Puerto Rico has been a hub of pharmaceutical manufacturing for some time, but in the aftermath of hurricane Maria (and Irma), that has changed – at least for now. Without power in most of the island, but more importantly, without employees who can get to work on a regular schedule, much of Puerto Rico’s pharmaceutical manufacturing has been idled, and is likely to continue that way for some time.

According to the Bureau of Labor Statistics, pharmaceutical manufacturing represented 72% of Puerto Rico’s exports in 2016 ($14.5 billion), and the sector accounted for 25% of the total of U.S. pharmaceutical exports to the rest of the world. By comparison, California was next in line, but had only half as much in the way of pharmaceutical exports.

Puerto Rico has more than 50 registered pharmaceutical facilities on the island, producing sixteen of the top twenty selling drugs in United States, and seven of the top ten selling drugs globally.

Its status as hub of pharmaceutical and biotech manufacturing has its origins in its tax favored status under the Internal Revenue Code, which, for decades, incentivized U.S. based manufacturers to send profits from the island’s plants to their stateside parent companies without having to pay federal taxes. In 1996, President Clinton signed into law an amendment to the Internal Revenue Code, phasing it out over ten years.  Several plants have shuttered since the phase out of this tax favored status, and with the devastation caused by hurricane Maria, analysts worry that several more will never reopen for business.

Recognizing the impact that the shut-down of a large segment of the U.S. pharmaceutical industry can have on the supply of drugs to consumers (and hence on public health), FDA Commissioner Gottlieb has issued two statements (here and here) in recent days, emphasizing the importance of Puerto Rico to the continued success of the U.S. pharmaceutical industry (as well as on the importance of the pharmaceutical industry to Puerto Rico’s economic health), and on the efforts that are being made by FDA to identify and bring the island’s pharmaceutical resources back into operation.

Leading up to the storm, our team of shortage experts worked to identify and coordinate with companies that have manufacturing facilities in Puerto Rico to assess the potential impacts on their facilities to avoid—whenever possible—shortages of critical medical products. During and following the storm, we have worked with pharmaceutical and medical device firms to figure out whether manufacturing facilities were damaged, or if they were still operational and could continue to function on generator power. Since Friday, we have undertaken swift and extensive efforts to prevent or limit the loss or shortage of multiple drugs critical to American patients due to the challenges related to refrigeration, storage and transportation. The agency has been working closely – throughout the weekend and into today – to relocate products in coordination with our federal and local government colleagues and pharmaceutical companies.

The Commissioner also stated that he has directed the creation of a hurricane shortages task force that will be asked to identify potential issues and creative solutions to impending drug shortages, as the agency is aware of several other situations where there may be critical shortages “…if we don’t find a path for removal [of the drug products from Puerto Rico] or ways to get production back up and running.”

For all these reasons, we all hope that Puerto Rico’s recovery is swift and comprehensive.

Hyman, Phelps & McNamara, P.C.’s Mark I. Schwartz will be presenting on the Regulation of Biological Manufacturing at the Food and Drug Law Institute's (“FDLI’s”) Introduction to U.S. Biologics and Biosimilars Law and Regulation course, which is scheduled to take place from October 4-5, 2017 in Washington, DC.  A copy of the conference agenda is available here.

FDLI’s course is designed for new legal and regulatory professionals as well as seasoned professionals new to the topic or wanting a refresher.  The program explores the regulation of biological products, including biotechnology–derived therapeutic proteins, human tissue, gene, and cell products. Attendees will learn about the abbreviated pathway to market for biosimilar biological products and associated intellectual property issues, including exclusivity and biologics patent litigation. Case studies, hypotheticals, and ample time for Q&A are provided.

To learn more and to register for the conference, visit www.fdli.org/programs. Use discount code “save15”  to save 15% off your registration fee.

Earlier this week, FDA published another in its series of guidance documents devoted to implementing the Biologics Price Competition and Innovation Act (“BPCIA”). The objective of the new guidance, entitled Statistical Approaches to Evaluate Analytical Similarity Guidance for Industry, is to assist sponsors in demonstrating analytical similarity to support licensure under section 351(k) of the PHS Act. This guidance is intended to serve as a companion document for Quality Considerations in Demonstrating Biosimilarity of a Therapeutic Protein Product to Reference Product (we blogged about this guidance here).

According to the guidance, analytical similarity involves the comparison of structural or physicochemical and functional attributes using multiple lots of the proposed biosimilar product and the reference product. Under PHS Act § 351(i), “biosimilar” means that the biological product is “highly similar” to the reference product licensed under PHS § 351(a) – even if there are minor differences in clinically inactive components, as long as there are no clinically meaningful differences between biosimilar and reference product safety, purity, and potency. This must be demonstrated based on “analytical studies.”  In this guidance, FDA details its current thinking on these analytical studies, including challenges a sponsor may encounter.

FDA first addresses the challenges that may arise in attempting to demonstrate analytical similarity. These include a limited number of appropriate or representative reference product or biosimilar lots and the large number of attributes that can be compared to evaluate quality but may not actually be meaningful.

Thus, FDA recommends a risk-based approach in analytical similarity assessment of quality attributes. This approach involves an Analytical Similarity Assessment Plan.  A successful Analytical Similarity Plan will be based on testing with a minimum of 10 reference product lots, 10 biosimilar lots, representative samples of reference product variability (including expiry), U.S.-licensed reference lots only, and lots manufactured with different processes or scales.

The Analytical Similarity Assessment Plan itself should be based on a several step approach:

• Step 1: Determine the quality attributes that characterize the reference product in terms of structural/physicochemical and functional properties.
• Step 2: Rank these quality attributes according to risk of potential clinical impact.
• Step 3: Evaluate these attributes based on three tiers of statistical approaches.

The intent of the analysis is to examine the potential impact on clinical performance and the degree of uncertainty around a clinical attribute in terms of risk to product similarity. Beyond risk, the level of impact of the attribute, the assays used for the attribute, and the types of attributes evaluated should all be carefully considered.

Once the attributes are identified and ranked, the sponsor should determine the appropriate statistical methods to be used based on risk ranking. Tier 1 testing, or formal statistical equivalence testing, should be used for those quality attributes determined to have the highest potential clinical impact.  Tier 2 (called the Quality Metric approach), involves setting ranges of acceptable quality attributes and is best used for medium-impact attributes.  Finally, Tier 3, Visual Displays, involves subjective assessment through observation and should be used for those attributes with either the lowest risk of potential clinical impact or those attributes that are important but not amenable to formal tests or quantitative evaluation.

FDA notes that final assessment of “highly similar” is made upon the totality of evidence rather than the passing or failing of the analytical similarity criteria of any one tier or any attribute. This demonstrates FDA’s willingness to show flexibility in applying a complex concept, which is necessary given the range of sizes and types of molecules eligible as biologic reference products.  Further, establishing biosimilarity is not a one-size fits all process, and this guidance is indicative of FDA’s case-by-case approach.  As with all drug development, both small and large molecule, FDA will be involved in the development program from the start – but this guidance gives industry the broad strokes to allow more productive planning conversations.

If you read our blog, you already know that the 21st Century Cures Act included a provision that created the Regenerative Advanced Therapy designation program, or “RAT” (see our previous coverage of the Act here).  You will also already know that the Center for Biologics Evaluation and Research (“CBER”) put forth its interpretation of the RAT designation program (see our previous coverage here).  What you may not know is that since that time, we’ve been busy making recommendations that we were hoping would be heard so that either FDA or Congress could improve the program.  Luckily, we have a couple changes to report.

A Name Change

Congress didn’t do FDA or industry any favors with the naming of the new designation program.  Nobody was excited to say their biologic product is a RAT! In HP&M’s January 12th webinar on the drug and biologics-related provisions of the 21st Century Cures Act, Frank Sasinowski made the pitch to rename the acronym.  Specifically, he proposed a reordering of the acronym lettering to ART, or Advanced Regenerative Therapy (see webinar slides 50-55 here).  While FDA didn’t initially propose to change the name of this designation program, sometime in early 2017 the Agency heeded this warning and changed the acronym to RMAT, or Regenerative Medicine Advanced Therapy (as reflected on CBER’s webpage here).  While the new name is a little redundant, it does the trick.

Inclusion of Gene Therapies

On a more substantive note, the 21st Century Cures Act language also left many of us in the advanced regenerative therapy industry scratching our heads.  The statute defined this new category of drugs to include cell therapies and therapeutic tissue engineering products, but not gene therapies.  Many of us felt that this must have been an oversight in the drafting of the provision, and that the legislative intent was surely to include gene therapies.  However, the webpage CBER created to implement the designation program did not add any clarity on this topic.  To thwart any differences in statutory interpretation between stakeholders, and to ensure predictability in the application of the designation, at the Rare Disease Congressional Caucus briefing held on March 2nd, Frank Sasinowski recommended to members of Congress and their staffs to make a technical amendment to explicitly include gene therapies in the definition of advanced regenerative therapy (see previous coverage of this briefing and Sasinowski’s slides here).

Congress did not take such action, despite having a chance to add a technical amendment with the passage of the FDA Reauthorization Act (“FDARA”) over the summer (see our firm’s detailed summary and analysis of FDARA here).  Instead, on August 28, 2017, FDA Commissioner Scott Gottlieb, M.D. announced, as part of a speech on oversight of stem cell therapies and regenerative medicine, the Agency’s “plan to include certain gene therapy products that permanently alter tissue and produce a sustained therapeutic benefit as part of the products that will meet the definition of being eligible to come under the pathway enabled by RMAT” (see the full statement here).  This new policy provides clear guidance that the door is open for RMAT designation to gene therapies.

Earlier this month, the U.S. District Court for the Central District of California dismissed a qui tam complaint filed against Medtronic and its subsidiaries alleging violations of the False Claims Act (FCA).  The relator (an LLC named “The Dan Abrams Company LLC” formed by a former Medtronic employee named Bryan Shapiro) alleged, inter alia, that Medtronic obtained marketing approval for some of its spinal implant products by deceiving FDA as to the intended use of these products, and that Medtronic promoted these products for an off-label use.  As a result, the relator alleged Medtronic caused the submission of false claims to CMS under an implied false certification theory.  The government declined to intervene.

The court’s discussion on the lack of grounds for the relator’s qui tam complaint is significant, particularly for device manufacturers facing fraud-on-FDA or off-label promotion claims under the FCA.

Regarding Medtronic’s alleged fraud to obtain clearance for its devices, the relator claimed that certain devices were designed for a use (cervical) other than the use for which Medtronic sought clearance (thoracolumbar). The court rejected this allegation, noting that FDA may grant 510(k) clearance with labeling limitations if FDA is concerned that a product may be used off-label. See FDC Act § 513(i)(1)(E).  The relator’s claim that a cleared device was actually intended for an off-label use was not itself sufficient to support a claim of improper clearance.  The court explained that “claims of fraud are disfavored if made by third parties who seek to second guess a decision by the FDA to certify a device,” Slip Op. at *8, and it noted that FDA has the enforcement jurisdiction and means necessary to “police” FDC Act violations.  The court cited the First Circuit D’Agostino decision (see our previous post here) to support its holding that an FCA action is an inappropriate tool against allegations of fraud on FDA. Id. at *9.

Surprisingly, the court did not reference the Ninth Circuit’s Gilead Sciences decision from this summer (see our previous post here) that cursorily held that similar claims were supported in the relator’s complaint. In that case, the Ninth Circuit rejected the rationale in D’Agostino and held that allegations of false statements and false conduct by the manufacturer to obtain approval of a drug were adequate to support an FCA claim (at least at the motion to dismiss stage).  As we previously blogged, the company in that case has filed a petition for rehearing or rehearing en banc (still pending), and several industry groups have filed briefs in support of the defendant.

The court dismissed the relator’s off-label promotion theory on the ground that CMS may cover a cleared device used off label if the use is “medically necessary” or “reasonable and necessary” to treat a specific patient. Id. at *10.  Specifically, the allegations “must be sufficient to support the claim that the [devices] were unsafe, untested or otherwise unfit for the purposes for which they were used, and that Defendants nevertheless knowingly promoted them.” Id. at *11.

Unlike other recent cases, the court brushed over the Escobar materiality issue, with little discussion or analysis of what constitutes a “material” false claim.  Medtronic had argued that there could be no materiality where the amount paid by CMS for a spinal surgery is not affected by whether Medtronic’s products were used and where CMS contractors would not know whether one or more of the devices had actually been used in a particular surgical procedure.  The court dismissed these arguments for purposes of Medtronic’s motion, explaining that CMS may still have assigned values to devices “that have been approved through an FDA process.” Id. at *11.  The rationale is confusing, however, and assumes an FDA value-assignment process that is not described in the FDC Act or FDA regulations.

While the court granted Medtronic’s motion to dismiss, it did so without prejudice. Relator may file an amended complaint by October 2, 2017.

Public Citizen sued FDA last week, in an effort to force Agency action on the tentative final monograph (“TFM”) for OTC oral health care drug products. That TFM currently permits the marketing of OTC benzocaine oral health care drug products labeled for use to relieve infant teething pain. On July 28, 2014, Public Citizen petitioned FDA to (1) reopen the OTC oral health care drug monograph, (2) revise the labeling requirements for benzocaine products to preclude indications for infant teething pain, and (3) require warning labeling on benzocaine products about the risk of methemoglobinemia, a rare but potentially serious blood disorder that can be caused by exposure to benzocaine. Effects of methemoglobinemia can include developmental delays, intellectual disabilities, seizures, or coma, among other things. FDA has yet to act on Public Citizen’s petition.

FDA’s TFM for oral healthcare drug products was issued in 1991. At that time, FDA’s advisory review panel “recognized that benzocaine could be linked to methemoglobinemia and that infants were more susceptible to that condition” (Compl. ¶ 16), but determined that a warning label was not necessary. According to Public Citizen, data on the link between benzocaine’s use as an anesthetic in teething infants and development of methemoglobinemia continued to accumulate after the TFM was published. So much so, that between 2003 and 2014, FDA “issued multiple safety announcements related to the risk of methemoglobinemia with OTC benzocaine products” based on adverse events reported to the agency. Id. ¶ 20, see also, e.g., FDA Consumer Update. In 2014, FDA also encouraged manufacturers to voluntarily include a methemoglobinemia warning on their benzocaine products, even though such a warning would fall outside the label specifications set forth in the TFM. Yet, FDA did not grant or deny Public Citizen’s petition – stating in February 2016 that it was unable to do so in light of the “significant/complex issues [raised by the petition] requiring extensive review and analysis by Agency officials.” Compl. ¶30.

Public Citizen’s suit faces an uphill battle, given courts’ traditional reluctance to force FDA’s hand with respect to either the substance or the timing of regulatory decisions grounded in science. While the gravity of this issue and FDA’s administrative record are factors in Public Citizen’s favor, the complaint lacks examples of benzocaine products currently on the market bearing indications for use in infant teething, and does not allege that Public Citizen’s members or their children are exposed to infant teething products containing benzocaine. Thus, FDA and the court might reasonably question Public Citizen’s claim to standing in the case.

Public Citizen’s lawsuit also highlights the significance of FDA’s ongoing discussions with industry about updating the OTC drug monograph program to make it more efficient, and the need for an OTC drug monograph user fee program. From that perspective, FDA and proponents of a user fee program may welcome litigation that draws public attention to the Agency’s lack of necessary resources to review and update OTC drug monographs.

On September 6, 2017, FDA issued the final guidance “Design Considerations and Pre-market Submission Recommendations for Interoperable Medical Devices.” The final guidance can be found here. The document provides guidance regarding interoperable devices, which it defines as devices “that have the ability to exchange and use information through an electronic interface with another medical/non-medical product, system, or device.”  FDA issued a draft of this guidance on January 26, 2016.  We previously blogged on the draft guidance here.

The final guidance is generally unchanged from the draft. There are, however, a few notable differences:

• The final guidance acknowledges that design considerations may be different for different types of devices. This is a good sign that FDA acknowledges that interoperability is not a one-size-fits-all requirement.
• The final guidance includes an additional design factor to consider regarding interoperability, “the transmission of metadata (e.g., unique device identifier (UDI), software version, configurations, settings).”
• With regard to the anticipated users, the guidance adds that “patients may need specific instructions on how to use their device in a home environment.”
• The final guidance emphasizes the need to perform risk analysis. For certain devices, FDA currently requests the risk analysis as part of the 510(k) submission. It will be interesting to see if FDA begins asking for the risk analysis for interoperable devices.
• With regard to the types of verification and validation that a manufacturer should perform, the final guidance includes two additional points to consider, “assur[ing] that reasonably foreseeable interactions do not cause incorrect operation of other networked systems; and conduct[ing] testing that simulates real-world use of the device.”
• The final guidance indicates that labeling considerations with regard to interoperability can be addressed through “materials within the package of the device, the instructions for use, or device-specific information posted on the manufacturer’s website.” (emphasis added.) FDA’s authority to regulate information on a company’s website as labeling is not clear cut. Therefore, it is interesting that the guidance makes such an affirmative assertion that labeling statements regarding interoperability may appear on a company’s website.

One final interesting point to note, the final guidance includes the following statement:

FDA recognizes and anticipates that the agency and industry may need up to 60 days to perform activities to operationalize the policies within the guidance. If new information regarding device interoperability as outlined in this guidance is not included in a premarket submission received by FDA before or up to 60 days after the publication of this guidance, CDRH staff does not generally intend to request such information during the review of the submission.

While it is generally understood, at least in industry, that it takes time to comply with new FDA guidances, it is unusual for a guidance to expressly allow for a lead-in period. However, in some instances, the Agency has been in a hurry to implement new guidances.  We think this language is a good sign that FDA is acknowledging that it will take time for manufacturers to comply with new guidance (even though the guidance is not technically binding).

The reduction in the rate of cervical cancer is one of the great success stories in public health.  The introduction of the Pap smear and human papillomavirus (HPV) testing has led to a significant reduction in the rate of cervical cancer.  However, there are still gaps in cervical cancer screening.  FDA will hold a public workshop early next year to talk about the possible use of a new measure to improve screening: self-collection of samples.

In its September 8 Federal Register notice announcing the meeting, FDA noted that “gaps in cervical cancer screening exist.”  The agency explained, “Barriers to cervical cancer screening may include limited access to such service in rural areas, socioeconomic status, etc.”  FDA is undoubtedly correct that cervical cancer screening rates can be and should be improved, and that there are non-medical barriers to increased testing.

The announcement is obviously significant for companies involved with cervical cancer testing.  The adoption of self-collection tests could expand the volume of HPV testing and Pap testing.  Moreover, this creates a potential market opportunity for companies that can make the self-collection devices.

However, the implications of the public workshop potentially go well beyond the field of cervical screening.  Many companies have wanted to pursue self-collection of diagnostic specimens by consumers for a variety of analytes and conditions.  Obtaining FDA clearance for those products has not been easy.  The upcoming workshop may shed some useful light on how companies can better position themselves to enter the market for self-collection devices for other diagnostic purposes.  At a minimum, the meeting should provide insights into issues that FDA thinks are key: “how such devices should be dispensed to end users of self-collection, proper use of the device to ensure patient safety, the collection of adequate samples for testing, the use of these test results in patient care, and the impact on the current regulatory framework.”  Those questions transcend the specific use of home-collection in cervical cancer, and apply more broadly to home-collection devices for a wide range of applications. Indeed, FDA’s consideration of OTC collection to reduce “barriers” could have implications for OTC devices generally.

Getting self-collection devices through the FDA will probably not be quick or easy, no matter what happens at the workshop. Nor is the workshop likely to lead to any change in policy by itself, and it probably won’t provide any answers at all. Still, it may illuminate some broader policy and regulatory issues for a wide range of diagnostic tests – and possibly even other devices.  That discussion could have repercussions far beyond cervical cancer screening.

It is the False Claims Act (FCA) case that wouldn’t die. The complaint in United States ex rel. King v. Solvay Pharmaceuticals, Inc. was originally filed in 2006 in the U.S. District Court for the Southern District of Texas. Through a series of partial summary judgment rulings, the District Court finally dispensed with the case (in Solvay’s favor) in March 2016. But the matter didn’t end there, as Solvay sought costs under 28 U.S.C. § 1920, and relators John King and Tammy Drummond appealed the District Court’s decision on both the merits and the award of costs to the Fifth Circuit. Now it appears the case may finally be at an end, with a Fifth Circuit ruling that upholds the District Court’s judgment in full, including $232,809.92 in taxable costs awarded to Solvay.

By way of background, the relators alleged that Solvay engaged in the off-label marketing and distribution of three drugs (Luvox, Aceon, and AndroGel) in violation of the FDC Act and the Anti-Kickback Statute (AKS). After federal and state governments declined to intervene in the case against Solvay at the District Court level, the District Court determined that relators John King and Tammy Drummond had not overcome the FCA’s public disclosure bar (a jurisdictional bar at the time) with respect to AKS/FCA claims associated with AndroGel, because they failed to establish their status as original sources of the information on which the claims were based. The District Court further held that relators had failed to sufficiently demonstrate that either Solvay’s alleged off-label marketing of Luvox and Aceon, or lobbying of state P&T committees and third-party publisher DrugDex regarding those drugs, actually caused the submission of false claims to the government.

After an exhaustive review of the evidentiary and other determinations made by the District Court, on September 12, 2017, the Fifth Circuit agreed with the District Court and upheld its disposition of the Solvay case. Evaluating the summary judgment decisions de novo, the Court held that there was no genuine issue of material fact as to whether the relators were original sources, or as to the causation evidence (or lack thereof). Relators had failed to establish, beyond mere speculation, that alleged “kickbacks” had caused the submission of false claims, or that off-label marketing had produced such claims, despite some evidence of a widespread off-label marketing scheme that relators alleged necessarily must have resulted in false claims.

Most interesting to us is the Court’s discussion of the difficulty of meeting the materiality standard in off-label promotion cases. We have been following how different federal courts around the country have been applying the Supreme Court’s materiality requirements discussed in its 2016 Escobar decision in the FDA regulatory context (see some of our previous posts here, here, here, and here). In this case, the Court latched onto a comment from a discussion that occurred during oral argument regarding the fact that Medicaid “pays for claims without asking whether the drugs were prescribed for off-label uses or asking for what purpose the drugs were prescribed.” Slip Op. at 13 n. 9. The Court noted that “[i]f this is true, given that it is not uncommon for physicians to make off-label prescriptions, we think it unlikely that prescribing off-label is material to Medicaid’s payment decisions under the FCA.” Id. (citing Universal Health Servs. Inc. v. United States ex rel. Escobar, 136 S.Ct. 1989, 2003-04 (2016)). This position, if widely accepted, would strike a blow to many future FCA cases involving the alleged off-label marketing of drugs or devices.

Finally, the Fifth Circuit approved the lower court’s award of taxable costs to Solvay under 28 U.S.C. § 1920 and Fed. R. Civ. P. 54(d)(1), while recognizing that the award amounted to “a fraction of the nontaxable expenses borne by litigants . . . .” An award of costs to defendants in these cases is rare, and helps serve as a check on overeager relators filing qui tam complaints without adequate legal or factual support.

Although relators could petition for rehearing or hearing en banc, and have 90 days (until December 11) to file a petition for writ of certiorari on any of the merits issue or on the award of costs, we think the possibility of further review is unlikely.

Hyman, Phelps & McNamara, P.C.'s Jeffrey N. Gibbs has teamed up with MassMEDIC and Right Submission to bring you a free webinar, titled "FDA Medical Device Submissions – You’ve Got Legal Questions – We Have the Expert," that focuses on legal questions you might have relative to FDA product submissions.  You can register for the webinar here.  It will take place on September 27, 2017 from 12:00 pm – 1:00 pm (Eastern).

Questions such as:

• From a legal perspective what are common mistakes submitters make in FDA submissions?
• What recent legal cases has CDRH been involved in and how have they turned out?
• Is the confidentiality text we copy-paste into our submissions legally binding and what happens if we don’t include it?  When should we include it?

This is an extraordinary opportunity to get your legal questions about FDA device submissions answered.  You can submit your own questions by email (info@massmedic.com) in advance of the webinar and they will be posed anonymously during the webinar.  Or send them to during the webinar.

Moderator: Juan Carlos Serna, Co-Founder & CEO, Right Submission
Presenter: Jeffrey N. Gibbs, Director, Hyman, Phelps & McNamara

Two public interest groups that are suing FDA over the Agency’s extension of the menu labeling compliance date have agreed to stay the litigation if FDA issues additional guidance before the end of the year and publicly confirms that it will not provide another extension.

As we previously reported, FDA was taken to court in June by the Center for Science in the Public Interest (CSPI) and the National Consumers League (NCL) over the Agency’s last minute extension of the compliance date for restaurant menu labeling. A month later, CSPI and NCL jointly sued FDA to have the delay vacated and a more immediate compliance date instated. They argued that the delay was unlawful because the Agency did not articulate a rational explanation for the delay or provide an opportunity for public comments before the delay took effect. The government filed a Motion to Dismiss in August, and the plaintiffs were scheduled to file their opposition or an amended complaint by September 19.

Meanwhile, as we reported here, FDA Commissioner Scott Gottlieb announced on August 25 that the Agency would issue “additional guidance” about menu labeling before the end of the year. His announcement gave no indication that the rule itself would be revised. Last Friday, CSPI, NCL, and FDA filed a Joint Motion for Stay that would put the litigation on hold in order to “allow FDA adequate time to prepare this guidance . . . .” In sum, the plaintiffs would agree to abandon their efforts for a more immediate compliance date provided that FDA takes steps to lock in place the current May 7, 2018 deadline.

If granted by the court, the Joint Motion would require that FDA, before the end of the year, “use its best efforts to confirm in a Federal Register publication that the Menu Labeling Rule’s compliance date is May 7, 2018.” If FDA does not issue that announcement, or if it fails to publish the additional guidance before the end of the year, or if FDA gives any indication (“by rule, guidance, public statement, publicly available document, or otherwise”) that the compliance date “could be or will be” extended, the stay may be lifted and the litigation may proceed with “expedited consideration.”

As part of the development of mandatory disclosure requirements for bioengineered foods, USDA is required to complete and report on a study to identify potential technological challenges that may impact whether consumers would have access to the bioengineering disclosure through electronic or digital links, such as barcodes and Quick Response (QR) codes. The electronic disclosure method is attractive to industry because it saves valuable “real estate” for other product information on the package. However, opponents such as the Center for Food Safety (CFS) believe that electronic links should not be an option because most consumers are unlikely to check on-line for the information while shopping.

Just about 14 days after CFS sued USDA claiming that the agency missed the statutory timeframe for issuance of the study report (see our previous post here), USDA issued the report.

As required by law, the study addressed five factors:

• “The availability of wireless Internet and cellular networks”;
• “The availability of landline telephones in retail stores”;
• “Challenges facing small and rural retailers”;
• “[E]fforts that retailers and others have taken,” thus far, “to address potential technology and infrastructure challenges”; and
• “The costs and benefits of installing in retail stores [technology] that provide[s] bioengineering disclosure information.”

The report describes the findings from 150 direct observations (40 in-depth discussions with consumers; observation of more than 75 consumers while shopping, and visits to 42 retailers) and 994 crowdsourced participants. The study focused on consumers that are interested in accessing information on the bioengineered status of their foods.

Some noteworthy findings include:

• A growing majority (currently 77%) of Americans own a smartphone;
• 85% of the smartphone owners “struggle[] with complicated mobile software application”;
• Scanning digital links requires access to the internet; although 97-100% of the chain stores provide WIFI in their stores, only 37% of small retail stores have WIFI.

Key challenges identified in the report include “difficulties recognizing the link [as associated with additional food information], accessing it through use of tools, [and] scanning the link.” Technical challenges to access include lack of a smartphone or scanner tool, old smartphones incapable of scanning, and lack of memory for an app. Not surprisingly, technological challenges “disproportionately impact low-income earners, rural residents, and Americans over the age of 65.”Authors acknowledge that costs of providing the tools (e.g., scanners) and access to WIFI may prove prohibitive for small and rural retailers. Moreover, due to continuing developments, technologies (such as scanners) may be outdated quickly. Nevertheless, researchers conclude that the government and interested parties can take “meaningful steps” to minimize the challenges and provide consumer access. Both supporters and opponents of digital links as a means for providing a bioengineered food disclosure statement undoubtedly will heavily scrutinize the report to find evidence to support their position. It remains to be seen if USDA will conclude that electronic links will provide sufficient access or if additional disclosure options should be provided. It will be interesting to see USDA’s proposed regulation.

After this year’s unanimous Supreme Court decision in Amgen v. Sandoz was remanded to the Federal Circuit (see our previous post here), that Court is now in the midst of addressing Biologics Price Competition and Innovation Act (“BPCIA”) state law preemption. In August, the parties filed supplemental briefs.  Amgen argued that Sandoz’s noncompliance with the BPCIA was unlawful and wrongful, and therefore sufficient for claims under California state law. Amgen argued that Sandoz waived any preemption defense and that the BPCIA does not preempt state law remedies for failure to comply.  Sandoz, conversely, contended that Amgen’s state law claims are preempted under the BPCIA and fail on the merits anyway, as there was no violation of federal or state law.

On Monday, the federal government jumped into the fray. The U.S. submitted an Amicus Brief arguing that the BPCIA preempts state law. Based on the tenet that the “federal statutes occupy the field of federal patent litigation,” states are precluded from regulating in the space.  The government’s focus is on patent litigation (not the more general patent law), explaining that federal courts have exclusive jurisdiction over claims arising under patent laws.  Field preemption is reinforced by the comprehensive regulation of biosimilars in the BPCIA.

The government also invokes a conflict preemption argument. Even if Sandoz “unlawfully” refused to exchange aBLA information with Amgen, a state law injunction would obstruct BPCIA’s purposes and objectives by depriving “the applicant of a choice [of participating in the information exchange] the BPCIA was designed to provide.”  It would additionally undermine the BPCIA litigation timetable.

The federal government has made its position pretty clear here: states should stay out of this federal issue.

It appears that CDRH has now resumed issuing guidances after not issuing any in the first six months of the new administration. In late August and early September CDRH has issued several final guidances, including “Use of Real-World Evidence to Support Regulatory Decision-Making for Medical Devices,” issued on August 31, 2017, and “Procedures for Meetings of the Medical Devices Advisory Committee,” issued on September 1, 2017.  Below, we discuss key points of each of the guidances.

Real-World Evidence

The draft of this guidance was issued in 2016, and it discusses types of clinical information, apart from traditional clinical studies, that could be used to support regulatory decisions, including premarket clearance/approval. According to the guidance, Real-World Evidence (RWE) is information regarding usage and potential risk/benefit of a device, which is derived from real-world data (RWD), including electronic health records (EHRs), claims and billing data, data from product and disease registries, and patient-generated data including in home-use settings, among others.  The guidance specifically excludes non-clinical data, adverse event reports, secondary use of clinical trial data (e.g., post-hoc analyses), and literature reviews.  RWE can be used in a variety of situations, according to the guidance, including in a premarket submission, postmarket surveillance study (Section 522), post-approval study, or as a control in a clinical study.

In our experience, FDA has often resisted acceptance of RWE because of concerns there was a bias in the data. The purpose of this guidance is to describe the factors that FDA will consider when reviewing RWE, namely (i) relevance, and (ii) reliability.

With regard to relevance, the guidance states that overall a sponsor should consider whether the data is directly relevant to the regulatory question at issue (e.g., a premarket submission, 522 order). The long list that follows certainly provides FDA with considerable flexibility in deciding whether to accept RWE and how much weight to give it.  The factors FDA will use to assess relevance include:

• the RWD contain sufficient detail to capture the use of the device, exposures, and the outcomes of interest in the appropriate population (i.e., the data apply to the question at hand);
• the data elements available for analysis are capable of addressing the specified question when valid and appropriate analytical methods are applied (i.e., the data are amenable to sound clinical and statistical analysis); and
• the RWD and RWE they provide are interpretable using informed clinical/scientific judgment. Important considerations for the assessment of this factor include:
  • whether the use of the device in a real-world population is representative as captured within the data source, and is generalizable to the relevant population being evaluated;
  • whether the RWD source is used regionally, nationally and/or internationally;
  • the overall percentage of patient exposure to the device that are captured in the RWD source;
  • the validation protocols and resultant data that are used to evaluate how well the RWD source reflects the patient population’s experience;
  • whether the RWD study design, study protocol, and/or analysis plan is appropriate to address the regulatory question and capable of being accomplished in a sufficiently timely manner;
  • whether the RWD contains elements to capture specific device identification information (e.g., unique device identifier);
  • whether the RWD adequately captures patient medical history and preexisting conditions, as well as follow-up information needed to evaluate the question being addressed (e.g., whether administrative claims data have adequate continuity of coverage);
  • whether sufficient data elements are collected to adjust for confounding factors that may impact the exposure or outcomes of interest;
  • whether any linkages performed are scientifically appropriate and account for differences in coding and reporting across sources;
  • the RWD source reporting schedule, including time interval between database close and release, and length of reporting periods;
  • the prior documented (e.g., peer reviewed publications or practice guidelines) use of the RWD source for determining outcomes-based quality assessments, validated predictive risk modeling, signal detection, performance improvement, benchmarking, and other clinically-meaningful uses;
  • whether the data elements collected are sufficient for assessing outcomes (including adjudication, if necessary); and
  • whether supplemental data sources are available and sufficient to provide any missing information or evidence required for an informed decision.

With regard to reliability, the guidance indicates that the Center will focus on two primary elements (1) how the data is collected (data accrual); and (2) whether the people and processes in place during the data collection and analysis are adequate to ensure data integrity (data assurance). In our experience, the question of reliability is the primary issue during FDA’s review of RWE, and if the sponsor does not have a relationship with the collectors of the data, it can often be next to impossible to provide the level of detail FDA needs.  The data indicates that it will consider the following factors when assessing data accrual:

• the preparedness of individual sites for complete and accurate collection of RWD (e.g., whether there are defined processes, site training and support, and qualified personnel);
• whether a common data capture form was used;
• whether a common definitional framework (i.e., data dictionary) was used;
• adherence to a common temporal framework for collection of key data points;
• the timing of establishing the study plan, protocol, and/or analysis plan relative to collection or retrieval of the RWD;
• the sources and technical methods used for data element capture (e.g., chart abstraction, point of care entry, EHR integration, UDI capture, data records from the device, and linkage to claims data);
• whether patient selection and enrollment criteria minimize bias and ensure a representative real-world population (e.g., all-comer’s design, consecutive patient enrollment);
• the timeliness of data entry, transmission, and availability; and
• whether necessary and adequate patient protections were in place (e.g., methods to protect patient privacy, and need for informed consent as determined by the reviewing IRB and in compliance with FDA regulations).

Finally, FDA will consider the following factors when assessing data assurance.

• the quality of data element population (e.g., whether abstracted from a verifiable source to assess transcription errors or automatically populated through a data extraction algorithm);
• adherence to source verification procedures and data collection and recording procedures for completeness and consistency;
• completeness (i.e., minimized missing or out of range values) of data necessary for specified analyses, including adjustment for confounding factors;
• data consistency across sites and over time;
• evaluation of on-going training programs for data collection and use of data dictionaries at participating sites;
• evaluation of site and data monitoring practices; and
• the use of data quality audit programs.

The guidance encourages sponsors to submit a pre-submission if it plans to use RWE in a premarket submission. While this might be the Center’s preference, there can be advantages to simply submitting the data if it is readily available to the company, the company is not collecting any new information, and it was not otherwise planning to submit a pre-sub (e.g., to address other regulatory questions).  Submitting the RWE in a premarket submission without a pre-sub will force the review team to provide definitive feedback during the review process, unlike the pre-submission process which is non-binding and often results in the reviewers asking for information it would like to see rather than what might be realistic or available. The pre-sub process can, however, be useful to get FDA’s informal feedback regarding the RWE, if it does not delay the company’s premarket submission.

The guidance also explains that an IDE is generally not required to collect RWE. However, according to the guidance, an IDE may be required “if data are being gathered to determine the safety and effectiveness of the device, and the process for gathering the data would influence treatment decisions, such administration would likely not be within the normal course of medical practice, and an IDE may be required.”

Whether this guidance will result in CDRH reviewers being more open to RWE remains to be seen. RWE can provide data that is more representative of a device in actual use.  This, however, may be the very reason why CDRH reviewers would be skeptical of it because it is not as clean as the data sources CDRH generally expects.

Procedures for Advisory Committee Meetings

This guidance is less noteworthy than the RWE guidance. The draft guidance was issued in 2015; however, the draft was intended to replace a 1991 Bluebook memo on PMA panels. The procedures in this guidance are not new. The guidance states that it applies to all advisory committee meetings, including PMA panel meetings, but not dispute resolution panels.

The Center can convene an advisory committee meeting for a variety of issues, including advice on a premarket submission, e.g., PMAs, de novos. The guidance includes factors to consider when a panel for a premarket submission would be appropriate. It also provides model questions to be posed to the panel when it considers a submission. A panel can also be convened for classification or reclassification and other general issues. The guidance provides details regarding the level of expertise of the panel members, and the various procedures for panel meetings.

We hope that these guidances are a sign that we will see additional information coming out of CDRH in the future and that the freeze on guidances has been lifted. Regardless of your political views, guidance is often helpful to industry to help them better understand the Center’s current thinking.

A couple of months ago, as Congress was considering legislation that would ultimately be enacted as the Food and Drug Administration Reauthorization Act of 2017 (“FDARA”) (see our FDARA Summary and Analysis here), we put up a post on the new user fee structure under the second iteration of the Generic Drug User Fee Amendments (“GDUFA II”), and the new ANDA Holder Program Fee in particular.  Now that FDA has published the Generic Drug User Fee Rates for Fiscal Year 2018, and as we quickly approach the October 1, 2017 deadline when the state of ANDAs solidifies and fee payments are due (actually, fees are due no later than the first business day on or after October 1 of each such year), we thought it would be a good time to remind some ANDA owners who have a small number of approved ANDAs, or who are just over the application count threshold for paying a higher ANDA Holder Program Fee, that there’s another option out there to consider.  So we’re republishing and updating our previous post on the topic.

GDUFA II significantly changes the current user fee system and structure that have been in place the past five fiscal years under GDUFA I.  Not only will FDA collect a greater amount of user fee funding each year ($493.6 million annually adjusted for inflation), but one fee type will be eliminated (i.e., the Prior Approval Supplement fee), while others fees would be modified (e.g., a new Finished Dosage Form (“FDF”) facility fee for Contract Manufacturing Organizations (“CMO”)).  GDUFA II will also introduce a new fee type – the ANDA Holder Program Fee – that will account for 35% of annual fee funding.  The annual ANDA Holder Program Fee, along with the annual CMO FDF facility fee, are “small business considerations,” according to FDA.

Under the GDUFA II fee structure, the ANDA Holder Program Fee is set up as follows: a firm and its affiliates pays one program fee each fiscal year commensurate with the number of approved ANDAs (both active and discontinued ANDAs) that the firm and its affiliates collectively own. The program fee to be paid each year depends on the number of ANDAs owned.  Firms do not pay a per-ANDA fee.  Instead, the program fee is split into three tiers that represent different positions held by the firms and their affiliates within the market.  Specifically, FDARA amended the FDC Act to add Section  § 744B(b)(2)(E) to state: