In the White House coronavirus updates, President Trump has commended FDA for working “around the clock” to expedite the review of new medical products to help with the testing and treatment of COVID-19.  This is not puffery, as we at HP&M have experienced lightning fast feedback from FDA staff on Emergency Use Authorizations and expanded access and research protocols (for more information on EUAs in response to COVID-19, see recent posts here and here).

At the same time as conducting this important review work, FDA must also manage the challenges that the COVID-19 pandemic presents to the conduct of clinical trials for every other disease and condition.  Just 8 business days after releasing the original guidance on this, FDA provided an update by adding a Q&A section as an appendix.  In these 10 responses to commonly asked questions, FDA builds on the core set of considerations and recommended actions that the Agency provided in the body of the original guidance.  In this post, we summarize this new Appendix.  We recommend first reading our summary the original guidance, which remains unchanged (available here).

The new Q&A portion covers a number of topics important to many sponsors.  It first lays out decision-making considerations for two of the largest decisions sponsors must make as a result of this pandemic: (1) whether to continue the study and (2) whether continue administering the investigational product.  Other Q&A’s address managing protocol deviations and amendments, helping navigate a number of contingency measures (e.g., initiating virtual visits, switching to home delivery or infusion of the investigational product, alternative monitoring), and documenting informed consent from a patient in isolation.

Deciding Whether to Suspend or Continue an Ongoing Study (or Initiate a New One)

Every clinical trial depends upon an assessment of the participants’ safety and welfare.  In the updated guidance,  FDA discusses specific factors for  sponsors to consider when deciding how or whether to proceed with a trial during the COVID-19 pandemic:

• Limitations on the protocol that pose new safety risks on participants, feasibility of risk mitigation
• Availability of clinical investigators to provide oversight and assess/manage safety issues
• Sufficiency of clinical trial support staff; adequacy of equipment and materials
• Ability to conduct assessments (in-person at site or alternative site or virtually)
• Availability of clinical trial supplies and continued operation of vendors, especially related to the investigational product (and whether product stability will accommodate revised schedules)
• Availability of, and support for, IT systems and other technology needed, feasibility of contingency to minimize potential disruptions
• Continued operations of IRB/IEC and DMC staff, if applicable
• Feasibility given Federal and State public health measures/controls

FDA recommends involvement of the study’s safety monitoring committee, if established, to aid in supporting these assessments given their responsibility to assure the safety of participants.

FDA notes that the decision to start a trial presents different risks and benefits than continuing one, stating that (other than trials of products intended for COVID-19-related uses) sponsors of new studies need to be able to assure patient safety and trial integrity.  Furthermore, sponsors of new studies should consider whether the trial could interfere with public health measure (e.g., social distancing) implemented by Federal and State authorities to control the virus.

Deciding Whether to Continue Administering the Investigational Product (to All or Some Participants)

In the decision to continue administering or using the product, assuming availability of the product and ability to administer and assure safe use, FDA recommends that sponsors consider the following:

• Participant benefit from treatment
• Availability of reasonable alternative treatments
• Seriousness of the disease being treated
• Risks involved in switching to an alternative treatment if necessary

A decision to discontinue administer need not be universal to all study participants.  Where discontinuation would present substantial risk to certain participants, including because the investigator perceives them as benefitting clinically, then the sponsor can consider amending the protocol to include only those patients with apparent benefit and discontinue the others.  Before doing so, the guidance states that sponsors should discuss this with the relevant review division.

FDA acknowledges there are situations where discontinuation of product may be necessary, including due to lack of product supply or inability to administer or ensure safe use.  In any case where administration is discontinued, it is important to provide appropriate management after.

Capturing Protocol Deviations

As discussed in the main body of the guidance (and discussed in our previous post), sponsors should be documenting the specific deviations and reasons that result from the impacts of the COVID-19 pandemic.  While typically deviations are captured individually, when large numbers of deviations are systematically experienced (e.g., all visits are being conducted remotely rather than at the site), these can be documented collectively with a listing of all study visits that experienced that deviation.

As noted in the main body of the guidance, it is important to capture specific information for individual participants that explains the basis for missing protocol-specified information, including the relationship to COVID-19 (e.g., missed study visits or discontinuations due to COVID-19-related closure of a clinical study site).  This information should be captured in the case report form, or similar systematic process.  Processes should be developed to capture site-level status, site- or vendor-level protocol deviations, and process deviations.  COVID-19-related deviations should be summarized in the clinical study report.

Managing Protocol Amendments

FDA reminds sponsors of the regulatory threshold for when a particular decision necessitates a protocol amendment (21 CFR 312.30(b)), which is:

• For a change that significantly affects the safety of subjects
• For Phase 2 and 3 studies only, a change that significantly affects the scope of the investigation or the scientific quality of the study

To help interpret this regulation, FDA notes that protocol amendments are not required for when pausing enrollment to decrease potential exposure to COVID-19.  In addition, a protocol amendment is not required for every individual modification unless required to prevent imminent safety risk to patients; instead, several protocol modifications can be consolidated. However, any modifications to protocol-specified procedures that occur prior to an amendment implementing that modification must be documented as a protocol deviation

For studies under an IDE, FDA recognizes that given the unique and evolving circumstances surrounding the impact of COVID-19, it may be challenging to submit 5-day Notices when implementing changes that are exempt from prior FDA approval (21 CFR 812.35(a)(3)).  The guidance allows sponsors to instead consolidate implemented changes as long as the IDE is updated as soon as possible.

The guidance also recommends clearly identifying cover letters to accompany COVID-19-related protocol amendments under INDs and IDEs by adding to the subject line: PROTOCOL AMENDMENT – COVID-19.

Evaluating Contingency Measures: Virtual Visits & Home Delivery/Infusion & Off-Site Monitoring

All protocols should be evaluated periodically to consider whether modifications to the protocol could help ensure the safety of participants.  The guidance provides greater granularity into FDA’s current thinking about contingency measures specific to avoiding the risk of exposure to COVID-19.

1. Virtual Visits. Conducting telephone or video contact visits for safety monitoring rather than on-site visits can be immediately implemented with subsequent review by the IRB and notification to FDA. These reflect protocol deviations (until the amendment is approved), so need to be documented as previously described. Since this change would likely result in some protocol-required procedures not being conducted (e.g., vital signs, blood samples for safety laboratory values), the sponsor must assess the potential impact on patient safety, considering how to mitigate risks or even the need to discontinue the investigational product.

2. Home Delivery. For products that are self-administered at home, home delivery, if it does not raise any new safety risks, may be implemented to protect patients from coming to clinical trial sites. Applicable FDA regulations for maintaining required storage conditions and product accountability remain. If the protocol indicates pharmacy dispensing, then a protocol amendment is required to change to direct-to-patient shipments.

3. Home Infusion. For products infused at the clinical trial site, alternative sites for administration (e.g., home nursing or alternative sites by trained by non-study personnel) should be considered and discussed with the appropriate FDA review division, particularly where altered storage or handling conditions could adversely affect product stability (e.g., cell and gene therapies). Applicable FDA regulations for maintaining required storage conditions and product accountability remain. If suitable alternative arrangements cannot be made, sponsors should define circumstances when discontinuing product treatment, while continuing study participation even if with delayed assessments.

4. Off-Site Monitoring. Recognizing that monitors may not be able to access trial sites for on-site visits in a timely manner during the pandemic, sponsors should work to find alternative approaches (e.g., enhanced central monitoring; telephone contact with sites to review study procedures, participant status, and study progress; or remote monitoring of individual participants). Sponsors should carefully document situations where monitors were unable to access, or had to delay, monitoring of a site.  Sponsors should also document whether protocol deviations or other GCP non-compliance issues were delayed in being identified due to this.  FDA recognizes the unique situations will occur at sites due to COVID-19 control measures and states it will consider these when evaluating inspection observations.

Obtaining Informed Consent from a Patient is in Isolation from COVID-19 Infection

While FDA regulations generally require that informed consent of a participant be document by use of a written form approved by the IRB and signed and dated by the subject (or their legally authorized representative) at the time of consent, the guidance identifies alternative ways to satisfy the documentation requirement if the patient is in COVID-19 isolation.  First, if technology is available, electronic methods should be considered.  When not possible to obtain it electronically, the guidance details a procedure where an unsigned consent form is provided to patients and, by direct communication or telephone/videoconference, verbal confirmation of consent is obtained and that the form in their possession is signed and dated.  Documentation procedures are provided as well.

As noted in our blog post last week, FDA has issued several guidance documents authorizing the emergency use of medical devices and drugs to address the COVID-19 outbreak.  These EUAs provide a streamlined approach for selling otherwise unapproved products intended to alleviate the national emergency.  Today’s blog post describes a separate, but related, FDA initiative to alleviate companies’ postmarketing reporting obligations for their routine, non-COVID–19 related products during a pandemic.  FDA recognizes that a pandemic can result in a shortage of staff (due to illness or stay-at-home orders), and seeks to prioritize both FDA and industry’s limited resources to manage the pandemic.  This guidance provides regulated entities some relief on continuing business operations without fear of running afoul of FDA enforcement.

The Office of Counterterrorism and Emerging Threats, CDER, CBER, CDRH, and CFSAN all joined in issuing the guidance for industry titled, “Postmarketing Adverse Event Reporting for Medical Products and Dietary Supplements During a Pandemic.”   These offices anticipate that “during a pandemic, industry and FDA workforces may be reduced because of high employee absenteeism,” at the same time that adverse events related to the pathogen causing the pandemic likely would increase.  FDA states that it will exercise enforcement discretion (i.e., does not intend to object) if a company does not submit certain required adverse event reports within the time required by statute and regulation.  FDA expects that any delayed reports will be submitted within 6 months after the pandemic ends and operations resume to pre-pandemic levels.

In the guidance, FDA emphasizes that companies should already have in place a Continuity of Operations Plan (COOP) to address all firm operations in the event of a pandemic.  (Companies who may not have developed such a procedure pre-COVID-19, should prioritize this in advance of their next FDA inspection.)  The COOP should address what happens if there is pandemic-related high employee absenteeism and require the company to maintain documentation of the declaration of the pandemic and the factors preventing the company from meeting its normal regulatory requirements (e.g., high absenteeism, increase in adverse event reports).

Specific to adverse event reporting, FDA sets forth its general premise that “normal adverse event reporting processes should be maintained to the maximum extent possible” during a pandemic.  But the guidance details in Table 1 exactly which adverse event reports FDA will continue to require and those it will permit to be stored until the pandemic concludes.  With some exceptions, FDA will only require timely reporting of events that are related to products that are indicated for the treatment or prevention of the pathogen causing the pandemic.   FDA still requires reporting for deaths associated with drugs, biologics, blood and blood components, source plasma, and medical devices, and also requires timely reporting of adverse reactions associated with HCT/Ps or that would result in a 5-day MDR (i.e., those that necessitate remedial action to prevent unreasonable risk of substantial harm to public health).  FDA also reserves the right to communicate special concerns about certain products that must be reported even during a pandemic.

FDA recognizes there may be a gap between when the pandemic is resolved and a pre-pandemic state is restored.  But once both events happen, FDA expects companies to follow their COOP and generally plan to submit stored reports to FDA within 6 months on a prioritized basis (e.g., the reports with shorter time periods should be reported before the periodic, routine reports).

This guidance is practical in its approach and provides helpful assistance to those companies who simply cannot handle its regulatory obligations remotely.   It also relieves pressure from companies who may otherwise be trying to develop solutions to directly address the pandemic, and are seeking to divert its limited resources internally.  To take advantage of this guidance, in the short term, a company should be documenting any inability to meet its obligations to submit postmarket reports; in the long term, a company should develop a robust COOP to make seamless its decisionmaking should (heaven forfend) another pandemic occur.

You’ve seen the news about insufficient supply and availability of ventilators to treat patients with Coronavirus Disease 2019 (COVID-19).  You’ve also likely seen news of ideas to mitigate this shortage.  On March 24, 2020 FDA issued an Emergency Use Authorizations (EUA) for ventilators, anesthesia gas machines modified for use as ventilators, and positive pressure breathing devices modified for use as ventilators (collectively referred to as “ventilators”), ventilator tubing connectors, and ventilator accessories (EUA) and a companion policy, Enforcement Policy for Ventilators and Accessories and Other Respiratory Devices During the Coronavirus Disease 2019 (COVID-19) Public Health Emergency (Policy) to allow emergency use of ventilators in healthcare settings.  Eligible devices include “ventilators, ventilator tubing connectors and ventilator accessories that are not currently marketed in the U.S., or that are currently marketed in the U.S., but a modification is made to the device that would trigger the requirement that a manufacture submit a new premarket notification (510(k)) to FDA.”  Policy at 3.

Instead of an EUA for a specific device, FDA has issued a general EUA that provides criteria for specific devices to be added.  Eligible devices will be added to Appendix B of the EUA after FDA determines they meet the criteria for safety, performance and labeling set forth in Appendix A of the EUA.  With the EUA, FDA will waive requirements for current good manufacturing practices (cGMP) and registration and listing.

For devices that are currently cleared in the US and will be modified for emergency use, the Policy states that the Agency does not intend to object to introduction of these modifications without submission of a premarket notification (510(k)).  Three types of modifications are discussed.

1. Modifications to the indications for use, claims or functionality, such as the use of powered emergency ventilators and anesthesia gas machines for mechanical ventilation of patients, use of ventilators outside of their cleared environment of use, use of sleep apnea devices and oxygen concentrators when medically necessary and clinically appropriate.
2. Modifications to hardware, software and materials changes to allow use of alternative components, addition of filtration, modification of ventilator parameters and remote monitoring. FDA will also not object to implementation of technology currently authorized under an Investigational Device Exemption that provides physiological closed loop (automate) algorithms for oxygen titration.
3. Use of breathing circuit components beyond their indicated shelf-life and duration of use.

The Policy also provides recommendations for current ventilator manufacturers whose products are not currently marketed in the US.  For these eligible devices, manufacturers should engage with FDA by sending device information including product labeling, current market authorizations, conformance with standards, use of a quality management system and whether the device’s power supply is compatible with US voltage, frequency and plug type.  “Where appropriate under the circumstances, FDA will notify the manufacturer that it does not intend to object to the distribution and use of the device while the manufacturer is preparing, and FDA is reviewing the EUA request.” Policy at 13.

For manufacturers who have not previously been engaged in medical device manufacturing but with capabilities to increase supply of these devices, FDA states that they intend to work collaboratively through the EUA process.  The Policy notes that this applies to US manufacturers in other manufacturing sectors.

To be added to Appendix B of the EUA, devices must be validated to ensure safety and performance and accompanied by EUA labeling.  The criteria for safety, performance and labeling requirements are specified in Appendix A of the EUA.  The Policy as well as Appendix A of the Ventilator EUA require safety and performance standards be complied with, as applicable.  These standards cover basic safety and essential performance, electromagnetic compatibility, use in the home, software lifecycles, wireless coexistence, biocompatibility, and device specific performance.  Instead of submission of test reports, the EUA request should include declarations of conformity to these standards.  The EUA also should include:  device specifications, instructions, reprocessing and shelf-life information, facility requirements (e.g., gas connection type).  For continuous ventilator splitters (adapters for multiplexing), safety and performance considerations for creating and testing these components are provided, including material properties, gas pathway biocompatibility, leak, disconnect alarm and compliance with standards for ventilator circuitry.

Finally, the EUA provides labeling considerations for both ventilators and ventilator splitters.  For ventilators, labeling will include specifications, alarms, reprocessing and other applicable instructions, a statement that FDA has authorized emergency use of the device and FDA’s fact sheets,  Fact Sheet for Healthcare Providers and Fact Sheet for Patients.  Additional recommendations are provided for the safe use of ventilator splitters.

There are currently no devices listed in Appendix B of the EUA.  Even with the waivers provided by the EUA, there could be significant delays to bring additional ventilators to the market if all of the required testing has not been previously conducted.  It is not clear if FDA will add devices to Appendix B that have some basis of safety and performance data, while allowing some tests to be run concurrently with distribution and use of the devices to meet emergency demand.  The Policy is clear that the Agency understands the need and intends to collaborate with manufacturers.  Engaging them early, by contacting CDRH-COVID19-Ventilators@fda.hhs.gov, is recommended to all ventilator manufacturers working to help in this public health emergency.

As part of a larger COVID-19 outbreak response effort, many state pharmacy regulators have issued waivers or temporary suspensions of certain pharmacy laws. The California State Board of Pharmacy, State of Ohio Board of Pharmacy, Pennsylvania Department of State, and Texas State Board of Pharmacy have all issued COVID-19-related waivers or suspensions affecting both pharmacy staffing and licensing.  These waivers meet the dual objectives of enhancing pharmacy response to the ongoing COVID-19 pandemic, while also allowing pharmacy staff to responsibly practice social distancing.  This is merely a sample of an ever changing landscape and we will provide updated information regarding these waivers when possible.

California

Staffing

As of March 20, California will allow the ratio of pharmacists to intern pharmacists to increase to allow for one additional pharmacy intern, so long as certain conditions are met.  California currently allows for a pharmacist to supervise no more than two intern pharmacists at any one time.  Cal. Bus. & Prof. Code § 4114(b).  The pharmacy must document the need for the modification due to the COVID-19 public health emergency.  The intern pharmacist must have an anticipated graduation date in 2020, or have graduated from a recognized school of pharmacy, or be certified by the Foreign Pharmacy Graduate Equivalency Committee.  Similarly, California is also permitting an adjustment of the ratio of pharmacy technicians to pharmacists to allow for one additional technician for each supervising pharmacist.  California law currently allows for a pharmacist to technician ratio of 2:1, with some limited exceptions.  Cal. Bus. & Prof. Code § 4115(f).  A waiver granted by the Board is limited to 30 days.  All documentation and justification related to the staffing ratio waivers must be maintained for one year following the end of the declared emergency.

As of March 18, California is expanding the activities permissible as “remote processing.”  Pharmacists performing remote processing may also receive, interpret, evaluate, clarify, and approve medication orders and prescriptions, including medication orders and prescriptions for controlled substances classified as Schedule II, III, IV or V.  The pharmacist remote processing waiver does not extend to final product verification and dispensing.  The waiver also allows pharmacists to supervise processing done by interns and technicians remotely using technology.  Pharmacists who are supervising remotely must be readily available to answer questions and must verify the work performed by the intern or technician.

Facility Licensure

As of March 21, California will allow a licensed pharmacy to receive prescription drugs and devices from an unlicensed pharmacy, wholesaler, or third-party logistics provider located in another state to alleviate a temporary shortage that could lead to a denial of healthcare, under certain conditions.  The unlicensed entity must be appropriately licensed in its home state and the California pharmacy must maintain documentation of the license verification.  The California pharmacy must also maintain documentation of the temporary shortage of the drug or device received from the unlicensed entity and the drug or device must have been produced by an FDA-registered manufacturer.  Under the Board’s policy, a waiver granted by the Board is limited to 30 days.  All documentation related to the waiver must be maintained and readily retrievable for three years following the end of the declared emergency.

Ohio

Staffing

As of March 13, Ohio has authorized remote order entry for all licensed/registered pharmacist, pharmacy interns, and pharmacy technicians.  Remote processing includes data entry functions, but does not include dispensing.  For pharmacists, remote processing includes activities such as receiving and interpreting medication orders and performing prospective drug utilization review.  For technicians and interns, remote processing includes activities such as order entry and insurance processing.  This guidance is in effect until rescinded by the Board.

Facility Licensing

In an effort to ensure drug supply chain continuity, Ohio is expediting licensure for “drug distributors” which under Ohio regulations includes wholesale distributors (including brokers and wholesalers), manufacturers, outsourcing facilities, third-party logistics providers, and repackagers.  In order to expedite licensure, the Board is temporarily waiving the requirement for the submission of ownership/officer and responsible person criminal records checks prior to the initial issuance of a drug distributor license received on or after March 2, 2020. Instead, the drug distributor will have 120 days from the date the application is submitted to submit fingerprints for criminal records checks to the Ohio Bureau of Criminal Investigation.  The expedited licensure guidance shall remain in effect until June 14, 2020 or when Ohio’s emergency orders are lifted, whichever is earlier.

As of March 24, Ohio is also allowing the sale and shipment of certain prescription drugs that are in shortage by out-of-state facilities that are not licensed in Ohio.  This guidance applies to drugs on the FDA’s drug shortage list and drugs on the American Society of Health-System Pharmacists drug shortage list.  Controlled substances and prescription drugs containing gabapentin are excluded from the policy.  In order for an Ohio terminal distributor of dangerous drugs (TDDD) to receive drugs to alleviate a shortage, the unlicensed location must be properly licensed in good standing in its home state and the Ohio TDDD must maintain the licensure verification.  The TDDD must also main documentation of the shortage for any drug received under this guidance and the drug must be produced by an FDA-registered drug manufacturer.  The TDDD must comply with all recordkeeping requirements and all documentation and records must be maintained and readily retrievable for three years following the end of the declared public health emergency.  The unlicensed facility must submit an Out-of-State Shipment Notification Form to the Board of Pharmacy prior to shipping any drugs to the Ohio TDDD.  This guidance shall remain in effect until June 14, 2020 or when Ohio’s emergency orders are lifted, whichever is earlier.

Pennsylvania

Staffing

As of March 22, Pennsylvania is allowing pharmacists to supervise pharmacy interns and technicians responsible for data entry via “technological means.”  The pharmacy must have documented policies and procedures to protect against patient harm and the pharmacist must be readily available to answer questions and be fully responsible for the practice and accuracy of the intern or technician. This suspension does not allow for pharmacy technicians and interns to fill prescriptions from a remote location; a pharmacist is still required to be on-site to fill prescriptions.

Facility Licensure

As of March 22, Pennsylvania is temporarily suspending the requirement for a non-resident pharmacy registration for the duration of the COVID-19 emergency.  An out-of-state pharmacy that does not hold a Pennsylvania non-resident pharmacy registration may ship into the state so long as the pharmacy has access to common patient files, has a business relationship with a Pennsylvania pharmacy and is licensed in good standing in the home state.  The requirement for nonresident pharmacy registration is temporarily suspended for the duration of the COVID-19 emergency.

Texas

Staffing

On March 20th, Texas temporarily suspended the requirement of in-person contact for patient consultation and will allow for telephonic consultation.  The suspension of the in-person consultation requirement remains in effect until terminated by the Office of the Governor or until the March 13, 2020 disaster declaration is lifted or expires.

Facility Licensure

Texas has also temporarily suspended the inspection requirement to renew Class A-S (community pharmacy engaged in sterile compounding), Class B (nuclear pharmacies), Class C-S (hospital, ambulatory surgery center, or institutional pharmacy engaged sterile compounding), and Class E-S (non-resident pharmacy engaged in sterile compounding) pharmacies.  This will allow pharmacies with these license types that have not been inspected by the Board within the last renewal period to still renew their pharmacy licenses.  The waiver does not apply to other classes of pharmacy licenses (e.g., Class D clinic pharmacies, Class F freestanding emergency medical care center pharmacies).  The suspension of the inspection requirement remains in effect until terminated by the Office of the Governor or until the March 13, 2020 disaster declaration is lifted or expires.

FDA is exercising significant emergency authorities during the COVID‑19 pandemic.  Not all of industry is affected, but those who are manufacturing or distributing (or using) devices being used to fight the pandemic can benefit by understanding FDA’s emergency‑related policies and practices.  These are evolving every day, but we have gained enough experience, and there is now enough FDA guidance, that it seemed worthwhile to try to sketch out a roadmap, even if somewhat rudimentary.

Although the EUA authority applies to drugs, devices, and biological products, our focus in this blog post is confined to devices.  We will cover these topics:

• How to obtain an emergency use authorization (EUA) for devices under section 564 of the Federal Food, Drug, and Cosmetic Act (FDC Act).
• Practical information about how to import EUA devices and devices marketed under enforcement discretion.
• Postmarket compliance for EUA devices.
• PREP Act immunity for EUA devices.

FDA’S EUA AUTHORITY

Under the FDC Act, it is unlawful to introduce into interstate commerce a medical device that lacks 510(k) clearance or premarket application (PMA) approval when required.  An EUA is effectively a substitute clearance or approval issued by FDA in a time of emergency pursuant to Section 564 of the FDC Act.  An EUA authorizes emergency use of a device that (1) is not approved or cleared for commercial distribution or (2) is approved or cleared, but not for the emergency intended use.

FDA may only issue EUAs within the scope of an applicable HHS emergency declaration.  The Secretary of HHS, Alex Azar, has issued three EUA device-related emergency declarations to date for the COVID-19 pandemic.  The first two emergency declarations issued relate to in vitro diagnostic (IVD) devices (see Federal Register notice here) and personal protective respiratory devices (see Federal Register notice here).  Following publication of these emergency declarations, FDA issued over fifteen EUAs for IVDs, and two EUAs for facial respirators (see list of COVID-19 EUAs here).

This week, HHS issued a third device-related emergency declaration, which is broadly applicable to “emergency use of medical devices, including alternative products used as medical devices” and has a retroactive effective date of March 24 (see Federal Register notice here).  FDA has already issued one EUA for a ventilator (see EUA here) pursuant to the authority granted by this broad emergency declaration.   Other EUAs seem likely to follow.

Preparation of a Request for EUA

Under Section 564 of the FDC Act, an EUA request must satisfy the following criteria:

1. There is an applicable HHS declaration related to a serious or life‑threatening disease or condition;
2. Based on the totality of scientific evidence, it is reasonable to believe that the device may be effective in diagnosing, preventing, or treating the disease or condition;
3. The known and potential benefits of the device outweigh the known and potential risks of the device; and
4. There are no adequate, approved, and available alternatives to the device.

FDA issued an EUA guidance document in 2017 expanding on FDA’s expectations for these four criteria.  The guidance clarifies that the fourth criterion, regarding no available alternatives, does not mean that only one EUA can be issued for a device type or category.  Rather, a device manufacturer can establish that there are no available alternatives if there are “insufficient supplies of the approved alternative to fully meet the emergency need.”

The 2017 guidance does not specify any particular format for EUAs, but for the COVID-19 pandemic, FDA has requested use of FDA-created EUA templates.  FDA has posted to its website two EUA templates for IVD EUAs, one for laboratories to perform high-complexity testing under the Clinical Laboratory Amendments (CLIA) (see template here) and one for commercial test kit manufacturers (see template here).  FDA has stated that templates for non-diagnostic devices can be requested via email at CDRH-NonDiagnosticEUA-Templates@fda.hhs.gov, but has not yet posted any non‑diagnostic EUA templates to its website.  We are aware of one that is being used by an FDA review team but it has not been publicly released to our knowledge.

In our experience with the EUA process so far during the current emergency, the review divisions we have worked with have requested initial submission of the request as a “Pre‑EUA.”  The Pre-EUA submission has the same content and data as an EUA submission, but submitting as a Pre-EUA apparently allows FDA to work interactively with the device manufacturer to gather the necessary data and information to compile a complete EUA request that is ready for approval.

FDA’s Current Policies for IVD EUAs

The COVID-19 pandemic has led to a pressing need throughout the country for appropriate screening and diagnostic tests.  As a result, FDA established policies related to COVID-19 tests early in the Agency’s response to the pandemic.  Perhaps because the IVD policies were created early, they have evolved over time to adapt to the test market.

On February 29, FDA issued a guidance document describing a policy that would allow laboratories certified under CLIA to perform high-complexity testing to develop, validate, and use diagnostic tests for the SARS-CoV-2 virus, prior to submission of a request for EUA.  The grace period was approximately 15 business days.  This policy allows laboratories to proceed to market quickly with validated laboratory-developed test while simultaneously seeking an EUA.

Under this policy, once a laboratory has a validated test, it must notify FDA via email (at CDRH-EUA-Templates@fda.hhs.gov) that it has a validated assay and will begin clinical testing.  During the 15-day grace period, lab reports must include a statement that the test has been validated, but FDA’s independent review of the validation is pending.  While awaiting FDA’s determination on the request for EUA, the laboratory must obtain confirmation of the first five positive and first five negative clinical specimens using an EUA-authorized assay.  If FDA ultimately refuses to issue the EUA, the laboratory must terminate testing patient specimens and issue corrected test reports that indicate the prior test result may not be valid.

On March 16, FDA issued an updated version of this guidance document (Policy for Diagnostic Tests for Coronavirus Disease-2019 during the Public Health Emergency), which retained the February 29th policy regarding high-complexity laboratories without modification, and added three additional policies addressing various testing scenarios that arose as states and commercial laboratories attempted to respond to the call for additional tests.

The updated guidance included a policy that permitted state authorization of laboratory tests developed by high-complexity laboratories in lieu of an EUA.  Prior to publication of this guidance, on March 12, FDA issued enforcement discretion for laboratory tests authorized by the Wadsworth Center of the New York State Department of Health.  On March 13, the President issued a Memorandum on Expanding State-Approved Diagnostic Tests, which explicitly gave FDA authority to offer the same enforcement discretion policy to any other state that requests it.  FDA is requesting that states choosing to exercise this option notify FDA.  Additionally, FDA has asked laboratories with tests authorized by a state, rather than through the EUA process, submit a notification to FDA via email at CDRH-EUA-Templates@fda.hhs.gov.

Originally, the grace period applied to laboratory-developed tests in high-complexity CLIA certified laboratories.  This updated guidance extended the policy to commercial test kit manufacturers and distributors, who now may begin distribution of a test kit prior to submission of a request for EUA for a period of 15 business days, so long as the test has been validated, the manufacturer sends an email notification to FDA, and the test report includes the disclaimer that the validation has not been reviewed by FDA.  Unlike the policy for high-complexity laboratories, FDA recommends that commercial test manufacturers post to their website the instructions for use and a summary of assay performance.

The fourth policy in the March 16 updated guidance relates serology tests.  Serology tests that identify antibodies (e.g., IgM, IgG) to SARS-CoV-2 from clinical specimens do not require an EUA.  To qualify for this enforcement discretion policy, a test must be appropriately validated, the test manufacturer or laboratory must send a notification to FDA via email, and the test reports must have the following disclaimers:

• The test has not been reviewed by the FDA.
• Negative results do not rule out SARS-CoV-2 infection, particularly in those who have been in contact with the virus. Follow-up testing with a molecular diagnostic should be considered to rule out infection in these individuals.
• Results from antibody testing should not be used as the sole basis to diagnose or exclude SARS-CoV-2 infection or to inform infection status.
• Positive results may be due to past or present infection with non-SARS-CoV-2 coronavirus strains, such as coronavirus HKU1, NL63, OC43, or 229E.

There has been some confusion among laboratories and test kit manufacturers as to whether the policies in the March 16 guidance apply to home testing and/or home collection.  FDA’s guidance states that none of the four policies applies to home testing.  FDA’s Frequently Asked Questions webpage on diagnostic testing for SARS-CoV-2 clarifies that the policies also do not apply to home collection tests that are performed in a laboratory.  So, all home tests or tests using home specimen collection require an EUA, and laboratories and manufacturers cannot begin distribution prior to approval.

FDA is hosting a weekly virtual town hall series to provide policy updates and answer questions regarding COVID-19 diagnostic tests.  These webinars may prove to be a useful channel for policy updates on FDA review and regulation of COVID-19 IVDs in the coming weeks.

The first virtual town hall was held on March 25 (see slides here), during which Elizabeth Hillebrenner, Associate Director for Scientific and Regulatory Programs in the Office of the Center Director, and Timothy Stenzel, Director of the Office of In Vitro Diagnostics, summarized the policies in the March 16th guidance and answered questions from industry.  Many questions related to CLIA requirements, which FDA stated should be directed to CMS rather than FDA.  Though, FDA did clarify that the March 16th policies would not alter the relevant CLIA requirements for a test.  For example, if a test is moderate or high complexity, it can only be used in a doctor’s office if the doctor has the appropriate CLIA certification.

HOW TO IMPORT EUA AND ENFORCEMENT DISCRETION DEVICES

During the past week, FDA has provided increased clarity on importing devices subject to EUAs, devices subject to enforcement discretion, and alternative products to be used as medical devices.  Imports have been a source of consternation for industry as, even under the best of circumstances and with clear guidance, products do not always enter the U.S. at an efficient pace.

As background, FDA has broad authority over imports of products subject to its jurisdiction.  FDA may refuse admission of a product if the product “appears from the examination of . . . [a] sample or otherwise” to violate the law.  FDC Act § 801(a).   This standard is flexible, and permits FDA to refuse product entry into the U.S. based on subjective criteria.  Historically, this created inconsistency among different FDA Import Offices and even inconsistent approaches among reviewers within the same office.

Since mid-2016, we have seen many consistency issues addressed by the onboarding of the Automated Commercial Environment (ACE) for FDA-regulated products.  As we previously blogged, ACE provides importers with a “single window”  to submit information to government agencies, reducing redundant submissions to different agencies that may have jurisdiction over the products proposed for import.  The ACE system relies heavily on the use of appropriate codes to identify manufacturers, products and product uses.  The FDA Supplemental Guidance, last updated in April 2018, provides the appropriate codes for use with FDA-regulated products.

One of the biggest issues for importers during the COVID-19 public health emergency has been the lack of appropriate codes in the FDA Supplemental Guidance to address devices that may be subject to EUAs, those subject to enforcement discretion, or alternative products intended to be used as medical devices.  Although FDA published final guidance in 2017 on Emergency Use Authorizations of Medical Products and Related Authorities making clear that products subject to EUA could be legally imported, no mechanism was provided in that guidance on how to appropriately code these imports – with the guidance merely stating that, “[t]he letter of authorization should serve as appropriate documentation or certification that the product may be legally imported or exported.”  While the FDA Supplemental Guidance includes a “compassionate use/emergency use” code for medical devices, it was unclear whether importers could apply the code to commercial shipments of EUA products or whether the code applies to more discrete utilizations of a device for more traditional compassionate use purposes.

On March 24, FDA issued a statement that it had taken action to increase COVID-19 response supplies by providing instructions to the import community on importing personal protective equipment and other devices.

These instructions provide specific codes for importers to utilize when importing 3 categories of products:

• Non-FDA-regulated general purpose protective equipment – importers should utilize, if available, Harmonized Tariff Schedule codes (HTS codes) that do not flag the entry for FDA review.  If an HTS code has a flag, importers should do a ‘disclaim’ for FDA;
• Products authorized under EUA – importers should use Intended Use Code 940.000: Compassionate Use/Emergency Use as well as the applicable FDA product code;
• Products regulated by FDA as a device, not authorized by an EUA, but where an enforcement discretion policy has been published in guidance – importers should use Intended Use Code 081.006: Enforcement discretion per final guidance as well as the applicable FDA product code.

While these import instructions are helpful, gaps remain.  FDA has historically required importers to identify products’ intended uses at the time of import.  It is unclear whether importers may use HTS codes that avoid FDA review for general purpose products that do not meet medical device requirements but are intended for use as medical devices.  FDA has provided published guidance on certain face masks (and importers can now use intended use code 081.006 for these products).  As of March 25, there was not guidance for other types of personal protective equipment such as surgical gowns, although we are aware that FDA has provided email guidance to members of industry stating its willingness to exercise enforcement discretion in certain circumstances.

In a March 26 email response from the newly established COVID19FDAIMPORTINQUIRIES@fda.hhs.gov, we received confirmation that there is no mechanism to import personal protective equipment for a medical use (Gloves, Gowns, Surgical Apparel, etc.,) that is not in compliance with traditional medical device requirements, even if FDA has provided email guidance that it would exercise enforcement discretion in certain circumstances.  FDA confirmed that for these products, “There are no exemptions from registration, listing, and/or clearance/approval requirements at this time.”

To its credit, FDA appears to recognize many of these issues and is taking steps to partner with industry. We are aware that FDA has proactively reached out to importers to facilitate information exchanges that may help expedite U.S. entry of these much‑needed products.

POSTMARKET COMPLIANCE

To date, FDA has not issued general guidance to address postmarket compliance of EUA devices and the issue of enforcement has not arisen in any meaningful way in the current pandemic.  That could change later, so it is at least worth knowing what the statute authorizes FDA to do.

Under Section 564 of the FDC Act, FDA has authority to set “conditions of authorization” for an EUA.  For on any device with an EUA, the letter of authorization will set forth specific conditions of approval.  This authority is somewhat different for products not previously regulated versus those already regulated but being put to a new emergency use.

For products previously unapproved under the FDC Act:  An EUA may specify appropriate conditions to ensure that healthcare professionals administering the product (and patients receiving it) know that it is being used under FDA’s emergency use authority and the significant known benefits and risks and alternatives.  Patients specifically may be told of an option to refuse or accept it and the consequences.

In addition to these informational requirements, FDA may set appropriate conditions for monitoring and reporting adverse events associated with the emergency use.  FDA also may subject manufacturers to appropriate conditions concerning recordkeeping and reporting, as well as inspection of the records, with respect to the emergency use.

Finally, FDA has broad authority over distribution (including who may distribute and/or receive product), who may administer and to whom it may be administered, and requirements for collection and analysis of information about the safety and effectiveness of the product.

For unapproved new uses:  For a manufacturer of a device subject to an EUA for a new emergency use, FDA is required to apply the informational requirements above, to the extent practical, and FDA is authorized to apply adverse event reporting and recordkeeping and reporting.

Interestingly, if an EUA requires a change in labeling, the manufacturer may choose not to comply.  In this situation, FDA may not authorize a distributor or other person to obscure or alter the original labeling.  FDA may authorize a distributor to add supplemental labeling not subject to the misbranding requirements (502 of the FDC Act).

All devices:  FDA has broad authority to waive or limit compliance with good manufacturing practice (for devices, the Quality System Regulation), including any adulteration requirements (section 501 of the FDC Act).

Finally, FDA may establish conditions on advertisements and other promotional descriptive printed matter for the emergency use.  This authority includes the right to invoke the restricted device authority over advertising in Section 502(r) of the FDC Act.

PREP ACT IMMUNITY

The Public Readiness and Emergency Preparedness Act (PREP Act) is a broad and complex public health emergency statute.  Of interest here, it has a provision that authorizes the Secretary of HHS to issue a declaration (i.e., a PREP Act declaration) that triggers broad statutory immunity from liability under federal and state law.  This immunity applies to claims of loss caused or resulting from administration or use of countermeasures to diseases, threats and conditions determined by the Secretary to constitute a present or credible risk of a future public health emergency.  The immunity is applicable to entities and individuals involved in the development, manufacture, testing, distribution, administration, and use of such countermeasures.  The exception for “willful misconduct” is exceedingly narrow.

As mentioned, the immunity from liability is triggered by a PREP Act declaration.  A PREP Act declaration has been issued for COVID‑19.  Although the immunity provisions in the PREP Act are too complex for this already quite long blog post, it is at least worth knowing that a device receiving EUA approval for fighting COVID‑19 also receives immunity under the PREP Act.  Specifically, the statute defines a “covered countermeasure,” to include “a . . . device . . . authorized for emergency use in accordance with section 564.”

In 2009, Levon Helm, formerly of The Band, wrote and recorded “Growin’ Trade,” a song about a weary, disillusioned American farmer reluctantly staves off bankruptcy by growing illegal cannabis.  Helm nor anyone else could have known that in the ensuing years, a majority of states would decriminalize cannabis, a number of whom would authorize cannabis for medicinal and recreational purposes.  It would have been beyond anyone’s wildest imagination that the Drug Enforcement Administration (“DEA”) on March 23, 2020, would issue a Notice of Proposed Rulemaking (“NPR”) that while issuing additional registrations to manufacture marijuana for research, also involves the agency inserting  itself in the manufacturer-to-researcher equation by buying, taking possession and directing marijuana to researchers.  Controls to Enhance the Cultivation of Marihuana for Research in the United States, 85 Fed. Reg. 16,292 (March 23, 2020).

In summary, DEA finally appears ready to start evaluating applications and issuing DEA registrations to manufacture marijuana for research.  However, to meet the requirements under the international treaties, DEA is proposing to control the distribution of marijuana by purchasing the crops from the manufacturers and then acting as the distribution point to the researchers.  This raises a number of regulatory issues and concerns over how DEA will prioritize the sale and distribution.

For over 50 years, DEA has granted only one manufacturer registration for marijuana, restricting all marijuana production for research to the University of Mississippi, under contract with the National Institute on Drug Abuse (“NIDA”).  DEA issued a policy statement in August 2016 recognizing the increased interest in the research of certain cannabinoids, including cannabidiol, concluding, based on discussions with NIDA and the Food and Drug Administration (“FDA”), “that the best way to satisfy the current researcher demand for a variety of strains of marijuana and cannabinoid extracts is to increase the number of federally-authorized marijuana growers.”  Applications to Become Registered Under the Controlled Substances Act to Manufacture Marijuana to Supply Researchers in the United States, 81 Fed. Reg. 53,846, 53,847 (Aug. 12, 2016).  [See DEA Policy Expands the Number of Marijuana Cultivators for Research, Aug. 17, 2016].

DEA’s proposed rule that would increase the number of marijuana growers for research purposes resulting in a larger, more diverse variety of marijuana for research.  The proposed regulations would allow DEA to evaluate the 37 pending manufacturer applications, establish a program to register additional marijuana growers, and for the agency purchase, take possession and direct marijuana to registered researchers.  DEA, Press Release, DEA Proposes Process to Expand Marijuana Research in the United States (March 20, 2020).  While registering additional growers of marijuana for research is long overdue, that DEA would assume such an active, direct role in the supply chain raises a number of questions as noted below.

We reported last August that DEA was not ready to evaluate the registration applications it had received since announcing in 2016 that it would accept applications and issue registrations to manufacturer marijuana for research.  [See Ease on Down the Road: DEA Still Not Ready to Evaluate Marijuana Manufacturer Registrations, Aug. 29, 2019].  To meet increased demand for research with marijuana, marijuana extracts and marijuana derivatives, DEA has increased the annual production quota for marijuana by 575 percent since 2017, from 472 kilograms to 3,200 kilograms in 2020.  DEA, Press Release, DEA Proposes Process to Expand Marijuana Research in the United States (March 20, 2020).

DEA anticipates approving applications for registration of three types of bulk marijuana manufacturers:  manufacturers who grow marijuana for their own research or drug development; manufacturers who supply marijuana to other DEA registrants; and manufacturers who supply marijuana to support NIDA’s drug supply program.  Id. at 16,295-96.

The NPR explains that because marijuana is a schedule I controlled substance, registration applications to manufacture it are governed by 21 U.S.C. § 823(a).  Controls to Enhance the Cultivation of Marijuana, at 16,293.  For DEA to issue a registration under 21 U.S.C. § 823(a), DEA must determine that the registration is consistent with the public interest based on enumerated criteria and with U.S. obligations under the Single Convention on Narcotic Drugs, 1961 (“Single Convention”).  Id.  Article 28 of the Single Convention requires signatory countries that permit cultivation of the cannabis plant for the production of cannabis or cannabis resin to comply with Article 23 controls, and excludes the cultivation of cannabis for industrial or horticultural purposes.  Id. at 16,294.  Article 23 requires signatory countries that allow the cultivation of cannabis for lawful purposes, such as manufacturing for research, to:

1. Designate areas and plots of land where they will permit cannabis plant cultivation for producing cannabis or cannabis resin;
2. Ensure only licensed cultivators engage in cultivation;
3. Specify through licensing the extent of the land on which cultivation is permitted;
4. Require cultivators to deliver all their cannabis to the responsible agency, ensuring the agency purchases and takes physical possession of the crops as soon as possible, but not later than four months after the end of the harvest; and
5. “Have the exclusive right of importing, exporting, wholesale trading, and maintaining stocks of cannabis and cannabis resin,” except the exclusive right need not extend to medicinal cannabis, cannabis preparation, or the stocks of cannabis and cannabis resin held by manufacturers of such medicinal cannabis and cannabis preparations.

DEA already performs the first three functions under the Controlled Substances Act (“CSA”), so to comply with the CSA and issue registrations consistent with the Single Convention, the agency is proposing revising its regulations “to directly perform” the fourth and fifth functions as well.  Id.

So, to comply with the Single Convention, the regulations, if finalized, would require:

1. Registered manufacturers to deliver the entirety of their cannabis crops to DEA, and DEA to purchase and take physical possession as soon as possible, but no later than four months after harvest.
2. DEA may accept delivery and maintain possession of the crops at the registered location of the registered manufacturer consistent with the CSA security controls required for schedule I substances.  DEA would designate a secure storage mechanism at the manufacturer’s registered location to maintain possession by controlling access to the cannabis.  If no suitable location exists at the manufacturer’s registered location, DEA would designate a location for the grower to deliver the crops within four months of harvest.
3. DEA would have the exclusive right to import, export, wholesale trade and maintain cannabis stocks other those held by registered manufacturers and distributors or medicinal cannabis or cannabis preparations.  DEA may authorize registrants to perform such activities.  DEA would require prior written notice of each proposed cannabis import, export or distribution specifying the quantity, and the name, address and DEA registration of the recipient manufacturer or researcher before authorizing the transaction.  Registered manufacturers could not import, export or distribute cannabis without the express written authorization of DEA.
4. A registered manufacturer must notify DEA in writing of its proposed harvest date at least fifteen days prior to commencement of the harvest.  (A delay of DEA taking possession “would not only increase the risk of diversion, but would also adversely impact the quality of the crop.).  Id. at 16,294-95.

DEA intends to purchase marijuana with funds from the Diversion Control Fee Account and add a variable administrative cost per kilogram to the sales price to end users.  Id. at 16,297.  The merits of this proposition alone could be the subject of its own blog post.

If the proposed rule is finalized as is, DEA would become an active player in these enterprises, constituting a huge leap from the role of an enforcer of federal law regulating marijuana to being responsible for purchasing, possessing and directing marijuana in the research supply chain.  How is this going to work?  Can DEA be both a participant and regulator of the same activities?  Will DEA’s participation be hampered by investigative, administrative and budgetary constraints?  All stakeholders would be best served for DEA to delegate as many of these proposed new responsibilities to registered entities who are better equipped to engage in these activities.

In addition to compliance with the Single Convention, DEA may grant a registration to manufacture marijuana only where the agency determines the registration is consistent with the public interest based on criteria in 21 U.S.C. § 823(a), including limiting the number of registered bulk manufacturers to that which can produce an adequate and uninterrupted supply of marijuana under adequately competitive conditions in order to maintaining effective controls against diversion.  Id. at 16,296.  To fulfil this requirement, a bona fide supply agreement between a grower and registered schedule I researcher would provide evidence that an application is necessary to produce an adequate and uninterrupted supply of marijuana under adequate competitive conditions.  Id.  The proposed regulation defines a “bona fide supply agreement” as “a letter of intent, purchase order or contract between an applicant and a researcher or manufacturer.”  Id. at 16,305.  Applicants seeking to grow marijuana for their own research can meet this requirement by holding a DEA registration to conduct research with marijuana.  Id. at 16,296.  Applicants should be prepared to produce bona fide supply agreements to DEA as part of the preregistration process.

DEA will also determine which applicants to register as consistent with the public interest by  emphasizing the “applicant’s ability to consistently produce and supply marihuana of a high quality and defined chemical composition” and “[w]hether the applicant has demonstrated prior compliance with the CSA and DEA regulations.”  Id. at 16,297.  DEA stated in its 2016 policy statement that “[i]n this context, illegal activity includes any activity in violation of the CSA (regardless of whether such activity is permissible under State law) as well as activity in violation of State or local law.”  Applications to Become Registered, at 53,847. DEA explained at the time that while past illegal conduct involving controlled substances would not automatically disqualify an applicant, “it may weigh heavily against granting” a registration.  Id.  Given all things being equal, it will be interesting to see whether DEA penalizes those applicants who ignored this warning and conducted state-authorized cannabis activities in violation of the CSA by favoring those who did not by granting the latter a registration.

Having received 37 applications since August 2016, how will DEA determine which of those registrations to grant and how to handle additional applications it receives?  “With limited exception,” DEA will first evaluate the applications it has received before the final rule becomes effective, and will not consider applications received after the rule becomes effective until it grants registrations or denies registrations of the earlier applicants.  Id. at 16,297. Because DEA is required to issue a show cause before denying any application for registration, and provide the applicant with a right to an administrative hearing, we expect that a number of applicants will challenge these denials and lead to more litigation.

Neither Levon Helm nor anyone else could not have envisioned in 2009 that DEA would seek to purchase, take possession and direct marijuana in 2020.  Not even for legitimate research.

Electronic comments on the proposed rule must be submitted, and written comments postmarked, on or before May 22, 2020.

For the past two years, FDA has been working to improve the 510(k) Third Party Review Program.  This program is meant to delegate the review of certain 510(k) submissions, freeing FDA’s limited resources to focus on the review of more complex devices and those that present a greater risk to users.  While this seems like a great program in theory, since its introduction it has been greatly underutilized due to FDA routinely re-reviewing the submission.  In September of 2018, FDA issued a draft guidance on an updated Third Party Review Program, which was finalized on March 12, 2020.  The final version is largely unchanged from the draft.  This post will focus on notable changes.  For a more detailed overview of the Program overall, visit our prior blog post, here.

Overview of the Prior Third Party Review Program

FDA’s Third Party Review Program, formerly known as the Accredited Persons Program, allows sponsors to submit 510(k) applications for devices with eligible product codes to a Third Party Reviewer, who uses FDA criteria to evaluate the submission.

The Final Guidance, like the draft, limits eligibility for Third Party Review to certain device types which generally present a lower risk to users.  It also outlines the same factors it will consider when determining eligible devices: (1) the risk profile of the device, (2) the extent to which a Third Party Reviewer would have access to the information needed to make a well-informed decision, (3) the extent to which the review requires multifaceted interdisciplinary expertise, and (4) the extent to which post-market safety data should be considered.  Product codes eligible for Third Party Review are identified on FDA’s product code classification database.

After its substantive review, the Third Party Reviewer sends the submission to FDA with a recommendation that the device is Substantially Equivalent (SE) or Not Substantially Equivalent.  FDA has thirty days to make a final determination.  Under the prior program, however, FDA regularly re-reviewed all or part of the 510(k) submission before making a final determination, essentially eliminating the program’s efficiency.  FDA accepted 75 Third party 510(k) submissions in fiscal year 2018 and 78 in fiscal year 2019.

Overview of FDA’s New 510(k) Third Party Review Program

As noted above, FDA’s final guidance is largely unchanged from the draft.  The most notable, non-substantive change is abbreviating the program as the “3P510k” Review Program, previously the “3P Review Program.”  Not only is this a mouthful, the reference to a 510(k) submission as “510k” makes many in the industry, the author included, cringe.  FDA provided no explanation for the change in name, or dropping the parentheses in 510(k).

A more substantive change is the expansion of international standards with which the 3P510k Review Organization can comply and still “be in compliance with most FDA 3P510k Review Organization requirements and meet FDA’s recommendations” in the guidance document.  While FDA does not elaborate on what it means by “most” requirements, it is notable that under the final guidance, 3P510k Review Organizations and Reviewers can comply with the Medical Devices Single Audit Program (MDSAP) and the International Medical Device Regulators Forum’s Good Regulatory Review Practices; whereas the draft only referenced reliance on standards in MDSAP.

FDA’s Final Guidance elaborates on the draft’s reference to forum shopping, explaining that 510(k) Submitters are not permitted to provide substantially the same submission to multiple 3P510k Review Organizations to find the one most likely to recommend an SE determination.  The final draft also adds trade secrets to the description of confidential information a 3P510k Review Organization is expected to protect.  Disclosure of confidential information or trade secrets is prohibited under the 3P510k Review Program and could result in a suspension or withdrawal of recognition of the organization.

When FDA issued the draft a year and a half ago, we expressed cautious optimism that the revamped program would provide a meaningful alternative to the 510(k) submission process for certain devices.  While that outcome is not yet clear, we look forward to tracking the use of this program and will keep our readers updated with any additional developments.

The COVID-19 pandemic has had a significant impact on day-to-day life for all of us in an attempt to “flatten the curve” to slow transmission of the coronavirus (SARS-CoV-2).  However, for those of us involved in the development of medical products, quarantines, site closures, travel limitations, interruptions in the supply chain, and infection add an unprecedented set of challenges that make it difficult to conduct clinical trials.  In an acknowledgement that protocol modifications may be required and protocol deviations may be unavoidable, FDA’s three medical product centers today issued a Guidance on Conduct of Clinical Trials of Medical Products during COVID-19.  Given this public health emergency, this guidance was developed and implemented without prior public comment and is effective immediately.

Considerations That May Result from COVID-19 Pandemic

FDA outlines considerations to assist in assuring the safety of trial participants, maintaining compliance with good clinical practice and minimizing risks to trial integrity during the COVID-19 pandemic.  Considerations for sponsors, investigators, and institutional review boards (IRBs) include:

• To ensure the safety of trial participants, consider whether to: (a) continue trial recruitment, (b) continue use of the investigational product for patients already participating in the trial, and (c) change patient monitoring during the trial. The key to this is insuring trial participants are kept informed of any changes to the study or monitoring plans that could impact them.
• If trial participants may not be able to come to the investigational site for protocol-specified visits, consider alternative methods for safety assessments (e.g., phone contact, virtual visit, alternative location). If in-person visits are not possible, and safety of trial participants cannot be assured by alternative means, consider whether to discontinue use of the investigational product (and, if so, whether withdrawal of active investigational treatment requires additional safety monitoring).
• If a trial, as designed, cannot be properly conducted, consider whether it is possible to delay some assessments or whether to stop ongoing recruitment or even withdraw participants.
• If onsite monitoring visits are no longer possible, consider use of central and remote monitoring programs.

Even if these considerations are not yet impacting a clinical trial, FDA requests sponsors, investigators, and IRBs to ensure they have policies and procedures in place to protect participants and manage study conduct during possible disruption as a result of COVID-19.

FDA Guidance on Specific Actions

Outside of these decision-making considerations, FDA provides guidance on other specific actions:

• COVID-19 Screening Procedures: If COVID-19 screening procedures are mandated by the health care system in which the clinical trial is being conducted, these do not need to be reported as an amendment to the protocol, even if done during clinical study visits, unless the sponsor is incorporating the data collected as part of a new research objective.
• Safety-Related Changes to Protocols and Informed Consent: If protocol or informed consent changes are anticipated as a result of COVID-19 that will help minimize or eliminate immediate hazards or to protect the life and well-being of participants (e.g., to limit exposure to COVID-19), these changes may be implemented without IRB approval or before filing an amendment to the IND or IDE (but are required to be reported afterwards), although early engagement with IRBs is encouraged.
• Protocol Deviations: Sponsors and investigators should work with IRBs prospectively define procedures to prioritize reporting of deviations that may impact the safety of trial participants.  While alternative processes should be consistent with the protocol to the extent possible, any contingency measures implemented should be documented with the reason taken. It is important to capture specific information in the case report form that explains the basis for missing data (e.g., due to changes in study visits schedules, missed visits, or patient discontinuations), including the relationship to COVID-19.
• Efficacy-Related Changes to Protocol: FDA recommends consultation with the review division, if feasible, regarding protocol modifications for the collection of efficacy endpoints (or other changes that would require changes to the statistical analysis plan (SAP)), such as use of virtual assessments, delays in assessments, and alternative collection of research-specific specimens. Failure to collect an efficacy assessment should be documented by identifying the specific limitation imposed by COVID-19 leading to the inability to perform the protocol-specified assessment.  Prior to locking the database for a study, sponsors should address in the SAP how protocol deviations related to COVID-19 will be handled for the prespecified analysis.

As an overarching action item for sponsors, investigators, and IRBS, the draft guidance requests that policies and procedures be put in place to describe approaches to be used to protect trial participants and manage study conduct during possible disruption of the study as a result of COVID-19 control measures at study sites.  The policies and procedures could address, for example, changes to the informed consent process, study visits and procedures, data collection, study monitoring, adverse event reporting, and changes in investigator, site staff, and clinical monitor due to travel restrictions, quarantine measures, or COVID-19 illness itself.

FDA established an email box for receipt of questions on clinical trial conduct during the COVID-19 pandemic: Clinicaltrialconduct-COVID19@fda.hhs.gov.

Documenting Actions Taken in Response

In addition, FDA requests that all actions taken by the sponsor, investigator, and IRB be documented.  Specifically, FDA states that the clinical study report or other separate study-specific document provide:

• A description of contingency measures implemented;
• A listing of all participants affected with a description of how participation was altered; and
• Analyses and discussions that address the impact of the implemented measures (e.g., trial participant discontinuation, alternative procedures) on the safety and efficacy results reported.

What Should Sponsors Do Now?

For each protocol, sponsors should evaluate whether new or modified procedures should be in place to protect trial participants and manage study conduct during possible disruption of the study as a result of COVID-19.  Sponsors should also prospectively develop plans for addressing different circumstances (e.g., quarantined study site, illness at the site, cancelled study visit) and regulatory responsibilities (e.g., informed consent, product accountability and administration, training and monitoring the sites).  Finally, sponsor should ensure that the investigators and study sites involved in their clinical studies are familiar with the recommendations in these new FDA guidelines as soon as possible.  Many of the FDA recommendations directly affect the study investigator, such as a need to document the relationship of COVID-19 to the conduct of the study including contingency measures, missing data, or protocol deviations.

With the growth of biosimilar applications, courts have been faced with a litany of questions arising from the interplay between reference product intellectual property and the biosimilar application process.  Though the BPCIA was designed to “learn” from FDA’s experience with the Hatch-Waxman Act, the procedural differences in the patent dance raise novel questions (for example, questions about whether the patent dance is mandatory and proper notice timing made it all the way to the Supreme Court).   The Federal Circuit, back in December, addressed another one of these questions arising from a significant difference between the Hatch-Waxman Act and the BPCIA: the role of process (or manufacturing) patents.

The patent safe harbor under 35 U.S.C. § 271(e), as we have discussed here and here, exempts drug development and approval from patent infringement provisions, and courts have interpreted the safe harbor to apply to broadly to FDA-regulated and approved products, including biologics.  Generally, the safe harbor protects the use of a patented technology for all development activities “reasonably related” to FDA approval.  Indeed, as long as there is a reasonable basis to believe that patented technology may be used for a non-routine FDA submission, the use is not an act of infringement.  Courts continue to grapple with the application of the safe harbor to different types of FDA submissions as the regulatory process has become more complex—and largely have continued to expand its scope.

However, now that biosimilars and the biosimilar patent dance are a thing, the courts have to assess the scope of the safe harbor with respect to types of patents.  This wasn’t an issue in the past because FDA regulations preclude the listing of process patents in the Orange Book, which means that process patents are not included in the Hatch-Waxman patent dance.  Indeed, the Federal Circuit has even held that, for purposes of patent infringement, the act of submitting an ANDA is only an artificial act of infringement with respect to a drug substance or drug product patent—thereby omitting process patents from the infringement calculus until the product has been placed into interstate commerce (obviating the need for the application of the safe harbor to process patents).  See Glaxo Inc. v. Novopharm Ltd., 110 F.3d 1562 (Fed. Cir. 1997).  But in the biosimilars context, where the manufacturing process may be integral to the safety, potency, and purity of the biological product, and is therefore critical to the product itself, process patents are included in the patent dance, raising questions of how the safe harbor actually works when the act of manufacturing itself is an act of infringement.

In December, the Federal Circuit was asked to opine on jury instructions with respect to the application of the safe harbor to process patents in patent litigation relating to Hospira’s biosimilar application referencing Amgen’s erythropoietin.  While no one argued that the safe harbor does not apply to process patents (likely because the safe harbor statute expressly applies to “the use” of a patented invention for FDA approval purposes) , the jury found that only 7 of Hospira’s 21 batches of drug substance were covered by the safe harbor; the other 14 therefore infringed on Amgen’s process patents.

Hospira argued that “no reasonable jury could have found that some, but not all, of Hospira’s drug substance batches were protected by the Safe Harbor defense.”  Instead, Hospira argued, the instructions to the jury with respect to the application of the safe harbor to process patents were flawed.  The instructions, in relevant part, stated:

You must evaluate each of the accused activities separately to determine whether the Safe Harbor applies.  If you find that an accused activity was reasonably related to the development and submission of information to the FDA for the purpose of obtaining FDA approval, then Hospira has proved its Safe Harbor defense as to that activity. If Hospira has proved that the manufacture of a particular batch was reasonably related to developing and submitting information to the FDA in order to obtain FDA approval, Hospira’s additional underlying purposes for the manufacture and use of that batch do not remove that batch from the Safe Harbor defense.

Hospira argued that this instruction focused on the intent of manufacturing batches rather than whether each batch was used for purposes reasonably related to Hospira’s submission.  Amgen, unsurprisingly, argued that the jury instruction clearly applies only to the use of the batches.

The Federal Circuit sided with Amgen.  The Court explained that because the patented inventions are “Amgen’s claimed methods of manufacture,” “[t]he relevant inquiry, therefore is not how Hospira used each batch it manufactured, but whether each act of manufacture was for uses reasonably related to submitting information to the FDA.”  In other words, the jury appropriately focused on the “why” of each use of the manufacturing process.  Regardless, the Court continued, “the instructions struck the appropriate balance by telling the jury that Hospira’s additional underlying purposes do not matter as long as Hospira proved that the manufacture of any given batch of drug substance was reasonably related to developing information for FDA submission.”  Because substantial evidence supports the jury’s findings that the 14 batches—which were admittedly made for commercial inventory but supposedly used for biosimilarity testing, revisions to release specifications, stability testing, and continued process verification—were not manufactured solely for uses reasonably related to the development and submission of information to FDA, as they were also used for routine submissions and therefore not protected by the safe harbor, the Court found the jury’s findings reasonable.

Hospira filed a Petition for Rehearing En Banc in January, arguing the Federal Circuit misapplied the safe harbor with respect to biosimilar process patents.  Instead of the underlying purpose for the use of the manufacturing process, Hospira contends that the jury must look at the ultimate use of the product manufactured through the potentially infringing process.   Looking at the broader application of the safe harbor, Hospira argues the Federal Circuit’s ruling “calls into question the continuing viability of the Safe Harbor” because “[i]f an act of manufacture infringes regardless of how the product batches produced by the patented method are used, then the statutory protection for ‘making’ a drug is rendered illusory for a large subset of the patents available to be asserted under the BPCIA.”  Therefore, the Court’s ruling that “subsequent uses that are objectively related to obtaining FDA approval cannot bring the making of the [erythropoietin] within the Safe Harbor if the manufacture itself was not ‘required,’ at the time of manufacture, for seeking FDA approval” must be erroneous.

According to Hospira, because it ultimately used all of the batches to generate data for its aBLA, its infringement of Amgen’s process patents is protected under the safe harbor regardless of its intent when manufacturing those 14 batches.  This is particularly true, Hospira argues, because of the nascent nature of the aBLA process.  Because, at the time of submission, FDA had only “issued limited draft guidance for the requirements for approval of [an aBLA],” Hospira did not know exactly what testing and how many batches would be necessary for approval.  Therefore, Hospira manufactured batches to preclude “giving the FDA less information than it deserves and/or needlessly prolonging the review process if FDA finds the initially submitted data to be insufficient.”

Amgen responded in late February, urging the Court to deny the Petition for Rehearing.  Amgen focuses on the wording of the jury instruction rather than the overarching policy debate, arguing that the jury instruction was consistent with the statute, as well as existing safe harbor case law.  Further, Amgen emphasizes that the testing performed on the batches was required only because the batches were made for commercial inventory.  The jury properly found, based on substantial evidence, that the tests performed were “routine testing” not subject to the safe harbor.  Indeed, Amgen explains, that “rather than use ‘how’ or ‘why,’” the panel correctly applied the language used in the statute: “whether each act of manufacture was for uses reasonably related to submitting information to the FDA.”

Ultimately, there is an underlying question of fact here—whether the Hospira actually used those batches for routine submissions or approval submissions—which may lead the Federal Circuit to reject the Petition for Rehearing En Banc.  While that would certainly be a bad outcome for Hospira—and arguably for any aBLA-filers mired in regulatory uncertainty— such an outcome may preclude clarity on the why vs. how issue.  But even if that happens, this is unlikely to be the last we hear from the Federal Circuit on the scope of the safe harbor as it applies to process patents.  As the biosimilar patent dance process unfolds, we expect that process patents will play a larger role, culminating in even more questions for the courts.

A month ago, we blogged on FDA’s emerging strategy of granting Emergency Use Authorizations (EUAs) for devices, drugs, and biologics that can be used to combat the spread of COVID‑19.  Since then, FDA has begun granting EUAs, with more in the pipeline.  In addition, the Secretary of Health and Human Services (HHS) has now issued a so‑called PREP Act declaration that triggers extremely robust product liability protection for medical products used pursuant to an EUA.

To help industry understand FDA’s legal tools and role in fighting the pandemic, the Food and Drug Law Institute (FDLI) is hosting a webinar on March 19 (Thursday).  It will be free to members and available for a low price to non‑members.  Hyman, Phelps & McNamara, P.C.’s Jeff Shapiro will be moderating the panel.  Here is FDLI’s description of the webinar:

FDA is actively working with companies to identify potential shortages and mitigate any impacts as early as possible. FDA has also recently approved several Emergency Use Authorizations (EUAs) for medical products used to diagnose or prevent transmission of COVID-19. What is FDA’s role in responding to public health emergencies such as COVID-19? What is FDA’s process for issuing drug, device, or biologics EUAs? What other tools does the agency have to decrease the impact of supply chain disruptions, product shortages, and disease outbreaks, and what are the legal limits to FDA’s authority? How does FDA work with other agencies and entities such as the Centers for Disease Control and Prevention and World Health Organization?

FDA is urgently seeking to authorize diagnostic tests (see this guidance just issued) but it is also approving EUAs for prevention devices (e.g., facial respirators) and, hopefully, there will be vaccines and drug therapeutics that qualify in the near future.

Come join us to learn about EUAs, the PREP Act and more!

Since as early as 2005, industry has asked FDA for its input on the listing of device patents in the Orange Book (see our previous post here).  FDA has, for the most part, refused to address this question.  As such, industry has decided to just go for it and list device patents in the Orange Book as long as the device is integral to the safety or efficacy of the drug product and the patent is reasonably likely to be infringed if a generic version of the drug is approved.  Consistent with its ministerial role in Orange Book patent listing, FDA has listed these patents.  Though former Commissioner Gottlieb implied that FDA would soon address this issue, it hasn’t.  Indeed, in the 15 years since industry has been doing this, FDA has not said a word.

While FDA has been silent, the First Circuit recently opined on the issue.  In a different context than we’d expect—antitrust litigation—the Court made a bold declaration that device component patents that do not explicitly claim the drug product cannot be listed in the Orange Book in In Re Lantus Direct Purchaser Antitrust Litigation.  Unfortunately for industry, the Court did not tease out what it means by “drug product,” merely stating that a patent must claim the drug for which the applicant submitted the application.

In Re Lantus Direct Purchaser Antitrust Litigation challenges Sanofi’s patent listings for Lantus, an insulin glargine approved by FDA in 2000.  At approval, Sanofi listed one patent covering the drug substance, which expired in August 2014.  In 2007, Sanofi received approval of Lantus Solostar, which contains the same active ingredient but is a combination product including a self-injection drug delivery device.  Sanofi submitted an additional patent covering the “drive mechanism” component of the Solostar self-injection delivery system to the Orange Book in 2013.  In 2013-2015, several competitors submitted 505(b)(2) applications to FDA referencing Lantus, including paragraph IV certifications to the Solostar drive mechanism patent; they each culminated in a licensing agreement between the parties.

As a result of the Solostar drive mechanism patent listing, the plaintiffs in In Re Lantus Direct Purchaser Antitrust Litigation, a putative class of direct insulin glargine purchasers, allege that Sanofi artificially restricted competition in the insulin glargine market.  Because, they allege, the Solostar drive mechanism patent was improperly listed in the Orange Book, any litigation commenced in response to Paragraph IV certifications for this patent was a “sham” initiated to trigger an automatic 30 month stay.  The District Court dismissed the plaintiff’s antitrust claims predicated on the improper listing of the Solostar drive mechanism patent because of the “ambiguities in the FDA’s listing requirements.”  On appeal, the First Circuit disagreed.

Interpreting the plain wording of the Hatch-Waxman provisions, the Court determined that a patent listed in the Orange Book must not only be a patent that claims a drug, but “it must be a patent that claims the drug (or method of using the drug) ‘for which the applicant submitted’ the sNDA.”  According to the Court, because the Solostar drive mechanism patent “does not claim or even mention the Lantus Solostar,” it does not “claim the drug” and was improperly listed in the Orange Book.  Though the patent may claim an “integral component” of the drug product, the Court stated that it sees “nothing in the statute or regulations that welcomes such a further expansion of the already stretched statutory terms, whereby an integral part of an injector pen becomes the pen itself, and in turn is a drug.”

Once the Court determined that Sanofi should not have listed the Solostar drive mechanism patent, it followed that Sanofi could be held liable for antitrust injury arising from the restricted competition.  Sanofi argued that because it was required to list all patents that reasonably relate to the drug product, it should not be liable for antitrust violations, as it was merely trying to fulfill its statutory responsibilities under the Hatch-Waxman Amendments.  While the Court agreed to some degree, it maintained that regulatory responsibilities do not immunize improper patent submissions from antitrust scrutiny.  Nevertheless, a good faith defense may be applicable here.  Thus, the Court held that the Solostar drive mechanism patents were improperly listed, but “the defenses to antitrust liability as a result of such an improper submission include proving that the submission was the result of a reasonable, good-faith attempt to comply with the Hatch-Waxman scheme. . . .”  The case will go back to the District Court to litigate this issue.

Because the patent at issue here claimed only a device component rather than the pen injector itself, the decision here is not at odds with industry’s current practices.  Indeed, it is arguable whether a specific device component is integral to the safety or efficacy of the drug product, particularly if it’s not detailed in product labeling.  Nevertheless, the Court’s decision is vague and open to interpretation.  When it states that the “drug” must be claimed in the patent to be properly listed in the Orange Book under the plain language of the statute, it is not clear whether the patent would need to include the drug substance or if a patent that claimed only the delivery device for the approved drug would suffice.  The Court doesn’t go that far; instead, it states the patent needed to claim either insulin glargine or Lantus Solostar to be eligible for listing: the question goes to whether “Lantus Solostar” means the drug substance for use with the Solostar pen, or whether the pen would have been enough.  Perhaps this is a question that the Court would rather defer to FDA, but, as we know, FDA isn’t offering up any opinions here.

The fact pattern here is narrow enough that this decision is not likely to be explosive—the patent claims only a component of the delivery device and two versions of the same product are approved under the same NDA with only one requiring use of the device—and the decision is limited to the First Circuit.  But the implication here is that if FDA doesn’t take a stance here, courts are going to make up their own rules.  It’s rare for a court to opine on a regulatory procedure when FDA won’t.  And if courts are making up their own procedures, those procedures could be completely at odds with industry practices—practices that industry was forced to adopt specifically because FDA would not make a determination on the issue.  And it is apparently not a full defense to antitrust allegations that the listing is consistent with the ambiguous FDA policies on device patent listing.

Again, the fact pattern here precludes widespread application to the practices adopted by most drug/device product manufacturers, and that’s likely why the Court could make such a sweeping assertion in this matter, but the implications of this decision suggest that courts will act even where FDA has not provided clear direction.  This raises significant risks where regulatory uncertainty pervades.  The takeaway, therefore, is that just because FDA hasn’t objected (even when asked repeatedly to opine on conduct), a court still may.

Last week, FDA submitted to Congress the report on CBD (“CBD Report”) that the agency was directed to prepare by the Further Consolidated Appropriations Act, 2020. Concurrently, the Commissioner issued a statement that summarizes the agency’s progress to date, and a consumer update that emphasizes the agency’s safety-related concerns. Altogether, the documents suggest that greater clarity on the regulatory path for some categories of CBD products is not on the near horizon.

At the heart of FDA’s difficulty in discerning that path is insufficient scientific data regarding the safety of CBD. The agency cites several potential risks that have come to light thus far (e.g., livery injury, drug-drug interactions, and possible male reproductive toxicity), and points to numerous questions that remain unanswered, particularly with respect to the potential effects of sustained use. Although FDA is conducting or sponsoring some research, the agency is reiterating its call for submission of data to the docket established in connection with the public hearing held last May. Yesterday, the agency issued a notice of the reopening of that docket for an indefinite time to facilitate submission of “data that may help to address uncertainties and data gaps related to the CBD.” FDA’s wish list is long, and includes studies that address:

• risk of liver injury
• toxicities of active metabolites
• impact on the male reproductive system
• effect of co-administration with other substances, including medicines, alcohol, and dietary supplements
• impact on neurological development
• sedative effects
• transdermal penetration and pharmacokinetics
• safety of long-term or cumulative exposure, including in vulnerable populations
• effects of different routes of administration on CBD’s safety profile
• effect on food and non-food producing animals
• potential for bioaccumulation

In the interim, FDA acknowledges in its CBD Report that the horse – neigh, the entire herd – has left the barn, with a “vast proliferation of CBD consumer products” since passage of the 2018 Farm Bill. FDA continues to view CBD products that make therapeutic claims as posing the greatest risk to public health, but also expresses “serious concerns” about contaminants such as heavy metals and THC, false claims pertaining to composition or levels of CBD, and marketing to vulnerable subpopulations such as children.  As a potential next step, FDA is considering the issuance of a “risk-based” enforcement policy; however, that policy “would need to balance the goals of protecting the public and providing more clarity to industry and the public regarding FDA’s enforcement priorities while FDA takes potential steps to establish a clear regulatory pathway.” In other words, even that won’t be easy – or quick.

Last Thursday, March 5, 2020, the FTC filed a formal complaint alleging deceptive marketing practices against tea and skincare company, Teami, LLC, and its co-founders, as well as a stipulated order for permanent injunction and monetary judgment.  In conjunction with the filings, the FTC also issued 10 warning letters to Instagram influencers regarding their failure to disclose material connections to Teami in Instagram posts about Teami products.   On Friday, the FTC issued a press release about its settlement with Teami, posted about the settlement to its Consumer Information blog, published a separate post on its Business Blog, published links to Teami endorsement videos from Cardi B, Brittany Renner and an Instagram post from Jordin Sparks, tweeted about the case using images of Cardi B, Brittany Renner and Jordin Sparks, and announced and hosted a conference call for media.  That’s a lot of content in a short amount of time –  all aimed at ensuring high media coverage of one of FTC’s latest enforcement actions around deceptive marketing practices and the use of social media influencers/advertisers.

But first, the complaint.  The FTC alleges that Teami disseminated false or unsubstantiated efficacy claims about its teas through express or implied claims about treating cancer, reducing cholesterol, decreasing migraines, preventing and treating colds, causing weight loss and burning body fat.  Specific examples provided in the complaint relate to content on the Teami website from as late as December 2018.  The FTC also alleges that Teami engaged in deceptive advertising by failing to disclose material connections.  The complaint notes that the FTC wrote to the company in April 2018 about several influencer product endorsements and that in May 2018, Teami had implemented a social media policy to ensure relationships were clearly and conspicuously disclosed.  The complaint notes that many paid influencers were contractually obligated to obtain Teami approval before posting about Teami products.  Despite this requirement, the FTC alleges that Teami did not enforce its own social media policy requirements and numerous influencer posts did not clearly and conspicuously disclose that they were paid by Teami.   As part of the complaint, the FTC identified influencers, excerpts from their posts, as well as the number of influencer followers, illustrating the size of the audience affected by the content.

The FTC warning letters to influencers reference the FTC complaint against Teami and state that “[I]ndividual influencers who fail to make adequate disclosures about their connections to marketers are subject to legal enforcement action by the FTC.”  The FTC requests responses from influencers describing actions that have been taken or will be taken to ensure that social media endorsement posts clearly and conspicuously disclose relationships.  Responses are due to the FTC by March 30, 2020.

FTC does acknowledge that, in many instances, influencers did disclose their relationship as a “#teamipartner,” however the disclosure was not clear and conspicuous.  FTC states that the information did not always appear in the first two or three lines of text accompanying pictures and videos, and, on mobile platforms, users would need to click “more” to see that disclosure.  And FTC also points out how different technology renders posts differently to users – reinforcing that marketers need to consider the different platforms in which users will access content and whether disclosures are clear and conspicuous in each of those platforms.

As part of the settlement, the FTC set forth the following as part of its definition for “Clear(ly) and Conspicuous(ly)”:

• A required disclosure is difficult to miss (i.e., easily noticeable) and easily understandable by ordinary consumers, including
  • In any communication that is solely visual or solely audible, the disclosure must be made through the same means through which the communication is presented. In any communication made through both visual and audible means, such as a television ad, the disclosure must be presented simultaneously in both the visual and audible portions of the communication even if the representation requiring the disclosure is made in only one means
  • Visual disclosures, by size, contrast, location, the length of time it appears, and other characteristics, must stand out from accompanying text or other visual elements
  • Audible disclosures, including by telephone or video, must be delivered in a volume, speed, and cadence sufficient for ordinary consumers to easily hear and understand
  • When using an interactive electronic medium, the disclosure must be unavoidable
  • Disclosures must use diction and syntax understandable to ordinary consumers and must appear in each language in which the representation that requires the disclosure appears
  • Disclosures must comply with these requirements in each medium through which it is received
  • Disclosures must not be contradicted or mitigated by, or inconsistent with, anything else in the communication

The disclosure and monitoring language largely tracks the language in the FTC’s first case involving individual social media influencers in 2017, however this is the first case to challenge claims made in social media endorsements about the effectiveness of health-related products.  The FTC is requiring Teami (and in turn, its influencers) to have adequate substantiation for weight-loss and other claims.

What’s notable about the Teami case is the FTC media blitz around the settlement – in addition to utilizing a variety of platforms to communicate, the FTC also uses celebrity images and videos as a hook.  And, while there are references to the FTC allegations around unsubstantiated efficacy claims, the bulk of FTC’s content focuses on the second count in the complaint – deceptive failure to disclose material connections related to paid endorsements.

Advertisers’ use of endorsements is a priority area for the FTC, particularly given emerging technology and use of social media.  FTC’s Endorsement Guides have been in place in some form for about 40 years, with its most recent update in 2009.  As we recently blogged, last month, the FTC announced it is seeking public comment on whether changes should be made to the Guides, including questions related to what, if any, changes should be made to account for changes in technology.

The FTC seems to be taking a page from industry’s book on the use of technology and celebrity images to capture audience attention.  Industry should take note, and exercise caution and compliance in implementing promotional strategies.  Your marketing, if done improperly, may someday become part of the FTC’s self-promotion.

The recent opinion in FTC v. Quincy Bioscience Holding Co., 2020 U.S. Dist. LEXIS 36424*(S.D.N.Y. Mar. 2, 2020) (background here) is a primer on affirmative defenses in an FTC Act case alleging deceptive advertising of a dietary supplement.  The FTC and State of New York brought a case alleging deceptive advertising of the dietary supplement, Prevagen, which purports to improve one’s memory.  We have discussed this case in the past – here and here – and in this post we will focus on the eight affirmative defenses that the FTC  moved to strike.  The court granted some, and denied others.  As someone who hasn’t litigated in a while, but follows litigation, this opinion was a good refresher on some basics.

Laches and Waiver:  For those who haven’t thought of laches since law school, it is the legal doctrine that an unreasonable delay in seeking a remedy for a legal claim will prevent it from being enforced if the delay has prejudiced the opposing party.  The court dispenses with this defense quite quickly because, “It is well settled that the United States is not bound by state statutes of limitation or subject to the defense of laches in enforcing its right.”  U.S. v. Summerlin, 310 US 4144, 416 (1940).

Validity of FTC Quorum: As happens occasionally, the FTC had only two Commissioners vote to bring the action – two Commissioner seats were vacant, and one Commissioner declined to participate in the vote, so the vote to bring the case was 2-0. Defendants argued that this was an ultra vires act (beyond one’s legal authority), and there wasn’t a valid quorum.  In an earlier opinion (389 F.Supp. 3d. 211 (S.D.N.Y. 2019)), the court determined that Rule 4.14(b) of the FTC’s Procedures and Rules of Practice states, “A majority of the members of the Commission in office and not recused from participating in a matter (by virtue of 18 U.S.C. 208 or otherwise) constitutes a quorum for the transaction of business in that matter.” 70 Fed. Reg. 53296-01 (Sept. 8, 2005) (codified at 16 C.F.R. § 4.14(b)).  Quorum is not the number of votes, but the number of persons required to be present in order for the business of the meeting to be conducted: at the time of this case, the quorum was three, and they were all present.

Commercial Speech: Defendant next made the argument that the claims were protected by the right to commercial speech and immune from regulation. The court dispensed with this quickly, stating that “deceptive commercial speech has no constitutional protection,” and “since the purpose of the trial of this case is to determine whether or not the advertisement is deceptive, the motion to strike the defense is denied.”

Good Faith: Good faith – here, in conducting clinical studies and advertising the results – is not a defense to liability under Section 5 of the FTC Act, but it may be a valid defense to the granting of an injunction. The court denied the motion to strike this defense.

Primary Jurisdiction of the FDA: While there are times when an argument that the FDA retains primary jurisdiction might prevail (e.g., awaiting FDA guidance on “natural”), “[g]iven the two agencies’ ‘overlapping and concurring jurisdiction,’ the FDA’s supposed ‘primary jurisdiction’ is not a viable defense.”

State Claims:  Defendant argued that the New York General Business Law claims fail because the alleged conduct took place outside of New York.  As the court did with the Commercial Speech argument above, it pointed out that the purpose of the trial is to determine whether any deceptive conduct occurred in New York, and denied the motion to strike the defense.

Right to Raise Additional Defenses: This defense, at least in theory, appears in many motions, but the issue here is just how that defense should be drafted.  This court did not wish for defendants to reserve the “unilateral right to add new and different affirmative defenses as they became known to it at indeterminate times in the future” (quoting Cty. Vanlines Inc. v. Experian Info. Sols. Inc., 205 F.R.D. 148, 157-58 (S.D.N.Y. 2002).  The court indicates that defendants may raise other defenses “with the opposing party’s written consent or the court’s leave” under Fed. R. Civ. P. 15(a).

This opinion was a fascinating walk-through of the defenses that are fairly common in litigation that we see in our space, and a good primer for regulatory attorneys who may not delve too deep into the procedural aspects of litigation that they read about every day.

Judge Naomi Buchwald of the District Court for the Southern District of New York recently found that the Department of Health & Human Services (“HHS”) misinterpreted a federal law requiring it to collect and post data for certain clinical trials, resulting in a 10-year gap in data that must be made publicly available. This decision will affect many clinical trials conducted between the time of the passage of the FDA Amendments Act (“FDAAA”) in September 2007 and the effective date of HHS’s Final Rule in January 2017 – meaning drug companies, medical device manufacturers and academic institutions will be required to post clinical trial data from clinical trials conducted during this time period.

The plaintiffs in Seife v. HHS are Charles Seife, an investigative journalist, and Peter Lurie, a former FDA associate commissioner who is also president of the public health watchdog Center for Science in the Public Interest.

Background

To provide some regulatory context, the ClinicalTrials.gov platform was developed by HHS and the National Institutes of Health (“NIH”) pursuant to the Food Drug and Modernization Act of 1997 (“FDAMA”), which required these agencies to establish, maintain and operate a data bank of information of clinical trials that could be accessed by members of the public, healthcare providers and researchers. Section 801 of the FDA Amendments Act of 2007 (“FDAAA”) imposed further reporting requirements aimed to “increase the availability of information to the public” and to “communicate the risks and benefits of drugs” in order to “help patients, providers and researchers learn new information and make more informed healthcare decisions.” Among those other requirements, FDAAA obliged “responsible parties” to submit specified “Basic Results” to NIH for inclusion in ClinicalTrials.gov for certain applicable clinical trials (“ACTs”). See our detailed summary of FDAAA and other requirements relating to the clinical trials database here.

On September 21, 2016, almost 10 years after the enactment of FDAAA and nearly 6 years after the deadline imposed on HHS by FDAAA, HHS promulgated its implementing regulations which we blogged about here. Effective January 18, 2017, the regulations declared that for ACTs of a product that is approved, licensed or cleared by FDA, Basic Results must be submitted within a certain time period.  However, for ACTs of a product that is not approved, licensed or cleared by FDA, Basic Results must be submitted only if the ACT had a primary completion date on or after January 17, 2017. If the ACT was completed after the enactment of FDAAA but before the effective date of the HHS Final Rule, Basic Results were not required to be submitted or posted if the ACT was for a product that was approved after the ACT was completed (“pre-Rule, pre-approval ACTs”).

Issue 1: HHS’s Interpretation of Final Rule Implementing FDAAA

When a court reviews an agency’s interpretation of its own regulation, it must apply Auer deference, which requires courts to defer to an agency’s reasonable interpretation of a genuinely ambiguous regulation. But the Supreme Court has recently cautioned that Auer deference does not apply in all cases, which we blogged about here. One such instance is when an agency interprets a rule that “parrots” the statutory text since the words initially come from Congress.

The Court found that the FDAAA unambiguously requires responsible parties to submit, and defendants to include on ClinicalTrials.gov, Basic Results for pre-Rule, pre-approval ACTs. Judge Buchwald compared the text of FDAAA and HHS’s Final Rule relating to the reporting of Basic Results and found that the Final Rule language is virtually identical to FDAAA.  Because the Final Rule parrots FDAAA, Auer deference does not apply to HHS’s interpretation. FDAAA states that “the Secretary shall include in [ClinicalTrials.gov] for each [ACT] for a drug that is approved… or licensed or a device that is cleared… or approved…, the following elements: [Basic Results]” (42 U.S.C. § 282(j)(3)(C)). Looking to the plain language of the statute, “is” of “is approved…. or licensed” or “is cleared… or approved” means a drug or device that is presently approved, licensed or cleared and therefore obligates HHS to include Basic Results on ClinicalTrials.gov for each ACT that studied a product that is presently approved by FDA, regardless of the marketing status of the product at the time when the ACT was conducted.

Defendants argued that such an interpretation of the FDAAA would violate a canon of statutory construction that statutes should not be construed to apply retroactively. However, Judge Buchwald determined that responsible parties knew since the enactment of FDAAA in 2007 that they were required to submit Basic Results for each ACT of a product that is approved. It was only in the 2016 HHS Final Rule, where HHS told parties they weren’t required to submit Basic Results for pre-Rule, pre-approval ACTs, that this requirement changed. Because the Court found that FDAAA unambiguously requires responsible parties to submit, and the government to include on ClinicalTrials.gov, Basic Results for pre-Rule, pre-approval ACTs, the Court granted plaintiff’s motion for summary judgment to hold unlawful and set aside HHS’s interpretation of the Final Rule as contrary to the FDAAA.

Issue 2: FDA’s and NIH’s Failure to Engage in Enforcement Action

FDAAA also created enforcement mechanisms to ensure that responsible parties comply with their clinical trial reporting obligations. HHS was empowered to issue a notice of noncompliance to a responsible party that fails to submit or submits false or misleading clinical trial information. If a violation is not corrected with 30 days, the responsible party will be subject to a civil monetary penalty up to $10,000 for each day the violation is left uncorrected. HHS delegated this power to FDA. NIH must include in the ClinicalTrial.gov entry a statement that “the responsible party is not in compliance” by failing to submit or submitting false or misleading clinical trial information, the penalties imposed for the violation, and whether the responsible party has corrected the information. NIH must also provide a means for the public to easily search ClinicalTrials.gov for notices of noncompliance. To date, FDA has never issued a noncompliance notice under its authority, and NIH has neither posted a public notice of noncompliance nor created a search function for such notices on ClinicalTrials.gov.

Plaintiffs challenged FDA’s and NIH’s failure to issue a noncompliance notice to responsible parties who have failed to report clinical trial information and NIH’s failure to provide a search function for such notices. Defendants argued that their challenged inaction is not subject to judicial review under the APA because the text of the FDAAA assigns discretion to the agencies to decide whether or not to engage in such enforcement actions. The court determined that FDA’s obligation to issue noncompliance notices only arises after FDA determines that clinical trial information has not been submitted or submitted information is false or misleading.  However, that determination is within FDA’s discretion and, since FDA has never made such a determination, FDA has no obligation to issue noncompliance notices.

The court then determined that the NIH notices are required to include information that exists only after FDA exercises its discretion under the FDA notice provision. Requiring NIH to post noncompliance notices on ClinicalTrials.gov without FDA first issuing their noncompliance notice to the responsible party would be “nonsensical” according to Judge Buchwald. Similarly, NIH’s nondiscretionary obligation to create a search function is predicated on FDA’s discretionary obligation to issue noncompliance notices to responsible parties for failing to submit clinical trials data. NIH is not required to create a search function for FDA noncompliance notices that do not exist. The court therefore granted the plaintiff’s motion for summary judgment

What Now?

While the court’s decision requires the results of clinical trials conducted in unapproved products between September 2007 and January 2017 to be posted on ClinicalTrials.gov, it is unclear whether FDA will require responsible parties to report, how long responsible parties have to report, and for HHS to subsequently post, such data.

*Admitted to Maryland Bar. Work supervised by the Firm pending D.C. Bar Admission.