markers as the source of mechanistic confirmatory evidence, the new guidance acknowledges that in vitro data could provide a source of such evidence.

FDA does something else interesting here with respect to pharmacodynamic markers.  In a footnote, FDA states that demonstration of an exposure-response relationship between the drug and a pharmacodynamic biomarker could be “particularly persuasive” confirmatory evidence even where disease pathophysiology is not well understood and the biomarker’s relationship to the drug’s MOA is not clear. In effect, FDA has expanded the notion of mechanistic confirmatory evidence to include both true mechanistic evidence as well as implied mechanistic evidence based on pharmacodynamic data.

Evidence from a relevant animal model

Previously, FDA only discussed a possible role for data from animal models within the context of mechanistic information. The new guidance, however, provides an entirely separate discussion of the role of this data. In doing so, FDA is clearly drawing much narrower boundary around the potential for animal models to contribute to confirmatory evidence than before. “Typically, results of studies conducted in an animal model of disease are intended to support progressing a drug candidate forward from preclinical to clinical development, rather than to support a finding of substantial evidence.” FDA then describes three potential factors to weigh when considering the contribution of animal model data: “[1] similarity of pathophysiology and manifestations of the disease in the animal model and in humans, [2] elucidation of the drug’s mechanism of action with evidence of similar pharmacology and pharmacodynamics in the animal model and humans with disease, and [3] evidence that the results of efficacy studies conducted in the animal model reasonably support clinical benefits and outcomes in humans with disease.”

Ultimately, FDA sets a very high bar for accepting animal model data as confirmatory evidence stating: “Only models that have proved to be translational (i.e., prior drugs with the same intended clinical effect have been shown to have this effect observed in the animal model, with similar exposure-response) are likely to be considered as confirmatory evidence.” For rare diseases and, obviously, those with unmet medical needs this may prove to be an impossible bar to surmount. But as we noted above, FDA did not include a discussion of how their authority to exercise regulatory flexibility in the context of rare, serious conditions and those with unmet medical needs will be applied to evaluating confirmatory evidence. In the context of many rare and ultra-rare conditions, an animal model may be able to meet one or more of FDA’s factors above and, yet, not be able to pass this translational test because there may no prior drugs developed to demonstrate the animal model’s translational ability. Such circumstances appear to be a reasonable place for FDA to exercise a degree of flexibility.

Natural history

Of the types of confirmatory evidence that were discussed in earlier guidance, natural history evidence also saw a significant expansion in this new guidance. Previously, FDA’s example only raised natural history when there were historical controls to reinforce a finding on an objective endpoint (e.g., mortality). The new guidance removes this narrow interpretation and describes natural history more broadly as an opportunity to leverage external controls, such as: (1) the use of patient-as-own-control study designs supported by natural history data to show the absence of significant period effects or spontaneous resolution of the condition and (2) progressive diseases where using natural history can be used to confirm that the amount of deterioration in the control group is an accurate reflection of disease progression.

While FDA does not make a distinction between using natural history to substantiate the primary efficacy endpoint from the double-blind phase of a single trial from secondary efficacy endpoints and other supportive analyses, our experiences in ALS and Friedreich’s Ataxia have demonstrated that natural history can be used to substantiate findings from key secondary efficacy endpoints and the open-label extension phase of the single study. In these recent experiences (i.e., the approvals of Relyvrio and Skyclarys), the combination of open-label extension data and natural history data proved to be an invaluable source of confirmatory evidence to support approval.

Same pharmacological class, real-world data, & expanded access

FDA’s new Confirmatory Evidence Guidance includes confirmatory evidence from drugs in the same pharmacological class and, for the first time, evidence from real-world data (“RWD”) and expanded access programs (“EAPs”). The discussions of confirmatory evidence from drugs in the same pharmacological class provide little additional thinking compared to what FDA has already laid out in its December 2019 Substantial Evidence Guidance.  Similarly, the discussion of RWD is consistent with previous guidance documents on the topic, including limiting consideration of this type of data to support the approval of a new indication for a drug already approved.

In contrast, the addition of EAPs as a potential source of confirmatory evidence is quite noteworthy. While FDA is clear that many EAPs are not be designed to gather data of the quality and quantity to support their use as confirmatory evidence, FDA nonetheless acknowledges that an EAP could gather data that is sufficiently reliable and persuasive (e.g., objective clinical outcomes in the context of detailed medical record collection).  In the context of rare diseases, particularly ultra-rare diseases, where each patient represents relatively larger proportions of the known U.S. patient populations, it seems that EAPs should carry additional weight.

It’s the moment we’ve all been waiting for, dreading, anticipating . . . .

Today, FDA released a copy of a proposed rule to regulate laboratory-developed tests (LDTs), which is scheduled to be published in the Federal Register on October 3rd.  The proposed rule has a 60-day comment period for stakeholders.

This proposed rule is a long-time coming.  For more than 30 years, FDA has asserted that it has jurisdiction to regulate LDTs as medical devices and clinical laboratories as manufacturers.  As we have blogged about extensively over the years, FDA has initiated, but not completed, many efforts through different means to create a regulatory framework for LDTs.  FDA previously attempted to regulate LDTs via guidance (see posts here, here, and here) and Congress has engaged in multiple attempts to pass the VALID Act (see posts here and here).  After Congress failed to enact VALID in December 2022, as part of user fee reauthorization, CDRH declared its intention to promulgate LDT regulations.

This proposed rule, if finalized, would phase out the Agency’s general enforcement discretion approach for LDTs, so that in vitro diagnostics (IVDs) “manufactured by a laboratory would generally fall under the same enforcement approach as other IVDs.”  As described in the proposed rule, FDA believes increased oversight is necessary to ensure the safety and effectiveness of IVDs.  The proposed rule cites the current “bifurcated system,” in which companies will initially launch their diagnostic assays as LDTs or offer them as LDTs following failure to obtain clearance or approval.  These LDTs are performed in clinical laboratories regulated under the Clinical Laboratory Improvement Amendments of 1988 (CLIA).  Nevertheless, the Agency believes this bifurcated system presents public health risks, and needs to be corrected by bringing LDTs under the FDA’s general IVD regulatory framework.

Indeed, there are thousands of LDTs offered in the U.S. which are offered for a wide variety of clinical applications from consumer health testing to cancer screening.  Many of these tests, in particular those for rare diseases, are not available as commercial IVDs.  The implementation of a regulatory framework and phasing out of LDT enforcement discretion will have a massive impact on a wide range of stakeholders – including clinical laboratories, healthcare providers, and patients – the ramifications of which will take time to fully assess.

Watch this space for further blog posts analyzing the proposed rule and its potential implications for stakeholders, and indeed for public health, in the coming days and weeks.

As readers of the FDA Law Blog know, the FDC Act is a strict liability criminal enforcement statute that can impose criminal misdemeanor penalties on a person without any showing of intent.  See some of our prior posts, here, here, and here.  If committed with an intent to defraud or mislead, an FDC Act violation can become a felony, which carries more significant jail time and financial penalties.  See some of those prior posts here and here.  What is less well-known is the provision in the FDC Act that purports to automatically convert a second FDC Act violation to a felony, even without any evidence of intent to defraud or mislead. See FDC Act § 303(a)(2), 21 U.S.C. § 333(a)(2): “[I]f any person commits such a violation after a conviction of him [of a prohibited act listed in section 331] has become final, . . .  such person shall be imprisoned for not more than three years or fined not more than $10,000, or both.”

The issue of whether this “second violation” felony requires evidence of intent was addressed in a recent Ninth Circuit decision, United States v. Marschall.  Richard Marschall, a “naturopathic doctor,” had been convicted in 2017 for a misdemeanor violation of the FDC Act for selling misbranded drugs.  In 2021, he was caught again, this time for selling a concoction of sugar and garlic that he claimed could prevent a whole slew of infections.  Marschall stipulated that he had had a prior FDC Act misdemeanor conviction, but at trial and on appeal, Marschall challenged the indictment as defective for charging him with a felony despite the lack of allegations regarding knowledge or intent.  His arguments were rejected by the district court, and the 9th Circuit affirmed the felony conviction.

The facts of Marschall’s case do not make a particularly compelling vehicle for the important legal question of whether a person can be convicted of a felony without any evidence of knowledge or intent.  While Marschall was convicted of a felony based on one earlier 2017 FDC Act conviction, in a footnote, the 9th Circuit notes that this was actually Marschall’s third FDC Act conviction.  Based on these facts, it hardly seemed a stretch for the 9th Circuit to be comfortable that the felony conviction did not raise statutory or constitutional concerns.

But the court’s opinion is not so limited.  At least in dictum, the court appears to suggest that any person (including a large corporation, or the responsible corporate officer of such a corporation) is put “amply on notice” by a prior FDC Act misdemeanor conviction, such that a subsequent felony could be warranted.  Given the broad range of products regulated by FDA, the laundry list of activities prohibited under the FDC Act, and the scope of strict liability misdemeanor exposure, we respectfully disagree.

Indeed, under an unlimited reading of the second violation provision, a global company engaged in a multitude of FDA-regulated activities should be alarmed.  If one business unit is convicted for a food-related violation, perhaps related to failing to maintain adequate HACCP controls, the corporation could be subject to potential felony charges years later for wholly unrelated conduct by a separate business unit for, hypothetically, off-label promotion of a medical device.  Under Marschall, this corporate entity was on notice.  And the risk is the same regardless if the “person” is a corporation or a natural person, a mid-level manager or a CEO.   Such an expansive application hardly seems consistent with the notions of federal criminal prosecution for felonies.

A practical rejoinder to this concern is that first and second misdemeanors are not brought by federal prosecutors without any exercise of prosecutorial discretion, and if such a second misdemeanor prosecution was brought, a court could address these concerns then. The problem with that argument is that the threat of strict liability criminal exposure often results in resolutions short of trial, and felony exposure tilts the scales of justice even more in favor of the prosecution.

Companies and individuals must be aware of the risk that they could be charged with a felony despite the lack of intent.  We will cover further use of the second misdemeanor charge in future posts.

On October 11th, Hyman, Phelps & McNamara, P.C. Director Deborah Livornese will join Faber Deaufur & Itrato Principal Jill Alvarez and Counsel Heather Centauro, and Helen Hemley at Mass General Hospital, for a discussion on diversity in clinical trials, and the implications of the new federal guidelines under the Food and Drug Omnibus Reform Act of 2022 (“FDORA”), which was passed as part of the Consolidated Appropriations Act, 2023, Pub. L. No. 117-328 (2022) (see our FDORA summary and analysis here).  Hear about the new requirements under FDORA related to increasing diversity in clinical trials, strategies for increasing the participation of subjects from historically underrepresented groups, and how these new requirements and approaches should be considered in clinical trial and other related agreements.

Click here to register for this free event!

Much has changed since the long-gone days of 2017.  The Washington Nationals won the World Series, Presidential administrations have come and gone, and FDA has added new meeting types and formats to its menu.  And so, FDA has issued a new draft guidance to bring everyone up to speed on formal meetings under PDUFA.  While the Nats being replaced by the Orioles as the dominant home team did not get a mention in the new Draft Guidance, there were plenty of other interesting changes made to the old 2017 draft guidance.  Many of these changes are not specifically “new,” but the draft guidance formalizes them to a certain extent and puts them all in one place – until more changes are made, that is.

The biggest changes are the addition of Type D and Initial Targeted Engagement for Regulatory Advice on CDER and CBER ProducTs (INTERACT) meetings to the four types already present (Types A, B, B (end of phase), and C), and the addition of additional meeting formats.

Type D Meetings

Type D meetings were first introduced in the PDUFA VII goals letter, and much of the language from that letter is repeated verbatim in the new draft guidance.  A Type D meeting is a meeting focused on a narrow set of issues (not more than two topics and associated questions) that are used to discuss issues at key decision points.  Examples of Type D meeting requests are described in the new draft guidance:

• A follow-up question raising a new issue after a formal meeting (not just a clarifying question – more on that later)
• A narrow issue on which the sponsor is seeking input with only a few (3-5) associated questions
• A general question about an innovative development approach that does not require extensive, detailed advice

Also, the issues should not require input from more than three disciplines or divisions.  The meeting package for Type D meetings should be included with the meeting request.  The new draft guidance warns that sponsors should not request several Type D meetings in temporal proximity instead of a single Type C meeting.  If the request does not fit into the narrow Type D window, a Type C meeting is generally the appropriate meeting type.  FDA will convert the meeting to the appropriate meeting type (B or C) if the sponsor submits an inappropriate Type D meeting request, and the sponsor can either withdraw their request or accept the conversion without submitting a new meeting request.  The draft guidance helpfully adds a few examples of appropriate Type D meeting scenarios, and they are:

• A specific question about an aspect of a complex or innovative trial design (e.g., innovative pediatric design approach)
• A specific question about presenting data following a pre-BLA/NDA meeting
• A specific follow-up question about a new idea stemming from a Type C meeting

The timelines for Type D meetings were added to the very helpful tables in the draft guidance.  FDA intends to respond to a Type D meeting request within 14 days from receipt and to schedule a meeting or issue written responses within 50 days of receipt of a request.  FDA intends to provide preliminary responses to Type D meeting packages no later than 5 calendar days before the meeting date.  The goal for meeting minutes is the same as all other meeting types – 30 days after the meeting.

In our experience, Type D meetings are being granted as written responses only (WRO), so no videoconference/teleconference option.  So, these do not seem to be a suitable place for topics that, while narrow, would benefit from a dialogue with FDA.  In fact, it seems to us that the Type D meeting provides an opportunity to elicit iterative input from the Agency given that many Type C meetings and even some Type B meetings are being granted as WRO in recent years.  With the live discussion by phone or video, it had been difficult for sponsors to ensure their briefing materials, often consisting of complex data and issues, were understood and that they had clarity around FDA’s written feedback.

INTERACT Meetings

INTERACT meetings have a bit of a longer history than Type D meetings, but not much (although they replaced the older “pre-pre-IND meetings”).  INTERACT meetings are for novel products and development programs that present unique challenges early in development (before filing an IND or having a pre-IND meeting) and are intended to facilitate IND-enabling efforts where there are novel or challenging issues.  The issues appropriate for an INTERACT meeting typically relate to IND requirements, such as questions about IND-enabling studies, complex manufacturing technologies or processes, development of innovative devices used with a drug or biologic, or the use of New Approach Methodologies (methods to be used in place of traditional animal testing).  The sponsor needs to have selected a specific investigational product or have a product-derivation strategy to evaluate in a clinical study before requesting an INTERACT study.  Like with Type D meetings (and Type A meetings and Type C meetings about a novel surrogate endpoint), the meeting package should be included with the meeting request.

The new draft guidance also describes some questions and topics that would be appropriate for an INTERACT meeting:

• Choice of appropriate preclinical models or toxicology studies for novel drug platforms or drug candidates
• CMC issues or testing strategies aimed to demonstrate safety adequate to support a first-in-human (FIH) study
• Advice related to the design of proof-of-concept or other pilot safety/biodistribution studies necessary to support a FIH trial
• General recommendations about a future FIH trial where the population is novel and there is no prior precedent or guidance
• Recommendations on approach for further development of an early-stage product with limited CMC; pharmacology/toxicology; and/or clinical data that were collected outside of a U.S. IND

For INTERACT meetings, FDA intends to respond to a meeting request within 14 days of receipt and to schedule a meeting or issue written responses within 75 days from receipt of the meeting request.  FDA intends to provide preliminary responses to INTERACT meeting packages no later than 5 calendar days before the meeting date.  For INTERACT meetings, in lieu of meeting minutes, preliminary responses will be annotated and resent within 30 days if the advice provided changes as a result of the meeting.

In our experience with INTERACT meetings prior to their formalization as part of PDUFA, these meetings were often limited to very early development where there were novel CMC/manufacturing issues.  Meeting questions pertaining to proposed, novel nonclinical development plan or any clinical development issues were explicitly excluded as being premature for an INTERACT meeting.  So, it will be interesting to see whether FDA’s practices change given how their own guidance explicitly includes those very topics as within the scope of an INTERACT meeting.

New Meeting Formats

Back in the old days of 2017, everyone knew that face-to-face meant your face was in the same room as the other faces.  Now, we know better.  As such, the new draft guidance breaks down face-to-face into “In person face-to-face” and “Virtual face-to-face (video conference).”  Moreover, for in-person face-to-face meetings, “core” attendees (those with primary speaking roles) will participate in-person with the sponsor/applicant at FDA, but there will be a hybrid virtual component for “non-core” participants.  The new draft guidance states that individuals expected to have a more peripheral role (such as to answer one possible question) may participate virtually to save room for the “core” attendees.  The “core” sponsor personnel should plan to attend in person (or otherwise a virtual face-to-face meeting should be requested), but “core” attendees may join virtually if they are suddenly unable to attend in-person.

That brings us to virtual face-to-face meetings, where attendees participate remotely on a virtual meeting platform, with “core” attendees’ cameras on.  In the previous draft guidance, teleconference/videoconference meeting formats were combined in the same category, but now that face-to-face means face-to-webcam as well, the new draft guidance distinguishes between the two.  However, it is possible that the only difference between a teleconference and a “virtual face-to-face” conference is that the cameras on Zoom (or other platform) are off.

This is understandably very confusing terminology. You may have even had to reread what we wrote a couple of times just to make sure you understood.  So, we encourage sponsors requesting meetings to be clear and not use “face-to-face” alone if trying to request an “in person” meeting, as FDA could interpret that as a request for a “virtual cameras on” meeting.

Other Changes

The new draft guidance makes various other changes as well.

For meeting requests, it specifies that there should be generally no more than 10 total consecutively numbered questions in a meeting request and that meeting requesters should not submit subquestions (1a, 1b, etc.) – these will be counted toward the overall number of questions regardless.  The new draft guidance also includes Type D, INTERACT, and all Type C meetings along with the previous draft guidance’s inclusion of pre-IND and Type C meetings other than those for a new surrogate endpoint as the types where FDA may convert to written response.

The new draft guidance states that requestors are “encouraged” to include their meeting packages for all meeting types, if possible.  For both meeting requests and meeting packages, the new draft guidance also removes descriptions of old-fashioned paper submissions to FDA for meetings – everything should be submitted electronically, though, if necessary, noncommercial IND holders may also submit via the appropriate center’s document room.

In responding to meeting requests, FDA still reserves the right to determine what format is most appropriate.  If WRO is the type granted, FDA will notify the requester of the date it intends to send the written response in its response to the meeting request.  The new draft guidance also explicitly encourages sponsors to submit a rationale in a follow-up correspondence if they believe a meeting is needed instead of written responses, and FDA may or may not convert it back to a live meeting format.

Finally, the new draft guidance adds a paragraph to the end of the draft guidance stating that sponsors may submit a “follow-up opportunity/clarifying questions” correspondence in formal submission to their application to ensure their understanding of FDA feedback.  Such correspondence should be sent as a “Request for Clarification” within 20 calendar days following receipt of meeting minutes or written responses (or preliminary comments if the meeting is cancelled), and FDA intends to respond within 20 calendar days of receipt.  This correspondence should only include questions of a clarifying nature, not new issues or proposals (or a Type D meeting could be appropriate).  However, even if this correspondence is out of scope, if the issue is narrow and focused, the review division may provide a response as soon as reasonably possible.  We are relieved to see this opportunity to ask follow-up clarifying questions after an FDA meeting was not eliminated with the advent of the Type D meeting, as they both seek to serve similar goals.  Often, timely clarification can be the difference between a sponsor being able to submit a final study protocol and initiating recruitment or being able to finalize an NDA/BLA submission – where every day is material to the company.

P.S. – As this post publishes, the Orioles may have just cemented the AL East Division title.  Something we would have never imagined given the rebuild that started back in the long-gone days 2017.  Let’s go O’s!

Hyman, Phelps & McNamara, P.C. (HP&M), a leader in providing legal and regulatory support to the life sciences industries, today announced the appointment of Jeff Grizzel to the newly created position of Chief Marketing Officer (CMO).  Grizzel will oversee the marketing organization, with responsibility for continuing and enhancing HP&M’s brand and expanding its business development activities.

Jeff joins HP&M from Compliance Architects where he served as Vice President of Business Development.  Prior to Compliance Architects, Jeff held senior leadership positions as Conference Director and Director of Sales for industry leading provider FDAnews.

“During my time at HPM I’ve felt extremely fortunate to work with an incredible group of FDA lawyers and professionals whose work speaks for itself.  Jeff’s knowledge of FDA and regulated industry along with his prior experience will help us ensure that companies and individuals who need our expertise understand the depth and breadth of our services,” said J.P. Ellison, HP&M’s Managing Director.

“I’m incredibly excited by the opportunity to work for HP&M and its amazing group of professionals.  Since I entered the life sciences industry in 2005, I’ve respected HP&M and admired their expertise and elite standing,” said Grizzel. “I look forward to bringing my strengths in marketing, branding and business development to bear as HP&M continues to serve the life sciences community around the world.”

Grizzel holds a degree in Economics from High Point University and lives in Falls Church, VA.  If you have any media, speaking, marketing or legal services-related inquires please contact him at jgrizzel@hpm.com or (202) 800-6116 direct / (202) 999-0302 cell.

More than 40 registrants — primarily hospitals and pharmacies — have paid significant civil penalties of up to $5,000,000 to settle allegations they failed to report controlled substance thefts or significant losses to the Drug Enforcement Administration (DEA).

The risks to hospitals and pharmacies are multi-faceted and growing.  Non-compliant facilities face:

• Increased patient and employee health risks — in some cases even overdose deaths
• Multi-million-dollar settlements — and these amounts have been increasing each year
• Significant long-term compliance costs to meet the requirements of government settlement agreements
• Erosion of public trust and confidence in affected hospitals and pharmacies
• Unwanted local and national publicity

Hyman, Phelps & McNamara (HP&M) invites you to join Director Larry Houck for a free webinar on the compliance lessons learned from recent hospital controlled substance diversion cases.

In this webinar you’ll learn:

• How employees diverted controlled substances — their methods are constantly evolving
• What red flags were missed
• DEA inspection priorities
• Safeguards to minimize internal diversion
• Best practices for maximizing diversion detection

Mr. Houck was a DEA Diversion Investigator for 15 years prior to joining HPM in 2001.  He conducted numerous employee diversion investigations in the field and later served as Staff Coordinator in Diversion Control’s Liaison and Policy Section at DEA headquarters.

Don’t delay, click here to register today!

Every parent is familiar with the parade of horrors that accompany household items as mundane as window coverings.  The cords that dangle from blinds are universally recognized as a grave danger to infants and children.  It is also a hot-button issue for the U.S. Consumer Product Safety Commission (CPSC), the federal agency charged with monitoring and enforcing against dangerous consumer products. On November 28, 2022, CPSC issued a final rule on a new safety standard for operating cords on custom window coverings.  The way it did so, however, will have ramifications for agency rulemaking going forward, including that done by the FDA.

CPSC’s final rule essentially banned all corded window coverings under what the D.C. Circuit Court of Appeals described in a recent opinion as an “aggressive timeline for industry compliance.”  The nearly $7 billion window covering industry was well aware of the dangers of dangling cords and put industry standards in place in 2018 and updated them in 2022.  Those standards did not address custom-made coverings however, and CPSC targeted this safety void.  However, as the D.C. Circuit found, the CPSC Commissioners ordered their new rule move forward with some very real procedural deficiencies, over industry protest and against the advice of their own agency counsel.

Within two days of the final rule, the Window Covering Manufacturers Association filed suit at the D.C. Circuit, which has primary jurisdiction to review consumer product safety rules under the Consumer Product Safety Act. See 15 U.S.C. § 2060(c). The court heard the case on an expedited basis and, last week, vacated the final rule. The court found that the Commission acted arbitrarily by failing to publicly disclose the evidence it used to support the consumer safety risk and the need for immediate action. The Commission also failed to perform an appropriate cost-benefit analysis because it used the prices of stock window coverings, which were not relevant to the rule. Finally, the rule was set to come into effect 180 days from the publication of the rule, which was an impossible timeline for industry to meet.

This decision from three Democrat-appointed judges can be seen as a traditional pullback of a procedurally deficient agency rule.  But there may be more for us to learn from this decision. Given a looming threat to agency deference, as seen in the Supreme Court decision in West Virginia v. Environmental Protection Agency last year, courts might be looking for ways to limit agency expansion. If agencies get ahead of themselves, as they often do, courts may be only too happy to rein them in. 

In this case, the D.C. Circuit ruled for the industry and sent the case back to CPSC for further action. So, this is not a decision that strips CPSC of the power to enact new rules. But any case that sends a proposed rule back to its home agency has import. No federal agency wants to be the next to headline a Supreme Court case that jeopardizes Chevron deference. Thus, federal agencies must carefully consider changes or novel interpretations of their authorities. We hope “slow and methodical” will remain in style as agencies adopt new rules or stake out novel enforcement authorities.

Given that both CPSC and FDA are regulatory agencies charged with protecting consumer safety, you can bet that this case has some rule-making takeaways that FDA will digest.  First, FDA will process and enact rules with deliberation.  After this opinion, we bet that the agency will continue to make rules at its current systematic pace.  Second, we expect FDA to make every effort to listen to industry and consider relevant standards as it decides how and why to address issues through rulemaking.  And third, we expect transparency from FDA about its decisions.  FDA, and all agencies, now have additional notice that attempts to justify decisions without that transparency are likely to draw the ire of courts.

Window Covering Mfrs. Is another judicial note to FDA and all federal agencies that they need to remain purposeful and transparent in their rulemaking and take the necessary time to veer policy away from the appearance of capriciousness.