Notwithstanding FDA’s earlier efforts touting the benefits of outsourcing facility registration, here,  there are less than 75 registered facilities.  Almost the same number of outsourcing facilities have opened – and shut – their doors since the passage of the 2013 Drug Quality and Security Act (Title I) (DQSA), which created the outsourcing facility registration category and set forth statutory parameters for their operation.  In addition to those statutory parameters within the DQSA, FDA has published multiple guidance documents dictating additional confines in which outsourcing facilities should function.  Why are not more drug manufacturers or pharmacy compounders jumping at the chance to enter into this novel, unique drug space?  FDA recently published in the Federal Register a notice seeking comments on certain information collection activities in order to better understand issues facing  outsourcing facilities.  See “Activities; Proposed Collection; Comment Request; Obtaining Information To Understand Challenges and Opportunities Encountered by Compounding Outsourcing Facilities (85 Fed. Reg. 36857 (June 18, 2020) (Docket No. FDA–2019–N–3077).  FDA recognizes that, “Five years since its creation, this domestic industry is still relatively small and is experiencing growth and market challenges.”  The Agency further notes that there continues to be drug quality issues concerning the products manufactured at outsourcing facilities.  FDA is soliciting comments on proposed information collection associated with FDA “research” to obtain information from pharmacists and other management at outsourcing facilities, and related compounding businesses, to “support a comprehensive analysis of the outsourcing facility sector that will inform ongoing FDA work in this area.”  More specifically:

FDA intends to engage in several initiatives to address challenges and support compliance and  advancement.  One initiative includes conducting in depth research to understand better the challenges and opportunities encountered by the outsourcing facility sector in a number of different areas. These include: Operational barriers and opportunities related to the outsourcing facility market and business viability; knowledge and operational barriers and opportunities related to compliance with Federal policies and good quality drug production; and barriers and opportunities related to outsourcing facility interactions with FDA.

85 Fed. Reg. 36858.  FDA intends to pose the following types of questions during its research activity, and believes 300 respondents will participate, with total burden of 600 hours.  The types of issues that FDA intends to consider in its research include the following:

1. What financial and operational considerations inform outsourcing facility operational and business model decisions?
2. What factors impact the development of a sustainable outsourcing facility business?
3. What financial and operational considerations inform outsourcing facility product decisions?
4. Do outsourcing facilities understand the Federal legislative and regulatory policies that apply to them? What, if any, knowledge gaps need to be addressed?
5. What challenges do outsourcing facilities face when implementing Federal current good manufacturing practice (CGMP) requirements?
6. How do outsourcing facilities implement quality practices at their facilities?
7. How is CGMP and quality expertise developed by outsourcing facilities? How do they obtain this knowledge, and what training do they need?
8. What are the economic consequences of CGMP noncompliance/product failures for outsourcing facilities?
9. What are outsourcing facility management and staff views on current interactions with FDA? How do they want the interactions to change?
10. What are outsourcing facilities’ understanding of how to engage with FDA during and following an inspection?

The comment period will be open for 60 days (until August 17, 2020).  This blogger believes other considerations that FDA’s researchers may want to ponder include exactly what outsourcing facilities are permitted to compound, and whether limitations of exactly what an outsourcing facility can used in compounding affects market entry decision making.  In addition, researchers may want to consider the effect on market entry of the “Bulks List 1 (i.e., permissible substances) significant “limitation” on what outsourcing facilities may compound.  Simply put, Bulks List I is woefully “short” – and getting shorter —  when compared to the substances that can be used in compounding by Section 503A pharmacies (even given statutory limitations on compounding “essentially copies” of commercially available drug products).  FDA’s removal of substances from Bulks List 1, after significant investment by outsourcing facilities (i.e., stability and other studies) to ensure the safe, appropriate use of such substances, likely stifles not only innovation in the space, but also the facility’s ability to engage in the expenditure of resources to compound the drug product in the first instance.  This likely affects the ability of outsourcing facilities to engage in profitable compounding opportunities, especially when one considers the effect of FDA’s drug approval status for certain bulk substances on the potential removal of those FDA approved “substances” from FDA’s Bulks List 1 (i.e., vasopressin and others).  Among other significant “market” issues, researchers also may want to consider the effect of the vague “Prohibition on Wholesaling” statutory provision on the ability of outsourcing facilities to sell for resale their safer, cGMP-quality formulations to compounding pharmacies and doctors’ offices.  In addition, FDA should also consider the effect of myriad state licensing requirements on outsourcing facilities’ market entry.  States and FDA have not coordinated registration, licensing or other regulatory requirements.  As two significant examples, some states require pharmacy licensure notwithstanding the DQSA’s provision stating that pharmacy licensure is not required (but operations must be supervised by a licensed pharmacist).  Other states do not permit co-location of an outsourcing facility and a traditional FDA-registered drug manufacturer, notwithstanding FDA’s Facility Guidance that permits such co-location.  If outsourcing facilities want a stake in the discussion, please submit comments to docket number FDA-2019-N-3077, linked here.

The U.S. Departments of Agriculture (USDA) and Health and Human Services (HHS) work together to update and release the Dietary Guidelines for Americans (Dietary Guidelines) every five years. (See our post about the 2015 Dietary Guidelines here.)  Each edition of the Dietary Guidelines is intended to reflect the current state of nutrition science and provide advice on what to eat and drink to promote public health and reduce risk of chronic disease. The 2015-2020 Dietary Guidelines for Americans  are currently in effect until the 2020-2025 Dietary Guidelines are released.

The Dietary Guidelines Advisory Committee (DGAC) is tasked with providing USDA and HHS with a scientific review of specific topics and supporting scientific questions on nutrition and health. While the final report of the scientific review was expected on June 17, 2020, instead the DGAC hosted a webinar outlining its findings and providing an understanding of what might be in the final report to be presented to USDA and HHS in July.  To put it simply (and this won’t surprise anyone who spent time looking at the food pyramid on the back of your cereal box) the  current advice remains eat more vegetables, fruits, whole grains, nuts, legumes, seafood, and lean meat; and eat less added sugars, refined grains, sodium, and red and processed meats. And drink less alcohol.

Concerns have been raised that the DGAC is influenced by industry and the current administration.  Those with concerns point in part to the issues that the scientific report will not address, including red meat, sodium levels,  and the impact of food production on the environment.  There are, however, two recommendations discussed in the June 17, 2020 webinar that are surprising given those concerns.  The first is the recommended amount of energy from added sugars. The 2015-2020 Dietary Guidelines recommended no more than 10% of energy intake be from added sugars (recall that this forms the basis of FDA’s reference daily intake value for added sugars). This year’s recommendation seems to be 6% of energy, which is even less than the level recommended by the WHO.

On the issue of alcohol, for those who already drink alcohol, the DGAC recommends no more than one drink per day – “at all levels of consumption, drinking less is generally better for health than drinking more.”  This is a change from prior years, when the recommendation for men who drink alcohol was two drinks or less per day.

The final scientific report by DGAC due in July 2020 is a resource that helps to inform the final Dietary Guidelines — it is not a draft of the Dietary Guidelines.  The next step in the Dietary Guidelines process is the forwarding of the final and full scientific report to HHS and USDA in July, followed by a period of public comment.   HPM will keep you abreast of the process as it moves forward.

As we previously reported, the Made in the USA claim, as a voluntary claim on consumer goods, including products under FDA jurisdiction such as foods, over-the-counter drugs, and cosmetics, continues to be a popular advertising claim.  Generally, FTC enforcement actions regarding unqualified Made in the USA claims have been limited to closing letters and orders enjoining companies from making false and misleading Made in the USA claims.  In these actions, the FTC relied on the standard for such claims laid out in FTC’s 1997 Enforcement Policy Statement on US Origin Claims.

Last year, the FTC received a Petition requesting that it  issue a rule for Made in the USA claims.  As the Petition pointed out, the FTC Act provides the FTC with the authority to issue a rule for “Made in the U.S.A.” product labels at 15 U.S.C. § 45a.  Importantly, violations of such a rule would be treated as a violation of a rule under 15 U.S.C. 57a, allowing the FTC to seek not only an injunction but also civil penalties.

In fall of 2019, the FTC held a public workshop and collected public comments covering three aspects of Made in the USA claims: (1) consumer perception of such claims; (2) concerns about the FTC’s current enforcement approach; and (3) potential changes to the FTC’s enforcement strategy.  A report of that workshop was published on June 19, 2020 and is available here.

Also on June 19, 2020, FTC announced a notice of proposed rulemaking for the unqualified Made in the USA claim.  Consistent with the 1997 Policy Statement and the various consent orders, the proposed rule will prohibit marketers from including unqualified Made in USA claims on product labels unless:

• final assembly or processing of the product occurs in the United States;
• all significant processing that goes into the product occurs in the United States; and
• all or virtually all ingredients or components of the product are made and sourced in the United States.

The proposed regulation would not preempt state law that sets higher standards.

The proposed rule does not apply to all advertising claims, as the FTC’s authority regarding Made in the USA claims is limited to claims on product labels.  Interestingly, the rule extends beyond claims made on product labels to Made in the USA claims appearing in “mail order catalogs or mail order advertising.”  That term is defined as “materials, used in the direct sale or direct offering for sale of any product or service, that are disseminated in print or by electronic means, and that solicit the purchase of such product or service by mail, telephone, electronic mail, or some other method without examining the actual product purchased” that “include[] a seal, mark, tag, or stamp labeling a product Made in the United States.”

Commissioner Phillips and  Commissioner Wilson issued statements, here and here, asserting that the scope of FTC’s authority under 15 U.S.C, § 45a does not extend to online and mail order claims as that provision refers to product labels, not to other labeling or advertising.

Comments may be submitted until 60 days after publication of the proposed rule in the Federal Register.

In recent months, the Food and Drug Administration (FDA) has issued a record number of Emergency Use Authorizations (EUAs) under Section 564 of the Federal, Food, Drug, and Cosmetic Act (FDCA).  With a large number also pending, this review pathway is becoming almost common for a wide range of products, predominantly devices, although drugs and biologics are also eligible.

In this light, some questions of law and policy already settled regarding 510(k) submissions or premarket approval (PMA) applications may need to be re‑analyzed to determine if the answer is the same in the EUA context.  With the COVID emergency likely to continue for some time, these questions will not soon disappear.

Today, we tackle the question of whether a company may lawfully advertise a device with an EUA pending (prior to issuance of the EUA)?  For more than 40 years, FDA’s policy has been that a device with a 510(k) pending may be advertised (promoted) prior to clearance.  In Compliance Policy Guide (CPG) 300.600,

FDA considered the question of judging when a device has entered commercial distribution (not interstate commerce).  This question was central to qualifying for “preamendment” status by being “on the market” as of May 28, 1976.  (The policy was issued in 1978.  Obviously, this question is no longer very important.)

The answer FDA gave was that a device would be considered in “commercial distribution” if it had been (i) displayed, advertised or offered for sale for a non‑research/investigational use and (ii) the manufacturer had accepted or was prepared to accept an order “that resulted, or would have resulted, in a contract of sale for the device in the United States, generally with delivery to occur immediately or at a promised future date.”  So a willingness to contract or entering into actual contractual agreements was deemed an essential element of commercial distribution.

In the same policy, FDA stated that, as a derivation from this analysis, devices with a 510(k) pending are not considered to enter commercial distribution if they are advertised (meeting required condition (i)) so long as no orders for sale are solicited or accepted (defeating required condition (ii)).  The policy statement itself does not address orders contingent on obtaining a 510(k) clearance, but FDA historically has taken the position that such orders satisfy required condition (ii) and constitute an element of commercial distribution.

At first blush, it would seem relatively straightforward to apply this policy to EUAs.  An EUA authorizes the introduction of a device into interstate commerce.  It is essentially a substitute legal permission in the absence of 510(k) clearance or PMA approval.  Therefore, if promoting a device (without taking orders) is permissible in the 510(k) pending context, it is logical to apply the same rule in an EUA pending context.

But there is a complication to consider:  FDA’s policy only explicitly applies to devices with a 510(k) pending.  FDA has never said that it applies to devices with a PMA pending.  The EUA pathway, however, applies to all device types.  A device with an EUA pending could be 510(k)‑able, but it might also be one that is ordinarily required to obtain PMA approval.  The pathway depends upon the device technology and indications for use.  If the device is novel, the ultimate classification may not yet be decided.

It can be replied that FDA has never said the 510(k) pending policy is not applicable to PMA‑pending devices.  In fact, there is not an obvious basis for excluding PMA‑pending devices from policy in CPG 300.600.  This policy is based upon a determination that advertising a device is a necessary but not sufficient activity to put it into commercial distribution.  That determination would logically apply to PMA‑pending devices as well.  Also, the policy in CPG 300.600 was formulated in the context of a question that only implicated 510(k)‑eligible devices.  Therefore, FDA did not have occasion in CPG 300.600 to address devices that require PMA approval.

Nor has FDA had much occasion since that time to address whether CPG 300.600 extends to PMA‑pending devices.  The reason is that a provision in the Investigational Device Exemption (IDE) regulation prohibits all promotion of an investigational device (21 C.F.R. § 812.7).  Most devices requiring PMA approval require a supporting IDE study, thereby triggering this prohibition.  In short, even if CPG 300.600 were to be extended to PMA­‑pending devices, it is largely a moot point, because the IDE regulation flatly forbids promotion of a device while it is investigational.

So what does all this mean in the EUA context?  It appears that the general rule of thumb should be that a device with an EUA pending, just like a device with a 510(k) pending, may be promoted prior to issuance, provided that purchase orders are not solicited or accepted.

A more difficult question is whether § 812.7 prohibits promotion of an EUA‑pending device if the same device was or is under IDE study.  Take the strongest case, in which the indications for use in the IDE study (and eventual PMA application) are the same as the EUA indications.  (That will not be entirely true in many cases, because an EUA must focus on fighting the pandemic.)  There is no doubt that § 812.7 prohibits promotion of the investigational device.  Does it apply to the same device with an EUA pending?

In my view, the prohibition against promotion of the investigational device does not apply.  The question really comes down to whether the IDE regulation applies simultaneously to the investigational and EUA versions of a device.  One reason that the IDE regulation should be applied to the former but not the latter is that the two devices are not the same.  They may have the same technology and the same or similar indications, but the EUA device will be labeled differently.  Among other things, it will be labeled as an “EUA device” and not an “investigational device.”  That distinction is meaningful, because the IDE regulation only applies to investigational devices.  Things will get tangled up very quickly if the EUA device is subjected to the IDE regulation alongside the investigational device.

For instance, the IDE regulation requires that an investigational device be labeled “Caution:  Investigational Device.  Limited by U.S. Law to Investigational Use” (21 C.F.R. § 812.5).  If the IDE regulation were applied to an EUA device, then the EUA device would have to bear this caution as well.  That result would be nonsensical.

As another example, the IDE regulation requirements apply until the device receives clearance or approval.  What happens when the EUA is obtained and the EUA device begins to be advertised and shipped?  Does that end the investigational status of the device being studied?  Arguably, it would, if the EUA and investigational versions of the device are being treated as one and the same under the IDE regulation.  Therefore, it makes sense to acknowledge that the they are not the same and that the IDE regulation does not apply to the EUA version of the device.

Finally, as a policy matter, there is no need to fear that the investigational devices will be deployed “off­ label” for an advertised EUA use.  The use of the investigational devices is strictly controlled under the IDE regulation and must follow a written protocol.  Therefore, if an EUA device is advertised while the EUA is pending (or after issuance of the EUA), that cannot induce off-label use of the investigational device so long as the sponsors complies with the IDE regulation.

In short, under the analysis above, any device with an EUA pending may be advertised prior to issuance of the EUA.  Of course, FDA has not weighed in on this issue, so there is some regulatory uncertainty.  A company considering whether to advertise an EUA pending device should proceed with caution after careful consideration of all the circumstances.

CMS Proposed MDRP regulation:  In the Federal Register of Friday, June 19, CMS published a proposed rule to implement statutory amendments to the Medicaid Rebate Program statute, and to add CMS’s own policy proposals to encourage value based purchasing arrangements and discourage patient copay assistance.  The variety of topics covered in this rule include:

• Best price changes and other and other measures to encourage value based arrangements in Medicaid (and elsewhere)
• Additional regulations to implement the alternative rebate for line extensions, including an exceptionally broad definition of “new formulation” and a definition of “oral dosage form”
• Introduction of a new, problematic hurdle for claiming the best price exceptions for manufacturer coupon and other patient savings programs
• Clarification of the average manufacturer price (AMP) and best price treatment of rebates to Medicaid Managed Care plans that are not paid pursuant to a CMS-approved supplemental rebate program.
• Implementation of statutory amendments to exclude sales of authorized generics from the brand AMP, redefine single source and innovator source drugs to remove references to “original NDAs”; and redefine multiple source drugs to include OTC drugs that are covered outpatient drugs.

HPM has prepared a memo summarizing this wide-ranging rule (click here).

Federal District Court Decision on Base AMP Reset:  On the same day that CMS published its proposed rule, the Federal District Court for the District of Columbia issued a decision upholding CMS’s rejection of a base AMP reset by a drug manufacturer.  In Ipsen Biopharmaceuticals, Inc. v. Azar, Ipsen had obtained approval in 2007 for Somatuline Depot for the treatment of acromegaly.  In 2014, FDA approved two supplemental NDAs (sNDAs), one for changes in manufacturing and the container closure system, and the other for a new indication for treatment of gastroenteropancreatic neuroendocrine tumors.  Ipsen notified CMS that it intended to establish a new baseline AMP for the revised product, because the revisions were substantial and required two sNDA approvals.  CMS responded that the new version must assume the same base AMP as the original version, because the dosage form and strengths of the drug remained the same and they were marketed under the same NDA.  Ipsen ultimately filed suit against HHS, claiming that CMS’ decision was arbitrary and capricious and exceeded CMS’ statutory authority.  The Court upheld CMS’s position.  At least for drugs that are not subject to an alternative rebate for line extensions (because the original drug was not an oral dosage form drug), CMS’s bright line rule prevails:  a manufacturer may establish a new baseline AMP for a drug only if the manufacturer obtains approval (i.e., an NDA or BLA) for a new dosage form or strength of the drug.

It has been over three months since FDA issued its press releases stating that it was postponing most foreign and domestic facility surveillance inspections (see here and here).  Since then, apparently only “mission critical” surveillance inspections have taken place, leaving the bulk of registered facilities on FDA’s inspection list to await the agency’s eventual return.  While this might be good news for some drug facilities, it is creating an enormous headache for many more, including those that are currently listed as Official Action Indicated (OAI), since it is difficult to get a New Drug Application (NDA), Abbreviated New Drug Application (ANDA) or Biologics License Application (BLA) approved when one of the manufacturing facilities in a drug application is listed as OAI on FDA’s inspection database.

And it is nearly impossible for the review process to reach a successful conclusion if FDA finds that a manufacturing facility is exhibiting major deviations from current Good Manufacturing Practice, which is associated with an “unacceptable” state of compliance.  Worse yet, even if the OAI classification is associated with a manufacturer of an Active Pharmaceutical Ingredient, rather than that of a Finished Dosage Form, FDA may, and frequently does, block review of the NDA, ANDA and BLA for the finished drug product made with that API (or drug substance).

Without any public statements on this issue from FDA, it is difficult to understand why this bottleneck is occurring.  After all, FDA has had the statutory authority to conduct so called “paper inspections” since the Food and Drug Administration Safety and Innovation Act (FDASIA) was signed into law on July 9, 2012.  Section 706 of FDASIA (codified at 704(a)(4) of the Federal Food, Drug, and Cosmetic Act (FDCA)) specifies FDA’s authority to demand production of drug records remotely by the addition of the following text to the FDCA:

(4)(A) Any records or other information that the Secretary may inspect under this section from a person that owns or operates an establishment that is engaged in the manufacture, preparation, propagation, compounding, or processing of a drug shall, upon the request of the Secretary, be provided to the Secretary by such person, in advance of or in lieu of an inspection, within a reasonable timeframe, within reasonable limits, and in a reasonable manner, and in either electronic or physical form, at the expense of such person. The Secretary’s request shall include a sufficient description of the records requested. [emphasis added]

In addition, FDA has section 501(j) FDCA, which states that a drug shall be deemed to be adulterated:

If it is a drug or device and it has been manufactured, processed, packed, or held in any factory, warehouse, or establishment and the owner, operator, or agent of such factory, warehouse, or establishment delays, denies, or limits an inspection, or refuses to permit entry or inspection. [emphasis added]

In guidance that FDA published in October 2014, entitled Circumstances that Constitute Delaying, Denying, Limiting, or Refusing a Drug Inspection, FDA has interpreted section 501(j) FDCA as including some circumstances where inspection records are not provided by an establishment pursuant to 704(a)(4) FDCA.

“…[T]he ability to access and copy records is a critical aspect of FDA inspections. Not allowing an authorized representative of the FDA access to or copying of records that FDA is entitled to inspect by law, including not providing records that FDA requests pursuant to section 704(a)(4) of the FD&C Act, may be considered limiting an inspection.  Examples of records limitations include, but are not limited to…:

• A facility provides some, but not all of, the records requested by the FDA investigator that FDA has authority to inspect.
• A facility provides the FDA investigator the requested records that FDA has authority to inspect, but they are unreasonably redacted.
• A facility refuses to provide records that FDA requests pursuant to section 704(a)(4), or such records are unreasonably redacted.” [emphasis added]

In addition, on August 25, 2017, FDA published SMG 9004.1 “Policy and Procedures for Requesting Records in Advance of or in Lieu of a Drug Inspection” that outlines the relevant timeframes for receipt and review of establishment records, and the types of records that can be requested.

Hence, it is unclear why agency resources, which have not been used for on-site surveillance inspections for over 90 days, have not been quickly redirected, en masse, to “paper inspections” under section 704(a)(4) FDCA.  Nor is this simply an issue of FDA falling behind on inspections.

In the era of Covid-19 and anecdotal evidence of people hoarding medicines, the possibility of growing drug shortages has become a public health issue, and hence there is no excuse for further delaying approval of NDAs, ANDAs and BLAs due to FDA investigators who cannot travel to an OAI facility to perform a follow-up inspection.  To make matters worse, some of these facilities could be manufacturing the next drug or biologic that preliminary evidence shows is helpful in treating Covid-19 symptoms.*

*As a postscript, there are indeed avenues to seek marketing authorization if the drugs are on FDA’s Drug Shortage List, or are used to treat COVID-19.   Hyman, Phelps has extensive experience assisting clients in seeking Emergency Use Authorizations for pharmaceuticals and medical devices, even if the products are not approved (or, in the case of medical devices, cleared).   We also have advised clients who have sought permission to distribute drugs that are experiencing shortages, despite prior adverse findings by FDA.

The American Conference Institute (“ACI”) is sponsoring its annual Food Law Conference on July 15, 2020. Like a lot of conferences this year, the ACI conference format has changed from a live, in-person event to an interactive, virtual conference.

ACI’s Food Law conference is a unique, interactive forum where key legal, regulatory and compliance stakeholders for the food industry will gather to discuss how to best prepare for the future by examining current challenges, benchmarking existing strategies, and analyzing critical areas for innovation.

The “Who’s Who of the Food Law Bar” will give you critical insights as they discuss and analyze:

• Plant-Based “Meats” and “Milks”: Anticipating the FDA’s/USDA’s Regulatory Platform
• Status check on CBD and Cannabis for the Food Industry
• Analysis of the Current Trade and Tariff Environment on the Food Industry
• Social Media Think Tanks on the Role of Influencers/Virtual Influencers and User-Generated Content for the Food Industry
• Recalls and Crisis Management Integration War Room

Hyman, Phelps & McNamara, P.C.’s Riëtte van Laack will be speaking at a session titled “Food Law and Regulation 101: A Primer on Applicable Laws, Regulations and Key Agencies Having Authority over Food.”

FDA Law Blog is a conference media partner. As such, we can offer our readers a special 10% discount. The discount code is: D10-825-825EX01. You can access the conference brochure and sign up for the event here.  We look forward to “seeing you at the conference.”

A Supreme Court decision this week shows good potential to upend FDA and FTC’s claim that they can without limits seek disgorgement of “profits” from defendants who engage in unlawful activities.  In Liu v. Securities and Exchange Commission, the question was whether the SEC could obtain disgorgement of all the money received by a defendant which has engaged in unlawful activity, under the SEC’s  general statutory authority to obtain equitable injunctive relief.  The lower courts had held that the SEC could force disgorgement as an equitable remedy, but the Supreme Court vacated and remanded that award.  Considering the already tenuous grounds that FDA and FTC rely on to demand disgorgement, this case sets the stage for future challenges to these agencies’ ability to obtain disgorgement and restitution pursuant to their authorizing statutes.

Justice Sonia Sotomayor wrote the Opinion in which all the Justices joined except Justice Clarence Thomas, who would have gone further to hold that disgorgement was wholly unavailable because “disgorgement is not a traditional equitable remedy.”  The majority Opinion struck a middle ground, however, finding it “inequitable that [a wrongdoer] should make a profit out of his own wrong,” even if the term “disgorgement” has not always been recognized by equity courts.  But even if disgorgement is allowable equitable relief, the Court delineated several limits on disgorgement “to avoid transforming it into a penalty” beyond courts’ equitable powers.  First, disgorgement is permissible only as a way to return the defendant’s wrongful gains to those harmed.   This limitation cast serious doubt on the SEC’s ability to put some or all of the disgorgement award into the U.S. Treasury.  (Similarly, the FTC and FDA commonly ask that courts put disgorgement awards into the U.S. Treasury.)  Second, the amount of disgorgement should be limited to the profits obtained by an individual defendant, making joint and several liability relief unjustified.  And third, disgorgement should generally only apply to “net” profits, taking into account expenses, rather than all revenues from the wrongful acts.  Although the Court declined to decide whether the SEC had pursued disgorgement in violation of these limitations, the guiding principles it laid out strongly lean against the disgorgement amount previously awarded being awarded again on remand.

In evaluating whether disgorgement was available in this case, the Court parsed the language of the Securities Exchange Act, 15 U.S.C. § 78u(d)(5):  “In any action or proceeding brought or instituted by the Commission under any provision of the securities laws, . . . any Federal court may grant . . . any equitable relief that may be appropriate or necessary for the benefit of investors.”  (Emphasis added.)  And even with this explicit language giving courts the power to grant “any equitable relief” for securities violations, the Court still vacated the award and remanded for consideration of whether disgorgement here was fashioned pursuant to the limiting principles for equitable relief set forth above.

In contrast, the FDC Act and the FTC Act contain more limiting language about the availability of equitable relief in conjunction with an action brought under these statutes.   Indeed, nowhere in the FDC Act is there any mention of equitable relief, such as disgorgement or even restitution.  Rather, FDA simply relies on the vague statement that courts can “restrain violations” of the FDC Act to support its demand for disgorgement and/or restitution:  “The district courts of the United States and the United States courts of the Territories shall have jurisdiction, for cause shown to restrain violations of section 301 . . . .”   21 U.S.C. § 332(a).   There is no doubt that Congress specifically authorized FDA, through DOJ, to bring injunction actions under the FDC Act, but it does not come close to the language in the securities law authorizing courts to grant “any equitable relief” as part of the injunctive remedy.  See also Jeffrey N. Gibbs and John R. Fleder, Can FDA Seek Restitution or Disgorgement?, 58(2) Food & Drug L.J. 129 (2003).

And Section 13(b) of the FTC Act similarly suffers from the same problem.  It provides that “in proper cases the Commission may seek, and after proper proof, the court may issue, a permanent injunction”  in a federal district court.  15 U.S.C. 53(b).  But like the FDC Act, it is silent on  equitable relief that could include disgorgement or restitution.

We eagerly await the Court’s decision on whether to grant the petition for a writ of certiorari in FTC v. Credit Bureau Center, LLC, a case challenging whether the FTC Act authorizes courts “to enter an injunction that orders the return of unlawfully obtained funds.”   See our previous posts here and here for more information about this case.

On Tuesday, June 16, the U.S. Court of Appeals for the District of Columbia Circuit affirmed a district court decision to vacate the May 2019 Drug Price Transparency rule published by the Centers for Medicare & Medicaid Services (CMS).  As we reported when the rule was issued, the rule would have required pharmaceutical manufacturers to disclose the Wholesale Acquisition Cost (WAC) in Direct-To-Consumer (DTC) television advertisements for certain prescription drugs and biological products.  See 84 Fed. Reg. 20,732 (May 10, 2019) (“Disclosure Rule” or “Rule”).

According to CMS, the Rule was designed to invite public scrutiny into manufacturers’ list prices and to give consumers price information that could help them make critical health care decisions.  The Rule was immediately challenged by a group of pharmaceutical manufacturers on Administrative Procedures Act (APA) and First Amendment grounds. On July 8, 2019, the District Court of the District of Columbia published a memorandum opinion vacating the Rule on APA grounds while declining to reach the Constitutional argument. See Merck & Co. v. HHS, 385 F. Supp. 3d 81 (D.D.C. 2019).

On appeal, the Circuit Court reviewed de novo the district court’s interpretation of 42 U.S.C. §§ 1302(a) and 1395hh(a)(1), the two statutes that CMS used as its authority for the Disclosure Rule.  Unlike the district court, which ruled at Chevron Step One that the statute unambiguously foreclosed any regulation of pharmaceutical advertisements or price disclosure requirements, the Circuit court assumed that the statutes conferred “some relevant regulatory authority” in these areas, and proceeded to a Step Two analysis to decide that the Rule fell outside any reasonable reading of the Agency’s general administrative authority.

The text of the statute authorizes CMS to promulgate regulations that are “necessary to the efficient administration of the functions” of CMS,” see 42 U.S.C. § 1302(a), or “necessary to carry out the administration of the insurance program” under the Medicare Act, see 42 U.S.C. § 1395hh(a)(1).  The court explained that, “for a regulation to be ‘necessary’ to the programs’ ‘administration,’ . . .  the Secretary must demonstrate an actual and discernible nexus between the rule and the conduct or management of Medicare and Medicaid programs,” the “focus must also be on those two programs,” and have an effect on them that is “more than tangential.”  Instead, she found that the Disclosure Rule “bears at best a tenuous, confusing, and potentially harmful relationship to the Medicare and Medicaid programs.”

CMS had argued that the rule was necessary for the “efficient administration” of Medicare and Medicaid because price transparency will reduce wasteful and abusive increases in drug and biologics list prices. Judge Millett disagreed with the Agency for four reasons. First, as the government acknowledged, WAC “has no meaningful relationship” to what the federal and state governments pay for the drugs under Medicare Part B, Medicare Part D, and Medicaid,  and WAC is “even further removed” from what beneficiaries pay under these programs (deductibles and copays).  Second, beneficiaries, who are largely unaware of how their payments are computed, will likely be confused and deterred by high prices listed in the advertisements that they will almost never pay and that they are unlikely to understand.  Third, TV advertisements are not targeted to Medicare/Medicaid recipients but are accessible to healthcare consumers not covered by these federal programs. According to Judge Millett, this “increases the distance between the Disclosure Rule and any actual administration” and shows an example of the Rule’s administrative overreach. Fourth, and finally, Judge Millett noted that the regulation was “sweeping” in nature and scope and may have broad implications, not least of which was that it “implicate[d] a substantial constitutional question”—even if, as CMS argued, the cost of compliance was low.

Like the lower court’s decision, this decision did not reach the constitutional question raised by the manufacturers – i.e., whether the WAC disclosure rule compelled speech in violation of the First Amendment.  Certain states, such as New Hampshire, Oregon, and Vermont, have enacted statutes and issued implementing regulations that require manufacturers to report WAC information on certain new drugs and drugs whose WACs have increased, and also require this WAC information to be published on a government web site for public access.  Judge Millett’s conclusion that WAC is information that consumers are “unlikely to understand,” that may “generate harmful confusion,” and that “bears at best a tenuous, confusing, and potentially harmful relationship” to government programs throws some doubt, not only on the wisdom of disseminating WAC information to consumers, but also on whether such WAC consumer disclosure laws and their implementing regulations pass Constitutional muster.

On June 3, 2020, the Sugar Association (SA) filed a Petition with FDA.  The Petition calls on FDA to

1. improve the labeling of alternative sweeteners in the ingredients list on food labels,
2. take steps to address the “particular difficulties raised by the unquantified presence of nonnutritive sweeteners in the diets of children,”
3. require disclosures of potential gastrointestinal effects of various sweeteners at meaningful quantities,
4. take action against what SA claims are “misleading or otherwise unlawful” added sugars claims, and
5. issue guidance to industry specifying that no/reduced added sugars claims be accompanied by appropriate disclosures.

SA notes that the new “added sugar” labeling requirement (a major aspect of the updated nutrition labeling regulation discussed here) seems to have led food manufacturers to replace sugar with what SA calls “Alternative Sweeteners,” defined as “Substances used as substitutes for sucrose and other mono-and disaccharides in food and beverage products to provide sweetness. Alternative Sweeteners provide less than 4 calories per gram and include all low and non-calorie sweeteners including high-intensity sweeteners, artificial sweeteners, and sweeteners used for bulking purposes such as sugar alcohols.”  According to SA, this definition of Alternative Sweeteners would include certain fibers,  such as polydextrose and chicory root fiber which, according to SA, are added to foods for their sweetening effect.

Petitioner asserts that consumers do not realize that the product contains alternative sweeteners because their presence is not called out and consumers do not recognize the chemical names for such substances.  Therefore, Petitioner request that FDA issue guidance providing that the parenthetical term “(Sweetener)” be included after the common or usual name of each sweetener used in a food that is not already required to be identified as a sweetener or is required to be disclosed on the Nutrition Facts label.

SA claims that no/reduced added sugar claims  lead consumers to conclude that the reformulated products are healthier.  SA questions that conclusion for various reasons.

Among other things, Petitioner brings up the issue of safety of high intensity or nonnutritive sweeteners for children.   Petitioner suggests that parents are unknowingly feeding their kids products that include nonnutritive sweeteners.  Its ask that FDA require disclosure of the  type and quantity (in mg) of each non-nutritive sweetener on products consumed by children.

Petitioner further raises the concern that some alternative sweeteners, including sugar alcohols but also products such as polydextrose and chicory fiber (inulin), may cause gastrointestinal discomfort.  It asks that FDA require disclosure of  gastrointestinal effects of various sweeteners, at minimum thresholds of effect (which it suggests is 10 g per day).

Petitioner provides several examples of products with reduced sugar claims but appear but do not significantly less calories. It asks that FDA take immediate action to stop these claims.   To address the alleged misimpression that a food with no or reduced added sugar claims has lower calories, Petitioner further requests that FDA issue guidance requiring that any no/reduced sugar claim be accompanied with the following disclosure “Not lower in calories” unless the reformulated products have 25% fewer calories than the reference product.  In addition, it asks that FDA require that any such food product include (on the principal display panel) a statement ““Sweetened with [name of Sweeteners(s)]” when sugar alternatives are included.

This Petition brings up various issues each of which can be expected to generate more discussion.  We will be monitoring comments and possible FDA action.

The Prescription Drug Marketing Act (PDMA) and implementing regulations establish procedures for distributing prescription drug samples, including requirements related to requests, receipts, and recordkeeping.  Federal Food, Drug, and Cosmetic Act § 503(d); 21 C.F.R. Part 203.  Typically, many drug manufacturers that use drug samples as part of their marketing programs provide samples through in-person visits by sales representatives.  FDA notes that during the COVID-19 public health emergency, drug manufacturers have been relying more on mail and common carriers to deliver these samples.

The desire of most people to avoid unnecessary in-person contact with others during this COVID-19 public health emergency has affected package delivery practices, in general, and increased the use of telemedicine for non-emergency doctor “visits.”  Recognizing these changes, FDA last week issued an immediately effective temporary guidance for industry entitled, “Temporary Policy on Prescription Drug Marketing Act Requirements for Distribution of Drug Samples During the COVID-19 Public Health Emergency,” in which FDA, through the exercise of enforcement discretion, relaxes (for now) some requirements for obtaining  signatures for receipt of samples and expands where samples may be delivered during this time.  Except as noted, this guidance, like several others issued during this time, is intended to be temporary and to remain in effect only for the duration of the COVID-19 public health emergency.

Under normal circumstances, a drug manufacturer or authorized distributor of record may deliver drug samples upon the written request of a licensed practitioner by mail or common carrier to either the licensed practitioner or to the pharmacy of a hospital or other healthcare entity specified by the requesting practitioner provided certain conditions are met. 21 C.F.R. § 203.30.  The new temporary guidance does not affect request requirements.

But the guidance loosens the requirements in the PDMA and regulations that a receipt of delivery contains certain specified information and is signed by the recipient.  In the interest of employee and patient safety at this time, mail and common carriers may be considering alternate ways of verifying receipt and FDA is doing the same.  Specifically, FDA states that it does not intend to take action against a manufacturer or authorized distributor of record that accepts alternate ways of verifying delivery and receipt of drug samples instead of obtaining the signature, provided that other receipt requirements are met.

FDA also lays out in the temporary guidance the conditions under which drug samples can be provided to a patient’s home or a licensed practitioner’s home.  The regulations limit the locations to which drug samples may be delivered to the licensed practitioner or to the designated pharmacy of a hospital or other healthcare facility.  Under the temporary guidance, drug samples may also be delivered to the patient’s home if the written request from practitioner is for an identified designated patient  (and has all the other usual written request requirements), and the receipt and recordkeeping requirements are met.

With respect to delivery to the licensed practitioner’s home being used as an office, FDA notes that neither the PDMA nor the regulations prohibit delivery to the practitioner’s home, provided all other request, receipt, and recordkeeping requirements are met.  FDA goes on to say that this interpretation represents its current thinking and is not anticipated to change following termination of the current emergency.  FDA intends to address the issue in a future guidance with appropriate changes based on comments and its experience with implementation.

Interestingly, the PDMA and regulations on their face do not require that the licensed practitioner’s home is being used as an office, but it appears that FDA assumes that this is the case.  In this era of telemedicine, it may not be difficult to meet that requirement, but it will be interesting to see if FDA expands on this idea in future guidance and requires more than intermittent use of the home for taking calls.

Anyone who has recently (on Tuesdays and Thursdays at least) tried – and we mean tried – to wander on to www.regulations.gov to do a little FDA docket research has likely been redirected to a new URL: https://outage.regulations.gov/beta-redirect/.  And the first thing you see on that redirected webpage is the following message:

You are being redirected to Beta.Regulations.gov.

Why is this happening?

In order to get important user feedback, www.regulations.gov will be redirecting users to the Beta site at https://beta.regulations.gov every Tuesday and Thursday in June and July for 24 hours starting at 8:00 am ET.  Please note that all comments that are submitted through the Beta, both during the redirect and regular operations, are provided to agencies.

Read the GSA Blog Post

We went ahead and read the blog post from the U.S. General Services Administration (“GSA”), titled “GSA Steps Forward to Modernize Electronic Rulemaking,” and also viewed an Introduction Video.  Afterwards, we had the same question the GSA proffers above: “Why is this happening?”

According to the GSA’s blog post:

GSA’s eRulemaking program is modernizing Regulations.gov, the source for information on the development of federal regulations and other related documents issued by the U.S. government.  On Regulations.gov, you can find, read, and comment on regulatory issues that are important to you.  The Regulations.gov beta version is a re-envisioning of the site, with enhanced search capabilities, a simplified commenting process, and a brand new design to improve user experience in public commenting.

The existing Regulations.gov site is planned to be formally decommissioned in September 2020 and replaced with the modernized version that is currently available for evaluation at beta.regulations.gov.

In another document with Frequently Asked Questions the GSA states:

Why is Regulations.gov beta necessary?

Regulations.gov has received almost 10 million comments since 2006, making it a heavily trafficked site that is critical to government transparency and the public’s ability to comment on agency documents and regulations.  To ensure Regulations.gov is continually improving to meet the needs of this user base, the site’s user interface, commenting process, and behind-the-scenes architecture require enhancements to reflect updated design and technology standards.

While the Beta site may provide for “a brand new design to improve user experience in public commenting,” it’s certainly a step down for researching those public comments and other documents.

FDA moved from the Agency’s now-legacy docketing system to Regulations.gov back in January 2008 (here).  Though it took a little getting used to at first, the then-new Federal Dockets Management System quickly grew on us.  It provides an easy-to-use search feature that allow one to create daily docket sheets by agency and to search across dockets.  That’s important to us.  We need to know what’s going on each day at the Agency.

Unfortunately, the new, but not improved, Beta site is not so easy to maneuver.  It seems to us that in an effort to simplify things, the GSA has made searching dockets a tedious and frustrating process.  Give the Beta site a quick spin and you’ll see what we mean.  We even had to come up with a workaround to create quick daily docket sheets.  Here are example URLs: “https://beta.regulations.gov/search?agencyIds=FDA&postedDateFrom=06-09-2020&postedDateTo=06-10-2020&sortBy=title&sortDirection=desc” (for documents) and “https://beta.regulations.gov/search/comment?agencyIds=FDA&postedDateFrom=06-09-2020&postedDateTo=06-10-2020&sortBy=postedDate&sortDirection=desc” (for comments).  These URLs search FDA docket entries on the Beta site from June 9, 2020 to June 10, 2020, from newer to older postings, under the “Documents” and “Comments” tabs, respectively.  You just have to modify the dates in the URLs when you want a different time period.  But two searches are necessary.

If you’re up to it, there’s a “Feedback” button where you can submit comments on the Beta site.  Maybe if enough people comment, the GSA will do some retooling to add better search and other capabilities.  Here are some of our specific comments:

• Add the ability to sort search results by “ID number,” which amounts to Docket Number. This is critical.  There can be hundreds – and sometimes thousands – of entries each day.  Folks need to maximize the ability to sort by “ID number” to group dockets together.
• In Beta, you have to separately search “Documents” and “Comments.” That means running each search twice . . . . and reviewing the results twice.  That’s a lot of unnecessary work.
• Currently on the Beta site, the “old” Regulations.gov links do not work (e.g., https://www.regulations.gov/docket?D=FDA-2007-D-0369). It is unclear whether this will be the case once the Beta site is fully live.  If so, then a lot of our old blog posts with links to Regulations.gov will no longer work.  The same is true for other publishing outlets.  So, there should be automatic forward-linking between the old and new platforms.

FDA’s recent announcement (see our previous post here) that after 40 years the Orange Book may get a bit of a facelift – as well as a comment in a new draft guidance that folks could obtain prior editions of the Orange Book through the Freedom of Information Act – got us thinking: Wouldn’t it be nice if the entire Orange Book – that is, all of the prior editions and supplements from the 1979 draft edition to the current 2020 BPCIA Transition edition and beyond – were available online so that folks could see how the publication has evolved over the past 40 years??  So we’ve gone ahead and done just that.  Please give a warm welcome to the Orange Book Archives!

The Orange Book Archives is the culmination of several years’ worth of work at hunting down each of the annual editions and supplements and then scanning them into PDF format.  We are still missing a few of the monthly supplements from the early 1980s.  So if you happen to have one of them handy, please send us a PDF so that we can add it to the collection.  We will add the missing supplements from 2002 and 2003 once COVID-19 stay-at-home orders are lifted and we are allowed to return to the office.

Putting together the Orange Book Archives has been a labor of love . . . and probably not so different than trying to put together a full set of the difficult-to-find 1933 Goudey baseball cards.  Along the way we had help from some folks, including Bruce Pokras (now Editor-in-Chief of the Orange Book Companion), Erika Lietzan (Associate Professor of Law, University of Missouri School of Law), and the Office of Generic Drugs, which allowed us to borrow Donald Hare’s Orange Book collection (Don is the Father of the Orange Book and passed away earlier this year).  Of course, we supplied FDA with a copy of the collection we assembled.

We hope you enjoy the Orange Book Archives as much as we enjoyed putting together the collection.  Over time, we will try to make modifications and add extra materials related to the Orange Book, such as historical versions of the Reference Listed Drugs by ANDA Reference Standard List and the Orange Book Patent Listing Dispute List.

FDA issued another COVID-related guidance for immediate implementation last week.  Citing a substantial increase in the number of requests for individual patient expanded access requests for COVID-19 investigational drugs (which we will use here to include biological products), on June 2, 2020, FDA released a guidance for investigational review boards (IRBs)  and clinical investigators entitled “Institutional Review Board (IRB) Review of Individual Patient Expanded Access Requests for Investigational Drugs and Biological Products During the COVID-19 Public Health Emergency Guidance for IRBs and Clinical Investigators”.

As in many of the other guidances issued during the ongoing COVID-19 public health emergency, FDA states that it intends this guidance to remain in effect only for the duration of the emergency, but notes that the within 60 days following termination of the public health emergency, the agency intends to review and revise the guidance taking into consideration its experience with implementation and any comments received.

As its title suggests, the guidance applies only to requests under FDA’s individual patient expanded access pathway (21 C.F.R. §312.310), sometimes referred to as “compassionate use,” and does not apply to expanded access programs for intermediate-size or treatment expanded access requests (under 21 C.F.R. § 312.315 or 312.320).  Under the regulation, individual patient expanded access allows a patient with a serious or immediately life-threatening disease or condition to gain access to an investigational drug when there is no comparable or satisfactory alternative therapy, the potential benefits to the patient justify the potential risks, and the requested use will not interfere with clinical investigations that could support marketing approval.  The primary purpose of providing individual access to an investigational drug under this pathway is for diagnosing, monitoring, or treating the patient, rather than generating scientific safety or effectiveness data.

A request for individual patient expanded access can be submitted to FDA by a licensed physician as a new investigational new drug application (IND) or by the sponsor of an existing IND as a protocol amendment.  An emergency request does not require prior IRB approval, but the IRB must be notified within 5 working days of treatment initiation, and subsequent use is subject to IRB review.  Prior IRB approval is required for non-emergency requests for individual patients.  A physician submitting a non-emergency request may request a waiver from the ordinary requirement for full IRB approval.  As FDA has outlined in previous guidance (“Expanded Access to Investigational Drugs for Treatment Use – Questions and Answers”), such a waiver is appropriate when the physician obtains concurrence from the IRB chairperson or another designated IRB member.

FDA states that it is providing recommendations about the key factors and procedures IRBs  should consider when reviewing individual patient access requests, including IRB reviews conducted by an individual member, because the agency has become aware that during the existing public health emergency IRBs are seeking clarity on how to comply with their obligations under 21 C.F.R. part 56.

FDA recommends that IRBs consider establishing procedures for a single IRB member to review an expanded access submission for an individual patient when a waiver from full IRB review is requested, including procedures that outline relevant factors to be reviewed and procedures for documenting the decisions made.

FDA suggests that review of an expanded access request for an individual patient focus on assessing the risks and benefits for the patient involved, and notes that the information must be adequate to assess whether these risks have been minimized and are reasonable in relation to the anticipated benefits.  FDA does not expect that a protocol will be necessary to provide sufficient information to determine if those criteria are satisfied (although if the request is submitted by the sponsor it is likely that a protocol is already available).

FDA lists the following as information that should be included, noting that the information may be included in a thorough patient history and treatment plan:

• proposed daily dose, route, and frequency of administration, duration of planned treatment, criteria for discontinuation of treatment, and planned dose modifications for adverse events;
• planned monitoring for adverse events, response to treatment, and changes in clinical status, as well as proposed modifications to the treatment plan to mitigate risks to patients if appropriate;
• key details of the patient’s history, including diagnosis and summary of prior therapy (including response to such therapy), and information regarding a patient’s relevant clinical characteristics (such as comorbid conditions and concomitant medications); and,
• summary of the known risks of the drug.

The guidance also provides that the IRB’s review of an expanded access request for an individual patient should include:

• an assessment of the qualifications of the requesting physician submitting the individual patient expanded access request;
• if the request is for a pediatric patient, confirmation that adequate provisions are included for soliciting age-appropriate assent from children and permission from a parent or guardian; and,
• confirmation that the informed consent document contains the information required under 21 C.F.R 50.25. Given that the drug used under expanded access is investigational, FDA considers a statement in the informed consent document indicating that although the primary use of the drug is for treatment, the drug is investigational and FDA has not determined that the drug is safe or effective for use in treating COVID-19, to satisfy the requirement under 21 C.F.R §50.25(a)(1) that the informed consent provide a statement that the use of the product “involves research.”

The U.S. Department of Agriculture (“USDA”) continues to consider and approve state and tribal hemp production plans, announcing the approval of plans for the U.S. Virgin Islands, Cheyenne River Sioux Tribe, Chippewa Cree Tribe, Lac Courte Oreilles Band of Superior Chippewa Indians, and Red Lake Band of Chippewa Indians on May 27th.  To date, USDA has approved 47 hemp production plans: 18 for state/territory plans and 29 tribal plans.  USDA, USDA Approves Hemp Production Plans for U.S. Virgin Islands, Cheyenne River Sioux Tribe, Chippewa Cree Tribe, Lac Courte Oreilles Band of Superior Chippewa Indians and Red Lake Band of Chippewa Indians (May 27, 2020).

The Agricultural Improvement Act of 2018, popularly known as the Farm Bill, established general requirements for the oversight of hemp producers.  The USDA exercises primary regulatory authority over hemp producers in the United States under the Agricultural Marketing Act of 1946 (“AMA”), as amended by the Farm Bill.  USDA regulates hemp production under a federal regulatory framework in states and within tribal boundaries that do not have a USDA-approved plan.

The AMA also authorizes the states and Indian tribes desiring to exercise regulatory authority over hemp production within their boundaries to submit plans for approval by USDA.  The AMA gives USDA sixty days to review state and tribal plans.  USDA issued its interim final rule in October 2019 establishing a domestic hemp production program, including implementing the requirements for state and tribal plans set forth in the Farm Bill.  State and tribal regulatory plans must include:

• Maintaining relevant information about the land on which hemp is produced, including a legal description of the land, for at least three years;
• A procedure for testing hemp THC concentration levels;
• A procedure for disposal of plants that exceed hemp THC levels, and products from those plants;
• A procedure to comply with the enforcement provisions specified in the AMA;
• A procedure for conducting random, annual inspections of hemp producers;
• A procedure for submitting information to USDA; and
• Certification that the state or tribe has adequate resources and personnel to implement required hemp production procedures.

In addition, USDA is reviewing one state and four tribal plans, and has reviewed and returned three state plans as well as a tribal plan for editing or amendment.  USDA, Status of State and Tribal Hemp Production Plans for USDA Approval (updated Apr. 29, 2020).  Four states and three tribes have expressed interest or intent to submit a plan, one state will apply USDA’s plan, and eighteen states continue to operate under the 2014 agricultural pilot program.  In sum, there are or will be over 80 hemp production regimens in play around the country.