FDA recently issued a draft guidance which would update the agency’s Cybersecurity in Medical Devices: Quality System Considerations and Content of Premarket Submissions guidance.  The draft guidance provides recommendations on what is required to meet cybersecurity obligations under section 524B of the Food, Drug and Cosmetic Act (FD&C). Once finalized, the content from the draft guidance will be included within the existing cybersecurity premarket guidance.

Cyber devices as defined in Section 524B(c) of the FD&C Act are devices that “(1) include[] software validated, installed, or authorized by the sponsor as a device or in a device; (2) [have] the ability to connect to the internet; and (3) contain[] any such technological characteristics validated, installed, or authorized by the sponsor that could be vulnerable to cybersecurity threats.”  FDA interprets the “software” definition to include software that is firmware or programmable logic in addition to software in a medical device (SiMD) or software as a medical device (SaMD). FDA interprets the “ability to connect to the internet” to include devices that can connect to the internet by any means whether the sponsor intends the device to be connected or not.

For medical devices that meet the definition of a cyber device, manufacturers are required to submit specific information in premarket submissions.  Manufacturers are required to design, develop, and provide a “reasonable assurance” that both the cyber device and related systems (e.g., update servers, network connections, cloud, etc.) are cybersecure. In addition, manufacturers need to submit plans for monitoring, identifying, and addressing post market cybersecurity vulnerabilities.  Consistent with the existing premarket cybersecurity guidance, FDA recommends submitting a Cybersecurity Management Plan that should also include disclosing vulnerabilities to device users and other relevant stakeholders “in a reasonable time”.  The plan should include the frequency at which cybersecurity will be re-evaluated and the frequency at which the manufacturer will deploy patches and updates to the end users. Section 524B(b)(2) requires manufacturers of cyber devices to make updates and patches for known unacceptable vulnerabilities “on a reasonably justified regular cycle” and to make updates and patches to address out of cycle, critical vulnerabilities that could cause uncontrolled risks “as soon as possible”. The guidance does not define “on a reasonably justified regular cycle” or “as soon as possible” but instead recommends manufacturers should “update appropriate cybersecurity documentation (e.g., threat modeling)” throughout the device lifecycle as a way to “quickly identify” vulnerabilities and satisfy the patching requirements in the FD&C Act.

Manufacturers that make modifications to an existing device will also need to submit the required information in a premarket submission. In determining what information to submit, the manufacturer should assess whether the change impacts the cybersecurity of the device. FDA provides examples of changes that are likely and unlikely to impact cybersecurity of an existing device.  Even for changes that are unlikely to impact the cybersecurity of the device, such as material changes, sterilization method changes, or changes to an algorithm without changing the architecture/software structure or connectivity, FDA recommends that the following information be submitted:

• Software Bill of Materials (SBOM),
• Summary of any cybersecurity impact since the last authorization,
• Summary of any vulnerabilities identified since the last authorization,
• Description of any limitations to updating the cybersecurity of the device and related systems which should include an assessment of residual cybersecurity risks and benefit risk analysis, and
• Cybersecurity Management Plan or if one was previously submitted, a summary of any changes to the plan and summary of patches or updates made to the device since the last authorization to increase cybersecurity.

As part of the premarket submission review, FDA will assess whether there is a “reasonable assurance of cybersecurity.”  In making this determination, FDA will consider changes in the environment of use, new risks or vulnerabilities in technological characteristics as compared to the predicate device, and how the performance testing submitted addresses new risks and vulnerabilities. Although a “reasonable assurance of cybersecurity” is not explicitly defined, FDA points manufacturers back to the existing cybersecurity guidance (i.e., Appendix 4) for the documentation requirements to “demonstrate reasonable assurance that the device and related systems are cybersecure”.

The draft guidance also notes that FDA may find a proposed device “not substantially equivalent (NSE)” to a predicate device if the proposed device has increased cybersecurity risks that “could negatively impact the safety and effectiveness of the device.”  In the example provided in the draft guidance, the increased cybersecurity risk could be related to a lack of “necessary encryption to protect against a recently identified cyber threat” for which the proposed device is not protected.  The sponsor of the proposed device will be expected to provide performance data to support the cybersecurity of the device against the newly identified threat, and if the data are inadequate, FDA could find the device NSE.

The problem with this expectation, however, is that it is possible, and even likely, that the predicate device, especially as it was cleared, is also not protected against this newly identified threat.  As is often the case when there are advances in technology and understanding of risks, new devices may be held to a higher standard than those to which they are claiming equivalence.  Particularly in the context of a 510(k), it may be difficult for FDA to enforce this expectation if it is not also required of the predicate if there was no public notice to industry of the newly identified threat.  Doing so may be inconsistent with the least burdensome requirement as well as the concept of substantial equivalence.

Given the implications of receiving an NSE for cybersecurity alone, manufacturers and interested parties can still provide comments online regarding the draft guidance until May 13, 2024.

The Associated Press reported on Tuesday following confirmation by five anonymous individuals with knowledge that the Drug Enforcement Administration (“DEA”) is moving to reschedule marijuana from schedule I to the less stringently controlled schedule III.  US poised to ease restrictions on marijuana in historic shift, but it’ll remain controlled substance (Apr. 30, 2024).  Xochitl Hinosa, Justice Department Director of Public Affairs, confirmed that Attorney General Merrick Garland signed off on DEA’s proposal stating, “Today, the Attorney General circulated a proposal to reclassify marijuana from Schedule I to Schedule III.”  Quoted in Id.  The White House Office of Management and Budget will review the rescheduling proposal.  Afterwards DEA will publish a notice of proposed rulemaking for public comment in the Federal Register.  After the public comment period closes, DEA will review comments and issue a final rule.

Background

In October 2022, President Biden directed the Health and Human Services (“HHS”) Secretary and the Attorney General to “initiate the administrative process to review expeditiously how marijuana is scheduled under federal law.”  Statement from President Biden on Marijuana Reform, White House (Oct. 6, 2022).  Biden also pardoned prior federal simple possession offenses and encouraged governors to do the same.  Last August, the Food and Drug Administration (“FDA”) and HHS, after considering the eight-factor analysis required by the Controlled Substances Act (“CSA”) for scheduling substances of abuse, recommended DEA reschedule marijuana from schedule I to schedule III.  Letter to DEA Administrator Anne Milgram, from Assistant Secretary for Health Rachel Levine (Aug. 29, 2023).  By recommending rescheduling to schedule III, FDA/HHS determined that marijuana no longer meets schedule I criteria under the CSA and that it does not meet schedule II criteria either.

Since August the Attorney General and the DEA Administrator have been pressed by high profile politicians and others ranging from no rescheduling to total decontrol.  Former DEA Administrators and National Drug Policy Directors asserted that the science demonstrating marijuana’s high addictive potential, its lack of accepted medical use, and rescheduling impact on prosecuting drug trafficking organizations required marijuana to remain in schedule I.  Letter to U.S. Attorney General Merrick and DEA Administrator Anne Milgram, from Michele Leonhart, et al. (Oct. 2023).  The Democratic governors of Colorado, Illinois, Louisiana, Maryland, New Jersey and New York advocated for rescheduling to schedule III to protect the public against more dangerous drug use asserting that legal marijuana products sold in states where they are legal “are significantly safer than myriad alternatives, including opioids.”  Letter to President Joseph R. Biden, Jr., from Governor Jared Polis et al. (Dec. 5, 2023).  Democratic state attorneys general viewed rescheduling “as a public safety imperative” and also encouraged rescheduling to schedule III based on FDA’s “scientific and medical conclusions.”  Letter to DEA Administrator Anne Milgram, from Phil Weaver, et al. (Jan. 12, 2024).  Three Republican senators on the Foreign Relations Committee advised to consider U.S. treaty obligations in rescheduling.  Letter to Administrator Anne Milgram, from Mitt Romney, Pete Ricketts and James Risch (Mar. 27, 2024).  And twenty-one Democratic senators and members of Congress pushed not only “to promptly remove marijuana from Schedule I,” but to deschedule it altogether.  Letter to Attorney General Merrick Garland and Administrator Anne Milgram, from Senator Elizabeth Warren, et al. (Apr. 24, 2024).

Scheduling Under the CSA

Substances in schedule I of the CSA have a high potential for abuse, no currently accepted medical use in treatment in the U.S., and lack accepted safety for use under medical supervision.  21 U.S.C. § 812(b)(1).  Those in schedule III have a potential for abuse less than schedule I or II substances, have a currently accepted use in treatment in the U.S., and their abuse may lead to moderate or low physical dependence or high psychological dependence.  21 U.S.C. § 812(b)(3).

The CSA requires analysis of eight statutory factors for scheduling actions of substances of abuse:

1. The drug’s actual or relative potential for abuse.
2. The drug’s scientific evidence of its pharmacological effect, if known.
3. The state of current scientific knowledge regarding the substance.
4. The drug’s history and current pattern of abuse.
5. The drug’s scope, duration, and significance of abuse.
6. The risk to public health.
7. The drug’s psychic or physiological dependence liability.
8. Whether the drug is an immediate precursor of a substance already controlled.

21 U.S.C. § 811(c).

FDA/HHS Analysis, 2023

FDA/HHS last conducted an eight-factor analysis of marijuana in 2016 and concluded that marijuana continued to meet schedule I criteria.  Denial of Petition to Initiate Proceedings to Reschedule Marijuana, 81 Fed. Reg. 53,688 (Aug. 12, 2016); Denial of Petition to Initiate Proceedings to Reschedule Marijuana, 81 Fed. Reg. 53,767 (Aug. 12, 2016).  FDA/HHS found that marijuana continued to have high potential for abuse and lacked accepted safety for use under medical supervision but, perhaps most important, had no currently accepted medical use in treatment in the U.S.  The scientific and medical finding was binding on DEA and, without a finding that marijuana had a currently accepted medical use in treatment, DEA denied the petitions to reschedule.

Unlike its 2016 analysis, FDA’s/HHS’ 2023 analysis considers marijuana to have a currently accepted medical use in treatment in the U.S.  The 2023 analysis “largely focused on modern scientific considerations on whether marijuana has a CAMU [currently accepted medical use] and on new epidemiological data related to abuse of marijuana” since 2016.  FDA, Basis for the Recommendation to Reschedule Marijuana Into Schedule III of the Controlled Substances Act, 5.  FDA conducted epidemiological analyses of marijuana abuse and its associated harms through comparisons with heroin (schedule I); fentanyl, oxycodone, and hydrocodone (schedule II); ketamine (schedule III); benzodiazepines, zolpidem, and tramadol (schedule IV); and alcohol.  Id.  FDA/HHS concluded that marijuana should be rescheduled to schedule III.  FDA/HHS found that even with a high prevalence of nonmedical use, epidemiological indicators suggest that marijuana does not produce outcomes as serious as those of schedule I or II drugs.  Id. at 62.

FDA/HHS conducted a two-part test to determine whether marijuana has a currently accepted medical use in treatment in the U.S.  The Office of the Assistant Secretary (“OASH”) found that more than 30,000 healthcare professionals “are authorized to recommend the use of marijuana for more than six million registered patients, constituting widespread clinical experience associated with various medical conditions recognized by a substantial number of jurisdictions across the United States.”  Id. at 24.  (Thirty-eight states currently authorize marijuana in different formulations for specific qualifying medical conditions).  OASH concluded “there is widespread current experience with medical use in the United States” by licensed healthcare providers for which “such medical use is recognized by entities that regulate the practice of medicine in these states.”  Id.

FDA/HHS next reviewed studies investigating safety and efficacy/effectiveness of marijuana, professional societies’ position statements, data from state medical marijuana programs and national surveys, and labeling of relevant FDA-approved products.  Id. at 63.  FDA analyzed anorexia related to a medical condition, anxiety, epilepsy, inflammatory bowel disease, nausea and chemotherapy-induced vomiting, pain, and post-traumatic stress disorder.  FDA/HHS concluded that “some creditable scientific support” exists for the medical use of marijuana for the treatment of anorexia related to a medical condition, chemotherapy-induced nausea and vomiting and pain.  Id. at 63-64.  HHS/FDA also concluded that there is accepted safety for using marijuana under medical supervision for treatment of these conditions.  FDA/HHS concluded that marijuana does not meet schedule I criteria.  Id. at 64.

FDA further noted that clinical studies demonstrate that marijuana produces physical and psychological dependence, and abuse may lead to moderate or low physical dependence depending on frequency and degree of marijuana exposure.  Id. at 64-65.

U.S. Treaty Obligations

As a signatory to the Single Convention on Narcotic Drugs, 1961, the U.S. is obligated to maintain certain provisions related to drugs controlled under that treaty.  Congress has enacted a number of CSA provisions to ensure compliance.  The CSA requires the Attorney General, by delegation the DEA Administrator, to carry out treaty obligations without regard to findings required by 21 U.S.C. §§ 811(a) or 812(b), and without regard to procedures required by 21 U.S.C. §§ 811(a) and (b).  21 U.S.C. § 811(d)(1).  The Administrator must control marijuana in the schedule she deems most appropriate to comply with U.S. treaty obligations under the Single Convention.

Cannabis and cannabis resin are schedule I substances under the Single Convention.  United Nations, International Drug Control Conventions, Schedules of the Single Convention on Narcotic Drugs of 1961 as amended by the 1972 Protocol, as of May 17, 2023 (2023).  The Single Convention requires manufacturing quotas and import/export permits for schedule I substances.  Single Convention, Arts. 19, Par 1(a)-(d); 31, Par. 4(a).  Under the CSA, import and export permits are required only for schedule I and II substances and schedule III narcotics, but not for non-narcotic schedule III substances.  Schedule III substances do not require manufacturing quotas.  To comply with the treaty obligations as a schedule III substance, DEA may have to require marijuana import/export permits and manufacturing quotas.

Federal CSA Implications

Rescheduling marijuana to schedule III would have significant implications for growers, processors, and dispensaries.  Those entities will likely need to obtain and maintain a DEA registration.  They will likely need to take initial and biennial inventories, maintain transaction records, file suspicious order and theft/loss reports, and maintain adequate security.  Will dispensing marijuana, as with other schedule III substances, require a prescription issued for legitimate medical purpose by a DEA-registered, state-licensed practitioner?

State Implications

In addition to DEA, the states, commonwealths, and territories also regulate controlled substances within their jurisdictions.  Most states’ controlled substance regulatory regimes mirror the federal CSA and DEA regulations, but most vary on how they regulate marijuana:

• 38 states authorize different dosage formulations for specific medical conditions
• 24 states including DC authorize adult recreational use
• 5 states criminalize all marijuana use

Depending upon the jurisdiction, substances of abuse are regulated as controlled substances if, as with the federal CSA, they meet certain criteria.  At least half the states require the same eight-factor analysis as the feds, but some (New Mexico and Oregon) have fewer criteria while others (Illinois and Wyoming) consider additional factors.  Any federal scheduling action will require a handful of states to automatically regulate the substance consistent with the federal action.  This will likely prove inconsistent with a state’s authorization of marijuana for medical or recreational purposes.  Federal scheduling actions automatically require about sixteen states to control with the CSA unless there is an objection, a public hearing, and state authority decision.  Other states have discretionary scheduling authority not tied to federal scheduling.

For states that authorize marijuana for medical or recreational use, this may represent a sea change and potential culture shift.  State authorities should begin to take stock of potential federal marijuana rescheduling by assessing and understanding how it will impact their state.  Were DEA to reschedule marijuana to schedule III, and states regulate in a less restrictive schedule or allow continued recreational use, how will DEA and DOJ respond?

On April 29, 2024, FDA announced its finalization of the laboratory developed test (LDT) rule.  The final rule will be published in the Federal Register on Monday May 6, 2024 (here).  The final rule marks another milestone in the more than three decades long battle over LDTs.  FDA notes that it received over 6,500 comments on the proposed rule.  Showing how motivated FDA was to quickly finalize the rule, the Agency claims to have reviewed and addressed all major issues they raised in less than 5 months.

As regular readers of the blog know, we have written about LDTs many times before.  In this post, we focus on the final rule.

Overview of the Rule

In short, the Final Rule makes explicit that LDTs are, in FDA’s view in vitro diagnostic devices subject to FDA regulatory oversight, and always have been.  With the Final Rule’s publication on Monday, May 6, 2024, it will start the countdown to a four-year, 5-phase transition away from what FDA deems to have been its exercise of enforcement discretion for LDTs.  (The rule’s effective date is 60 days after publication.)  Below we provide a brief summary table of the phases and timeline.  These did not materially change from before.

Table 1: Phase-Out Policy Stages, Timeline, and Requirements

Not all LDTs will be required to comply with all aspects of the phases above.  One of the most interesting aspects of the final rule is the exemptions that FDA established.    FDA has created a number of categories of tests for which FDA intends to exercise enforcement discretion.  These largely did not appear in the proposed rule.  In the table below, we summarize the types of devices for which FDA intends to exercise varying levels of enforcement discretion.

¹ In addition to standard registration and listing information, FDA is requiring the submission of labeling pursuant to 21 C.F.R. § 807.26(e) to obtain “information on test performance and a summary of the supporting validation, among other things.”  Public Inspection version p. 47, 58, 59.

² While required, FDA explains that compliance with NYS CLEP clinical laboratory standards could satisfy the required portions of the QS Regulation with the exception of the design control requirements in 21 C.F.R. § 820.30.

³ This exemption is limited to the portions of the QS Regulation other than the Records requirements in 21 C.F.R. Part 820, subpart M.

Things People Aren’t Talking About But Should Be

While significant focus on the nuts and bolts of the final rule has been paid by the press and others, including the phase out periods and enforcement discretion carve outs, there is a lot more in this final rule, which comes in at 528 pages (in the Public Inspection version).  Below we discuss some of the notable points from the rule.  Note: there are no shortage of interesting points in this Final Rule and these are just a select few.

Revisionist History.  FDA claims that it has exercised enforcement discretion since 1976 over LDTs.  That would be rather shocking considering that the concept was only first introduced publicly by the Agency in 1992 (see earlier post here).  (Back then, LDTs were called “home brews.”  While FDA repeatedly disparages LDTs as unsafe, it has at least dropped this disparaging term.)  This revisionist history appears to be part of the Agency’s attempt to claim jurisdiction over LDTs dating back to the enactment of the Medical Device Amendments.  (This is roughly analogous to the statement that “Oceania had always been at war with Eurasia” in 1984.)

LDTs are Illegal.  Almost as disturbing as FDA’s revised history is its bald statements that LDTs are, and always have been, illegal.  FDA states, “Although FDA is phasing out its current general enforcement discretion approach over a period of years, the phaseout policy does not in any way alter the fact that it is illegal to offer IVDs without complying with applicable requirements.”  Of course, the natural consequence of saying that LDTs are allowed only on sufferance through FDA’s exercise of discretion means that every LDT is illegal, but FDA here is blunter in its language.

FDA’s Claims Regarding NY State Experience.  FDA notes as evidence of LDTs lacking appropriate analytical and clinical validity that New York State Department of Health Clinical Laboratory Evaluation Program (NYS CLEP) couldn’t approve more than half of initial applications because of deficiencies such as, including inadequate validation data.  Only needing to ask questions regarding deficiencies in approximately half of submissions actually sounds like the lab industry submitting to NYS CLEP is doing quite well in these authors’ opinion.  By FDA’s logic, the entire medical device industry must be in total shambles because in the last 10 fiscal years (FY14-24) in the first cycle review, between 63 and 78% of 510(k) submissions receive a request for additional information meaning that it could not be initially cleared without addressing various deficiencies. See page 107 of FDA’s 1^st Quarter FY2024 MDUVA V Report (here).  The real issue is how many tests were ultimately approved, not how many raised questions in the initial submission.

FDA’s Stance on Collection Devices.  While some of the enforcement discretion carve outs may be modestly helpful, even labs that enjoy certain enforcement discretion may not be free from regulatory oversight.  Footnote 21 states, “We note that “IVDs offered as LDTs” does not include IVDs manufactured or used outside of a laboratory, including collection devices.”  In recent years, we have seen FDA challenging use of common collection device materials in LDTs.  Thus, labs will need to ensure that the collection materials they employ are being used for their on-label purpose.  If not, FDA may claim that the lab needs to seek clearance/approval for the collection device.  FDA’s attacks on collection devices can provide a backdoor route to challenge LDTs that enjoy continuing enforcement discretion.

FDA Collection and Review of Labeling.  As noted above in Table 2, FDA is requiring that certain LDTs submit, as part of its device listing process, copies of a to‑be‑listed LDT’s labeling. FDA notes that it views the labeling requirements of 21 C.F.R. Parts 801 and 809 as potentially being “encompassed in more than one document, such as the test protocol, test report template, and test menu.”  See response to Comment 176.  Thus, affected labs will be required to submit to FDA significant amounts of information as part of the device listing.  What will FDA do with this information?  The Final Rule states, “This labeling will facilitate FDA surveillance for potentially poor performing LDTs that should otherwise be addressed.”  Public Inspection version p. 58.  What is a “poor performing LDT?”  How will FDA assess performance?  Will FDA give a lab the opportunity to address any claims of poor performance or will such tests be required to exist the market?  Bottom line – while these tests are “exempt” from the premarket approval/clearance process, FDA appears to still be reviewing them and perhaps with less transparency than would otherwise occur in the ordinary course.

What Happens Next

The Final Rule will become effective in 60 days, on Friday July 5, 2024.  In a sort of reverse Independence Day for labs, all labs offering LDTs will be on a ticking clock to begin efforts to comply with the various stages of the phase out plan, as applicable.  One looming question for many in this space is – what happens to new tests?  While the preamble to the rule is not expressly clear, it appears that new LDTs can continue to enter the market so long as they comply with the requirements at the time (i.e., per the Phase Out Policy Stages, see Table 1 above).  Of course, as time goes by, some labs will not be able to meet these timelines, and so some tests will not be introduced or their introduction will be delayed.

While there will almost certainly be a legal challenge to the final rule, how such a challenge could affect the timeline for implementation is not clear.  It took 32 years from the first challenge to FDA regulation of LDTs to today.  If there is litigation, this next phase will be resolved far faster.

Hyman, Phelps & McNamara, P.C. proudly announces the return of attorney Sarah Wicks to its drug development and compliance group. Sarah brings a wealth of experience and a proven track record of advising innovative drug and biologics companies through the intricate landscape of product development and commercialization. Her expertise spans a range of critical areas including: human subject protections, clinical trial conduct, development strategies, FDA interactions, and enforcement action responses.

“Sarah’s a tremendous attorney who always understood HPM’s culture and commitment to client service.  Her additional professional experiences have only made her better and enhanced her contributions to the firm.  We couldn’t be happier that she’s back in the fold,” said J.P. Ellison, Managing Partner at HPM.

During her previous stint with HPM, Ms. Wicks was instrumental in the firm’s approach to client-centric solutions and innovative compliance strategies. Her background also includes significant roles such as serving as an adjunct professor at the George Washington University Law School, where she coaches health law moot court teams, and engaging actively with key industry groups like the Society for Clinical Research Associates and the Food and Drug Law Institute.

Ms. Wicks’ extensive experience also includes her time at the FDA’s Office of Generic Drugs Policy and the Office of Legislation, providing her with insider insights that greatly benefit her clients.

“I am very excited to have Sarah rejoin HPM.  Her extensive knowledge of, and insights into, preapproval drug development and approval strategy will benefit the patients, researchers, and sponsors we serve.  We look forward to working with Sarah as she also further enhances HPM’s capacity to assist companies with clinical trial operations and compliance, human subjects research protections, product promotion, and business transactions.  Most of all, we are excited to be working alongside someone who shares our passion to bring new therapies to those in need,” notes James E. Valentine, HPM Director.

Sarah’s expertise will contribute to our mission of helping drug and biologic companies navigate the pathways from discovery to commercialization.

Sarah graduated with a cum laude degree in Cell and Molecular Biology from Towson University, a M.P.H. from Johns Hopkins Bloomberg School of Public Health, and a J.D. from the University of Maryland School of Law.

FDA recently issued a draft guidance on Requests for Feedback and Meetings for Medical Device Submissions: The Q-Submission Program, which included some changes over the existing guidance which could have a negative impact on future pre-submissions.

The draft guidance attempted to clarify when a Sponsor’s question may be more appropriate for more informal communication.  The guidance recommends that questions “that can be readily answered” based on the FDA reviewers “experience or knowledge” and that “do not require additional background information, an in-depth review, or other FDA staff involvement” can be done outside of the Q-Submission process.  This hardly provides clarification and seems to limit the topics that could utilize this method of feedback.

In addition, the draft guidance, incorporated the 1998 guidance on PMA Day 100 Meetings.  The PMA Day 100 meeting may be used to discuss clarifying questions about Major Deficiencies and preliminary approaches for a response.   However, instead of committing to continued communication with the applicant every 4 weeks until the review is complete, FDA recommends the applicant submit a Submission Issue Request (SIR) to enable further discussion of a detailed  approach to addressing major deficiencies. It is not clear from the draft guidance how the timetables noted in Table 1 for an SIR would relate to an SIR submitted after the PMA Day 100 meeting.  However, Table 1 states that if the SIR request is received within 60 days of the FDA “marketing submission letter” FDA would, resources permitting, have the meeting or provide written feedback within 21 days.  It’s not clear, though, how SIR’s submitted after 60 days would be handled in the context of a post-100-day meeting interaction because some of those interactions would exceed 60 days, and per Table 1, FDA wouldn’t hold a meeting for 70 days after receiving such a request.  If this is FDA’s intent, it would be a major change to the process as set out in the 1998 Guidance allowing for monthly interactions.  In addition, the draft guidance indicates that “relevant review team members and management will attend the meeting with the applicant as well as other FDA staff as appropriate,” whereas the 1998 guidance states in addition to the relevant core review team, the Branch Chief, Division Director, or Deputy Director will attend the meeting with the applicant.

The draft guidance also provides additional detail on the number of questions that can be addressed within one pre-submission. FDA indicates that a pre-submission with too many topics does not result in productive discussions or feedback. The draft guidance echoes the existing guidance in that the pre-submission should be limited to 3-4 topics; however, the draft guidance goes further and recommends a limit of 7-10 questions across those topics.  In addition, the draft guidance offers some considerations regarding the types of questions and information necessary for FDA to provide feedback.  If the Sponsor submits an “excessive number of topics”, FDA may contact the Sponsor to discuss which topics should be prioritized and which topics can be delayed in a subsequent pre-submission.

The draft guidance further provides considerations for the type of questions to ask in a pre-submission.  For example, if the questions are related to regulatory pathway or indications for use, it may be too early to ask questions about performance data.  This seems misguided, as feedback on required performance data may shape the Sponsor’s decision on the final indications for use and claims for the device.  Similarly, if the design is not frozen and the Sponsor expects to make “technological changes” to the device, according to the draft guidance, it may be “premature” to ask questions about performance data. However, getting input on the design and performance testing plan at the time of the pre-submission can provide valuable insights to a Sponsor and may even direct changes to the design that were not anticipated. Conversely, waiting until the device is out of the design stage may be too late to first get input and alignment on required performance testing. Once the final device has been designed, Sponsors typically move quickly into executing performance testing (e.g., design verification and validation). For questions related to clinical study protocol, the draft guidance recommends that Sponsors provide the planned indications for use and describe the non-clinical data that will be included in a subsequent marketing application. With the increasing number of pre-submissions submitted to the Agency, it is not surprising that FDA added even more language restricting the scope and review of a pre-submission.

This draft guidance is open for comments through May 14, 2024, which can be submitted online.  We hope the final guidance provides more clarity on use of informal interactions with the Agency as a method of getting feedback.  We consider the focus on limiting the number of questions that can be addressed in any one pre-submission and the impact that will have on development timelines to be a step in the wrong direction.  The approach to submitting a pre-submission with a limited number of questions and following with additional pre-submission supplements to get feedback and alignment with the agency on a variety of topics does not align with helping ensure timely access to new medical devices. This approach, further, seems outdated given many Sponsors utilize agile-like approaches to medical device development focusing on flexibility, rapid iterations based on customer-centric feedback (including regulator feedback), and speed to market.  The pre-submission process is a useful tool for Sponsors to gain alignment on expectations upfront and early in the development process.  We hope FDA does not limit the utility of this valuable resource and instead considers how it can continue to collaborate early and often with industry to streamline and not prolong the development process.

On April 23, 2024 we blogged about Republican Senators Mitt Romney, Pete Ricketts and James Risch advising Drug Enforcement Administration (“DEA”) Administrator Anne Milgram to consider U.S. treaty obligations under the Single Convention, 1961, when rescheduling marijuana.  Later Democratic lawmakers, eleven senators and ten members of Congress, also penned a letter to Administrator Milgram and Attorney General Merrick Garland imploring DEA to not only “promptly remove marijuana” from schedule I of the Controlled Substances Act (“CSA”), but to deschedule it altogether.  Letter to Attorney General Merrick and Administrator Anne Milgram, from Senator Elizabeth Warren, Senator John Fetterman, et al., April 24, 2024.

This is the third letter from some of the same Democratic lawmakers to the Attorney General and DEA Administrator on marijuana rescheduling since the Food and Drug Administration (“FDA”) and Health and Human Services (“HHS”) recommended rescheduling in schedule III last August.  The current letter conveys impatience and frustration with the time DEA is taking to conduct its review, noting that it has been eight months since FDA/HHS recommended rescheduling and eighteen months since President Joe Biden directed HHS and the Department of Justice to “initiate the administrative process to review expeditiously how marijuana is scheduled under federal law.”  Statement from President Biden on Marijuana Reform, White House, October 6, 2022.  The lawmakers assert that “[i]t is time” for DEA “to act.”

The Dems note that marijuana’s continued schedule I placement “produces a cascade of severe penalties for marijuana users and businesses, including for criminal records, immigration statuses, employment, taxation, health care, public housing, social services, and more.”  While recognizing that rescheduling to schedule III “would be a meaningful improvement,” they assert that only descheduling, that is decontrolling altogether, would remedy the serious consequences associated with marijuana’s total prohibition.  DEA, they note, “now has the power to determine whether it will continue the failed approach of keeping marijuana in Schedule I.”

The lawmakers recognize that while there may be internal disagreements within DEA about rescheduling, they implore the agency to move “swiftly” because “[t]he longer marijuana remains scheduled in the CSA, the longer our communities face senselessly severe penalties and the longer the marijuana laws of the majority of U.S. states must remain in conflict with federal law.”  And further that “[r]ight now, the Administration has the opportunity to resolve more than 50 years of failed, racially discriminatory marijuana policy.”

At the same time, the lawmakers “trust that the DEA is working as quickly as possible toward a decision on how marijuana is scheduled” as noted by Vice President Kamala Harris in March.  (During a roundtable discussion about marijuana and criminal justice reform, the Vice President characterized marijuana’s schedule I classification as “absurd” but noted “I’m sure DEA is working as quickly as possible and will continue to do so, and we look forward to their work product.”  Vice president criticizes federal cannabis restrictions during White House weed event, March 15, 2024.)

The Dems conclude by walking back their demand somewhat that DEA deschedule marijuana altogether by expressing hope only that “DEA will not make the unprecedented choice to disagree with HHS’s medical finding that a drug does not belong in Schedule I.”

In response to the several of the senators’ earlier January 29, 2024 letter, DEA’s chief of DEA’s Office of Congressional Affairs wrote on April 16th to each that for DOJ, and by delegation DEA, to undertake administrative scheduling action on marijuana, it must follow the procedures established by Congress in the CSA that which includes opportunity for public comments and a hearing.  Letters to Elizabeth Warren, et al., from Michael Miller, April 16, 2024.  The DEA letter notes that DOJ “is carefully following those procedures as it conducts an administrative review of the scheduling of marijuana.”  DEA states that it has the final authority to reschedule a under the CSA “after considering relevant statutory and regulatory criteria and HHS’ scientific and medical evaluation.”

While the Democratic lawmakers advocate for descheduling to remedy the “cascade of severe penalties for marijuana users and businesses” and “more than 50 years of failed, racially discriminatory marijuana policy,” the CSA requires analysis of eight specific factors (“the eight-factor analysis”) for scheduling, rescheduling or descheduling substances of abuse.  Those eight statutory factors are:

1. The drug’s actual or relative potential for abuse.
2. The drug’s scientific evidence of its pharmacological effect, if known.
3. The state of current scientific knowledge regarding the substance.
4. The drug’s history and current pattern of abuse.
5. The drug’s scope, duration, and significance of abuse.
6. The risk to the public health.
7. The drug’s psychic or physiological dependence liability.
8. Whether the drug is an immediate precursor of a substance already controlled. 21 U.S.C. § 811(c).

Albeit the lawmakers’ reasons for quickly decontrolling marijuana are important, compelling and not without merit, but they are not among the eight factors the CSA mandates that DEA consider.

On April 24, 2024, the FDA issued a revised draft guidance, Promotional Labeling and Advertising Considerations for Prescription Biological Reference Products, Biosimilar Products, and Interchangeable Biosimilar Products – Questions and Answers, (the “Revised Draft Guidance”) which replaces the Agency’s initial draft guidance issued in February 2020 (the “Initial Draft Guidance”).

This Revised Draft Guidance provides considerations for manufacturers, packers or distributors (dubbed “firms”) of prescription biological reference products, biosimilar products, and interchangeable biosimilar products presenting data and information about such products in promotional materials in a truthful and non-misleading way.  Promotional labeling is generally any labeling other than FDA-required labeling that is devised for the promotion of a product, as well as other functions, and can include printed, audio, or visual matter that describes the product. While the Federal Food, Drug & Cosmetic Act does not explicitly define “advertisement,” FDA provides several examples in its regulations at 21 CFR § 201.1(l)(1) (e.g., “advertisements in published journals, magazines, other periodicals, and newspapers, and advertisements broadcast through media such as radio, television, and telephone communication systems”).

Major differences between the Revised Draft Guidance and the Initial Draft Guidance include additional recommendations, an example of a misleading promotional communication for interchangeable biosimilar products, and clarifications on postmarketing reporting requirements.

The Revised Draft Guidance emphasizes that where multiple products are licensed as biosimilar to and interchangeable with or biosimilar to but not interchangeable with the same reference product, promotional communications should avoid suggesting that any of the products are less safe or effective than each other for their approved uses. To emphasize this point, the Agency provides one new example of a promotional communication for interchangeable biosimilar products where it would consider the presentations described to be misleading (see Example 4 in Q7). In the example, it would be misleading for a product that is an interchangeable biosimilar to suggest superior safety and efficacy to a  non-interchangeable biosimilar product solely based on the product’s status as an interchangeable biosimilar product. Relatedly, promotional communications for a biosimilar product that suggest that a finding of biosimilarity means that the FDA determined the reference product and biosimilar product are identical to each other would not be accurate, and therefore misleading, because “biologics generally cannot be copied exactly” and typically have even minor differences between batches of the same product.

The Revised Draft Guidance also further clarifies postmarketing reporting requirements for submitting promotional communications to the FDA do apply to promotional communications for biological reference products, biosimilar products, and interchangeable products under 21 CFR § 601.12(f)(4). The FDA specifically notes that “specimens of mailing pieces and any other labeling or advertising devised for promotion of the reference product or biosimilar product [including an interchangeable biosimilar product] must be submitted to FDA at the time of initial dissemination of the labeling or at the time of initial publication of the advertisement, as applicable” and be accompanied by a completed Form FDA 2253 (emphasis added). We note this clarification is helpful given the modification to the definition of “promotional labeling” in the Revised Draft Guidance as part of footnote 4.  In the new definition, FDA removed the phrase, “that is devised for the promotion of a product,” broadening the definition of “promotional labeling” to potentially encompass any labeling other than the FDA-required labeling.  The restatement in text that postmarketing reporting requirements apply to labeling devised for promotion is supportive of our original understanding.

As a reminder, manufacturers, packers or distributors of prescription biological reference products, biosimilar products, and interchangeable biosimilar products may voluntarily seek FDA feedback on their proposed promotional communications before dissemination by following the current process outlined in FDA’s draft guidance Providing Regulatory Submissions in Electronic and Non-Electronic Format – Promotional Labeling and Advertising Materials for Human Prescription Drugs (April 2022).

Comments to the revised draft guidance are due to the docket by June 25, 2024.

We’ve been hearing for quite some time that a Final LDT Rule would likely be coming this spring, before May 1.  This timing has been attributed to FDA’s desire to avoid having the rule being overturned by Congress under the Congressional Review Act.  Of course, if a new administration takes over next year, the rule’s future would be questionable, even without congressional action.

As of Monday, April 22, FDA appears to be one step closer to achieving that timing goal with Office of Management and Budget (OMB) having completed its review of the final rule (see here). Our readers will recall that the rule went to OMB on March 1 for its review. OMB completed its review by concluding the final rule is “Consistent with Change.”  This conclusion means that OMB has returned the final rule to FDA with changes.  There is no way to know from this coding the source or extent of the changes as even editorial changes can cause a rule to be coded “Consistent with Change.”  Regardless of the changes, however, OMB has concluded that the final rule is consistent with its mandate to review final rules.  Bottom line – OMB did not object and FDA just cleared one more hurdle on its way to issuing the final rule.

The final rule was identified by OMB as Section 3(f)(1) significant meaning that the rule “may have an annual effect on the economy of $200 million or more . . . ; or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, territorial, or tribal governments or communities.”  (see here) With much at stake, OMB has held over two dozen meetings regarding the proposed rule (see here) with approximately half of those occurring since the final rule went to OMB for review.  The meetings have presented a mix of views with some organizations meeting with OMB being in favor of FDA regulation and others being very much opposed.

With a final rule now nearly a certainty, a legal challenge seems likely to follow.  As we have previously noted, there are plenty of grounds for challenging any final rule that is released (see our prior post here).

We will, of course, keep our readers up to date on the final rule.

Administrator Anne Milgram has been on the receiving end of high-level support for and against rescheduling marijuana since the Food and Drug Administration (“FDA”) and Health and Human Services (“HHS”) recommended the Drug Enforcement Administration (“DEA”) reschedule from schedule I to schedule III last August.  We blogged in February about the October 2023 letter from former DEA Administrators, Ms. Milgram’s predecessors, and Directors of National Drug Policy urging not to reschedule; the January 2004 letter Democratic state attorneys general pushing for rescheduling to schedule III; and the January 2024 letter from Democratic senators requesting descheduling altogether.  Democratic senators also weighed in, supporting rescheduling to schedule III in December 2023.

Administrator Milgram received another letter last month from Republican senators Mitt Romney (Utah), Pete Ricketts (Nebraska), and James Risch (Idaho), who sit on the Senate Foreign Relations Committee.  The Senators implore efforts to reschedule marijuana be driven by facts, “not the administration’s favored policy,” and question whether rescheduling would violate the Controlled Substances Act (“CSA”) and U.S. treaty obligations under the Single Convention on Narcotic Drugs, 1961.  Letter to Administrator Anne Milgram, from Mitt Romney, Pete Ricketts and James Risch, March 27, 2024.

The senators write that the U.S. ratified the Single Convention in 1967 and must impose certain domestic controls on marijuana and other drugs controlled by the treaty.  Marijuana is a schedule I drug under the Convention.  They write that the CSA implements treaty obligations in U.S. domestic law and that 21 U.S.C. § 811(d) specifically requires the Attorney General to control marijuana in the schedule he deems most appropriate for carrying out U.S. obligations under the Single Convention.

The senators note that DEA determined in prior rescheduling proceedings that 21 U.S.C. § 811(d) required classification of marijuana as a schedule I or II substance to comply with U.S. treaty obligations under the Single Convention, opining that it is important that DEA continue “to follow the law and abide by our treaty commitments.”

When DEA denied marijuana rescheduling petitions in August 2016, cannabis was listed as a schedule I and schedule IV substance under the Single Convention.  Schedule IV substances are highly addictive and rarely used in medical practice while schedule I substances are also highly addictive, liable to abuse or convertible to drugs similarly addictive and liable to abuse.  The Single Convention imposes more stringent controls on schedule IV substances than on schedule I substances.  The UN Commission on Narcotic Drugs removed cannabis and cannabis resin from schedule IV of the Single Convention in December 2020.  While FDA recommended rescheduling to schedule III, we think it more likely that if DEA reschedules marijuana it would be to schedule II because the Single Convention still requires manufacturing quotas for cannabis (which are not required for schedule III substances under the CSA).  In addition, the Single Convention requires import and export permits for international transactions involving cannabis, while the CSA requires permits for schedule I and II substances and schedule III narcotic substances.  The CSA does not require permits for non-narcotic schedule III substances.  Were DEA to reschedule marijuana in schedule III, the agency and registrants would have to straddle the requirements of two schedules by requiring manufacturing quotas and import/export permits.  On a final note, as a signatory to the Single Convention, U.S. marijuana manufacturers, importers, exporters, and distributors will be required to obtain DEA registrations, and prescriptions will be required for dispensing marijuana to individuals.

In response to their letter, the senators asked DEA:

• Whether DEA still holds the position as it did in 2016, when it declined to remove marijuana from schedule I, that marijuana must be a schedule I or II substance to comply with 21 U.S.C. § 811(d) and U.S. treaty obligations, and, if not, why has DEA’s position changed?
• Whether DEA believes the U.S. can meet its treaty obligations under the Single Convention if marijuana is rescheduled to schedule III?
• Whether DEA is consulting the Department of State about treaty obligations regarding marijuana and diplomatic implications of rescheduling?
• Whether DEA consulted “with key counterdrug partner nations about our shared obligations under the Single Convention and their views regarding a potential rescheduling” by the U.S.?
• What impact a potential failure by the U.S. to uphold its treaty obligations would have on our ability to ensure other countries enforce their drug controls under the Single Convention, including fentanyl?

The senators requested responses to their questions by April 12th.  The senators’ position through their statements and questions makes clear to DEA that U.S. treaty obligations under the Single Treaty must be part of the agency’s rescheduling considerations.

If you’ve been following this blog since the early days, then you know we fervently followed the more-than-decade-long soap opera that was The Medicines Company’s efforts to obtain a Patent Term Extension (“PTE”) from the U.S. Patent and Trademark Office (“PTO”) for U.S. Patent No. 5,196,404 covering ANGIOMAX (bivalirudin) after the company’s patent counsel untimely filed for a PTE 62 days after the ANGIOMAX NDA 020873 approval at 5:18 PM on Friday, December 15, 2000 (see our summary and “coda” posts here and here).  The way that matter ended up—after touching all three branches of the U.S. Government—was that, despite having missed the statutory 60-day filing deadline, the patent was granted a PTE due to a change in the law created by Section 37 of the Leahy-Smith America Invents Act (“AIA”) (Pub. Law No. 112-029), titled “Calculation of 60-Day Period for Application of Patent Term Extension” and referred to by some as “The Dog Ate My Homework Act” or the “Medco Fix.”

Post-AIA, and a later change to the law to account for controlled substance FDA application approvals, the PTE statute at 35 U.S.C. § 156(d)(1) states (emphasis added):

To obtain an extension of the term of a patent under this section, the owner of record of the patent or its agent shall submit an application to the Director. Except as provided in paragraph (5), such an application may only be submitted within the sixty-day period beginning on the date the product received permission under the provision of law under which the applicable regulatory review period occurred for commercial marketing or use, or in the case of a drug product described in subsection (i), within the sixty-day period beginning on the covered date (as defined in subsection (i)). . . .

For purposes of determining the date on which a product receives permission under the second sentence of this paragraph, if such permission is transmitted after 4:30 P.M., Eastern Time, on a business day, or is transmitted on a day that is not a business day, the product shall be deemed to receive such permission on the next business day. For purposes of the preceding sentence, the term “business day” means any Monday, Tuesday, Wednesday, Thursday, or Friday, excluding any legal holiday under section 6103 of title 5.

Since the PTE statute was created with the September 1984 enactment of the Hatch-Waxman Amendments, and even post-AIA, there have been various instances in which FDA-regulated companies (or their counsel) have failed to timely submit a PTE application to the PTO within the statutory 60-day window (see, e.g., here).  On occasion,  PTE applicants try to fight a PTO determination that the application was untimely. . . . which brings us to the topic of this post.

Taiho Pharmaceutical Co., Ltd. (Taiho Oncology, Inc.) (“Taiho”) is the sponsor of NDA 214801 for LYTGOBI (futibatinib) Tablets.  Usually at this point in a post we would identify the date of approval of the relevant NDA.  But that’s the controversy here: Did FDA approve LYTGOBI NDA 214801 on September 30, 2022 when the Agency issued its initial approval letter, or on October 5, 2022 when FDA issued a corrected approval letter?  That’s important, because PTE applications for U.S. Patent Nos. 9,108,973 and 10,434,103 (here and here) covering LYTGOBI were filed with the PTO on November 29, 2022, putting the 60-day PTE application deadline outside of the September 30, 2022 approval date, but within an October 5, 2022 approval date.

In January 2024, FDA affirmed to the PTO in a letter that “NDA 214801 was approved on September 30, 2022, which makes the submission of the patent term extension application on November 29, 2022, not timely within the meaning of 35 U.S.C. 156(d)(l).”  Taiho’s counsel quickly followed up with a letter to FDA and a supplemental submission to the PTO in February 2024 arguing otherwise:

“[P]ermission for commercial marketing” was not effective under the September 30, 2022 FDA letter because the product would have been misbranded if marketed thereunder.  Rather, “permission for commercial marketing” was only effective upon FDA’s issuance of its corrected October 5, 2022 letter.  Calculating the 60-day period as beginning on that date renders the application timely. . . .

In this case, it is axiomatic that (a) the error in the approval date and (b) the inaccurate listing of the storage conditions for the product in the initial FDA notification were false.  The statute does not provide any applicable exception for such a falsity.  Accordingly, had Taiho marketed the product with labeling containing those errors, that labeling would have been false.  In addition, leaving the errors in the statement of storage conditions in place would have resulted in the product being labeled to be stored at 32°F-86°F, rather than the correct 59°F-86T Given this 27-degree colder temperature range, and the notation in the initial carton labeling “Do not refrigerate or freeze,” storing at the incorrectly-labeled conditions could have compromised product quality, possibly affecting safety and/or effectiveness of the product.  Thus, regardless of the technicality of an initial notification letter stating approval on September 30, 2022, Taiho was prohibited under the FDCA from marketing LYTGOBI with false labeling, 21 U.S.C. sections 331(a) and 352.(a)(l), and the actual, valid “permission for commercial marketing” of LYTGOBI did not exist until FDA corrected the labeling language in its October 5, 2022 “Corrected Approval” letter.

But on March 18, 2024, the PTO rendered its decision that the PTE applications were not timely filed because LYTGOBI NDA 214801 was approved on September 30, 2022:

As admitted by Taiho Pharmaceutical in the PTE application filed on November 29, 2022, LYTGOBI® (futibatinib) received FDA approval for commercial marketing or use of pursuant to section 505(b) of the Federal Food, Drug and Cosmetic Act by the approval letter transmitted on September 30, 2022 at 12:08 pm. . . .

As a result, the “next business day” proviso of under 35 U.S.C. § 156(d)(1) does not apply here because the approval was transmitted on a business day (a Friday) before 4:30 pm Eastern Time.  Therefore, the filing of the present application for patent term extension on November 29, 2022 was untimely, because the sixty-day period would have begun on September 30, 2022, and ended on November 28, 2022. . . .

The proposed approval date [] is wholly uncorroborated because applicant failed to provide any evidence on the record to support October 5, 2022 as the approval date.  Instead, the initial PTE application filed on November 29, 2022, the corrected approval letter, and the original approval letter all consistently indicate that September 30, 2022 is the effective approval date.  Thus, absent evidence to the contrary, the approval date remains September 30, 2022.

Because the PTE application was not timely, Taiho Pharmaceutical is not entitled to extension of the term of U.S. Patent No. 9,108,973 under 35 U.S.C. 156.

It’s not terribly uncommon for FDA to issue corrected approval letters (and corrected labeling).  Indeed, we found a slew of them spanning decades: here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, and here.

While we didn’t perform our own analysis of the instances linked to above to determine whether or not each of the original approval dates was used for PTE application purposes, or whether the PTO accepted a corrected approval date, in at least one instance—see here and here—the corrected approval date was not used for PTE purposes, but instead, the original approval date.  But there may be more out there.  After all, as we posted in 2016, there have been approval date resets under certain circumstances.  So we’ll sit tight to see whether or not Taiho takes the next step of litigating the issue.

Medicine cabinet, stuffed to the gills
Capsules, liquid, patches, and pills
Expired oxy, hydro, benzos, and more
All kind of old meds flowing out the door

We will, we will, clear you
We will, we will, clear you

Back by popular demand, coming to a collection site in your town for one day only, is a return of the ever popular Drug Enforcement Administration’s (“DEA’s”) National Prescription Drug Take Back Day.  DEA, with its law enforcement partners, will host thousands of local drop-off locations nationwide for clearing out and proper disposal of unwanted expired and unneeded medication from medicine cabinets between 10:00 am to 2:00 pm local time on Saturday, April 27, 2024.

Drug Take Back Days have made appearances each spring and autumn since 2010.  Events over the years have led to the removal of more than 17.9 million pounds of unwanted medication across the country.  Last October’s Drug Take Back Day removed 600,000 pounds (300 tons) of medication at almost 4,700 collection sites.

Additional information about DEA’s National Prescription Drug Take Back Day, including local disposal venues, can be found here.

Clear that Cabinet Tour ’24…Don’t you dare miss it!

On April 10, the Fourth Circuit unanimously affirmed a summary judgment ruling for the Centers for Medicare & Medicaid Services (CMS) regarding the agency’s definitions of “line-extension drug” and “new formulation” for purposes of determining rebates that drug manufacturers may owe the Medicaid Drug Rebate Program (MDRP).  Vanda Pharmaceuticals, Inc. v. Centers for Medicare and Medicaid Servs., No. 23-1457 (4th Cir. Apr. 10, 2024).

Under the Medicaid Drug Rebate statute, a pharmaceutical manufacturer whose drug prices increase faster than the rate of inflation must pay additional per-unit rebates to the program.  The amount of the additional rebate is the excess (if any) of a drug’s current average manufacturer price (AMP) over the inflation-adjusted AMP for a statutorily specified baseline quarter. To address concerns that manufacturers were making minor changes to drugs in order for them to be characterized as new covered outpatient drugs with updated (and higher) baseline AMPs, Congress amended the statute in 2010 to add an alternative rebate for line extensions of oral dosage form single source or innovator multiple source drugs (i.e., NDA or BLA drugs).  Under that line-extension provision, a manufacturer that introduces a line-extension drug with a new baseline AMP must pay the greater of the rebate calculated in the ordinary manner, or an alternative rebate calculated in a manner that is tied to the inflation rebate of the predicate drug and thereby the predicate drug’s baseline AMP.   The statute defines a “line extension” as a “new formulation” of an existing drug, with certain exceptions.

In 2020, CMS issued a final rule providing a broad definition of “new formulation” as “any change to the drug, provided that the new formulation contains at least one active ingredient in common with the initial brand name listed drug.”  We wrote a memorandum summarizing CMS’ regulation here.

In April 2022, Vanda Pharmaceuticals filed a complaint in the Maryland Federal District Court to challenge CMS’ definition on Administrative Procedure Act (APA) grounds.  We previously blogged on the district court’s decision last year.  In short, the Federal District Court for the District of Maryland granted summary judgment to CMS and rejected Vanda’s arguments that (1) a drug approved under a new NDA cannot be a line extension; (2) a line extension, like its predicate drug, must be an oral solid dosage form; (3) CMS’ definition exceeds the plain meaning of “line extension”; and (4) Congress intended to target only slight alterations of a drug, as evidenced by the sole example in the statute of “an extended-release formulation.”  Vanda Pharmaceuticals, Inc. v. CMS, Civ. No. MJM-22-977 (Dist. Md. 2023).

The Fourth Circuit has now affirmed the Maryland Federal District Court decision, finding that CMS’ definitions of “line extension” and “new formulation” were neither contrary to law nor arbitrary and capricious under the APA.  More specifically, the Fourth Circuit found that the agency’s definition of “line extension” is “clearly within the bounds of the statute” and “a perfectly sensible way to implement the regime set by the Medicaid statute.”  The Court also found “that a broad definition of new formulation is appropriate.”  With regard to whether both the initial brand name drug and the line extension must be an oral solid dosage form, the Court found that CMS’ interpretation that only the initial brand name listed drug must be an oral solid dosage form is the more persuasive.

As we discussed in our 2023 blog post, this decision has implications extending beyond the MDRP.  The 2022 Inflation Reduction Act (IRA) imposes inflation rebates for Medicare Part D drugs whose price increases outpace the rate of inflation and defines “line extension” in a manner that is virtually identical to the MDRP definition.  The IRA also directs CMS to establish a formula for determining the inflation rebate for line extensions consistent with the formula under the MDRP, and in February of last year, CMS did so by issuing guidance adopting the MDRP definition of a new formulation for purposes of Medicare Part D inflation rebate.  Therefore, the Fourth Circuit’s ruling will impact drug manufacturer rebates for line-extension drugs in both Medicaid and Medicare Part D.  As the Fourth Circuit itself observed, “Line-extension status makes a big difference to the federal purse.  It creates the prospect of larger inflation-based rebates, which make up an increasingly large portion of the total amount paid under the Medicaid Drug Rebate Program—more than half since 2012.”

The U.S. Department of Health and Human Services (HHS) recently published a White Paper on Policy Considerations to Prevent Drug Shortages and Mitigate Supply Chain Vulnerabilities in the United States—with input from several HHS stakeholders, including FDA, CMS, and the Administration for Strategic Preparedness and Response.  With the COVID-19 pandemic in the not-so-distant past, we trust that a recitation of the importance of a resilient supply chain is not needed here.  As noted in the White Paper and discussed in greater detail in the Building Resilient Supply Chains, Revitalizing American Manufacturing, and Fostering Broad Based Growth: 100-Day Reviews under Executive Order 14017, 52% of all FDA-registered finished dosage form manufacturing facilities and 73% of all FDA-registered API-manufacturing facilities were located outside the United States as of March 2021. For generic drug manufacturing facilities specifically, the numbers are 63% and 87%.

To address the underlying causes of shortages, the White Paper suggests that the creation (by Congress) of two programs that link inpatient hospital purchasing and payment decisions to supply chain resilience practices would better incentivize investments in mature manufacturing practices.  The proposed Manufacturing Resiliency Assessment Program (MRAP) would be managed as a public-private partnership and would assign resilience scores to manufacturers of generic drugs, “based on an assessment of manufacturer practices and past performance.”  MRAP would provide oversight of an accreditation body which would conduct assessments—paid for by the manufacturer—based on criteria developed by the MRAP.  HHS would then use MRAP scores in the proposed Hospital Resilient Supply Program (HRSP).  As described in the White Paper, HRSP “could establish demand incentives and/or penalties, facilitating hospital purchasing that prioritizes supply chain resilience, rather than the current structure which generally prioritizes cost alone.”  Specifically, HRSP could link Medicare payments and/or penalties to hospitals based on a scorecard which captures the hospitals progress in “adopting practices that promote supply chain resilience or prevent shortages,” such as inventory management and the inclusion of effective failure-to-supply clauses.

Putting aside the question of whether the implementation of any program that requires Congressional action is feasible in the current political climate, we think the underlying premise of the White Paper falls short in both scope and in its description of factors that contribute to drug shortages.

I.  Scope

Based on the title of the White Paper, one might reasonably assume that the policy considerations proposed apply to all potential drug shortages.  However, only in the “Key Highlights” section is it mentioned that the paper “focuses of generic sterile injectable medicines used in inpatient settings, given their importance to acute inpatient care, and their relative risk of supply disruptions.”  That sterile injectables may be more vulnerable to supply change disruptions is not a novel concept.  FDA previously analyzed 163 drugs that went into shortage in the 5-year period between 2013 and 2017; 63% (103) were sterile injectables and 67% (109) were drugs that have a generic version on the market.  In its report, Drug Shortages: Root Causes and Potential Solutions, FDA explains that the equipment needed to produce sterile injectables is highly specialized and expensive, meaning that in a shortage situation, production capacity cannot be substantially increased without taking the time and expense of procuring and qualifying new equipment.  The White Paper notes that of the 123 drugs in shortage in January 2024,  a quarter were first reported in shortage prior to 2020, with the oldest dating back to 2012, and shortages were experienced across therapeutic areas; analgesics/anesthetics (17%), anti-infective (12%), and cardiovascular (13%) products comprised 42% of shortages.  Unfortunately, the White Paper does not provide further analysis on the generic sterile injectables and instead refers back to FDA’s analysis from 2013-2017.  However, a cursory review of the current FDA Drug Shortages list shows that of the 115 drugs “currently in shortage,” 76 are injections.

In the White Paper, HHS recognizes that “these challenges affect other products, and therefore, the solutions described here may be applicable in other markets.” However, HHS does not explain how it has made that determination and seems to gloss over entirely the complexities specific to sterile injectable manufacturing.  In Section I.A, the focus of the paper turns back to “drug shortages” generally, but HHS acknowledges that “shortages of medical devices have also been an issue for many decades.”  HHS suggests that its proposed HRSP “could be expanded to the outpatient setting or to include medical devices.”  Similarly, the MRAP could assess the feasibility of metrics for “other medical products, including, medical devices.”  Again, there’s no discussion of why HHS thinks these initiatives could be applicable to medical devices generally given the significant supply chain differences between drugs and medical devices, and even within the larger category of medical devices.  For example, how would HRSP incentives/penalties apply to low-cost, high-volume medical devices (e.g., surgical masks, gloves) versus medical devices that represent large capital expenditures (e.g., surgical robots, MRIs)?

II.  What about government factors that cause drug shortages?

Section I.C of the White Paper states, accurately, that “factors that cause drug shortages are multi-faceted and involve many market participants.”  The White Paper briefly discusses both the manufacturing supply chain as well as the roles various intermediaries (e.g., pharmacy benefit managers (PBMs), group purchasing organizations (GPOs), wholesale distributors) play before a finished product ever makes it to a patient.  As described in the White Paper, the factors that cause drug shortages are all caused, in one way or another, by the various market participants themselves.  For example, over-reliance on a few suppliers or manufacturers leave the supply chain vulnerable to disruption, and market concentration among GPOs and PBMs may undermine price competition and limit access.

What the White Paper does not adequately address is whether there are any government-controlled factors that also cause drug shortages.  Two such factors come to mind: FDA inspections and DEA quotas.  The White Paper states that “FDA has resumed normal inspection operations and continues to prioritize inspections that were delayed due to COVID-19” but does acknowledge that inspections are still an area of significant challenge for FDA.  In 2022, the Government Accountability Office (GAO) reported that FDA needed to improve its foreign inspection program and that report prompted a hearing on Capitol Hill in February of this year where HPM Counsel John Claud offered testimony.  We recently summarized another GAO report which described challenges FDA continues to face with clinical research inspections.

The White Paper acknowledges that “there is little to no flexible manufacturing capacity” and notes that FDA’s shortage response can include “exercising temporary regulatory discretion to increase supply.”  However, the White Paper does not acknowledge the role that DEA plays.  Specifically, DEA establishes an aggregate production quota (APQ) for each class of controlled substance listed in schedule I and II, and for the list I chemicals ephedrine, pseudoephedrine, and phenylpropanolamine, which limits the amount of each substance that can be manufactured in a given year.   In addition, DEA apportions individual manufacturing quota to API manufacturers and procurement quotas to dosage form manufacturers, which also limits how much each company can manufacture.  While DEA does have the regulatory authority to adjust quotas, such actions are not immediate.  For example, DEA and FDA jointly acknowledged in an August 1, 2023 letter that there have been ongoing shortages of various stimulant medications (e.g., methylphenidate, dextroamphetamine).  On August 10, FDA requested that DEA increase the APQ and individual manufacturing quotas to address the shortage.  A month later, on September 14, a manufacturer requested that DEA increase their methylphenidate manufacturing quota.  Finally, on October 3, 2023, DEA published an increase to the methylphenidate APQ.  DEA later acknowledged in a November 1 letter that it is “actively making changes” to the quota allocation process in order to address these shortages.  As of April 2024, both methylphenidate hydrochloride and various amphetamine products are still on the FDA drug shortage list.  Moreover, DEA announced that for 2024 it would be assigning procurement quotas by quarter rather than for the calendar year.  We are aware that several manufacturers have been delayed in receiving their second quarter quota.

CDER’s Office of Pharmaceutical Quality (OPQ) issued its 2023 Annual Report last week, and it’s an upbeat assessment of the Office’s policy and outreach efforts. Last year, OPQ saved a more quantitative analysis of its efforts for the other yearly publication it put out, on the State of Pharmaceutical Quality. Again this year, the Annual Report that was released last week did not feature much in the way of specific quality issues. That said, there are certainly some important data to review.

This year’s report noted that CDER’s Drug Product Catalog contains over 140,000 entries, the same amount as OPQ listed in 2022. Readers also saw that that the Center’s manufacturing Site Catalog remains steady at more than 4,800 entries, the same number we found in the 2022 State of Pharmaceutical Quality report. Those numbers are the stars in the manufacturing universe that CDER uses to plot its regulatory course, so it’s of interest to see how they have remained consistent even if OPQ didn’t take the next step of connecting the points in those constellations.

OPQ also boasted that last year it performed quality assessments of more than 1,100 approved or tentatively approved applications. In a display of the competition within the generic industry that keeps margins low, this total included 118 new drug applications and 956 generic drug applications. OPQ also worked on 55 novel drug approvals for products with new molecules.

Drug shortages have been a scourge for FDA, both as they negatively affect consumers and FDA’s reputation. The report stated that OPQ performed 359 expedited quality assessments to address shortages. Unfortunately, it is also unencumbered by any explanation about what those expedited reviews looked like, or, for example, how OPQ coordinates with CDER’s Drug Shortage Staff. From that lack of detail, it would appear that FDA thinks of Good Manufacturing Practice (cGMP) compliance as a timeless and ecumenical pursuit, following the well-worn path laid out in its now-18 year old guidance.

The role of technology on quality was another feature. The report highlighted CDER’s Framework for Regulatory Advanced Manufacturing Evaluation Initiative and OPQ’s own Emerging Technology Program. It also noted that last year, FDA hosted a two-day public workshop and published a white paper on the regulatory framework for Artificial Intelligence in drug manufacturing, in addition to other efforts. Like many of us, OPQ seems intent on trying to keep up with how technology can/will impact pharmaceutical quality.

There was also a nod to something we blogged about last year, OPQ’s recent reorganization. Now complete, the Office thinks the re-org will allow it “to adapt to the changing pharmaceutical landscape by being more agile and efficient.” Under the new structure, quality is assessed without concern for the relevant premarket approval process. The new sub-offices are organized to review drugs by type, not by approval route. This strikes us as another signal that FDA sees the policies of cGMP as evergreen, and largely immune to even seismic technology shifts.

OPQ plays such a vital role in the cGMP and drug quality space, we’re always happy to read about its policy and outreach efforts. But here’s also hoping that we’ll see some more detailed data in an upcoming missive on the industry-wide state of quality.

Every year, federal agencies submit a budget request to Congress to fund various agency initiatives, and every year FDA includes a list of legislative proposals that it would like to see come out of Congress.  This year is no different, and in fact some of the requests on this year’s list are repeat offenders from last year’s.  And though FDA may not have gotten everything that it wanted last year, reviewing and reflecting on these lists of legislative proposals provides important insight for industry to see where FDA thinks it might need congressional assistance to “better support Agency efforts to protect American consumers and patients.”  Perhaps unsurprisingly given the extraordinary focus on drug pricing in the last decade, generic competition—FDA’s only real way to have an effect on drug pricing—tops this year’s list.

Under the heading “Facilitating Competition” are multiple initiatives designed to either hasten development of generic drugs or limit blockades to market.  In the first category, FDA asks Congress to amend the FDCA to require drug manufacturers to disclose full information about the name and quantity of inactive ingredients in product labeling and permit FDA to disclose to generic sponsors the names and amounts of such inactive ingredients.  This proposal is clearly intended to address difficulties in formulating generic drugs with the same quantity and quality of inactive ingredients as required by regulation for certain dosage forms.  “FDA believes this change would effectuate timelier and more cost-efficient generic drug development . . . .”  Additionally, FDA moves into the biologics world, seeking to facilitate follow-on competition in that market by asking Congress to do away with the line between interchangeable biosimilars and other biosimilars; eliminating that distinction would allow for substitution of biosimilars (rather than only interchangeable biosimilars) thereby eliminating an obstacle to follow-on biologic access.  Finally, FDA asks Congress to amend to FDCA § 505(j) to address the submission and review of drug-device combination product ANDAs, as well as drug products submitted in an ANDA that are used with devices.  While it is not in question that FDA has the authority to approve combination product ANDAs, FDA seeks amendments to clarify that FDA can request and review data for such applications, that certain differences between the device constituent parts of the reference listed drug (RLD) and the proposed generic are permissible, and that differences in labeling between the RLD and the proposed generic as a result of permissible differences in the device are also permissible.

In the second category—limiting blockades to marketing—are efforts to limit blocking exclusivities and induced infringement liability.  First, FDA proposes to amend three-year exclusivity such that exclusivity is awarded only where the new drug applicant is actually seeking exclusivity and where the data supporting exclusivity actually demonstrates the hypothesized effect of the drug; this approach would prevent information on new safety risks from blocking competition.  Second, FDA proposes to amend the 180-day forfeiture provisions to address exclusivity parking by adding a 75-day failure to market period triggered by resolution of patent litigation without a finding or infringement or invalidity if there is no settlement agreement limiting the ability to market.  If a settlement agreement does limit ability to market until a certain date, that date would trigger a 75-day failure to market period.  Finally, in response to the GSK and Teva litigation, FDA continues to ask for a legislative fix.  Specifically, FDA asks to add a “safe harbor” from patent infringement liability for applicants for generic applicants marketing with a “skinny label” due to Agency concern that induced infringement litigation threats will impact the “timely availability” of generic drugs.  We note though that the proposed “safe harbor” isn’t exactly a “safe harbor” that would alleviate concerns of allegations of induced infringement arising from skinny labels; instead, it would only limit the use of certain claims from evidence of induced infringement and thus may not have the intended effect.

In addition to those initiatives relating to generic competition, the FY25 Legislative Proposals is filled with requests for other legislative authority.  Of particular interest to this blogger, FDA includes several initiatives related to animal drugs.  Specifically, FDA seeks a “targeted statutory provision for FDA-regulated biologic products for animals” so that more of these products can become approved, as the Agency estimates that over 95% of such products are not approved right now.  FDA also asks to amend the FDC Act to require labeling updates for new safety information for animal drugs, to allow for REMS for animal drugs, to require postmarketing studies for animal drugs to assess known or potential risks, and to prevent diversion of animal drugs.  FDA also asks for recall authority over drugs—both human and animal—to remove violative drug products from market “more quickly”.  There are a significant number of additional initiatives the Agency requests with sections dedicated to “Enhancing Data, Information, and Postmarket Safety;” “Addressing Medical Product Shortages and Supply Resiliency;” “Modernizing Foods Authority;” and “Other.”  FDA has a lot of wants, and it has seized the opportunity to ask for what it wants, what it really really wants.