For the last 13 years, this blogger has been at the center of what has now been dubbed “patient-focused drug development.” For 6 years, I served as a patient liaison within FDA in what was then called the Office of Special Health Issues.  This was the office (originally the AIDS Relations Staff) that was established in the 1980’s in response to the HIV/AIDS activism movement, the first function within the Agency with a mission to engage with patient stakeholders.  Over the years, this function expanded to cancer (renamed the Office of AIDS and Special Health Issues) and, ultimately, all serious and life-threatening diseases (dropping the AIDS nomenclature).  As part of this lean and mean team, I worked to incorporate patient viewpoints into study design, results interpretation, and, ultimately, benefit-risk decision-making.  In 2012 we at the Agency, under Dr. Janet Woodcock’s leadership, identified the need for more systematic patient engagement — a way to improve representativeness and be more proactive rather than reactive to interacting with patient communities.  So, we crafted the Patient-Focused Drug Development, or PFDD, a commitment that was agreed to in PDUFA V.  This launched us into a new era where we acknowledged that patients are experts in their lived experience and have important preferences to share. To ignore this wealth of expertise would be a huge missed opportunity to inform drug development and review.  Even since leaving FDA, as the PFDD initiative transitioned to externally-led meetings, my HP&M colleagues and I have helped nearly three dozen patient communities plan externally-led PFDD meetings, and that is only half of the work we do to help facilitate what the 21st Century Cures Act codified as “patient experience data.”

I have been boots on the ground in watching the culture shift both within FDA and in industry, as the value of the patient voice has been recognized as legitimate.  I have witnessed it inform whether clinical trial results are clinically meaningful (or not) as well as the selection and even development of primary endpoints.  Patient stakeholders have become partners in a decision-making process that serves as the gatekeeper to drugs – including both their benefits and their risks – but also will determine whether the status quo will remain (i.e., the morbidity, oftentimes irreversible and progressive, and mortality associated with their condition).  As someone who studied in the fields of public health, medical sociology, and biomedical ethics, I was impressed with how quickly the pharmaceutical and biotechnology arena caught up with what took many decades to occur in the context of the physician-patient relationship.  For too long, patients’ perspectives and own preferences were not considered in the provision of care by physicians at the patient level.  The practice of medicine was viewed as paternalistic.  Now there is a whole body of research that supports patients as partners in their own care, and the practice of medicine has largely corrected course.

This is what strikes me as so contradictory about the various critics who are suggesting that FDA violated the public trust when approving Aduhelm (aducanumab-avwa) for Alzheimer’s disease earlier this month (see our previous coverage of the approval here). In the last week, we have seen FDA advisory committee members resign in protest (see coverage here) and consumer advocates call for resignations of FDA officials (see coverage here). These self-proclaimed consumer and public health advocates, all who are physicians, feel they are in a better position to inform and/or judge FDA’s decision than the patients who will ultimately be the ones affected by this regulatory decision.  It harkens to the paternalism in medicine of the past.

As the ultimate stakeholder when it comes to drug approval decisions, shouldn’t we instead consider whether this builds or erodes patients’ trust in FDA?

Patient Input in the Approval of Aduhelm: Setting the Context for Accelerated Approval

While the FDA’s summary basis of approval, including supporting memos from both the Director of the Office of New Drugs (OND) and the Director of the Center for Drug Evaluation and Research (CDER), were just released (as I was writing this very post), FDA previously made clear statements about the role of patient stakeholders. In her closing statement during a press briefing on the date of the approval, CDER Director Dr. Patrizia Cavazzoni stated:

I wanted to thank the patients living with Alzheimer’s, their caregivers and health care professionals who have reached out to us over the past several months regarding the Aduhelm data. While our decisions are based on science and the data in the application, we have listened to and carefully considered the needs of the people who are living with this devastating, debilitating and incurable disease. The data supports patients and caregivers having the choice to use this drug.

What Dr. Cavazzoni lays out is the traditional way in which patients have informed drug benefit-risk decision-making: by setting the “clinical context” of the disease.  This clinical context encompasses two major considerations: 1) an analysis of the disease condition, including the severity of the condition, and 2) the degree of unmet medical need. This frames the assessment of benefits and risks, in a way, calibrating the application of the regulatory framework to the specific condition at hand.  For example, we know that cancer patients have a high tolerance for toxicity when offered a chance at improved survival, a risk tolerance that would not be shared by individuals suffering from the common cold.  We have also learned from patients with progressive conditions, like Pompe disease, that slowing progression of their otherwise universally permanently progressive condition would be of tremendous value to them – they do not need to see reduced symptom burden or improved functioning for a treatment to be meaningful.

However, the scope of patient input goes beyond setting the clinical context.  When a disease is serious or life-threatening and it has an unmet medical need, because there are serious risks associated with not approving a drug (i.e., serious morbidity, oftentimes irreversible and progressive, and risk of mortality), FDA must also balance the risks of making a type 2 error, or false negative conclusion from the data in hand.  Patients also have a role to play in setting the context for how much risk of a type 2 error they are willing to tolerate.  Or, said differently, patients can express their tolerance for less certainty of a treatment benefit.

Because no data set is completely reliable in establishing a drug’s benefit, and because no drug is universally effective for all patients, there is inherent uncertainty in every drug approval.  The question is: how much uncertainty is acceptable?  The Federal Food, Drug, and Cosmetic Act states that the evidence needs to be that “which it could fairly and reasonably be concluded…that the drug will have the effect…” (Section 505(d)).  Patients with different conditions, or even at different stages/severity of the same condition, may have different tolerance for less certainty (similar to the differences in risk tolerance discussed above).  This is why it is important for relevant patient populations to provide input as to what degree of certainty is needed for there to be a fair and reasonable conclusion of drug benefit for their condition.

One regulatory pathway that embodies this concept of “less certainty” is Accelerated Approval. These approvals, like with Aduhelm, may be granted when a benefit is demonstrated on a surrogate endpoint that is merely “reasonably likely…to predict clinical benefit” (i.e., it is not established using a validated surrogate endpoint that would support traditional approval, e.g., FEV1 in asthma or serum LDL in hypercholesterolemia).  Instead, the ultimate clinical benefit must be confirmed in a post-approval study.  If Accelerated Approval works to help expedite drugs to the market as it’s intended, then we should not expect all drugs approved on these surrogates to have clinical benefit confirmed.  It is in acknowledgement of this inherent uncertainty that FDA has provisions for expedited removal of these drugs if benefit is not confirmed post-approval.

We see that FDA considered Alzheimer’s patients’ input on tolerance for less certainty of treatment benefit for Aduhelm when Dr. Peter Stein, OND Director, shared during the press briefing:

We heard very clearly from patients that they are willing to accept some uncertainty to have access to a drug that could provide meaningful benefit in preventing the progression of this disease which as we all know can have very devastating consequences.

It is clear that this patient input helped inform the Agency’s conclusion that it was appropriate to consider approval based on an unvalidated surrogate (as long as it could conclude the surrogate was “reasonably likely to predict” clinical benefit), even without the ultimate showing of clinical benefit at the time of approval.  Patients expressed a willingness to take on the risks of a drug, even if benefits were less certain, because this uncertain chance of benefit and the associated risks of the drug was worth it to them compared to the alternative: waiting several years for another study, during which time there will be irreversible, progressive neurodegeneration.  Losing one’s identity, or possibly one’s life.  This input was further acknowledged by Dr. Stein in the concluding paragraph of his Concurrence Memorandum (at 9-10):

…approval using this pathway requires a tradeoff: patients and physicians who choose to use the drug must be willing to accept some residual uncertainty regarding clinical benefit – and therefore be willing to take a drug that may ultimately prove ineffective – along with the risks of the drug, in order to gain earlier access to a potentially valuable treatment. FDA staff has heard from patients that many would consider this a reasonable tradeoff and would opt to accept the uncertainty and risks for a drug that is likely, but not confirmed, to provide clinical benefit, potentially slowing the progression of their disease. Based upon this, I agree with the Office of Neuroscience that the benefit-risk balance for aducanumab is positive…

Closing Thoughts: Building Patients’ Trust & Digging into the Aduhelm Summary Basis of Approval

These statements by FDA officials surrounding the approval of Aduhelm, articulating how patient input set the context for their approval decision, should build trust with all patients.  This transparency surrounding one approval decision exemplifies that patient input matters.  This trust, with patients, is the trust that FDA should be most concerned about.

While we made some initial reflections of the merits of the Aduhelm approval in our June 8th blog post, we have not yet fully reviewed the SBA that was just released.  However, in the coming days we hope to do so and may provide our thoughts in subsequent posts.  In our work across many sponsors with many therapeutic modalities for many indications, we see how the many FDA review divisions apply the Accelerated Approval “reasonably likely to predict” standard required of a surrogate endpoint and, even more so, the application of the “substantial evidence of effectiveness” standard required of all new drug approvals, accelerated or traditional.  It is through this lens that we hope to evaluate the Aduhelm approval, to consider whether it “erodes” FDA’s standards.  However, as we collectively review these FDA review documents, we should all consider the patient input that FDA has shared with us and have that serve as our context for review as well.

Further Resources on Patient Input

For those of you who may now be intrigued about the evolution of patient input in drug development and regulatory decision-making, I would point you to some of our FDA Law Blog posts from over the years on this important topic:

• FDA Credits Recent Drug Approval to Patient Community Engagement; We Applaud the Agency for the Recognition and Its Legacy of PFDD (Dec. 3, 2020)
• Shifting Patient Engagement in the Era of COVID-19: HPM Facilitates the First Four Virtual Externally-Led PFDD Meetings, Moderating the Fifth Today (Aug. 28, 2020)
• FDA’s Latest PFDD Guidance Puts What Is Important to Patients at the Center of Drug Development. How? By Asking Them. (Oct. 11, 2019)
• HP&M Shares Experience with 16 Externally-Led Patient-Focused Drug Development Meetings; Summarizes Commonalities in Rare Disease Patient Perspectives in Comment to FDA (May 31, 2019)
• National Academies of Sciences Releases Report on Science of Patient Input, Citing Input from HP&M’s James Valentine (Dec. 18, 2018)
• HP&M Attorney Co-Authors Recommendations and “Rules of Engagement” for Successful Collaborations Between Sponsors and Patient Groups Around Clinical Trials (Aug. 7, 2017)
• Latest FDLI Update Magazine Features Interview Conducted by HP&M’s James Valentine on Patient Engagement in Drug Development (May 3, 2017)
• As the Patient-Focused Drug Development “Pilot” under PDUFA V Concludes, Is FDA Passing the Baton to Patient Organizations? (Oct. 18, 2016)
• CTTI Releases Recommendations and Tools to Maximize Engagement between Research Sponsors and Patient Groups (Oct. 7, 2015)
• What’s Next for Patient-Focused Drug Development? FDA Announces Final PFDD Meetings, and BIO Recommends Broader Use of the Benefit-Risk Framework (July 1, 2015)
• The 21st Century Cures Act: Putting Patients First, Literally and … Substantively (And FDA’s New Expanded Access Form) (Feb. 9, 2015)
• FDA Seeks Comments on Greater Patient Involvement in Medical Product Development (Nov. 13, 2014)
• When a Patient Speaks (Sept. 25, 2014)

End-of-Phase 2 (EOP2) is, in our view, one of the most critical moments in drug development.  It’s the moment at which a drug sponsor selects, and seeks FDA agreement on, its critical Phase 3 study parameters:  dose, eligibility criteria and endpoints, to name a few.  Errors or miscalculations in choosing these design components can send a safe and effective drug to the very expensive graveyard of failed Phase 3 studies.

So, what’s a sponsor to do when, at EOP2 and in subsequent interactions, it cannot reach agreement with the FDA review division on a critical parameter; let’s say the primary endpoint?  Submit a formal dispute resolution to bring the decision to the Office level, you say?  While that seems like a reasonable approach before spending millions of dollars on Phase 3, that option is not available to sponsors.  You see, in 2015, FDA revised its 15-year old FDRR guidance document to exclude EOP2 disagreements from the FDRR process (i.e., “Advice communicated in meeting minutes and other correspondences is not a regulatory action taken by CDER or CBER; therefore, it would not be an appropriate subject for a formal dispute resolution request (FDRR) by a sponsor.”).

In limiting the scope of FDRRs in this way, the Agency comforted itself that meeting minutes and advice letters (regardless of how strongly worded) convey mere “recommendations and/or advice made to a sponsor” and, as such, “[s]ponsors are not bound by such recommendations and/or advice.”  Of course, that’s true – at least as a technical matter.  The practical truth, however, is that failure to follow the Division’s recommendations for Phase 3 design puts the program at significant risk of failure even if the Phase 3 study is successful.  We’ll spare you the countless references to FDA advisory committee briefing documents in which a review division quotes its own earlier minutes or advice, pointing an accusatory finger toward the recalcitrant applicant who didn’t follow that advice.  Suffice it to say that a Phase 3 program that rebuffs FDA advice is a Phase 3 program fraught with peril – which, not surprisingly, is a Phase 3 program that investors will not fund.

We were so alarmed by the predicament created by the 2015 change to the FDRR guidance that we raised the issue in a comment to the docket.  There, we provided a hypothetical test case in which FDA meeting minutes accurately convey the division’s disagreement with the proposed Phase 3 study endpoint: “No, we do not agree. In order for your studies to provide substantial evidence of efficacy, we strongly recommend that you demonstrate an improvement over placebo in [insert FDA-preferred endpoint].” In our hypo (which, for many clients, reflects reality) further discussions with the division suggest that the disagreement cannot be resolved.  Unable to appeal, the sponsor conducts Phase 3 using its preferred endpoint rather than FDA’s and those studies are clinically and statistically successful.  We observed

the sponsor is already on notice that the review division will not consider these studies sufficient to demonstrate efficacy. It will request a pre-NDA meeting at which the division is likely to restate its view and refer back to the EOP2 minutes noting that the sponsor failed to follow previous advice. The sponsor, still unable to avail itself of the FDR process, must spend the resources necessary to prepare and submit a marketing application, and pay a user fee in excess of $2,000,000. FDA may issue a refusal to file (RTF) letter, which will restate that the endpoint is not appropriate. Because the FDRR process is not available for RTF actions, the sponsor must file over protest. Whether the application is voluntarily filed by FDA or filed over protest, the sponsor must wait 10 additional months, and face the prospect of an advisory committee which will consume significant additional resources, prior to receiving a complete response letter (CRL) stating for at least the fourth time that the endpoint was inappropriate. An appeal is still not available. The sponsor must instead request and attend another meeting with the division at which it will, for the fifth time, be told (likely with some warranted frustration by the review division) that the endpoint is not appropriate. Only at this point, three to four years after the original disagreement with the division, can the sponsor appeal under the 2015 Draft Guidance. If the appeal is successful in determining that the alternative endpoint is appropriate, the sponsor must assemble an NDA resubmission and undergo another six month review clock.

Well, despite our comment, FDA chose to finalize the guidance unchanged and since that moment has refused requests for formal appeals of disputes that arise at EOP2.

But why are we rehashing this 5+ year old history today?  In part, it may be that our egos are bruised or that we fester over having been right every time a potential client approaches us with a failed study that would have succeeded had it been able to convince FDA about a particular design element at EOP2, but mostly, it’s because we have identified a very important loophole.  A loophole so large that we’re not sure why we didn’t see it all along.  You see, what is appealable is a Special Protocol Assessment (SPA) No Agreement Letter.  And while conventional wisdom says that one is most likely to submit a SPA if it is possible to achieve  concurrence with FDA on the adequacy of study design, who’s to say that one can’t submit a SPA request in order to confirm a lack of such concurrence, thereby opening up the route to FDRR.

The truth is, we continue to believe that efficient development of novel therapies would be best served by changing the FDRR guidance to permit formal disputes of Phase 3 study design issues.  Since that doesn’t seem likely at this point, sponsors facing division-level disagreement on Phase 3 study design at EOP2 should consider whether to invest the time and resources necessary for the SPA and FDRR processes prior to initiating Phase 3.  While this could delay Phase 3 initiation by 4-5 months, it could accelerate (or make possible) time to ultimate drug approval.

On June 17, 2021, FDA gave notice of an upcoming public workshop focused on clinical trial designs for progressive multifocal leukoencephalopathy (PML).  PML is a rare disease that occurs when the JC virus (JCV), generally thought to lie dormant in the adult population, takes advantage of immunocompromised individuals.  JCV can cause a variety of devastating neurological symptoms primarily through infection of oligodendrocytes and astrocytes, leading to white matter lesions in the central nervous system.  Although this opportunistic virus appears to have no impact on healthy individuals, PML occurs most often in individuals who are immunocompromised, due to diseases like AIDS and leukemia, as well as in individuals taking strong immunosuppressive or immunomodulatory therapies, as may be the case following organ transplant or when managing an autoimmune disorder.  However, this often fatal and debilitating rare disease lacks targeted PML-specific therapies.

With this notice, FDA announced that it aims to engage with the public and private sectors, healthcare providers, academic experts, patients, and industry to discuss – (1) the unmet need for PML therapies and (2) issues of clinical trial design, including feasibility, trial populations, selection of control groups, endpoints, adaptive designs, and master protocols.  Public workshops such as this provide crucial opportunities to exchange ideas and expertise on developing therapeutics, gain insight into FDA thinking on clinical trial design and regulatory approaches, and inform the Agency and other stakeholders about the challenges to developing PML therapies.

The virtual workshop will take place on September 21, 2021, and a public docket seeking comments on the workshop will remain open until November 1, 2021.  Interested parties have until September 3, 2021, to submit requests to present during the workshop.  Our HPM team has extensive experience assisting patient groups, sponsors, and academics with their drug and therapeutic development needs for rare diseases and beyond.  Participation in this workshop is a must for anyone interested in PML, specifically, and an important opportunity to see these workshops in action for those seeking to gain insight into agency thinking around the challenges of rare disease drug development, more generally.

With the new Over-the-Counter (OTC) Monograph Reform came new facility fees (see our blog posts here and here, and FDA’s announcement here), and with new fees comes the new Arrears List. Facility fees under the OTC Monograph User Fee Act (OMUFA) were due for the first time on May 10, 2021, for fiscal year (FY) 2021.  On June 14, 2021, FDA published the OMUFA Facility Arrears List which is a list of registered facilities that are required to pay the FY2021 annual facility fee, but have failed to do so.  The list includes several hundred facilities running over 70 pages.  Given that this is the first year the fees have been assessed, it is not surprising that the list is long.  It likely contains some facilities that ceased operations prior to the applicability of the facility fee, and may also include some facilities that were registered as new manufacturers because they were used solely for the production of hand sanitizer under FDA’s temporary policy for manufacturing hand sanitizers in response to the COVID-19 pandemic.  As FDA explained when it reissued the OMUFA facility fees following the withdrawal of the original publication of fees, these facilities would not be required to pay OMUFA fees.

As with the arrears lists for other user fee programs, (possible) embarrassment is not the only consequence that accompanies appearing on the Arrears List.  Under section 502(ff) of the Food, Drug, and Cosmetic Act, a drug that is manufactured at a facility for which required OMUFA fees have not been paid is deemed misbranded.

On the same day it released the Arrears List, FDA also published on its website a series of Qs & As, “Other OMUFA Fee-Related Questions”.  These cover how to pay an overdue fee, whom to contact to correct an error in the listing, and how to request a refund for a fee paid in error.  They also clarify that, unlike some other user fee programs, there are no waivers or exemptions for OMUFA fees (although FDA is not assessing OMUFA facility fees for the aforementioned hand sanitizer facilities).

In October 2020, the Department of Health and Human Services (HHS) and the Food and Drug Administration (FDA) published a Final Rule (which we summarized here) that implemented Section 804 of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 384, to allow states and other entities (Sponsors) to develop a Section 804 Importation Program (SIP) to import certain prescription drugs from Canada into the United States (the “Final Rule”). As we previously reported, the Final Rule and HHS’s certification thereof was swiftly challenged in court by the Pharmaceutical Research and Manufacturers of America (PhRMA), the Partnership for Safe Medicines (PSM), and the Council for Affordable Health Coverage (CAHC).

After receiving a few extensions from the court, on May 28, 2021, the government filed a motion to dismiss the lawsuit for lack for subject matter jurisdiction, and alternatively, for failure to state a claim. According to the government’s memorandum in support of the motion, the complaint “presents ‘abstract hypotheticals or requests for advisory opinions’” and must fail on standing or ripeness. The government contends that the plaintiffs, who filed the lawsuit on behalf of their members seven days before the Final Rule went into effect, have not shown any injury-in-fact and merely allege possible future injury. The government argues that deferring the lawsuit until after a SIP is authorized by FDA would not burden plaintiffs’ members.

The government dedicated a substantial portion of its memorandum to describing the Final Rule in order to “reveal[] how many steps must be taken before [the Final Rule and the Certification’s] impact could be felt by any of Plaintiff’s members, let alone the general public.” This description highlighted many of the same concerns that the plaintiffs raised in their complaint. For example, the government cannot approve a SIP that has potential safety concerns, does not adequately ensure the protection of the public health, and does not result in cost savings to the American consumer. But while the plaintiffs asked the court to enjoin the Final Rule based on these concerns, the government assured the court that it could not even approve a SIP that did not adequately address these concerns.

The government’s motion to dismiss reflects an ambivalent attitude on the part of the Biden Administration toward the Trump-era importation rule. On one hand, the government’s motion to dismiss the lawsuit suggests that the Biden administration is not ready to completely close the door on drug importation as a potential approach to lower drug prices. On the other hand, the government’s memorandum goes into great detail on how difficult it will be to pass the statutory bar and obtain FDA approval to import drugs from Canada. The government emphasized that the onus to satisfy the statutory and regulatory criteria falls squarely on the SIP Sponsors. The government also pointed out that Canada’s Minister of Health has issued an interim order that prohibits would-be Canadian sellers from distributing drugs outside of Canada unless they have “reasonable grounds to believe that the distribution will not cause or exacerbate a shortage of the drug” in Canada. According to the government, the Canadian interim order injects further uncertainty into whether and to what extent the Final Rule could be implemented

It remains to be seen how FDA will evaluate SIPs based on the criteria set forth in the Final Rule. Six states (Vermont, Colorado, Florida, Maine, New Mexico, and New Hampshire) have passed laws allowing for the importation of drugs from Canada. We have reported on several of these laws. Two of these states (Florida and New Mexico) have submitted SIP proposals to FDA. We are watching to see FDA’s response, but do not expect to see these plans approved anytime soon, as the government has made no secret of the fact that FDA is not bound to any statutory timeline to make a decision on SIP proposals that have been submitted.

In our last post on Laboratory Developed Tests (LDTs), we suggested that Congress, not FDA, should lead in directing modernization of LDT regulation.  Any change should be made by enacting new law, and not by Food and Drug Administration (FDA) administrative fiat.

Coincidentally, on the same day the post went up, Senator Rand Paul introduced the “Verified Innovative Testing in American Laboratories Act of 2021” or the “VITAL Act of 2021,” a bill clarifying that the Centers for Medicare and Medicaid Services (CMS), not FDA, is to regulate LDTs.  It would require also that CMS hold a public meeting to solicit recommendations on updating existing Clinical Laboratories Improvement Amendment (CLIA) regulations related to clinical testing laboratories.  This step would help propel forward a public conversation (which CMS has already started) about how to update these regulations in light of technological advances.

FDA argues that technological advances in LDTs necessitate FDA’s regulatory oversight pursuant to the Food, Drug, and Cosmetic Act (FDCA).  Senator Paul’s bill would likewise facilitate regulatory reform to meet technological advances, but it would place the responsibility on CMS and use the vehicle of updating the CLIA regulations.  This approach makes more sense, because the CLIA regulations have always been the main vehicle for regulating clinical laboratory testing.

Indeed, the effort these past few years to apply the FDCA and its implementing regulations to clinical laboratory testing has been a failure.  The outcome was not a surprise, because the FDCA was designed for regulatory oversight of medical device manufacturing and distribution, not clinical laboratory testing.  Applying the FDCA to clinical laboratory testing is akin to putting a square peg in a round hole; it will work for a portion, but there are sharp corners that just do not fit.

The background to this discussion is as follows:  In 1976, Congress amended the FDCA to add a basic regulatory framework for medical devices.  A little more than a decade later, in 1988, Congress amended Public Health Service Act (PHSA) to add the CLIA, which provided a basic regulatory framework for clinical laboratory testing.  The Centers for Medicare & Medicaid Services (CMS) implements CLIA, largely based upon regulations issued in 1992.

Shortly after CLIA was enacted, FDA asserted authority to regulate LDTs under the FDCA.  This conclusion was strange, since CLIA is obviously intended for clinical laboratory testing while the FDCA is obviously intended for medical devices.

Nonetheless, FDA implemented the claimed authority by adopting “enforcement discretion” for all LDTs unless the public health supposedly demanded intervention.  That is, FDA claimed the authority to regulate LDTs while for the most part declining to do so.  Think of a lion watching a gigantic herd of wildebeests thundering past.  Every so often, FDA would charge and pounce, picking off a test here and there for active regulation, while it left the rest alone.

The agency choice of which tests to regulate was not based on factors set forth in a statute or even a regulation.  It was all decided by administrative fiat.  This abuse of enforcement discretion was arbitrary, capricious and likely unconstitutional.  Fortunately, The Department of Health and Human Services (HHS) finally put a stop to it last summer.

With this background, we return to Senator Paul’s bill.  It would require CMS to initiate a public conversation about how best to update the regulations for modern diagnostic technologies.  If there is good follow through, CMS would ultimately issue new regulations reflecting appropriate changes.  In this discussion, we would suggest that CMS also should seek to identify amendments to its statutory authority under CLIA, if any, that are necessary to complete the job of reform.

We predict that the discussion to be initiated by Senator Paul’s bill, focusing on CMS and CLIA, will be much more fruitful than FDA’s attempt (and recent legislative efforts) to apply the FDCA broadly to LDTs.  It is time to recognize that an FDA‑centric approach is not desirable.  That said, because some still argue for FDA oversight of LDTs, at least in part, we will consider in a future blog post whether there exists an appropriate (if limited) role for FDA in oversight of LDTs, even if CMS should take the lead through CLIA, as it has done for three decades or more.

While typically, FDA is responsible for setting forth its own agenda and enforcing compliance with its own regulations, the Trump Administration’s HHS, on its way out the door in late 2020, took the unusual steps of withdrawing an important FDA Compliance Policy Guide, “Marketed Unapproved Drugs – Compliance Policy Guide Sec. 440.100, Marketed New Drugs Without Approved NDAs or ANDAs,” which set forth FDA’s approach to prioritizing enforcement actions and exercising enforcement discretion with respect to marketed unapproved drug products.   As explained in CPG 440.100 and on FDA’s website, FDA adopted the “Unapproved Drug Initiative” (“UDI”) in 2006—later revised in 2011—to remove unapproved drugs from the market using a risk-based approach both to ensure the safety and efficacy of all drug products on the market and the integrity of the drug approval process.  Yet HHS, without input from FDA, “terminated” the UDI, citing increased drug pricing and shortages supposedly arising from the UDI.  HHS further withdrew all FDA materials relating to the UDI to “prevent actors from using Food and Drug Administration (FDA) rules to enjoy artificial monopolies over older drugs.”  While FDA was silent on the withdrawal for about 6 months, FDA finally withdrew HHS’s withdrawal of CPG 440.100 and the UDI on May 27, 2021.

In a somewhat scathing Federal Register Notice, FDA—noting that FDA “did not find any evidence that HHS consulted with, otherwise involved, or even notified FDA before issuing the HHS Notice”—explained that it was withdrawing HHS’s UDI Termination because “the HHS Notice contained multiple legal and factual inaccuracies.”  Specifically, FDA raised concerns with HHS’s misrepresentation of the term “new drug.”  A key term integral to the application of the drug approval requirements to a given product, FDA has always interpreted the term “drug” in the definition of a “new drug” to refer to the “entire drug product” rather than only the active ingredient, and courts consistently have upheld that interpretation.  The November 2020 HHS Notice, however, suggested that FDA previously had defined “new drugs” to mean active ingredient, and, therefore, the Notice reasoned that any active ingredient marketed prior to 1938 should not constitute a “new drug,” could be considered “grandfathered,” and may not require approval prior to marketing.  In this Federal Register Notice, FDA explained that it has never taken that position, as doing so “could result in significant harm to public health by suggesting that unsafe or ineffective drugs could circumvent the drug approval process.” FDA also criticized the implication in the HHS Notice that the CPG changed FDA’s interpretation of “new drug,” “grandfathered,” or “GRASE” status (formally known as drugs that are “Generally Recognized as Safe and Effective”) without required notice and comment.  FDA explained that the CPG changed no interpretations or definitions but merely reflected FDA’s decades-long interpretations and advised the public of FDA’s enforcement priorities.

Further, FDA assiduously defended the success of the UDI program.  Rejecting HHS’s position that the UDI program resulted in the “unintended” and “adverse” consequences of increased drug pricing and shortages, FDA explained that “the HHS Notice is supported by flawed facts,” as the single study relied upon was an observational study of only 26 products without adjustments for inflation, potentially resulting in an overestimation of real price changes.   Contrary to HHS’s assertions, FDA emphasized that the program and related compliance actions have resulted in approval of safe and effective versions of previously unapproved drugs.  FDA also cited carbinoxamine-containing products and quinine as examples of unapproved new drugs that, due to significant adverse events, were ultimately removed from the market as a result of this program.  And FDA refuted the HHS Notice’s association between the UDI and a Daraprim price increase for Daraprim: Daraprim was an approved drug without generic competition, and it was the absence of generic competition—not FDA enforcement under the UDI—that led to the increase in price.

Finally, FDA’s rebuke of the HHS Notice suggested that HHS did not have the statutory authority to withdraw the CPG as only the FDA Commissioner is “responsible for executing” the FDC Act.   FDA concluded its withdrawal notice by stating that “[t]he HHS Notice did not, and legally could not, provide a new pathway for the legal marketing of unapproved new drugs” as “[n]either HHS nor FDA has the authority to exempt a product or class of products that are new drugs under the FD&C Act from the new drug approval requirements of the FD&C Act.”

This is not the first time this year that FDA and HHS have given industry whiplash.  HHS withdrew FDA’s December 29, 2020 Federal Register Notice announcing OTC monograph fees only eight days after publication.  There, HHS threw FDA under the bus, issuing a statement that the imposition of user fees on hand sanitizer manufacturers “was not cleared by HHS leadership, who only learned of it through media reports” and that the HHS Secretary “would never have authorized such an action.”  Similarly, HHS and FDA withdrew HHS-proposed exemptions for 83 medical devices published in the Federal Register by the Trump Administration just days before leaving office.  There, HHS and FDA explained that “the proposed exemptions and bases for them are flawed.”  Once again, the Federal Register Notice explained that FDA “did not find evidence that HHS consulted with or otherwise involved FDA in its proposed exemption or the issuance of the January 15, 2021, Notice” and explained that only FDA ‘‘shall be responsible for executing’’ the FD&C Act.   The Agencies further explained that “it is particularly important that FDA have at least some level of involvement in this type of an action given the expertise needed . . . to assure the safety and effectiveness of a device,” and it’s clear from FDA’s withdrawal of the UDI withdrawal that the same premise applies to drugs.

As we explained back in late 2020 (after calling the HHS’s reasoning “malarkey”), the rescission of the UDI could mark “a return to the Wild West of marketed unapproved drugs instead of companies deciding to seek FDA approval.”  Thankfully, FDA has stepped in to reverse HHS’s thinly-veiled attempt to circumvent statutory drug approval requirements at the expense of safety and efficacy in an effort to control prices.

Yesterday’s FDA approval of Biogen’s Alzheimer’s drug, Aduhelm (aducanumab-avwa), is historic and is of a magnitude that it may be harbinger for future Agency actions, especially in neuropsychiatric conditions.   This has been a decision we’ve been closely following.  So much so, in November, right after the FDA Peripheral and Central Nervous System Drugs (PCNS) Advisory Committee had met on this therapy, the Pink Sheet quoted HP&M’s Frank Sasinowski in its coverage of the advisory committee as he floated the idea that FDA may turn to consider Accelerated Approval as a path forward on this therapy as the advisory committee had not been asked to nor had offered any opinion on this approval pathway.

Our reading of yesterday’s action is that while this is the direct action of the Director of the Office of Neuroscience, Dr. Billy Dunn, this approval has the full support of the Director of the FDA Center for Drug Evaluation and Research (CDER), Dr. Patrizia Cavazzoni.  This is because, not only did the FDA issue a press release, which is typical of any FDA regulatory action of this consequence but, in addition to the conventional press release which quotes Dr. Cavazzoni, she also issued her own personal, fairly extensive public statement explaining and defending this action.  Moreover, in her statement, Dr. Cavazzoni observes too that the advisory committee had not discussed the possibility of the Accelerated Approval pathway for this therapy.

While we do not yet have the FDA summary basis for approval, which we expect will contain very illuminating review memos, we can turn to the label and other overarching aspects of the approval for insights.  Below we highlight those observations that we believe, in the context of the broader regulatory landscape, set a positive trajectory for future Agency actions.  As you will see, ultimately, this Accelerated Approval may have benefited from FDA’s experience in evaluating products under the Emergency Use Authorization (EUA) regulatory framework.

Key Takeaways from the Aduhelm Label: What’s in It and What Isn’t

First, it was noteworthy what was missing from the label.  What do we mean?  Well, the FDA initially issued draft guidance on how to label drugs approved via the Accelerated Approval (i.e., Subpart H) pathway in 2014, then issued it as final guidance in January 2019.  In this guidance, FDA explains that sometimes “[s]imply reporting the endpoint used may convey sufficient information about uncertainty with regard to the limitations of usefulness drug and of uncertainty about anticipated clinical benefits…” Recent Accelerated Approvals we have been involved with, such as the 2017 approval of benznidazole for Chagas and the 2019 approval of Oxbryta for sickle cell disease, have taken this approach as they do not say anything more than identify the surrogate endpoint that was the basis of the approval and noting “continued approval…may be contingent upon verification and description of clinical benefit in confirmatory trials.”

However, the FDA guidance goes on to say in some cases, additional context is needed by specifically inserting a sentence in the indications statement that: no clinical benefit has been established.  This sentence was included in the 2016 approval of Exondys 51 for Duchenne muscular dystrophy and the 2018 approval of Andexxa for reversal of anticoagulation therapy.

It is noteworthy that this sentence that no clinical benefit has been established was deemed by FDA as unnecessary for Aduhelm to provide additional context beyond that the approval is based on reduction in amyloid beta plaques.  As an aside, we have found this inconsistency between which accelerated approval therapies are saddled with this sentence to be a paradoxical FDA policy as there is but a single standard for surrogate endpoints to be utilized for purposes of every Accelerated Approval (i.e., be “reasonably likely to predict” ultimate clinical benefit).  Moreover, in every Accelerated Approval, the clinical benefit must be confirmed in a post-approval clinical study, just as the labels for all Accelerated Approval drugs state.

Second, it was notable that the trials of Aduhelm were conducted in those with early Alzheimer’s disease, and the indication that FDA approved is for anyone and everyone with Alzheimer’s disease.  In many development programs, there is strong scientific rationale for generalizing the results (e.g., consistencies in the disease process, drug’s overall benefits and risks) and, as a result, indicating a drug for a population broader than those that were studied in clinical trials (see FDA’s indications and usage labeling guidance here).  This approach to labeling encourages sponsors to undertake rationale drug development planning, allowing them to focus on study designs that can most effectively capture treatment benefits (or lack thereof) (e.g., through enrichment – a technique particularly necessary in rare disease settings where numbers are small and heterogeneity is high).

Reflecting on the Use of Accelerated Approval as an Appropriate Tool for Regulatory Flexibility

There is a long and vibrant history of FDA using the Accelerated Approval pathway to help expedite drug development and approval.  This goes back to when Sasinowski was at FDA in the 1980’s, he had a hand in aiding others at FDA, like Dr. Bob Temple, to create on the Agency’s own initiative the Accelerated Approval pathway in order to address the raging AIDS crisis.  Later, in 1993, in private practice Sasinowski advocated for the first use of Accelerated Approval outside of AIDS and cancer, when Dr. Janet Woodcock approved Betaseron as the first drug for multiple sclerosis.  Over the past half of a decade, Sasinowski and Valentine have been involved in more than half of the Accelerated Approvals outside of cancer.  Ever since Sasinowski’s 2012 paper, cataloguing FDA’s exercise of flexibility in its approval of drugs for rare diseases (later followed-up in 2015 with an updated analysis by both HP&M’s Valentine and Sasinowski; both papers available here), the word “flexibility” has been used widely, but what it means or how to apply it is still subjective and largely unknown and unknowable except in hindsight such as in these two papers.

So, it is not surprising there have been questions about the future of Accelerated Approval making their way through the industry in the last year. While historically it seemed that the barrier to use of the pathway was a seemingly high evidentiary bar for demonstrating that a surrogate endpoint is “reasonably likely to predict” ultimate clinical benefit, recent concerns expressed by senior CDER officials indicated the barrier to its use was instead fears of whether the Agency could be sure that post-approval confirmatory studies would be conducted in a timely manner and could be designed in a way that would reliably produce interpretable data.  The basis for this concern materialized in October 2020 when CDER proposed withdrawal of approval for Makena after completion of its confirmatory study.  Then further, in April of this year, when FDA’s Oncologic Drug Advisory Committee met to review several oncology indications granted Accelerated Approval over the last five years in what appeared to be part of a broader evaluation of Accelerated Approvals in oncology.  The question was raised: does FDA still view Accelerated Approval as a realistic tool for expediting drug development?

Yesterday’s approval of Aduhelm helped answer that.  Both Dr. Dunn, in his memo to the PCNS Advisory Committee members, and Dr. Cavazzoni, in her statement, emphasized the utility of Accelerated Approval in devastating conditions where the needs for treatments are urgent.  This is certainly the case in Alzheimer’s disease – and as FDA articulates in its December 2019 draft guidance on substantial evidence of effectiveness, is exactly the context in many rare diseases.

In fact, it is in that document where FDA most extensively describes its flexibility in drug review.  For example, it describes the three major ways in which this substantial evidence of effectiveness standard may be met, the latter two which reflect a demonstration of flexibility via approval based on a single study: (1) two positive adequate and well-controlled studies, (2) one positive adequate and well-controlled study with confirmatory evidence, or (3) one adequate and well-controlled study with statistically very persuasive evidence.  FDA also describes how FDA will apply flexibility in applying this standard to different data sets on a case by case basis where either the condition is rare or is serious or there is a great unmet medical need.  To us, through this approval action, it seems that FDA is showing that the Agency it intends to include the Accelerated Approval pathway in its armamentarium of ways in which to exercise flexibility.  The evidence on the surrogate endpoint would still have to meet the substantial evidence standard by one of those three ways, but the Accelerated Approval pathway is clearly a type of flexibility that FDA has available to it in its discretion.

Closing Thoughts: A Non-COVID-Related Approval Based on Review Experience During the COVID-19 Pandemic 

So how did we get here? There is no question the last year has been unlike any other for all of us, but FDA has been steeped in “new” too.  From PPE to diagnostics, treatments to vaccines, the review staff have been applying a new statutory standard: that which supports Emergency Use Authorization (EUA) of a product for COVID.  While this is not new (see, e.g., EUAs during the Ebola epidemic), the COVID-19 pandemic required all-hands-on-deck.

Yesterday’s action by FDA gives the world a window on one way in which the Agency may be turning to Accelerated Approval; FDA has a regulatory tool, “Accelerated Approval”, that does, in some way, allow reviewers to approach the types of flexibility seen in FDA’s EUA authority where reviewers look to see that “known and potential benefits” outweigh the “known and potential risks”.  FDA always considers protecting against “known and unknown risks” when evaluating every new drug, so the risk evaluation side of this EUA equation would be one familiar to FDA reviewers (see, e.g., the Aduhelm warning for Amyloid-Related Imaging Abnormalities (ARIA)), and is not unique to Accelerated Approval.

Instead, what stands out is the reliance on an unvalidated surrogate that is merely “reasonably likely to predict” clinical benefit (i.e., it is a surrogate that is not so well established that it would support a full, or traditional, approval).  This is, in fact, accounting for “potential benefits”.  So, maybe yesterday’s action is in some way a hidden outgrowth of the Agency’s new experience with and comfort from exercise of its EUA authority in these COVID times.  It may well be that FDA’s COVID experiences have revealed to FDA that it could employ that “potential benefit” part of the EUA standard in the context of Accelerated Approval….such an epiphany could come from being hidden in plain sight all this time.  Perhaps someday we will look back and count today’s action as the harbinger of those unexpected findings and this epiphany that led to a new way to position Accelerated Approval as a finding the potential benefits of a therapy outweighed its known and potential risks.  Onward!

The RAPS Wisconsin Chapter is hosting a webcast on Wednesday, June 23, 2021, discussing device requirements for drug-led combination products.  Hyman, Phelps & McNamara, P.C.’s Adrienne Lenz will be the speaker.  This webcast will cover U.S. FDA requirements applicable to sponsors of drug-led drug/device combination products, including device requirements for the quality management system and good manufacturing practices (GMPs), device content to include in a new drug application (NDA), registration and listing, and post market reporting.  Attendees will gain a broad understanding of integrating device requirements into plans for development, NDA submission, and post market compliance.  A live Q&A portion with the speaker will follow the presentation.

FDA Law Blog readers are offered a discount of $5 off the RAPS member and nonmember prices.  ($5 for RAPS members and $20 for nonmembers).  The discount code is:  CHAPSPK5315DF.  You can access the webcast information and sign up for the event on the RAPS website.

Every year, the Food and Drug Law Institute (FDLI) publishes a compendium of the Top Food and Drug Cases from the previous year, as well as Cases to Watch, in conjunction with its popular Annual Conference.  This year was no different.  Recently, FDLI published on its website  its Top Food and Drug Cases 2020, and Cases to Watch 2021.  Hyman, Phelps & McNamara, P.C. attorneys Sara Koblitz and Anne Walsh contributed to this year’s installment.  We invite you to read Sara Koblitz’s chapter on the GSK v. Teva skinny-label carve-out case (see our previous coverage here and here), and Sara Koblitz’s and Anne Walsh’s contributions to Cases to Watch 2021.

While federal efforts to address prescription drug prices are debated, states have continued to pursue their own measures that require drug manufacturers and other entities in the drug supply chain to disclose information about pricing. (See our previous coverage of such state laws here, here and here.) In passing HB 1032, North Dakota became the most recent state to enact a prescription drug price transparency law. In addition, Texas recently passed HB 1033 to update its prescription drug price disclosure law that took effect in 2019. A summary of these new state law developments is included below.

Texas

As we initially reported here, Texas enacted a law in June 2019 requiring manufacturers to submit two types of reports beginning in January 2020. First, manufacturers must submit an annual report by January 15 stating the wholesale acquisition cost (WAC) of every approved drug sold in Texas. Second, manufacturers are required to submit a price increase report for a drug within 30 days after a WAC increase of 40% or more over the preceding three calendar years or 15% or more in the preceding calendar year. This report is due only for a drug with a WAC of at least $100 for a 30-day supply before the increase. Under the 2019 law, the price increase report had to contain, among other things, aggregate research and development costs, factors that led to the WAC increase, and the role of each factor’s impact on the cost. The 2019 law did not include any penalties for noncompliance with these reporting requirements.

Texas has now updated its price disclosure law to require that the manufacturer’s annual WAC report include additional information for any drugs that had a reportable price increase during the year. The additional information includes the aggregate, company-level research and development costs, the name of each of the manufacturer’s drugs approved by the FDA in the previous three calendar years, and the name of each drug that lost patent exclusivity in the previous three calendar years. Manufacturers will also now be required to submit a fee not to exceed $400 with their annual report. Manufacturers must still submit a WAC increase report within 30-days of an increase, and must still describe the factors that led to the price increase, but the disclosure of aggregate research and development costs has been removed from the price increase report and added instead to the annual report.

Texas has also added new provisions regarding enforcement of the reporting requirements. If a manufacturer fails to submit a report or fee, or fails to timely submit a report or fee, the manufacturer may be subject to administrative penalties of up to $1,000 per day. The state is supposed to provide manufacturers with written notice of noncompliance and administrative penalties may not be assessed if the manufacturer submits the required report or fee within 45 days after receiving the notice of noncompliance.

These changes take effect on September 1, 2021 and will therefore be applicable to the annual reports due by January 15, 2022.

North Dakota

North Dakota’s new law, HB 1032, sets forth reporting requirements applicable to drug manufacturers, pharmacy benefit managers (PBMs), and health insurers. Under the new law, PBMs are required to submit an annual report with information about aggregated rebates, fees, payments and financial incentives received by the PBM, distributed to health insurers, collected from pharmacies and passed to enrollees at the point of sale, retained as revenue by the PBM, and passed on to employers. Health insurers are required to submit annual reports with information related to the 25 most frequently prescribed drugs; the 25 prescription drugs dispensed with the highest dollar spend; annual net spending for prescription drugs; increases in premiums attributable to prescription drugs; and specialty drugs with utilization management requirements.

The North Dakota law includes three reporting requirements for drug manufacturers. First, manufacturers are required to submit quarterly reports (due no later than the 15th day of January, April, July and October) with the current WAC information for drugs sold in or into the state. Second, manufacturers are required to submit a report no more than 30 days after a WAC increase of 40% or greater over the preceding five calendar years or 10% or greater in the preceding twelve months for a manufacturer-packaged drug. Each WAC increase report must include:

• The name of the drug;
• Whether the drug is a brand name or generic;
• Effective date of the change in WAC;
• Aggregate, company-level research and development costs for the previous calendar year;
• Aggregate rebate amounts paid to each PBM for the previous calendar year;
• Name of each of the manufacturer’s new drugs approved by the FDA in the previous five calendar years;
• Name of each drug that lost patent exclusivity in the United States in the previous five calendar years; and
• A concise statement regarding the factor(s) that caused the WAC increase.

Third, manufacturers are required to provide notice in writing if the manufacturer is introducing a new prescription drug at a WAC that exceeds the threshold set for a specialty drug under the Medicare Part D program (currently $670 for a 30-day supply). The new drug notice must include a concise statement regarding the factor(s) that caused the new drug price to exceed the Medicare Part D program price and must be submitted within three calendar days following the release of the drug in the commercial market.

Information submitted in response to the new law will be published on a public website that is to be developed by the North Dakota insurance commissioner. The law provides that the quality and type of information submitted by manufacturers must be the same as that included in other public disclosures (for example, filings with the Securities and Exchange Commission).

North Dakota plans to pay for the administrative work related to these new requirements by increasing the license fees for jobbers, brokers, manufacturers, own label and private label distributors, repackagers, third party logistic providers, and wholesalers or distributors, including virtual wholesalers and distributors. Entities that do not comply with the new reporting requirements may be subject to a civil penalty of up to $10,000 per violation.

The North Dakota prescription drug price transparency law will become effective on August 1, 2021, so the first quarterly reports should be due by October 15, 2021. However, in our experience, states have historically struggled to set up the websites and infrastructure necessary for this kind of reporting in short timeframes. We will watch to see if North Dakota delays enforcement of this new reporting requirement.

As has been widely covered in local and national press in and around the Washington, DC area, this month marks the once every seventeen year emergence of the Brood X cicadas.  These insects are so plentiful in local areas with trees, including FDA’s aptly named White Oak campus, that they have prompted lots of advice about whether it is safe for human and pets to consume them.  At this point in the cicada cycle, a very unscientific sample of data seems to suggest that most dog owners have concluded that it is both unnecessary and futile to dissuade dogs from consuming them. Intake by humans appears more selective, but those in the know are strong advocates.

Globally, the United Nations Food and Agriculture Association has been reporting on insects as a human food source for some time, and recently issued a report that again recognizes the benefits of insect agriculture and lays out opportunities and challenges for the sector going forward. Insects have long been consumed in a number of regions, but have been slow to find acceptance in the west. That is slowly changing, partly in response to interest in more sustainable sources of protein. Earlier this year, the European Food Safety Authority found certain food uses of mealworms to be safe.  In the US, insect-based products have started showing up at select grocery stores, and interest is building in the use of insects in food for animals. In a potential sign of things to come,  last year a major pet food manufacturer launched a line of insect based dog and cat food in Switzerland.

A lot has changed in the FDA regulatory space since the last time cicadas were in the DC area in 2004.  By 2038 will humans and pets be eagerly anticipating a rare vintage of Brood X-based food products?  We wouldn’t bet against it, and we’ll be following and posting on developments in this area in the interim.

This sentiment is being exchanged by many with family, friends and colleagues looking forward to what we all hope is a near future in which we meet in person for work, play and everything else life has to offer.  We at Hyman, Phelps & McNamara, P.C. include FDA among those we are eager to see in person again soon.  Due to the COVID pandemic, during the past 14+ months our interactions with the Center for Drug Evaluation and Research (CDER) at all levels on behalf of our clients have been limited to telephone conferences which have by necessity taken the place of in-person meetings at FDA’s offices.  As pointed out by Dr. Patrizia Cavazzoni, Director of CDER, in her remarks at FDLI’s recent annual conference, FDA is to be commended not only for rising to the direct challenges posed by the COVID crisis, but also for adroitly pivoting to conducting the agency’s normal business without the opportunity to meet in-person internally or directly with the regulated community and its advisors.   But it’s just not the same. Meetings in person allow for the pre- and post-meeting informal exchanges that help to build collegiality and good working relationships.  The opportunity to observe body language is, as MasterCard would say, priceless.  And, in our experience, meetings in person result in a more robust dialogue between the agency and sponsors.

That’s why when Dr. Cavazzoni mentioned considering the continuation of virtual meetings with sponsors at CDER even after the pandemic in order to perhaps have more meetings and to avoid “sponsors wasting sometimes a day to travel, waiting at security for another 20 minutes and all that,” we wished we were attending the FDLI conference in person so we could rush to the podium to assure her that no sponsor we know would give up the opportunity to meet with CDER in person to avoid a trek to White Oak.  Offering the option to meet by phone to the sponsor would be appreciated and, in some instances, accepted, but the savings in travel time and costs pales in comparison to the benefits of an in-person meeting.  We hope that our clients will be heading out to White Oak soon.

The past two weeks have seen two noteworthy developments relating to CMS’s Medicaid Drug Rebate Program (MDRP) regulations.

1.  PhRMA Sues CMS Challenging MDRP Rule Curbing Patient Assistance

In December 2020, CMS published  a final rule making several changes to the MDRP regulations.  See our post here and our summary of the final rule here.   One of these amendments was a poorly thought-out rule that, if implemented, will render virtually unusable the current best price exclusion for manufacturer patient savings programs in the form of coupons, patient rebates/refunds, copay assistance, vouchers, and free drug programs.  The effective date of this amendment is January 1, 2023.

Manufacturers provide patient savings programs at the pharmacy counter to defray the patient’s out-of-pocket costs such as co-pays and deductibles.  Believing that these discount programs incentivize patients and their physicians to favor brand drugs over generics and other less expensive formulary alternatives, pharmacy benefit managers (PBMs) and health plans have implemented “accumulator programs” whereby the PBM or health plan declines to apply manufacturer assistance towards the patient’s deductibles or out-of-pocket maximums. Compl. ¶ 5.  This forces patients ultimately to pay the amounts subsidized by a manufacturer in order to meet their deductibles or maximums. Id.

CMS views accumulator programs as a way for PBMs and insurers to siphon off the benefit of manufacturer assistance so that it does not reach the patients for whom it is intended.  However, rather than directly restricting accumulator programs, CMS has opted to exclude manufacturer assistance from best price only if the manufacturer “ensures” that full value of the assistance is passed on to the consumer, thus imposing on manufacturers the onus of somehow determining whether a particular patient’s insurance plan has an accumulator program and negating it.

On May 21, the Pharmaceutical Research and Manufacturers of America (PhRMA) sued CMS on APA grounds, claiming that this change to the best price rule exceeds CMS’s statutory authority and is contrary to the Medicaid Rebate statute.  According to PhRMA, CMS recognizes that patient savings programs help patients afford necessary medications and stay on them, compl. ¶¶ 37, 41, and that accumulator programs dilute the benefit of such assistance and hurt the patient. Id. ¶ 41. But “rather than proposing solutions to limit the negative impact of accumulator adjustment programs,” CMS is penalizing manufacturers offering assistance to patients “unless the manufacturer somehow ‘ensures’ that the patient’s health plan does not use an accumulator adjustment program.” Id.

The complaint explains that manufacturers will not be able to structure their assistance to patients in a manner that can avoid accumulator programs because they do not know when or which health plan operates an accumulator program and thus “misappropriate[s] the benefit of the assistance from the patient to the plan.” Id. ¶¶ 45, 52.  Accumulator programs are not public knowledge; manufacturers, and even most patients, are unaware of them.  PhRMA argues that manufacturers will either be forced to conduct extensive investigations of health plans or claim adjudications for each patient, somehow gain the cooperation of health plans, or withdraw their assistance programs altogether.  Id. ¶¶ 47, 59.

The penalty for a manufacturer failing to ensure that a patient’s health plan does not use an accumulator program is to include the assistance in the determination of best price, which would almost always increase manufacturer rebates.  PhRMA argues, among other things, that manufacturer assistance cannot be taken into consideration in best price because it is not part of a drug’s price offered to health plans.  The complaint seeks a ruling that the amendment is invalid and an injunction against its implementation.  ¶¶ 49-63.

2.  CMS Proposes to Extend Effective Dates of Two MDRP Regulations

On Friday May 28, CMS proposed to extend the effective date of another best price amendment that appeared in CMS’s December 2020 final rule —  a new provision that permits a manufacturer to report multiple best prices if it offers a value based purchasing (VBP) arrangement to all of the states.  See our summary at 2-4.  That provision was supposed to become effective on January 1, 2022.  CMS now proposes to extend the effective date by six months to July 1, 2022, in order to “provide more time for CMS, states, and manufacturers to implement the new best price and VBP program …,” and also to give CMS more time to complete implementation of its new Medicaid Drug Program system that will replace the current Drug Data Reporting (DDR) system.

In addition, CMS proposes to extend the effective date of a 2016 regulation that requires AMP and Best Price to include sales to purchasers in the U.S. Territories (American Samoa, Northern Mariana Islands, Guam, Puerto Rico, and the U.S. Virgin Islands).  The original effective date of April 1, 2017 has already been delayed twice and is now proposed to be extended an additional two years until April 1, 2024.

Comments on these two proposed extensions are due by June 28, 2021.

NDA approval – that pinnacle of drug development – marks a moment of success for both FDA and the drug applicant.  The regulated and the regulator, having worked together for years, place a novel or improved therapy, with adequate directions for its use, in the hands of prescribers and patients.  The adequacy of those directions for use, in the form of the Prescribing Information (PI), is essential to the shared success.  The PI is key to both the safe and effective use of the product and the applicant’s ability to fully inform prescribers of its uses.  It’s for this reason that we are somewhat alarmed by a disturbing trend in the development of the PI for certain drugs.  That trend has seen some CDER review divisions providing dramatic changes to proposed labeling so late in the review process as to thwart thoughtful discussion.

Let’s take a step back.  As part of a drug’s marketing application, the applicant submits a proposed PI that includes information about the drug’s “indications, effects, dosages, routes, methods, and frequency and duration of administration and any relevant warnings, hazards, contraindications, side effects, and precautions, under which practitioners licensed by law to administer the drug can use the drug safely and for the purposes for which it is intended, including all conditions for which it is advertised or represented.” 21 CFR 201.100(d)(3), 314.50.   The applicant’s proposed PI is heavily annotated to technical reports and information in the NDA that support the inclusion of each statement in the labeling. 21 CFR 314.50.  Needless to say, teams of professionals, including clinicians, statisticians, pharmacists, clinical pharmacologists, and commercialization and reimbursement experts, spend many months refining and annotating the proposal.  During review, CDER professionals, including multiple members of the primary review team, the Office of Prescription Drug Promotion (OPDP), Clinical Outcome Assessment Qualification Program (COA) and the Office of Surveillance and Epidemiology (OSE), carefully evaluate the information and convene internal meetings to discuss any revisions that it believes are necessary.  Subsequent labeling discussions between the applicant and CDER to resolve any differences result in a final approved PI.

What with so many people evaluating so much information in such an important document, the need for thorough and thoughtful labeling discussions becomes an imperative to those with a sincere desire to see the drug succeed in aiding patients.  To be clear, we have no doubts about CDER staff’s sincere desire to see drugs it approves aid patients.  But that desire just doesn’t square with presenting the applicant with a take-it-or-leave-it approach to initial suggested labeling edits with no opportunity for discussion.  And yet, that’s what we see in far too many cases:  either labeling is not provided at all until very close to the action date or, perhaps more objectionable, CDER’s initial revised labeling is provided consistent with a communicated and reasonable timeline but edits to certain key sections are withheld until very close to the action date.  In these cases, applicants are invariably told that there is no time for discussion; their choices are to accept CDER’s edits and have the drug approved or to engage in discussions which, the applicants are warned, will likely result in a Complete Response action with the discussions occurring in the ominous “next cycle of review.”  While valor suggests that an applicant should stand its ground and fight for its drug, many companies understandably choose to accept FDA’s imperfect edits.  (As an aside, this is when we at HPM usually get a call from a potential client wanting to appeal the approved labeling language.  But, of course, such an appeal is not permitted as FDA argues that the applicant “voluntarily” changed its labeling and agreed to submit the labeling as revised by FDA.  And we have the unenviable task of explaining to a CEO that we cannot appeal her drug’s approval.)

This isn’t to say that CDER as a whole has adopted this approach.  CDER in fact recognizes that “[s]ince essential labeling discussions by necessity occur toward the end of the review cycle when available time is limited, it is important that communication between the FDA and applicants be clear and efficient.  Adherence to the review timeline, including completion of primary and secondary reviews well in advance of the PDUFA goal date, allows time to resolve labeling content issues and avoids crisis management of these issues near the PDUFA goal date.”  Guidance for Review Staff and Industry:  Good Review Management Principles and Practices for PDUFA Products (GRP Guidance) at 21.  CDER intends that draft labeling comments, along with an explanation for major changes, will be returned to the applicant at Month 8.25 of a 10-month review cycle.  CDER 21st Century Review Process Desk Reference Guide (DRG).

The DRG cautions that “[l]abeling discussions beginning too close to the end of the review cycle frequently result in inadequate time available to discuss labeling that both the applicant and the Agency can agree upon.”  DRG at 45.  This caution is correctly read as a call to ensure timely review.  But multiple clients allege that some CDER divisions seem to view it as a method of avoiding discussions of proposed language changes that lack scientific justification.  Essentially, the less defensible a proposed edit to the PI, the more likely that it will come as a last-minute change without time for discussion in the current review cycle.

As acknowledged in the DRG, it is the discussion – “the action or process of talking about something in order to reach a decision or to exchange ideas; a conversation or debate about a certain topic” (Lexico.com) that culminates in a PI that is maximally informative and valuable to prescribers and patients.  The exchange of redlined versions of the PI, often with no explanation for the division’s changes (or, worse, with only conclusory statements about certain language being “misleading” and no time to clarify the point) and/or no attempt to respond to scientific points made by the applicant (i.e., “The Division continues to believe that our recommended language is appropriate”) may serve as the start of that “conversation” by highlighting particular areas of disagreement with or misunderstanding of the sponsor’s proposal.  It should not, however, be the only means of communication about these points or the only step to approved labeling.

A timely, thoughtful and iterative process between the applicant and FDA is most likely to produce an informative PI that improves the drug’s benefit-risk profile.  Here’s hoping we can all keep our eye on that goal when nearing drug approval.