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.

In a recent decision out of the Seventh Circuit, Antrim Pharms. Llc. v. Bio-Pharm, Inc., 2020 U.S. App. LEXIS 4772* (7th Cir. 2020), the court decided a battle of the experts: Bio-Pharm prevailed after Antrim unsuccessfully argued the court should preclude testimony by Bio-Pharm’s expert, HP&M’s own Mark Schwartz, on how the FDA regulates ANDA holders. BioPharm also successfully argued the court should preclude testimony by Antrim’s expert on industry practices and how Bio-Pharm’s alleged breach impaired the value of Antrim’s business.

While we won’t get into the specifics of the case, what is important for our readers’ purposes is that Antrim sought to preclude Bio-Pharm’s expert, Mark Schwartz, because “allowing an FDA officer to testify on a legal issue invades the province of the court.”  We all learned in trial practice 101 that experts generally may not testify on pure issues of law, such as the meaning of statutes or regulations – that is the province of the attorneys trying the case, right?  But, the decision point out, courts do permit regulatory experts – even those who are lawyers – to testify on complex statutory or regulatory frameworks when it might help the jury understand a complicated framework.  Indeed, Fed. R. Evid. 702(a) states “A witness who is qualified as an expert. . . may testify in the form of an opinion or otherwise if: the expert’s . . . specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue.” While the court called this issue of preclusion “complicated,” it ultimately denied the motion to preclude the expert and allowed Mark to testify.

The next issue before the Court was whether Antrim’s industry expert with over 20 years of experience in the pharmaceutical industry should have been precluded.  This preclusion hinged not on the expert’s qualifications, but his intention to testify about “well-known industry practice and norms” on the issue of the specific ownership interests at issue in the case.  The problem was that the expert admitted during deposition that he had no specific knowledge of the ownership interests of either of the parties, even though that was precisely the fact at issue. The court determined that the proffered testimony was not relevant to whether the parties had in fact entered into an agreement to share equity.

In short, this case is a study not only in selecting your experts well, but also ensuring that their testimony is relevant and will help jurors – and the court – better “understand the evidence or determine a fact in issue.”  Mark Schwartz – the expert in the case discussed above – has served as an expert witness in other FDA-related litigation, basing that expertise on his 13 years at the FDA in various capacities, including ten years in the Office of Chief Counsel and three years as CBER’s Deputy Director of the Office of Compliance and Biologics Quality.

HP&M is nationally known and ranked for its food, drug and device regulatory knowledge, and HP&M attorneys regularly serve as advocates in disputes, but our readers may not realize the depth of our bench in expert witnesses. That experience ranges from issues such as the FDA regulatory framework, drug and biologic manufacturing, FDA drug and biologic compliance and enforcement (Mark Schwartz) to Hatch-Waxman, drug approval, and biosimilars (Kurt Karst), to the appropriateness of a change to the device without a new 510(k) and device labeling/advertising (Jeff Shapiro) among other topics and experts.

On February 27, the U.S. Department of Agriculture (USDA) announced the delay of enforcement of certain requirements under the interim final rule (IFR) for the U.S. Domestic Hemp Production Program.

As we previously reported, on Nov. 7, 2019, USDA published its much-anticipated rule establishing the requirements for hemp production under USDA, state and tribal jurisdictions.  The rule was published as an IFR to allow for the quick implementation (in time for the next growing season) and still provide interested parties time to submit comments.  USDA indicated that it planned to publish a final rule two years later.

Based on comments received, it appeared that the IFR requirement to test the hemp 15 days before harvest was expected to create problems for the farmers.  Under the IFR, testing must be done by DEA Registered Testing Laboratories.  However, according to commenters, the capacity of these laboratories is insufficient to handle the number of samples anticipated; some states have no DEA Registered laboratories, whereas others only have one or just a couple.

To address this complication, USDA has decided to delay enforcement of the requirement for labs to be registered by the DEA.  As announced on February 27, 2020, USDA plans to delay the registration requirement until Oct. 31, 2021, or until the final rule is published, whichever comes first.  The laboratories must still meet all the other requirements in the IFR, including the requirement to test for total THC employing post-decarboxylation or other similarly reliable methods.  Also, all labs must work towards being compliant with the DEA registration requirements before the period of delayed enforcement expires.

Another major hurdle in the IFR is the disposal of “hot hemp,” i.e., hemp that has more than 0.3% THC on a dry weight basis.  USDA has delayed enforcement of the requirement that producers must use a person authorized to handle marijuana under the Controlled Substances Act, such as a DEA-registered reverse distributor or law enforcement, to dispose of non-compliant plants.  USDA has increased flexibility in disposal methods by adding some common on-farm practices for the destruction of non-compliant plants making them non-retrievable or non-ingestible. A list of allowed disposal techniques and descriptions is available on the U.S. Domestic Hemp Production Program web page and include plowing under non-compliant plants or composting into “green manure” for use on the same land.

Last month, former Theranos executives, Elizabeth Holmes and Sunny Balwani, convinced U.S. District Judge Davila to throw out criminal fraud charges, while denying other defense motions (see Judge Davila’s order here). The charges allege the pair misled patients on the basis that the government can’t prove that patients who received inaccurate test results were actually harmed. As a recap, Holmes and Balwani are charged with wire fraud and conspiracy to commit wire fraud against investors, physicians and patients based on claims that their promising and novel blood-test would revolutionize the healthcare industry (see indictment here).  We have previously blogged about the Theranos saga here and here.

On Monday, February 10th, a hearing was held in which the government and defendants’ counsel argued their positions with respect to Holmes’ and Balwani’s three motions to dismiss which were jointly filed on January 27th.

The first motion argued that the government’s indictment is unconstitutionally vague and does not provide defendants with adequate notice. Under the Federal Rules of Criminal Procedure, and to pass constitutional muster, an indictment must contain plain and concise statements of the essential facts constituting the offense charged such that a defendant can prepare for their defense.

Holmes’ counsel, Amy Saharia of Williams & Connoly LLP, argued that prosecutors hadn’t given the former Theranos executives notice of when the former executives allegedly made false and misleading statements or specified which statements are exactly at issue. Saharia further asserted that discovery has been “massive”. As of the February 10 hearing, the government has produced more than 20 million pages of documents which include statements made on Theranos’ website and marketing materials, news articles and presentations given by Homes relating to the company’s blood tests. However, Judge Davila, denied these arguments, finding that the indictment is constitutionally sound because it provides enough detail to establish the particular factual universe of the underlying investor and doctor/patient scheme and Holmes’ and Balwani’s acts in furtherance of that scheme..

Relatedly, defendants asked Judge Davila to order the government to specify their charges in a bill of particulars (BOP). A BOP gives the requesting party knowledge of what the opposing party has alleged so the requesting party can better prepare a defense and be protected from unfair surprise at trial. The government disputed the suggestion that a BOP was necessary, noting a fear of unfair surprise was unfounded because the defense has been litigating the case at a sophisticated level for nearly two years and thus already knows the “particulars” of the case. However, Judge Davila agreed with Holmes and Balwani and ordered the government to produce a BOP as to the specific misrepresentations underlying the doctor-patient fraud.

The second motion argued that the indictment does not support a conclusion that defendants’ alleged statements and omissions were material. The three alleged false statements at issue were regarding Theranos’ 1) partnership with Walgreens, 2) its supposedly profitable relationship with the U.S. Department of Defense and that its technology had been deployed to the battlefield and 3) statements made to doctors and patients concerning the accuracy and reliability of its blood tests. Defendants focused on details in the indictment, such as the meaning of “consistently.” Prosecutors pointed to Theranos’ claim that its tests had received clearance from the FDA, which could lend surety to investors, physicians and patients that the technology was accurate and legitimate. Ultimately, Judge Davila determined that materiality does not require alleged misstatements to be accurate – it only requires the alleged misstatements to have a “natural tendency to influence”. Relating to the statements at issue, Judge Davila felt the first two statements give the false impression to an investor that Theranos’ business was growing and that it was a good investment. Similarly, the third statement gives a false impression to physicians and patients that Theranos’ technology would provide accurate results. Judge Davila denied this motion to dismiss after determining the indictment sufficiently alleges a factual basis that the alleged misrepresentations were material.

There were four types of possible victims in the alleged doctor/patient scheme: paying patients, non-paying patients, doctors and insurance companies, the latter which were not mentioned in the indictment as being defrauded. With regards to doctors or patients, the third motion argued that counts two and nine through eleven of the indictment did not allege that defendants acted with the specific intent to obtain money or property from any doctors or patients through deceit. Defendants argued that many of the alleged patient victims did not pay for Theranos tests, but rather were paid for by medical insurance companies, and thus portions of the indictment relying on “non-paying” patient victims were invalid. Judge Davila ruled that the indictment didn’t show that defendants had a specific intent to obtain money from patients whose insurance paid for the tests because the indictment does not explain how these patients were deprived of money or property. Judge Davila also determined that the indictment didn’t show that doctors were a victim of fraud. Therefore, the third motion was granted to dismiss counts two and nine through eleven to the extent they depend on “doctor-victims” and “non-paying patient-victims” but not paying “patient-victims.”

Holmes and Balwani each face 20 years in prison and hundreds of thousands of dollars in fines. Things will heat up this summer if the trial begins in August, as currently scheduled.

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

Under current law, a Narcotic Treatment Program (“NTP”) registered with the Drug Enforcement Administration (“DEA”) can only provide treatment at its registered location.  With the current opioid epidemic, the need to ensure access to medication-assisted treatment is more acute than ever.  To help address this public health crisis, DEA has published a proposed rule that would increase accessibility to medication-assisted treatment for patients with substance use disorders, including opioid use disorder.  Registration Requirements for Narcotic Treatment Programs With Mobile Components, 85 Fed. Reg. 11,008 (Feb. 26, 2020).  DEA proposes to waive the requirement that registered NTP operating mobile units that dispense narcotic drugs for maintenance or detoxification treatment at remote locations would need to obtain a separate DEA registration as a coincident NTP activity.  The proposal would allow the NTPs to bring treatment via Mobile Narcotic Treatment Programs (“MNTPs”) to areas previously inaccessible and treat patients unable to travel.  The proposal would make maintenance and detoxification treatment more available while requiring safeguards to minimize the risk of methadone and other controlled substance diversion.

DEA authorized MNTPs to operate ad hoc prior to 2007, but placed a moratorium on authorizing additional MNTPs since that time.  Id. at 11,009.  We were unable to determine how DEA authorized NTPs to use MNTPs, but it appears that the NTPs made special arrangements with local DEA offices.  Id. at 11,015.  Nineteen NTPs operated MNTPs over the past five years, and eight NTPs continue to operate MNTPs authorized by DEA.  Id. at 11,009.  DEA notes that the authorized MNTPs complied with the Controlled Substance Act and DEA’s regulations so the proposed rule “builds on the existing experience and provides additional flexibility” for NTPs to operate MNTPs “subject to the regulatory restrictions put into place to prevent the diversion of controlled substances.”  Id.

DEA would define a “Mobile Narcotic Treatment Program” as “a motor vehicle . . . that serves as a mobile component (conveyance) that is operating under the registration of a narcotic treatment program, and engages in maintenance and/or detoxification treatment with narcotic drugs in schedules II-V, at a location remote from, but within the same State as, its registered location.”  The agency would further define “Motor Vehicle” as “a vehicle propelled under its own motive power and lawfully used on public streets, roads, or highways with more than three wheels in contact with the ground. This term does not include a trailer.”  Id. at 11,018.

NTPs would have to notify the local DEA office in writing of their intent to operate an MNTP, and must receive written approval from DEA before beginning operation.  MNTPs, as controlled premises, are subject to DEA inspections.  The MNTP can only operate in the state where the NTP is registered.  NTPs must provide valid proper city/county and state licensing and registration information to DEA for the MNTP at the time of inspection, and prior to transporting controlled substances.  MNTPs cannot reverse distribute, share, or transfer controlled substances to another MNTP while away from the registered NTP.  NTPs will not be permitted to modify their registrations to authorize the MNTPs to act as collectors.  Nor can the MNTPs function as hospitals, long-term care facilities, or emergency medical service vehicles, and they cannot transport patients.

Each MNTP must have a securely locked safe to store narcotic schedule II-V substances and an alarm system.  The MNTP’s storage area cannot be accessible from outside.  The person transporting controlled substances in the MNTP must retain control over them when transferring them between the NTP and the MNTP, from the MNTP to the dispensing location, and when dispensing at the dispensing location.  The controlled substances must be properly secured in the safe at all other times.  The MNTP must be immediately return to the registered NTP location at the end of the day, and all controlled substances removed and secured within the NTP.

NTPs with MNTPs will have to establish a standard operating procedure to ensure that the controlled substances are accounted for, removed from the MNTP, and secured at the NTP if the MNTP becomes inoperable.

Patients receiving medication at an MNTP must wait in an area physically separated from the storage and dispensing area by a door or entryway or outside if it lacks seating or a reception area separated.  The MNTPs must comply with standards established by the Secretary of Health and Human Services regarding narcotic drug take-home quantities.  DEA will exercise discretion regarding the security required for MNTPs based on factors such as the program location, the number of patients and the number of physicians, staff members and security guards.  An MNTP may only be supplied with narcotic drugs by the registered NTP operating the MNTP.

DEA’s proposal to authorize registered NTPs to operate MNTPs to dispense and administer remotely without having to obtain a separate registration should help expand accessibility to needed treatment.  DEA learned from authorizing MNTPs prior to 2007, and from the few MNTPs that continue to operate, that it is possible to dispense methadone remotely from non-registered locations without increasing the risk of diversion. This action complements prior action by DEA to expand the number of narcotic dependent patients that could be treated by qualified physicians.

We note that DEA’s proposal gives the local office the discretion to decide whether or not to allow the NTP to utilize an MNTP.  It is unclear whether an NTP would be able to appeal an adverse decision to DEA headquarters on any adverse decision.  Also, the requirement that the drugs be returned to the NTP each day will limit the geographic reach of an NTP to operate an MNTP.

Electronic comments on the proposed rule must be submitted, and written comments must be postmarked, on or before April 27, 2020.

Last week, FDA once again changed course in its approach towards regulating pharmacogenomic (PGx) tests.  We have blogged on this story several times before (see past blog posts here and here).  A brief recap follows.

On October 31, 2018, FDA issued a Safety Communication regarding PGx tests.  In this safety notice, FDA made sweeping statements regarding the risks these tests allegedly posed.  The safety notice barely noted that PGx testing could be extremely helpful to physicians in guiding decisions about what drug to prescribe.  In early 2019, FDA began contacting individual companies offering PGx services, asking them to cease including information about specific medications that could be affected by variants identified in the PGx test report.  One laboratory – Inova Health Systems – declined to do so.  FDA sent them a scathing Warning Letter, which included a broad assertion of authority to regulate all LDTs.

FDA continued to contact labs and software providers, creating massive confusion and uncertainty in the process.  In our experience, FDA told individual companies that they could not even include gene-drug information in PGx test reports that was derived directly from the FDA-approved drug labeling.  FDA also rejected the inclusion of PGx information from well-established authoritative third parties, such as the Clinical Pharmacogenetics Implementation Consortium (CPIC).  For those companies targeted, FDA refused to engage in meaningful dialogue or identify any specific violation of the law that the companies had committed.

FDA’s actions were heavily criticized (see, e.g., letter from the National Alliance on Mental Illness).  Multiple concerns were expressed, including interference with the practice of medicine; impeding dissemination of information of clinical value (as recognized by inclusion in approved drug labeling); inconsistency with FDA’s expressed goal of furthering personalized medicine through better understanding of individual genetic variation; and the utter lack of transparency in FDA’s process, in violation of the Administrative Procedure Act.  On January 9, 2020, we filed a Citizen Petition with FDA on behalf of the Coalition to Preserve Access to Pharmacogenomics Information requesting FDA reverse its position.  The Citizen Petition raised multiple legal and policy arguments, including that FDA’s suppression of truthful, non-misleading information violated the First Amendment.  The Citizen Petition also noted the significant dilemma FDA had created for laboratory directors, who are required under CLIA to ensure that test reports include pertinent information for test interpretation; under FDA’s restrictive approach, labs could report out the genetic variants that had been identified but could not include information about the potential clinical relevance of such findings to specific patients.

On February 20, FDA unveiled a new approach towards PGx.

FDA described the revised thinking as the result of a new “collaboration between FDA’s Center for Devices and Radiological Health and Center for Drug Evaluation and Research intended to provide the agency’s view of the state of the current science in pharmacogenetics.”  The announcement again asserted that some PGx tests are potentially dangerous.  At the same time, FDA acknowledged that PGx tests could play a useful role, stating “this type of testing offers promise for informing the selection or dosing of some medications for certain individuals.”  This document also announced that FDA was releasing a Table of Pharmacogenetic Associations (“PGx Table”), which lists gene-drug interactions that the agency believes are supported by FDA-approved drug labeling and/or “sufficient scientific evidence based on published literature.”

The agency opened a docket for public comment on the PGx Table.  FDA invited feedback on “specific pharmacogenetic associations that should or should not be included as the agency continues to update this table,” noting that the feedback should include the supporting rationale and underlying evidence that supports any new pharmacogenetic association proposed to be included in the list.

FDA’s announcement is a welcome change in FDA policy.   Even if there are instances in which companies make unsubstantiated gene-drug association claims, FDA’s effective ban on gene-drug information went way too far.  The agency’s acknowledgment that this information can be useful to doctors is a step forward, and a change from FDA’s prior communications, as is FDA’s acknowledgement that drug labeling is not the sole repository of scientifically valid PGx data.  FDA admitted that “not all supported gene-drug interactions may be found in current FDA labeling,” and specifically recognized that gene-drug interactions could be adequately supported by professional guidelines, such as CPIC, and scientific publications.

Nevertheless, FDA’s most recent corrective actions do not fully address the problems FDA unleashed back on October 31, 2018.  The agency once again has acted without first seeking public consultation or making formal requests for stakeholder input.  One consequence of this seemingly ad hoc and nontransparent approach is that the information in the new PGx Table reportedly includes some gaps that may have been addressed with public input.  For example, as noted by Teri Klein of Stanford University, a co-principal investigator at CPIC, there are instances in which the PGx Table advises physicians to refer to FDA labeling for PGx-specific dosing recommendations that are not in fact contained in the labeling (e.g., azathioprine).  In sum, the regulatory landscape for PGx testing is better than it was when we submitted the Citizen Petition about 45 days ago.  However, it is still worse off than it was on October 30, 2018.

CDRH has made commitments to stakeholders about completing reviews in a timely manner. For the fiscal year (FY) 2019, though, FDA acknowledged that it missed review-time goals for evaluating product recalls and Medical Device Reports (MDRs). FDA reviewed and classified recalls in a timely fashion 84% of the time in FY 2019, just one percent shy of its 85% goal. (They do not define “timely fashion”.) For Blue Code MDRs, although its goal had been to review 90% of them within 72 hours of receipt, FDA did so 88% of the time in FY 2019. (While these may not seem like major deviations, we have seen FDA be strict when sponsors barely miss their study endpoint.)

In addition to these missed goals, only 21 quality-related warning letters were issued to device manufacturers last year. CDRH does not have any goals – or at least public ones – for issuing warning letters, but it does mark the third year in a row of record low quality-related warning letters issued. This is down from a recent high of 121 – or about 80% – in 2015.

FDA attributes these drops to the CDRH reorganization, which did away with the Office of Compliance, the Office of Surveillance and Biometrics, and the Office of Device Evaluation. In their place, the Office of Product Evaluation and Quality “super office”, which centralized much of the device review into one office, came to be, and with it, many staff acquired new responsibilities. FDA blamed the missed goals on the inexperience of staff in these roles.

However, that doesn’t explain other curious instances we have seen where FDA has operated out of the norm.  In the last six months, FDA flat out declined a pre-submission meeting. The company received a meeting rejection nearly five months after submitting the pre-submission (and far exceeding the 60-75 days timeframe for sending feedback or scheduling a meeting).

In another example, FDA has yet to provide a revised version of meeting minutes within 30 days of acceptance, as would be consistent and expected based on the pre-submission guidance. The lead reviewer in this case cited “a large backlog of files.”

We have also seen a recent instance where the review team stayed consistent in discussions with the company yet missed its 510(k) goal. Despite a high level of engagement from the company over the last year and including during the review of the submission, FDA missed the MDUFA performance goal for a 510(k) of 90 days. On February 24, 2020, 111 days after the submission was received and three weeks after the 90 days performance goal, the company finally received FDA’s decision.

With respect to administrative tasks, we have noticed extended delays over posting decision summaries to the De Novo database, which is supposed to be updated weekly. It has been nearly a year since several De Novos were authorized with no decision summary posted.  When pressed, FDA has not identified unusual circumstances contributing to these delays. Nor has it committed to posting the documents anytime soon. In one particular instance, eleven months elapsed from the time of the granting of the De Novo before a decision summary was posted to the public database.

These examples are idiosyncratic and don’t make a trend. Even so, CDRH’s willingness to miss deadlines in multiple situations starts to form a troubling pattern.

CDRH certainly has many challenging tasks and projects. Still, the seemingly increased tendency to miss deadlines is troubling. While the reorganization might explain inconsistent reviews, it cannot explain all these failures to meet expectations.

Genetics and genomics are becoming crucial to clinical care. As the “precision medicine” revolution spreads, cancer treatment, rare disease diagnosis, and cardiac care increasingly utilize genomics. Unfortunately, law and policy lag behind science, and the law governing genomics remains unclear – which means the time is ripe for analysis and thoughtful recommendations.

On Friday, March 27, 2020, top experts from Harvard Medical School, Columbia University, Vanderbilt University, the University of Minnesota, and other leading genomics and regulatory institutions will convene at Ropes & Gray, LLP, in Boston to tackle the issues.  Hyman, Phelps & McNamara, P.C. (“HP&M”) is co-hosting this conference on “LawSeq^SM: Facing the Legal Barriers to Genomic Research & Precision Medicine.”  Join us in person or by webcast to discuss pressing legal and policy issues in genomic research and clinical care; FDA regulation of genomic devices, software, and algorithms; and uses of genomic data.  Speakers include HP&M’s Gail Javitt, JD; MPH, Mark Barnes, JD, LLM, from Ropes & Gray; Alberto Gutierrez, PhD, and Elizabeth Mansfield, PhD, both formerly at FDA; Wendy Chung, MD, PhD, from Columbia University; Barbara Bierer, MD, from Harvard Medical School; and Ellen Wright Clayton, MD, JD, from Vanderbilt University. An agenda and more information is available here.  This free one-day conference will offer general CLE credits for New York, California, Illinois, and Minnesota.

Register now to attend in-person or online. The event is presented at the Ropes & Gray, LLP, offices in Boston in collaboration with Hyman, Phelps & McNamara PC; Vanderbilt University Medical Center; and the Consortium on Law and Values in Health, Environment & the Life Sciences at the University of Minnesota. This conference grows out of an NIH-funded grant on “LawSeq^SM: Building a Sound Legal Foundation for Translating Genomics into Clinical Application” based at the University of Minnesota and Vanderbilt University Medical Center, in collaboration with a Working Group of national experts. For more information on “LawSeq^SM,” visit here.

Blog readers may be thinking, “HPM, didn’t you just blog about the Vanda case last week?”  We certainly did (and had previously here and here).  You will recall that Vanda Pharmaceuticals did not prevail in its quest to have the Court find that FDA’s imposition of a clinical hold due to requirements for certain dog studies that would require euthanizing the dogs was arbitrary and capricious.  We have learned, however, that the company has not dropped its pursuit of change in the use of animals in preclinical studies.

In a January 23, 2020 letter to Dr. Janet Woodcock, the Center Director of the Center of Drug Evaluation and Research, and Dr. Peter Stein, Director of the Office of New Drugs, Vanda discusses not the particulars of the drug that was subject to the litigated clinical hold, but the broader need to identify and adopt better predictive technologies in the area of toxicology.

In addition to suggesting a private-public partnership to look at the adoption of  such technologies, Vanda describes two technologies stating that they are adequately validated in reproducibility and predictive power for liver injury.

We have heard FDA recognize the need for and voice the desire to see ways to conduct necessary preclinical toxicologic evaluations while minimizing the need for animal studies or reduce the need to euthanize animals used in testing.  Among the challenges to this shift is the need to validate proposed new approaches to preclinical testing.  In 2018, then Commissioner Gottleib announced a proposed FDA study to evaluate alternative methods for evaluating certain locally acting, nonsystemically absorbed drugs in dogs in an effort to develop a model that could be used in place of testing in dogs in the future.  It was also proposed that the dogs used in testing would not be euthanized at the end of testing, but would be adopted.  FDA issued a White Paper and solicited input on the proposed study.

The challenges in transitioning from traditional animal studies to modeling or other alternative methods for assessing risk prior to first use in humans are real.  In particular, the validation of some alternative methods has been hampered by the need to do lengthy trials or a lack of clarity about what acceptable validation data look like.  Industry, the FDA and other experts working together should be able to move forward to realize the goal of eliminating or reducing the use of animals.  Vanda’s letter may (re)ignite these efforts and lead to a private-public partnership, or it may shine a light on existing efforts within the Agency that may not be well-publicized.  The dog-lovers among us hope so.

We should note that FDA has made some strides in reducing euthanasia of animals used in its own labs.  In November of last year, FDA adopted a new policy for its research animals.  Under this policy, FDA “supports the transfer, adoption or retirement of FDA-owned research study animals that have completed their assigned research study” and that meet certain criteria related to health and behavior.  FDA’s policy leaves it to individual programs to establish specific procedures for the placement of the animals.

At a time when some influencers are making good money – and sometimes millions of dollars – for endorsing and promoting everything from fake eyelashes on Instagram to the latest video game on YouTube, the Federal Trade Commission (FTC) announced on February 12, 2020 that it is seeking public comment on whether to make changes to its Endorsement Guides as part of the agency’s retrospective review of all current rules and guides.

The Guides were first issued in 1980 and designed to assist businesses and others in conforming their endorsement and testimonial advertising practices to the requirements of Section 5 of the FTC Act.  The Guides were updated in 2009 to more directly address social media (see our posting on that here).  Since 2009, the FTC has issued various guidance documents directed to businesses and influencers – see, for example, our previous post discussing the 2015 updates to their Q&A here.

In a Federal Register notice, the FTC asks for comments on a range of questions, including:

• whether the Guides should be changed to account for changes in technology or the economy;
• whether some of the FTC’s guidance documents should be incorporated into the Guides;
• whether children are capable of understanding disclosures of material connections;
• whether incentives like free or discounted products bias consumer reviews, and whether or how those incentives should be disclosed;
• whether composite ratings that include reviews based on incentives are misleading, even when reviewers disclose incentives in the underlying reviews;
• whether the Guides should address the use of affiliate links by endorsers; and
• what, if any, disclosures advertisers or operators of review sites need to make about the collection and processing of publication of reviews to prevent them from being deceptive or unfair.

Commissioner Rohit Chopra issued a separate statement, advocating for developing formal rules which codify elements of the currently voluntary endorsement guides so that violators can be liable for civil penalties and damages under 15 U.S.C. §§ 45(m)(1)(A) & 57.  He also suggests instituting requirements for technology platforms (e.g., Instagram, YouTube, and TikTok) that directly or indirectly profit from influencer marketing.

Comments will be due within 60 days of publication of the Federal Register notice. Because of the impact of the 2009 updates, any new changes to the Endorsement Guides can be expected to have far-reaching effects.  We will be monitoring comments.

On February 13, the FDA released the final installment of guidance to support compliance with the Intentional Adulteration (IA) Rule under the FDA Food Safety Modernization Act (FSMA). The FSMA final rule on intentional adulteration, entitled “Mitigation Strategies to Protect Food against Intentional Adulteration” (IA rule), 21 C.F.R. Part 121, was published in May 2016. The rule is designed to address hazards that may be intentionally introduced to foods, including by acts of terrorism, with the intent to cause wide-spread harm to public health. This latest draft guidance adds to the draft guidance previously published in March 2019. The latest chapters cover the following topics:

• Chapter 5: Food Defense Corrective Actions
• Chapter 6: Food Defense Verification
• Chapter 7: Reanalysis, and
• Chapter 9: Recordkeeping

It also includes appendices on FDA’s mitigation strategies database and how businesses can determine their status as a small or very small business under the rule.

The initial draft guidance included chapters on:

• the components of the food defense plan;
• how to conduct vulnerability assessments using the key activity type method;
• how to identify and implement mitigation strategies; and
• food defense monitoring requirements.

As a reminder, compliance requirements for large facilities under the IA Rule began in July 2019, but the FDA delayed enforcement of the Rule until March 2020. The IA Rule generally applies to food facilities that are required to register with the FDA, absent an exception. Both domestic and foreign companies who sell product in the U.S are affected.

Animals, shmanimals.  Or so says FDA.  Well, FDA didn’t actually say that, but that’s the effect of the District Court of D.C.’s recent ruling in Vanda Pharmaceuticals v. FDA.  In a case we have been following for the last year or so, the District Court deferred entirely to FDA’s decision to place a clinical hold on Vanda’s human studies until studies in dogs were completed.  Vanda argued that FDA’s decision to place its trial on clinical hold lacked an articulated scientific basis and treated a guidance as binding.  In its initial Complaint, Vanda also argued that the mandated testing needlessly wastes dogs’ lives.  As such, Vanda alleged that FDA’s imposition of a clinical hold was arbitrary and capricious in violation of the Administrative Procedure Act (“APA”).  FDA asked to remand the issue to the Agency, the Court granted the request and stayed the litigation, but the Agency went back and made the same decision – this time providing significantly more explanation.  In response, Vanda revived its litigation.

In its second round of briefing, Vanda alleged procedural violations of the APA, as well as substantive violations of the Food, Drug, and Cosmetic Act with respect to FDA’s interpretation of the studies.  Vanda argued that FDA’s remand response is “impermissible post hoc rationalization” including new reasons for the imposition of the hold.  The Court rejected these arguments, noting that the justifications provided in the Remand Response were merely “amplified articulation” rather than post hoc rationalization.  Vanda also argued that the “proper decisionmakers” (the Medical Policy and Program Review Council or “MPPRC”) had not been responsible for the remand response and that the remand response amounted to the review division (Office of Drug Evaluation III) impermissibly “overruling” the MPRCC’s previous findings.  The Court quickly dismissed this argument noting that it had no support in statute or regulation, and, in any event, the remand response was issued by FDA.

Additionally, Vanda argued that FDA “skewed the administrative record on remand” by selectively opening the record and adding new studies supporting its position while ignoring studies Vanda and the Humane Society of the U.S. pointed out.  (Of note, the Humane Society tried to file an amicus brief in this case, but the Court rejected it, saying that all of the arguments it made had already been made by Vanda or were not adequately in front of the Agency prior to its decision.)  Explaining that FDA was required only to examine the record before it at the time the decision was made, the Court held that FDA was not required to consider any additional evidence in support of Vanda’s position.  The Court explained that “no provision in the APA requires FDA to give Vanda an ‘opportunity to offer contrary evidence’ on remand” and a “fundamental fairness” requirement would impose additional procedures on FDA without statutory basis.  Further, the Court noted that Vanda could have introduced its evidence into the administrative record through a “written request” containing “sufficient information” to support the removal of a clinical hold but chose not to do so.  As such, the Court rejected all of Vanda’s procedural arguments.  Finally, the Court noted that Vanda had not availed itself of the administrative pathway of dispute resolution once the clinical hold was imposed.

The Court divided Vanda’s substantive claims into two main arguments: FDA improperly used guidance as a binding legislative rule, and FDA relied on flawed scientific judgment.  Specifically,  Vanda objected to FDA’s reliance on the non-binding policy document, Guidance for Industry, M3(R2) Nonclinical Safety Studies for the Conduct of Human Clinical Trials and Marketing Authorization for Pharmaceuticals (Jan. 2010).  This guidance, referred to as the “ICH Guidance” because it was created by the International Conference for Harmonization, addresses the use of nonclinical safety studies to support the conduct of human clinical trials and marketing authorization for pharmaceuticals.  FDA has adopted this policy and relied on it as justification for requiring Vanda to conduct additional animal studies.  The Court concluded that the “the Remand Response makes clear that the ICH Guidance is a policy statement exempt from the notice-and-comment process, and that FDA did not rely upon it as a binding rule in imposing the clinical hold.”  As a general statement of policy (rather than a legislative rule), the Court explained that the guidance was not subject to notice and comment requirements.  Contrary to Vanda’s allegations, the true legal authority for the hold was FDA’s clinical hold regulations – not the guidance, which had no actual legal effect.

Finally, as is the norm, the Court largely deferred to FDA’s scientific expertise in this case.  Absent clear error or malfeasance, it’s almost impossible to overcome deference to scientific expertise – particularly in the area of necessary clinical studies.  Vanda argued that FDA ignored or misinterpreted cited studies; failed to explain why toxicity in nonrodent studies would be predictive of human toxicities; and that the Remand Response was a litigation-driven interpretation of a study.  In response, the Court asserted that Vanda failed to show that FDA’s interpretation of its study was unreasonable.  Additionally, because the legal framework mandates animal studies, the Court explained, the legal framework presumes some connection between animal and human toxicity.  The Court added: “If Vanda has a quarrel with animal studies and their predictive power for humans in general, its fire would be more appropriately aimed at the controlling statute and regulations, not at FDA’s actions in this case.”  Finally, the Court stated that Vanda’s litigation-driven “argument is dead in the water: the administrative record makes clear that FDA had noticed and was concerned about the adverse toxicity findings in the 3-month nonrodent studies well before the lawsuit was filed in February 2019.”

The results of the case are not surprising.  Back in February 2019, we predicted both a remand and deference to the Agency, concluding that “Vanda would then be left in the same place it is now but after several years of litigation” and still required to complete a dog study.  Based on our experience, this outcome was essentially guaranteed.  Almost a year later, we are back to the same question: what was in this for Vanda?

Nonetheless, as avowed animal lovers, our interest in this case was no less due to the implications for animal studies as it was on the implications for FDA jurisprudence.  Unfortunately, the Court was silent on this aspect of the case.  Instead, the Court left the question of the necessity of animal studies to FDA, which has committed to reduce, refine, and replace.  This commitment, emphasized as recently as 2018, is intended to “potentially replace much of the need to use dogs in future trials with new informatics tools.”  FDA wants to “do one single study involving a small number of dogs—where the dogs will only be subject to minimally invasive blood sampling, and adopted as pets at the completion of the short trial—to eliminate the need for the use of dogs in certain types of future studies, some where they might have been euthanized.”  Perhaps this statement, combined with the inconsistent demand of further dog testing, is really what prompted Vanda to file this lawsuit.  We may never know.  But, given FDA’s zealous defense in this lawsuit, with allegedly questionable scientific rational, there may be some activists questioning FDA’s actual commitment to reduce, refine, and replace.