On November 16, 2017, FDA released a comprehensive policy framework for how the Agency intends to apply existing laws and regulations that govern regenerative medicine products, including human cells, tissues, and cellular and tissue-based products (HCT/Ps). The policy framework is set forth in a series of four guidance documents (2 final, 2 draft) that build upon the regulatory framework for these products, which was completed in 2005.  A guidance document cannot alter a regulation, but can clarify how FDA intends to enforce the regulation.

In a self-described balancing act, Commissioner Gottlieb notes that FDA hopes to foster new and innovative treatment options for patients, while creating a clearer regulatory framework that will allow for greater enforcement ability against those that fall outside of the framework (statement available here).  In addition, the policy framework also serves to implement regenerative medicine-related provisions of the 21^st Century Cures Act, including the Regenerative Medicine Advanced Therapy (RMAT) designation program (see previous coverage here).  Recall, under Section 3033 of the 21^st Century Cures Act, which added Section 506(g) to the Federal Food, Drug, and Cosmetic Act (FDC Act), a drug or biological product is eligible for RMAT designation if:

1. It meets the definition of a regenerative advanced therapy: “cell therapy, therapeutic tissue engineering products, human cell and tissue products, and combination products using any such therapies or products, except for those regulated solely under section 361 of the [PHS Act] and part 1271 of title 21, Code of Federal Regulations”;
2. The drug is intended to treat, modify, reverse, or cure a serious or life-threatening disease or condition; and
3. Preliminary clinical evidence indicates the drug has the potential to address an unmet medical need.

The effect of designation means that FDA must take actions to expedite development and review of the drug, including early interactions to discuss the potential for accelerated approval. In addition, a designated drug may be eligible for priority review or accelerated approval under current FDA regulatory standards, and if approved under accelerated approval, would be subject to a confirmatory study.

The final guidance documents, which were addressed in a previous accompanying blog post (here), are:

• Regulatory Considerations for Human Cell, Tissues, and Cellular and Tissue-Based Products: Minimal Manipulation and Homologous Use;
• Same Surgical Procedure Exception under 21 CFR 1271.15(b): Questions and Answers Regarding the Scope of the Exception.

The two new draft guidances, which are the subject of this blog post, are intended to aid in bringing innovative, safe, and effective products to patients as efficiently as possible:

• Expedited Programs for Regenerative Medicine Therapies for Serious Conditions (“Expedited Programs for RMAT”);
• Evaluation of Devices Used with Regenerative Medicine Advanced Therapies (“Devices Used with RMAT”).

Draft Guidance #1: Expedited Programs for Regenerative Medicine Therapies

The “Expedited Programs for RMAT” draft guidance (RMAT draft guidance) describes several established programs, including Fast Track designation, Breakthrough Therapy designation, accelerated approval, and priority review designation, all of which are detailed in the more generally applicable guidance document entitled “Expedited Programs for Serious Conditions – Drugs and Biologics,” (May 2014) (see previous coverage here) as well as the newly established RMAT designation.

This draft guidance does not change the meaning of established terms such as “serious disease or condition,” “unmet medical need,” “surrogate endpoint,” “intermediate clinical endpoint,” and “clinically significant endpoint,” which were defined in the May 2014 Expedited Programs guidance. This new draft guidance does, however, address how CBER will apply the qualifying criteria for these expedited programs to regenerative medicine therapies, largely through examples.

Definition of RMAT

The RMAT draft guidance notes that regenerative medicine therapies are defined in section 506(g)(8) of the FDC Act, as “including cell therapies, therapeutic tissue engineering products, human cell and tissue products, and combination products using any such therapies or products, except for those regulated solely under section 361 of the Public Health Service Act (PHS Act) (42 U.S.C. 264) and [21 C.F.R. Part 1271].” RMAT draft guidance at 2.  In this draft guidance, FDA interprets section 506(g) to apply to gene therapies, including genetically modified cells, if they lead to a durable modification of cells or tissues (this policy was first announced by Commissioner Gottlieb in August 2017 – see previous coverage here).  FDA also interprets section 506(g) to permit RMAT designation of a combination product (biologic-device, biologic-drug, or biologic-device-drug) when the biological product component provides the greatest contribution to the overall intended therapeutic effects of the product (i.e., the primary mode of action is conveyed by the biological product component).

RMAT Benefits & Qualifying Criteria: Borrowing & Building upon Concepts from other Expedited Programs

The RMAT draft guidance clearly sets out the benefits and requirements of the RMAT designation by comparing and contrasting it to other, more-established expedited programs. With regard to benefits of RMAT designation – that FDA must take actions to expedite development and review of the product – the draft guidance interprets these statutory benefits as equatable to the benefits of the Fast Track and Breakthrough Therapy designation programs, which consist of:

• Opportunities for frequent interactions with the review team;
• Intensive guidance on an efficient drug development program;
• Organizational commitment involving senior managers; and,
• Consideration for rolling review of the BLA.

Then, with regard to the qualifying criteria for RMAT designation, the RMAT draft guidance establishes a broader approach to what qualifies as “preliminary clinical evidence” than FDA set out in the May 2014 Expedited Programs guidance. In addition to accepting more traditional clinical trials as preliminary clinical evidence, the RMAT draft guidance explicitly allows for well-designed retrospective studies and clinical case series that provide data systematically by treating physicians.  In addition, the RMAT draft guidance distinguishes what level of evidence is needed from Breakthrough Therapy designation, noting that RMAT does not require evidence that indicates the drug may offer substantial improvement over available therapies, which is a higher evidentiary bar.  This evidentiary flexibility comes with a key qualification.  The RMAT draft guidance requires the evidence to be generated using the actual product that is planned for clinical development, and not a related product.

RMAT-Specific Accelerated Approval

The RMAT draft guidance sets out that programs with RMAT designation are eligible for Accelerated Approval based on either (a) “previously agreed-upon surrogate or intermediate clinical endpoints that are reasonably likely to predict long-term clinical benefit” or (b) “reliance upon data obtained from a meaningful number of sites, including through expansion to additional sites, as appropriate.” RMAT draft guidance at 9.  While (a) is the traditional standard for Accelerated Approval under Subpart E, (b) is new and specific to RMAT-designated products, and the RMAT draft guidance specifies that this will depend on “whether the evidence of effectiveness is likely to be affected by a site-specific or investigator-specific bias, such that any conclusions regarding the product’s effectiveness could not be reliably generalized to other sites.” Id. This type of Accelerated Approval would likely result in requirements for post-approval clinical evidence about the product through expansion to additional sites.”

The other RMAT-specific Accelerated Approval provision that the RMAT draft guidance implements is the ability for such products to satisfy post-approval requirements via:

• The submission of clinical evidence, clinical studies, patient registries, or other sources of real world evidence such as electronic health records;
• The collection of larger confirmatory data sets as agreed upon during product development; or
• Post-approval monitoring of all patients treated with such therapy prior to approval of the therapy.

RMAT draft guidance at 10.

Considerations in Clinical Trial Design

Moving beyond the formal expedited programs, the RMAT draft guidance, in recognition that many regenerative medicines are being developed to address unmet medical needs in patients with serious conditions, including rare diseases, mentions innovative clinical trial designs that can support a BLA. Specifically, the RMAT draft guidance states that CBER will consider clinical trials that incorporate adaptive designs, enrichment strategies, and/or novel endpoints.

While this has already been done in other areas such as oncology drug development, the draft guidance proposes that, given the limited number of affected individuals in rare diseases that can participate in clinical trials, that several different investigational products may be compared to each other and a common control in a single study.

When selecting endpoints for clinical development, the draft guidance encourages sponsors to obtain input from the affected patient communities about endpoints that might be clinically meaningful – a principle supported by FDA’s Patient-Focused Drug Development Initiative (see previous coverage here).  As an example of such a patient-centric endpoint, the draft guidance discusses how improvement in performance of tasks that require visual function might be more appropriate than traditional measures of visual impairment in conditions that lead to advanced visual impairment; this is an apparent call-out of the endpoint Spark Therapeutics developed for its gene therapy program (see previous coverage here).

GMP Manufacturing Compliance Appears to be Waived

The RMAT draft guidance suggests that clinical trial data can be shared buy multiple clinical sites utilizing a common protocol if any individual site intends to seek BLA approval. While noting that the sites would also need to share a common manufacturing protocol, the RMAT draft guidance fails to address or even mention whether it expects to obtain comparability data for products manufactured at different sites (as it would for a commercial BLA), or whether it expects the clinical sites to expend the very substantial resources that would be needed to assure compliance with Good Manufacturing Practices (GMPs).  While FDA is to be applauded for its efforts in being creative, the resulting regulatory paradigm cannot result in disparate treatment of parties seeking BLA approval.

Draft Guidance #2: Devices Used with RMATs

The “Devices Used with RMAT” draft guidance (Device Evaluation draft guidance) was developed to satisfy the requirement set out in Section 3034 of the 21st Century Cures Act that FDA issue guidance clarifying how FDA will evaluate devices used in the recovery, isolation, or delivery of regenerative medicines.  Accordingly, this guidance discusses what FDA will consider when evaluating the devices used with RMATs.

Applying the Medical Device Regulatory Framework

The Device Evaluation draft guidance largely summarizes the existing medical device regulatory framework, asserting that devices used with RMATs are subject to the same processes and standards. For example, according to the draft guidance, like any other device, FDA has no predetermined list of intended uses or specific attributes that would result in a device used with an RMAT to be classified as a Class III device.  Also, FDA intends to apply the same regulatory principles to the development of devices used with RMATs, including the applicability of the “least burdensome” principle and determination of premarket pathway (e.g., 510(k), de novo, PMA, HDE).

Combination Device-RMAT Products

The Device Evaluation draft guidance attempts to simplify and streamline the application of regulatory requirements for combination device and cell or tissue products. The document articulates FDA’s intent that devices to be used with a specific RMAT may, together with the RMAT, be considered to be a combination product and be evaluated under a BLA at CBER.  However, stand‑alone devices that can be used for the recovery or delivery of approved RMATs (e.g., surgical tools, syringes) may be evaluated independently using premarket submission pathways for devices.  And, as such, FDA commits to apply the least burdensome principle to determine the “minimum required information” necessary for marketing authorization of that device.

Finally, in instances where the RMAT and specified delivery devices are separately packaged but labeled for use together, the two products may comprise a combination product. Where the delivery device may be used with multiple similar RMATs, separate marketing applications for each product may be required, however FDA intends to similarly simplify and streamline the regulatory requirements by reducing redundancy in data requirements (e.g., use RMAT IND studies to support approval or clearance of the device).

Use of a Device with One or More Types of Cell-Based RMATs

Because cell-based RMATs are likely to differ with regard to characteristics that can impact the way the RMAT interacts with different device materials (and, therefore, potentially impact its safety and effectiveness), such as cell viability, differentiation potential, activation state, and ability to respond to stimuli after administration, the Device Evaluation draft guidance discusses factors to consider when a device can be used with only one particular type of cell-based RMAT versus more than one type. Factors include (a) physical characteristics of the RMAT (e.g., cell size and sensitivity to shearing forces) and (b) demonstrated performance and compatibility.

Similarly, if during development, a given RMAT is demonstrated to have characteristics and use requirements that allow it to be administered with a class or subset of delivery devices without compromising safety and effectiveness, the RMAT may be approved on its own with appropriate labeling for use with devices. The draft guidance anticipates this will become more common as experience is gained over time with a specific RMAT or class of RMATs in different use settings.

On November 16, 2017, FDA released four guidance documents that, together, the Agency described as a “comprehensive policy framework” for applying existing laws and regulations governing regenerative medicine products, including human cells, tissues, and cellular and tissue-based products (“HCT/Ps”).  The policy framework is set forth in a series of four guidance documents (two final, two draft) that build upon the regulatory framework for these products, which was completed in 2005.  A guidance document cannot alter a regulation, but can clarify how FDA intends to enforce the regulation.

In a statement from Commissioner Gottlieb (available here), FDA describes a balancing act in which it hopes to foster new and innovative treatment options for patients, while creating a clearer regulatory framework that will allow for greater enforcement ability against those that fall outside of the framework.

The two new draft guidance documents, which will be the subject of a future blog post, are intended to aid the effort to bring innovative, safe, and effective products to patients as efficiently as possible:

• Expedited Programs for Regenerative Medicine Therapies for Serious Conditions (“Expedited Programs for RMAT”).
• Evaluation of Devices Used with Regenerative Medicine Advanced Therapies (“Devices Used with RMAT”).

The two final guidance documents describe the Agency’s approach to regulating HCT/Ps:

• Regulatory Considerations for Human Cell, Tissues, and Cellular and Tissue-Based Products: Minimal Manipulation and Homologous Use—Guidance for Industry and Food and Drug Administration Staff (November 2017) (“Regulatory Considerations Guidance”).
• Same Surgical Procedure Exception under 21 CFR 1271.15(b): Questions and Answers Regarding the Scope of the Exception—Guidance for Industry (November 2017) (“SSP Guidance”).

FDA regulations at 21 C.F.R. Part 1271, previous draft guidance documents, and untitled letters establish the Agency’s approach to regulating HCT/Ps. In short, some HCT/Ps are exempt from premarket approval and are subject to regulation solely under section 361 of the Public Health Service Act (“PHS Act”) (so‑called “361 HCT/Ps”) whereas others require premarket approval (i.e., as a drug, device, or biologic) (so‑called “351 HCT/Ps”).  Both 361 HCT/Ps and 351 HCT/Ps are subject to FDA requirements (at Part 1271) for registration and listing, donor-eligibility, current good tissue practices, and other requirements intended to prevent transmission of communicable diseases.  Still others – those that are the subject of the “same surgical procedure” exception – are exempt from both premarket approval requirements and the requirements of Part 1271.  (This regulatory regime is outlined at the end of this blog post in a flow chart, which is one of the few new features of the final guidance documents).

The two final guidance documents largely reiterate FDA’s existing approach to regulating HCT/Ps, including the Agency’s interpretation of “minimal manipulation,” “homologous use,” and the “same surgical procedure” exception, and they provide additional examples to illustrate FDA’s interpretations.

Together these two guidance documents finalize and consolidate four draft guidance documents: “Same Surgical Procedure Exception under 21 CFR 1271.15(b): Questions and Answers Regarding the Scope of the Exception” (October 2014) (“Draft SSP Guidance”); “Minimal Manipulation of Human Cells, Tissues, and Cellular and Tissue-Based Products (HCT/Ps)” (December 2014); “Homologous Use of Human Cells, Tissues, and Cellular and Tissue-Based Products (HCT/Ps)” (October 2015); and “Human Cells, Tissues, and Cellular and Tissue-Based Products (HCT/Ps) from Adipose Tissue: Regulatory Considerations” (December 2014).  The guidance document “Minimal Manipulation of Structural Tissue Jurisdictional Update” (September 2006) is now considered superseded.

The Regulatory Considerations Guidance

This guidance document finalizes FDA’s standing approach with regard to two key factors in determining whether a product is exempt from premarket approval: i.e., whether the HCT/P is only “minimally manipulated” and whether it is intended for “homologous use.” It does not change the Agency’s fundamental approach to these issues, but it does provide a number of additional examples to illustrate FDA’s approach, and relatively minor clarifications that were not included in earlier draft guidance documents.

Enforcement Discretion

Interestingly, although FDA has not changed its basic approach to regulating HCT/Ps, the Agency intends to exercise enforcement discretion for 36 months with regard to 351 HCT/Ps requiring premarket approval. The guidance states that, in order to “give manufacturers time to determine if they need to submit an IND or marketing application in light of this guidance,” FDA intends to exercise enforcement discretion (i.e., the Agency may permit marketing without an approved marketing application) if the HCT/P “is intended for autologous use and its use does not raise reported safety concerns or potential significant safety concerns.”  Regulatory Considerations Guidance at 21.

FDA intends to focus enforcement actions on “products with higher risk,” taking into account factors such as non‑autologous (allogeneic) use, the route of administration, the site of administration, and whether the product is intended for homologous or non-homologous use. For example, HCT/Ps administered via intravenous injection or infusion, aerosol inhalation, intraocular injection, or injection or infusion into the central nervous system, will be prioritized over HCT/Ps administered by intradermal, subcutaneous, or intra-articular injection. Id. Similarly, HCT/Ps intended for non-homologous use, particularly those intended to treat serious or life-threatening conditions, “are more likely to raise significant safety concerns than HCT/Ps intended for homologous use . . . .” Id. at 21-22.

Clarifications and Examples

Some of the minor clarifications and examples provided in the guidance include:

• Earlier draft guidance explained that different “minimal manipulation” criteria apply to structural tissue versus cellular/nonstructural tissue. The final guidance states that although FDA “acknowledges that some manufacturers assert that an HCT/P has both a structural and cellular/nonstructural function[,] . . . under the regulations, HCT/Ps are considered either structural tissues or cells/nonstructural tissues.” Id. at 7.
• The final guidance provides additional examples to illustrate the application of the “minimal manipulation” criteria to structural tissue (e.g., grinding fascia lata; removal of cells from structural tissue; storage in a buffer solution; cryopreservation and storage in liquid nitrogen vapor). Id. at 10-12.
• The final guidance clarifies that, although secreted body fluids are, by regulation, generally not HCT/Ps, cells from secreted body fluids are. Id. at 14.
• FDA regulations define “homologous use,” in part, as the “same basic function or functions in the recipient as in the donor.” 21 C.F.R. § 1271.3(c). The final guidance explains that “By ‘basic’ we mean the function or functions that are commonly attributed to the HCT/P as it exists in the donor. Basic functions are well understood; it should not be necessary to perform laboratory, pre-clinical, or clinical studies to demonstrate a basic function or functions for the purpose of applying the HCT/P regulatory framework. Also, clinical effects of the HCT/P in the recipient that are not basic function or functions of the HCT/P in the donor would generally not be considered basic function or functions of the HCT/P for the purpose of applying the definition of homologous use.” Regulatory Considerations Guidance at 16-17.

The SSP Guidance

Under 21 C.F.R. § 1271.15(b), an establishment that “removes HCT/P’s from an individual and implants such HCT/P’s into the same individual during the same surgical procedure” is exempt from both the premarket approval requirements and the requirements of Part 1271. An October 2014 draft guidance (the Draft SSP Guidance) provided FDA’s interpretation of this “same surgical procedure” (“SSP”) exception.  The final SSP Guidance provides some additional examples to illustrate the policies outlined in the October 2014 draft guidance of the same name (and in other related guidance documents listed above).  With one exception, described in the third bullet below, the underlying policies of the October 2014 draft guidance have not changed.

• What types of procedures may an establishment perform on an HCT/P and still maintain the SSP exception? FDA previously stated that “rinsing, cleansing, or sizing, or certain manufacturing steps” to process the HCT/P after removal and before reimplantation are generally permitted because they “raise no additional risks of contamination and communicable disease transmission beyond that typically associated with surgery.” Draft SSP Guidance at 3.
• The final guidance reiterates this position and provides additional examples of procedures that may be performed on an HCT/P as part of the SSP: these include “rinsing and cleansing by centrifugation or filtration solely to remove debris (e.g., lipids, blood, bone particles).” SSP Guidance at 7. In addition, certain “sizing and shaping” procedures would also be permitted, such as “dilatation to size a vascular graft in coronary artery bypass graft surgery, cutting parathyroid tissue into pieces appropriately sized for reimplantation, and meshing of skin grafts to facilitate shaping and sizing to cover cutaneous burn wounds.” Id. at 8. On the other hand, an HCT/P that undergoes centrifugation or filtration intended for “cell isolation, cell expansion, cell activation, or enzymatic digestion” would not qualify for the SSP exception. Id. at 7.
• Are there any procedures consisting of more than a single operation that are considered the same surgical procedure? FDA previously stated that, generally, a procedure that consists of multiple operations generally would not qualify for the SSP exception. However, FDA acknowledged that there may be limited circumstances in which surgical procedures performed a number of days apart may be considered the same surgical procedure, provided that no processing or manufacturing activities (beyond rinsing, cleansing, sizing, and storing) are performed on the HCT/P in the interim (e.g., craniotomy with subsequent implantation of the bone flap to reverse the cranial defect; parathyroidectomy with subsequent implantation of a portion of the tissue to preserve parathyroid function). Draft SSP Guidance at 4.
• The final guidance reiterates this interpretation. It does not provide additional examples beyond the craniotomy, craniectomy, or parathyroidectomy examples described above. It does, however, state that preservation techniques applied to the HCT/P between procedures, including “disinfecting or cryopreserving,” would not render the cranial bone flap or parathyroid tissue ineligible for the SSP exception. SSP Guidance at 6.
• Can an establishment that ships an HCT/P to another establishment before reimplantation qualify for the SSP exception? FDA previously said no: “Shipping the HCT/P to another establishment for implantation [or for temporary storage] raises safety concerns, such as contamination and cross-contamination, beyond those typically associated with surgery.” Draft SSP Guidance at 4.
• Although the final guidance reiterates FDA’s position that the SSP exception “generally applies only to those establishments that both remove and implant the autologous HCT/P at the same establishment,” it also acknowledges that there may be exceptions:  

For craniotomy, craniectomy, or parathyroidectomy procedures, FDA recognizes that under limited circumstances, in order to accommodate the medical needs of an individual patient, there may be a medical necessity for the establishment that removed the autologous cranial bone flap or portions of parathyroid tissue to send the HCT/Ps to a different establishment for reimplantation in the patient. In such cases, provided precautions will be taken to protect the HCT/P from contamination and cross-contamination, FDA does not intend to object to the recovering establishment sending the autologous cranial bone flap or portions of parathyroid tissue to a different establishment for reimplantation in the patient, without registering and listing with the FDA. (SSP Guidance at 6.)

Regulatory Considerations Guidance at 5.

On February 19, 2015, FDA granted de novo authorization to 23andMe for genetic tests for autosomal recessive traits that are offered directly to consumers (DEN140044).  Nearly three years later, FDA has proposed a pathway that opens this avenue further.  In a statement on November 6 announcing this action, Commissioner Gottlieb declared, “FDA [is] seek[ing] . . . an efficient pathway to bring these tests to consumers, without sacrificing the assurances offered by FDA oversight.”

The Federal Register notice setting forth the special controls for this new class of devices was not unexpected. FDA’s granting of de novo authorization of the 23andMe test meant that special controls would be issued some day.  The surprise, perhaps, was that it took so long, especially since the proposed special controls so closely track the  types of data that 23andMe submitted.

One aspect of the proposal, though, bears special attention. Typically, after de novo authorization other applicants either need to submit 510(k)s for all subsequent devices in that class (e.g., as happened with Philips’ digital pathology assay [DEN160056]) or are exempt (e.g., as happened after Widex was granted de novo status for wireless hearing aids [DEN100025]).  This time, FDA proposed that a company offering a test would need to obtain a 510(k) for its first test, but then subsequent tests within the class would be exempt.  FDA has called this “a one-time FDA reviewed genetic health risk assessment.”  Thus, in deciding whether to invest in seeking an initial 510(k), companies should consider what other tests within the classification can be added later on without a new submission.

There may be some question as to whether a particular test does fall within the regulation. The definition is not as precisely worded as many other classification regulations: “qualitative in vitro molecular diagnostic system used for detecting variants in genomic deoxyribonucleic acid (DNA) isolated from human specimens that will provide information to users about their genetic risk of developing a disease to inform lifestyle choices and/or conversations with a health care professional . . . .”  This “squishy” reference to “lifestyle choices” and “conversations” is not typical in defining a device classification.

The proposal does not mention one of the most controversial regulatory topics in diagnostics (or devices): FDA’s authority to regulate laboratory developed tests (LDTs) (see our previous posts here and here).  Yet lurking in the background in this proposal is FDA’s view that it does have the power to regulate LDTs.  If it didn’t, then a laboratory could offer an LDT genetic test directly to consumers without FDA oversight.  FDA, though, has repeatedly stated that direct-to-consumer LDTs are not entitled to enforcement discretion.  In the past, FDA has been attacked for trying to regulate LDTs by guidance.  Here, FDA is proposing a regulation that establishes regulation of a type of LDT – direct to consumer genetic tests – albeit in an oblique fashion.

On its face, the regulation would be agnostic. It would apply to tests offered at a site regardless of whether it qualified as an LDT.  Nevertheless, the tests most likely to be subject to regulation under this new classification are LDTs, not genetic tests based on commercial assays.

For labs that decide to pursue this route for their LDTs, the proposal can offer some benefits. Tests that are covered by this regulation could be ordered directly by consumers without the need for any medical review.  That can save costs and reduce the administrative burden.  Also, FDA clearance would allow the tests to be sold in those states where direct-to-consumer LDTs are currently problematic.

Comments on the proposal are due January 8, 2018. While the proposal may seem innocuous on its face, potentially affected stakeholders should carefully think through the consequences and implications of this action, as well as whether they have concerns about the scope of the regulation or the proposed special controls.

On October 30, CDRH issued the Final Guidance “De Novo Classification Process (Evaluation of Automatic Class III Designation)” (the “De Novo Guidance”). This is a final version of the 2014 draft by the same name (see our earlier blog post here). On the same day, CDRH also issued the draft guidance “Acceptance Review for De Novo Classification Requests” (the “De Novo RTA Guidance”).   Subsequently, on November 21, FDA held a webinar regarding the guidances. During the webinar, FDA explained the key provisions of both guidances and emphasized that the De Novo RTA Draft Guidance is not yet in effect. FDA will be posting a transcript, audio recording and slides here.

The final De Novo guidance is virtually unchanged from its 2014 draft. One new addition of note – which the Agency also highlighted during last week’s webinar – has to do with what happens if there is more than one de novo submission pending for a new type of device. The final guidance indicates that if there is more than one de novo submission for the same type of device, CDRH will review both simultaneously. When the first submission is granted, the Agency will notify the sponsor of the second submission (the second sponsor). The second sponsor will have the opportunity to withdraw their de novo and then submit a 510(k) establishing substantial equivalence to the first de novo (appropriately referencing information in its original de novo). While the guidance says it does not anticipate such a situation will arise, it will be a difficult situation for the second sponsor because it will lose its significant de novo submission user fee (currently $93,229). Even though the second sponsor will be able to reference the data in the de novo application, marketing authorization will be delayed while a 510(k) submission is prepared and a new review clock is initiated.

The Agency raised a few additional interesting points regarding the De Novo Guidance during the webinar. First, CDRH clarified that unlike 510(k)s which are cleared and PMAs which are approved, de novo requests are “granted.” This may be an important promotional point for companies after their de novo is granted, and a helpful semantic distinction. Second, a webinar participant asked how to determine if a de novo or a PMA is the appropriate regulatory pathway. We expected the Agency to refer the caller to the 513(g) process, a response that we have had several clients receive. Instead, however, CDRH indicated that it is up to the company to determine if its product fits within the definitions of Class I, II, or III, and it will also depend on the company’s business strategy. While it was somewhat surprising to hear CDRH defer to the company’s judgment and preference regarding classification when it directly affects the regulatory pathway, we are certain FDA would provide guidance if requested through the appropriate pathway (e.g., the 513(g) process).

The draft De Novo RTA Guidance is also unremarkable. The draft guidance contains checklists and looks very similar to the 510(k) RTA. Like the 510(k) RTA process, the de novo administrative review will occur in the first 15 days after receipt of a submission. In addition, the draft guidance gives the CDRH reviewer discretion to determine if missing items can be addressed interactively instead of refusing a submission.

Unlike the 510(k) RTA checklist, the De Novo RTA Guidance contains two checklists: a high-level checklist of required items; and a more detailed checklist of recommended items. If the submission contains the items on the second checklist, the guidance recommends including a completed copy of the second checklist. There is some duplication between the two checklists, e.g., both lists include a classification summary. In addition, the second list appears to include information that one would expect to see in a de novo submission. For example, the second list includes labeling and full tests reports. These are items that are typically required in a premarket submission; they are not optional. According to the guidance, a de novo request should only be refused if items on the first checklist are missing. Because of the duplication and the appearance of apparently required items on the option list, we expect that it may be administratively difficult to implement the two-checklist approach.

CDRH is accepting comments on the draft guidance through December 29. Once a final version of the guidance is issued, according to the draft, there will be a 60-day delay on implementation meaning that de novo submissions received in the first 60 days after issuances of the final guidance will not be refused for failure to include all required items. This will be important for companies with de novo submissions in process of being drafted to allow them time to comply. Although the De Novo RTA Guidance is not yet final, sponsors would be wise to begin reviewing and operationalizing the checklists now to ensure that their submissions contain the appropriate content for review.

Sherman, set the Way-Back Machine.

A press release from the U.S. Department of Justice announced that the former Compliance Director of Pharmakon Pharmaceuticals, Inc. has pleaded guilty in Indiana to conspiring to defraud the United States government by lying about failed potency tests of drugs that the pharmacy had compounded. This brings back memories to me about another Pharmakon, in another part of the world.

But, first, the current news. Caprice Bearden was indicted earlier this year by the U.S. Attorney’s Office for the Southern District of Indiana for her conduct while Director of Compliance at a compounding pharmacy located in Noblesville, Indiana, owned by Pharmakon Pharmaceuticals, Inc. She pleaded guilty on November 21 to the most of the charges in the Indictment (Indictment). She admitted to a statement of facts stating that she was aware of serious super-potency of drugs including morphine sulfate and midazolam, although she told FDA investigators she was not aware, prior to reports to FDA about superpotency in later lots (Plea Agreement). According to the Indictment against her and pharmacy owner Paul Elmer, sterile drugs compounded at the pharmacy were distributed to hospitals, including a hospital where the drugs were used in a neonatal intensive care unit, and caused serious distress to at least one patient. Ms. Bearden’s sentencing is not yet scheduled. Mr. Elmer is scheduled to go to trial on April 16, 2018.

So why the obscure reference to a frequent saying by a minor character in the Bullwinkle and Rockie cartoon series (a reference probably lost on any readers under the age of 60)? Because years ago, in Tampa, Florida, our firm represented a drug manufacturing company named Pharmakon. The U.S. Food and Drug Administration (FDA) and the Department of Justice demanded that Pharmakon, and its owner Abelardo Acebo, sign a “Consent Decree” which included, characteristically, a grant of broad shutdown powers to FDA. If they refused to sign, FDA would file a lawsuit. Like very few other companies, Pharmakon refused the Consent Decree, and faced an injunction action brought in federal court. The government failed to win a Preliminary Injunction against Pharmakon, and the presiding judge appointed as a special master the expert who had testified on behalf off Pharmakon at the Preliminary Injunction hearing, to monitor Pharmakon and file regular reports with the Court. He did so. But about three years later, the final hearing on the injunction request was held, the circumstances had changed, and the judge ruled against Pharmakon, forcing it to shut down.

No connection is known to exist between the two Pharmakons, except in the synapses of this blogger.

Although the Drug Supply Chain Security Act of 2013 (DSCSA) required publication by 2015 of guidance addressing grandfathering of certain product identifier requirements for packages or homogeneous cases of finished dosage form prescription drugs, “its better late than never,” as the saying goes.  On Monday November 27th, FDA announced the availability of draft guidance titled, “Grandfathering Policy for Packages and Homogenous [SIC] Cases of Product Without a Product Identifier.” Comments on the proposed draft are due by January 26, 2018. As FDA states in its Federal Register Notice announcing the draft guidance, a critical part of the DSCSA (Section 582(a)(5)(A)) requires each package and homogeneous case of product in the supply chain to contain by a specific date a product identifier encoded with the product’s standard numerical identifier, lot number, and expiration date.  FDA’s draft guidance specifies whether and under what circumstances packages and homogeneous cases of product not labeled with an identifier will be exempt (“grandfathered”) from Section 582’s identifier requirement.

FDA states that this draft guidance must be read in conjunction with FDA’s previously issued draft guidance titled, “Product Identifier Requirements Under the Drug Supply Chain Security Act” (see our previous post here) where FDA announced, among other things, that it will exercise enforcement discretion for manufacturers that do not add a product identifier to each package and homogeneous case of product intended to be introduced in a transaction into commerce before November 27, 2018 (i.e., delaying the serialization deadline by one year).

The “scope” of the latest draft guidance is as follows: A package or homogeneous case of product “is in the ‘pharmaceutical distribution supply chain’ if it was packaged by the product’s manufacturer before November 27, 2018.”  (Emphasis added.)  Thus, a package or homogeneous case of a product that is not labeled with a product identifier “is eligible for an exemption under Section 582(a)(5)(A)” as described in the guidance ”only if the product’s manufacturer packaged the product before November 27, 2018.” (Emphasis added.)  There also must be documentation that the product was packaged by a manufacturer before November 27, 2018.  As an example, FDA states that if a package or homogeneous case not labeled with a product identifier is accompanied by transaction information (TI) or a transaction history (TH) indicating a sale before November 27, 2018, then a trading partner may “reasonably conclude” the product was “packaged” by the manufacturer before that date.  However, if TI or TH does not include a sale prior to November 27, 2018, absent other indications that the product may be suspect or illegitimate, then the transaction statement (TS) “is one indication that the product was in the pharmaceutical distribution supply chain before that date.”  One could wonder here whether “packaged” but “unsold” products qualify for the grandfathering exemption, and whether this will cause confusion for industry.

Concerning trading partner requirements under the grandfathering exemption, the draft guidance notes as follows:

Manufacturers, distributors, and dispensers are exempt from two requirements in Section 582 where there is documentation showing that the unserialized product was in the pharmaceutical distribution supply chain before November 27, 2018:

For Manufacturers:

• Where investigating an unserialized product to determine whether it is illegitimate, the manufacturer is exempt from the requirement to use the product identifier for verification. However it still must validate the TH and TI, and otherwise investigate pursuant to Section 582(b)(4)(A)(i)(H).
• In circumstances were the authorized trading partner in possession of the product requests verification from the manufacturer, the manufacturer is exempt from verification using the product identifier, but still must follow the other requirements in Section 582(b)(4)(C) (i.e., advise concerning whether the product is indeed suspect or illegitimate).

For Wholesale Distributors:

• Wholesale distributors are exempt from Section 582(c)(2), which requires they only engage transactions involving serialized product after November 27, 2019.
• Wholesale distributors shall not be required to verify product using the product identifier beginning November 27, 2019, but they must validate applicable TH, TI and TS in their possession to determine whether the product is illegitimate.

For Dispensers:

• Dispensers are exempt from Section 582(d)(2), which requires they only engage transactions involving serialized product after November 27, 2020.
• Wholesale distributors shall not be required to verify product using the product identifier beginning November 27, 2020, but they must validate applicable TH, TI and TS in their possession to determine whether the product is illegitimate.

For Repackagers:

The grandfathering exemption applies to repackagers, with certain limitations:

• Repackagers are partially exempt when they receive unserialized product after November 27, 2018, if they accept product without a product identifier after that date. However, if the repackager transfers ownership of a product without an identifier after November 27, 2018, it must add a product identifier to the package or homogeneous case.
• Like other trading partners mentioned above, repackagers will not be required to verify a product using the product identifier (if the product does not have one) after November 27, 2018, but it must take other steps outlined in the statute to otherwise investigate whether the product is illegitimate, including verifying TH and TI in its possession.
• If a repackager initially repackaged and sold unserialized product prior to November 27, 2018, it is exempted from the requirement that, upon request, it verify the product using the product identifier, but it must still follow other relevant statutory requirements.

Importantly, the draft guidance states that trading partners may engage in transactions involving grandfathered products until product expiry. FDA states that, although there is no “sunset” date for the grandfathering exemption, it expects few unserialized products  to remain  in the supply chain by November 27, 2023.

Lastly, concerning saleable returned packages and homogeneous cases of product (i.e., trading partners’ accepting returns of and redistribution of product), for returns without product identifiers after November 27, 2018, manufacturers, distributors and repackagers are exempt from the requirement to verify the product identifier.  Manufacturers are exempted from the requirement to add an identifier before redistribution.  Repackagers are exempted from the requirement so long as they initially repackaged and sold the product without an identifier before November 27, 2018.

FDA makes clear that unlike the guidance on Product Identifier Requirements, above, where FDA is exercising enforcement discretion, in this draft guidance, eligible product is “grandfathered” or exempted from certain statutory requirements.

The recently-enacted Food and Drug Administration Reauthorization Act (“FDARA”) includes the Medical Device User Fee Amendments of 2017 (“MDUFA IV”) (see our summary here).  This new law affects multiple aspects of the device review process.  MDUFA IV supplements FDA’s funding of device regulation, with the goal of increasing the speed and efficiency of the Agency’s review of new devices, as well as improving the safety and effectiveness of marketed devices.  In addition to modifying the user fees, MDUFA IV broadens the scope of submission subject to user fees and performance goals.

Hyman, Phelps & McNamara, P.C.’s Jeffrey N. Gibbs will be moderating the Food and Drug Law Institute’s (“FDLI’s”) November 30, 2017 webinar, titled “MDUFA IV and Related CDRH Guidance Documents: Impacts on Industry.”  Webinar panelists will discuss relevant aspects of FDARA and the MDUFA IV Commitment Letter, highlight major changes to the program, and discuss the effects on the device industry, including the issuance of substantive key new guidance documents, such as when new 510(k)s must be submitted.

Additional information on the FDLI webinar, including registration information, is available on FDLI’s website here.

Last week FDA formally announced yet another transparency initiative – this time, it’s the inclusion of patent submission dates in the Orange Book!  (FDA informally announced the change a couple of weeks ago with a note in the Orange Book stating: “Effective November 21, 2017, the Orange Book search results and drug listings will display patent submission dates where available.”) In accordance with FDA’s October 2016 final rule implementing portions of the 2003 Medicare Modernization Act (“MMA”), FDA has decided to publish this information in the Orange Book prospectively.  (That being said, FDA began patent submission date data collection in 2013, and the newly updated Orange Book includes patent submission dates since then.) According to FDA’s press release announcing the change, the data are intended to “help generic manufacturers determine the earliest date when they may be able to market new generic medicines.”

This is a big – and important – change to the Orange Book.  Now applicants will have a much clearer picture on timely listed patents and whether listed patents indeed require certification. Knowing the submission date will also help clarify whether a listed patent will trigger a 30-month patent litigation stay, otherwise delay approval of a pending application, or require a carve-out.

Previously, patent submission date information was available only by contacting the Orange Book Staff.  This made it difficult for generic companies to determine if a patent was late-listed, relisted, or properly listed, and therefore difficult to know whether an ANDA applicant needed to include a patent certification or needed to update an application with an amended certification.  All this information should be a lot clearer with this development.  Hopefully, this will streamline the process for generic drug manufacturers and cut down on some work for the Orange Book Staff.

Like any other corrections to the Orange Book, NDA holders should contact the Orange Book staff with any correction requests (with justification).

As noted, this new information is only published on a prospective basis, and going back to 2013 when FDA began collecting patent submission date information.  That means there are about 4,000 patent records for which submission dates are available and that are now published in the Orange Book. For the remaining thousands of patents without a published patent record, interested parties will still have to reach out to FDA for patent submission information.

The Association for Accessible Medicines (“AAM”) recently submitted extensive comments to FDA in response to the Agency’s June 2017 Federal Register Notice on “Administering the Hatch-Waxman Amendments: Ensuring a Balance Between Innovation and Access.” Among AAM’s litany of suggested changes and improvements is a request that FDA update the Orange Book with more comprehensive patent information:

Knowing whether patent information is timely submitted to FDA for Orange Book listing is information critical to ANDA applicants. For example, a company with a pending ANDA is not required to certify to new patent information listed in the Orange Book if such patent information is listed more than 30 days after patent issuance, or more than 30 days after a relevant approval under an NDA making a previously issued patent listable.

FDA should amend the Orange Book to include a new column in the “Patent and Exclusivity List” that identifies the date on which a particular patent was considered listed in the Orange Book. Supplying such information in a readily accessible document would avoid companies and their representatives having to send multiple requests to FDA to supply such information, and should immediately clarify for ANDA applicants whether a patent is timely listed and must be addressed in a patent certification.

With FDA’s recent announcement on Orange Book patent submission date information, that’s one item FDA and AAM can check off the list of improvements.

On October 30, CDRH finalized the guidance entitled, “Manufacturers Sharing Patient-Specific Information From Medical Devices With Patients Upon Request”.  This is the final version of the guidance, “Dissemination of Patient-Specific Information from Devices by Device Manufacturers” issued in June 2016 (see our blog post on the draft here.)

We do not typically comment on guidance name changes from draft to final, but in this case the addition of “Upon Request” to the final guidance name marks a significant change from the draft to final guidance. The draft guidance contemplated prospective, unrequested dissemination of patient-specific information from medical devices.  The final guidance, however, is limited to providing such information in response to a “request.”  The guidance does not explain or define a request other than to say that a request could be directed to a patient’s healthcare provider or a device manufacturer.

The draft guidance was significant precisely because it allowed device manufacturers to share patient-specific data, including interpretive information, directly with patients without the communication being considered labeling or requiring a new premarket clearance or approval. The more limited scope of the guidance certainly tempers the importance of the guidance if providing data upon request will have a much more limited impact.  The guidance highlights that patients are taking greater interest in and control of their health.  However, patients are likely to request certain information only if they know of its availability.  The guidance is silent as to whether a patient’s request can be solicited or not.  For example, would this guidance still apply if a manufacturer posts on its website that certain information from its device can be shared upon request?  Without specific restriction in the guidance, it appears the answer would be yes, unless FDA viewed this as improperly soliciting an unsolicited request.

In the draft guidance, the flow of information was from a device manufacturer to a patient directly. The guidance indicates that often times patient-specific information is accompanied by other explanatory text.  If a healthcare provider could also be disseminating patient-specific information, it may be appropriate for device manufacturers to have a standard template for such communication.  However, the guidance is silent on this point.

The definition of “patient-specific information” is relatively unchanged from the draft to final guidance. However, notably the final definition excludes the statement that the device information be “consistent with the intended use of the medical device.”  The final guidance defines patient-specific information as:

information unique to an individual patient or unique to that patient’s treatment or diagnosis that has been recorded, stored, processed, retrieved, and/or derived from a legally marketed medical device. This information may include, but is not limited to, recorded patient data, device usage/output statistics, healthcare provider inputs, incidence of alarms, and/or records of device malfunctions or failures.

Like the draft guidance, the final states that interpretive information should be limited to “interpretations of data normally reported by the device to the patient or the patient’s healthcare provider.” To illustrate this point, the final guidance provides the following example as falling outside the scope of this guidance:  “results of individual component tests for specific analytes that comprise or are utilized in a cleared assay but have not been individually approved or cleared to test for those specific analytes.”  Thus, even though the “consistent with the intended use of the medical device” has been removed from the final definition, the remainder of the information continues to suggest that any patient-specific information provided should still be consistent with the intended use.

The final guidance, like the draft, emphasizes the need for providing comprehensive and contemporaneous information to patients, and manufacturers sharing such information should consider the content and context of the dissemination when responding to requests. The final guidance, interestingly, provides less guidance on these points than the draft.  We expect that manufacturers seeking to provide patient-specific information will still have a lot of questions that are unanswered by this guidance before they start sharing information.

The Food and Drug Law Institute’s (“FDLI”) Enforcement, Litigation, and Compliance Conference is just a few weeks away, and spaces are going fast!  The two-day conference will be held on December 6-7, 2017, in Washington, D.C.  Hear from new government officials, including Rebecca Wood, the new Chief Counsel for FDA, and Ethan Davis, the newly appointed Deputy Assistant Attorney General, Consumer Protection Branch, US Department of Justice.

Attendees will:

• Explore the latest enforcement action trends in food, drugs, biologics, medical devices, and tobacco
• Gain practical tips and best practices for responding to enforcement action by FDA or other government agencies
• Learn how to comply with new and upcoming FDA rules and regulations
• Hear from FDA’s Center Compliance Directors on priorities for 2018 and from ORA on the status of Program Alignment.

Hyman, Phelps & McNamara, P.C.’s Anne K. Walsh will present on enforcement issues throughout the supply chain.  View the full agenda at here and register using the discount code, save10.

The American Conference Institute’s Legal, Regulatory, & Compliance Forum on Controlled Substances is scheduled to take place in Washington, D.C. from January 29-31, 2018.

Esteemed, top-notch faculty speaking at the conference include current and former officials from the DEA and FDA, representatives from State Attorney General and U.S. Attorney Offices, as well as high-level in-house executives, and top outside counsel. Conference speakers will provide their insights into the most pressing topics affecting the space such as:

• Reassessing your Responsibilities in Light of the Changing Scope of Suspicious Order Monitoring Requirements
• Evolution of Abuse-Deterrent Opioid Drug Products
• Understanding and Comparing State Prescription Drug Monitoring Programs
• Diving into the State, County, and City Opioid-Related Investigations

Hyman, Phelps & McNamara, P.C.’s John A. Gilbert, Jr. will be speaking at a session titled “Overcoming Challenges for Schedule III Opioids and Non-Opioid Products,” and will be moderating a panel discussion, titled “Politics and Policy of Controlled Substances in View of the Opioid Overdose Crisis.”

FDA Law Blog is a conference media partner. As such, we can offer our readers a special 10% discount. The discount code is: P10-999-FDAB18. You can access the conference brochure and sign up for the event here. We look forward to seeing you at the conference.

On November 14, 2017, the USDA Agricultural Marketing Service (AMS) announced that it will further delay and reconsider the Organic Livestock and Poultry Practices (OLPP) regulations.  This is not the first delay of the effective date for the OLPP regulations.

The OLPP final rule amends the organic livestock and poultry production requirements of the organic regulations by adding provisions for (1) livestock handling and transport for slaughter; (2) avian living conditions; and (3) expanding and clarifying existing requirements covering livestock care and production practices and mammalian living conditions. The final rule was issued on January 19, 2017, in the last 24 hours of the Obama administration. The effective date for the rule was March 20, 2017.  However, in March, consistent with the memorandum “Regulatory Freeze Pending Review,” AMS delayed the effective date by 60 days.

Next, on May 10, 2017, nine days before the new effective date, AMS announced a further delay of the effective date; this time by six months, until November 14, 2017, because “significant policy and legal issues addressed within the final rule warranted further review by USDA.”  Concurrently, AMS issued a proposed rule requesting comments on the course of action for the final rule.. AMS asked comments on four possible options:

1. Let the rule become effective on November 14, 2017.
2. Suspend the rule indefinitely to allow time to consider whether to implement, modify or withdraw the final rule.
3. Delay the effective date of the rule further, beyond the effective date of November 14, 2017.
4. Withdraw the rule.

AMS received more than 47,000 comments. More than 40,000 comments (34,600 of which apparently were submitted as form letters) selected “Option 1: Implement,” 28 comments supported “Option 4: Withdraw,” some comments supported “Option 2: Suspend”; and only one comment selected “Option 3: Delay.” In light of these results, the announcement of another six months delay is somewhat surprising.

So why did AMS decide to delay the effective date yet again? According to the announcement in the Federal Register, AMS has concluded that “important questions regarding [its] statutory authority to promulgate the OLPP rule and the likely costs and benefits of [the] rule” need to be more fully assessed. AMS now questions whether it has the authority, under the Organic Food Production Act (OFPA), to issue regulations “reflecting a stand-alone concern for animal welfare.” It asserts that it has concluded that “OFPA’s reference to additional regulatory standards ‘for the care’ of organically produced livestock is limited to health care practices.” In addition, AMS is uncertain that the OLPP is consistent “with USDA regulatory policy principles . . . . because the requirements in [the] rule may not represent the most innovative and least burdensome tools for achieving regulatory ends.” AMS also is concerned that due to an error in the calculation of the benefits, it may have overestimated the benefits of the final rule. In light of these questions and uncertainties, AMS does not want to proceed with the implementation of the rule. Instead, a delay to allow for careful reconsideration is warranted.

Presumably, AMS will issue a proposed rule for comments on the revised cost benefit analysis and AMS’s interpretation of its (limited) authority under the OFPA in the near future.

Meanwhile, a September 2017 lawsuit by the Organic Trade Association challenging AMS’s repeated delays of the effective date as violations of the Administrative Procedures Act and the OFPA remains pending. As a result of the delay of the effective date, that proceeding also is delayed.

If you happened to log on to the FDA Law Blog or the Hyman, Phelps & McNamara, P.C. (“HPM”) websites over this past weekend, then you probably noticed some big changes. We’ve totally overhauled and upgraded the blog and the HPM websites to bring them into modern times and to better reflect our FDA expertise and the creative personality of HPM.  In fact, our new firm tagline is “Expertise in all things FDA.”

As for the FDA Law Blog, after celebrating 10 years of blogging earlier this year (see our previous post here), and during which 10 years we didn’t really invest much time and resources into making things “pretty,” we thought it was time to change things up.  After all, as our new blog tagline states, the FDA Law Blog is “where experts go to learn about the FDA.”  (And, as some folks from FDA have told us over the years, the FDA Law Blog is where FDAers go to learn about FDA.)  So we changed blogging platforms to better integrate the blog with the HPM website.  (Don’t worry!  All of our blogging history – about 3,250 posts – and popular trackers, such as the FDA Citizen Petition and 180-Day Exclusivity Trackers, are available on the new FDA Law Blog website.)  Now we have a cool new look, as well as a new FDA Law Blog logo that’s pretty neat-o!

We hope folks like the changes we’ve made to the FDA Law Blog. There will be other modifications and additions down the road.  As for the new HPM website, we urge you to check it out.  In addition to being a professional and informative website, it has a fun, tongue-in-cheek element to it that really says a lot about the unique personality of HPM and the depth of our expertise.  Enjoy.

Small business owners and managers of chain restaurants subject to FDA’s menu labeling rule remain confused as to the criminality of adding an extra dollop of ketchup to a hamburger. One thing is now clear — the only way to stop FDA’s years of wasteful dithering on menu labeling is for Congress to intervene.

Last week, FDA issued another in a string of guidance documents, and again failed to explain or simplify the hopelessly complex regulations aimed at requiring the disclosure of calories on menus in chain restaurants. The tortuous and bizarre history of FDA’s efforts to interpret several pages of statutory text intended to set a flexible national standard for calorie disclosure, which the restaurant industry favors, has just become more tortuous and bizarre with FDA’s latest effort to explain a needlessly inflexible regulation. We have posted regularly on FDA’s menu labeling rule and guidance documents (see, e.g., here and here).

The most entertaining (or depressing, depending on your point of view) aspect of FDA’s latest draft guidance is the agency’s attempt to calm those who justifiably fear federal prosecution for inadvertently exposing consumers to a few extra calories. When FDA issued its final menu labeling regulation in 2014, FDA required that small business owners and/or managers certify that the calorie information they submit to FDA is “true and accurate.” Because the Federal Food, Drug, and Cosmetic Act is a strict liability criminal statute, the submission of a certification that is not “true and accurate,” even if the small business owner or manager believed it to be so, is a prosecutable criminal offense potentially subjecting the individual to fines and prison. This is a highly questionable penalty for the inadvertent failure to certify to an accurate calorie count on a slice of pizza or a piece of apple pie.

The absurdity of the situation has led members of Congress and others to object, and now FDA has attempted to convince us of its good intentions in the latest menu labeling draft guidance. FDA explains that

our goal is to ensure compliance among covered establishments in a cooperative manner, and we do not intend to penalize or recommend the use of criminal penalties for minor violations. For example, we would consider examples such as the following to be minor violations:

• Inadvertently missing a calorie declaration for a standard menu item on a buffet when other items are labeled;
• Minor discrepancies in the type size/color contrast of calorie declarations, provided that they are readable;
• Minimal variations or inadvertent error that would only minimally impact the calorie declaration or other nutrition information, such as adding extra slices of pepperoni on a pizza or adding an extra dollop of ketchup on a hamburger when not typically added; or
• Not rounding your calorie declaration correctly in accordance with the menu labeling rule.

Guidance Q&A 6.2.

These examples beg the following questions: What if I miss two calorie declarations on a buffet, or miss one and the other items are incorrectly labeled? What if there are type size discrepancies and the numbers are not readable by customers with bad eyesight? What if I add two dollops of ketchup? What if I routinely add one extra dollop so that dollop is deemed by FDA to be “typically added”? Will these violations be criminally prosecuted? OK, ridiculous, right? Well, no, not if you are the target. That FDA felt the need to explain that one dollop ketchup “violations” would not be pursued as crimes as long as they are not routine violations only further illustrates the serious deficiencies and overreach of FDA’s regulation.

And, as the Wall Street Journal pointed out on Monday (here), there is much more that is wrong with FDA’s menu labeling effort. The most profound is FDA’s misinterpretation of a statute that was intended to provide a flexible framework, given the thousands of different types of businesses that the law covers, by which to informatively disclose calories to consumers. FDA has turned this flexibility on its head by over broadly interpreting the term “menu” to include coupons and other marketing materials, even though the calorie information is accessible to consumers in other formats, and by preventing the substitution of more efficient computer and internet-based technological solutions to replace expensive printed material. The latest guidance ostensibly was meant to resolve these key issues, but it fell far short of that goal. In fact, the latest FDA effort causes even more confusion and unpredictability by creating a new “enticement” test that appears to turn additional marketing materials into “menus.” And FDA purports to provide flexibility by allowing restaurants to declare calories via in-store tablets and electronic kiosks; but this is nothing new and is hardly flexible – if a restaurant that declares calories via tablet or kiosk also has a traditional menu board, the menu board must also declare calories.

The most significant problems with FDA’s current regulation have not been and cannot be fixed by guidance, as “non-binding” guidance cannot change requirements that are set through regulation. Unless Congress finally turns its attention to the Common Sense Nutrition Disclosure Act, a bill that would lead FDA down the right path, small businesses will not only be forced to waste many more millions of dollars on useless compliance measures, they will be left wondering whether even their well-intended efforts might be subject to arbitrary federal prosecution.

You may be a doctor, dentist, veterinarian, pharmacy, wholesale distributor, or manufacturer, and you just received an Order to Show Cause from the Drug Enforcement Administration (DEA). An Order to Show Cause can have a significant impact on your ability to handle controlled substances and, ultimately, to practice medicine or continue business operations. An Order to Show Cause must be taken seriously and requires a prompt response. This post summarizes DEA’s Order to Show Cause process, as well as highlights some important deadlines that you must meet to preserve your rights.

What Is an Order to Show Cause?

An Order to Show Cause is DEA’s official initiation of an administrative proceeding to revoke or suspend an existing DEA registration or deny an application for a DEA registration. By law, DEA must provide you with notice and an opportunity for a hearing before it can take away your registration (or deny your application), so DEA will issue an Order to Show Cause, which explains the legal grounds for revoking or denying a registration and informs you of your right to challenge DEA’s decision.

What Are Your Options When You Receive an Order to Show Cause?

You have several options. The first is to request a hearing before one of DEA’s administrative law judges (ALJs). To preserve your right to a hearing, you must file a request for a hearing with DEA’s Office of Administrative Law Judges within thirty (30) days of service of the Order to Show Cause. A second option is to waive your right to a hearing and simultaneously file a written position statement, again within thirty (30) days of service of the Order to Show Cause. A third option is to ignore the Order to Show Cause, in which case DEA will request a final order based only on DEA’s evidence. Which option is best for you is a decision that is best made after consulting with experienced counsel.

What Happens If You Request a Hearing?

A timely request for a hearing places your case on the docket of one of the ALJs. The ALJ will issue an order for prehearing statements and schedule a prehearing conference, which is typically conducted telephonically. At the prehearing conference, the ALJ will set a date and location for the hearing.

The hearing closely resembles a trial, but the ALJ (rather than a jury) is the trier of fact. Both the government (represented by DEA counsel) and you will have an opportunity to present your case through witness testimony and written evidence. Hearings can range from half a day to several weeks, depending on the complexity of the case. After the hearing, both parties may submit post-hearing briefs, and the ALJ will issue a recommended decision. The parties may file exceptions to the decision if they believe the ALJ made a factual or legal error in the decision. The recommended decision is submitted to the DEA Administrator who reviews the decision, rules on the exceptions, and issues a final order regarding your registration, either adopting or rejecting the ALJ’s recommended decision.

Not all cases end up going to hearing, however, as DEA is often willing to reach a settlement resolution.

What Happens If You Waive Your Right to a Hearing?

If you choose to forgo a hearing, the government will forward your case with its evidence (along with any timely submitted position statement) to the Administrator. The Administrator will then issue a final order based on the review of the evidence and written statements provided.

What Is an Immediate Suspension Order?

An Immediate Suspension Order is the exception to the rule that DEA will not revoke or suspend an existing DEA registration prior to a hearing. An Immediate Suspension Order allows DEA to suspend your registration upon a determination that there is an “imminent danger to the public health and safety.” An Immediate Suspension Order is served along with an Order to Show Cause, allowing you to challenge DEA’s determination that your registration should be revoked, but it takes away your ability to handle controlled substances while your case is pending. As a result, an Immediate Suspension Order can significantly (and immediately) affect your ability to practice medicine or operate your business.

What Is a Corrective Action Plan?

A recent amendment to the law (called the Ensuring Patient Access and Effective Drug Enforcement Act of 2016) now allows recipients of an Order to Show Cause (except those also receiving an Immediate Suspension Order) to submit a Corrective Action Plan. A Corrective Action Plan provides an opportunity for the registrant to demonstrate remedial actions contemplated or taken, and requests DEA to discontinue the Order to Show Cause proceedings. What should be discussed or admitted in a Corrective Action Plan, as well when it should be submitted (the law is unclear), is a decision that likely should be made after seeking advice from an experienced attorney.

Are You Allowed to Have an Attorney Represent You?

You are permitted to proceed on your own (i.e., pro se) or to have an attorney represent you. Because of the complex nature of these proceedings and the stakes involved, representation by a law firm experienced in handling DEA hearings may be a necessity.

What Resources Are Available?

DEA’s Office of Administrative Law Judges website provides some helpful resources, including templates of various filings. We also regularly blog on DEA administrative cases and procedures (see here), and our HPM attorneys have authored articles (see here and here) and spoken (see here) on the hearing process.