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Focus on Regulation

DOJ announces one of largest False Claims Act recoveries concerning U.S. Government small business programs

Last week, the Department of Justice (DOJ) announced a $16 million settlement with Virginia-based government defense contractor, ADS Inc., to resolve allegations that ADS and its subsidiaries violated the False Claims Act by submitting claims for payment under fraudulently obtained small business set-aside contracts. DOJ reported that the ADS settlement “ranks as one of the largest recoveries involving alleged fraud in connection with small business contracting eligibility.”1 Continue Reading

Do the Waive – FDA Implements Informed Consent Waivers for Minimal Risk Studies

On July 25, 2017, FDA issued a guidance document describing under what circumstances IRBs may now approve consent procedures that waive or alter some or all of the elements of informed consent as set forth in FDA’s informed consent regulation (21 CFR 50.25). Continue Reading

EMA prepares plan to face Brexit

European Medicines Agency (EMA) has released a business continuity plan dealing with the potential implications of Brexit. EMA, which is currently established in London, will be required to transfer the Agency’s headquarters to another EU Member State. With the aim to conserve Agency’s capacities to protect public and animal health, EMA has issued a press release which defines related changes.

The business continuity plan categorises and prioritises EMA’s activities in accordance with their impact on public health. It places EMA’s activities into three categories of priority. Activities of the highest priority are placed in Category 1, high priority activities in Category 2 and activities of lower importance in Category 3.

In May 2017, EMA had already started to scale back activities in Category 3 in order to focus on Brexit. EMA had decided to suspend the development of the European Medicines Web Portal. This is a new publicly-available online information source on all medicinal products marketed in the EU. EMA had also suspended its contribution to the e-submission project which allows applicants to electronically submit documents linked to authorisation requests. Additionally, EMA had suspended the development of a transparency roadmap for EMA future measures and the participation in the benchmarking of medicines regulatory authorities in the EU as of 2018.

In addition to these measures, EMA intends to reduce the number of audits and participation by its members in external meetings or conferences. The purpose of these changes is to allow EMA to support other core activities. EMA will, however, analyse later the duration of suspension of these activities in order to avoid undermining Agency’s quality work.

As regards Category 2 , EMA highlights that activities of this category will be maintained for as long as possible in order to secure the development of medicinal products. Examples of activities of Category 2 concern the proactive publication of clinical data and various initiatives promoting the availability of medicines.

EMA’s first priority is to properly run the activities of Category 1. These activities are related to the assessment and safety monitoring of medicinal products. Any disruption in these activities would have a detrimental impact on the health and well-being of the population in Europe.

EMA will further examine potential loss of staff higher than expected and the related impact on categories 1 and 2. If the Agency’s relocation will cause a more permanent loss of skilled and experienced staff, EMA may be led to a situation where it cannot operate properly.

Further updates will be provided by EMA on the implementation of the business continuity plan.


EMA envisage to link development of companion diagnostics and personalised medicines

The European Medicines Agency (EMA) has released a concept paper on the development of personalised medicines and companion diagnostics. EMA proposes to develop a guideline that will provide guidance relating to the interface between personalised medicines and companion diagnostics.

Companion diagnostics are defined by the In Vitro Diagnostic Regulation as a medical device which allows identification of patients who are most likely to benefit from a medicinal product. Companion diagnostics also permit the identification of patients likely to be at increased risk for serious adverse reactions from a medicinal product.

The concept paper highlights that the current legislation does not directly link medicinal products with companion diagnostics. According to EMA, the envisaged guideline could provide guidance on how evidence to support the validation of a companion diagnostic can be generated during the development of a medicinal product. In particular, the concept paper discusses the potential to align technical assay validation and clinical evidence requirements for medicinal product approval with technical and clinical performance requirements for CE marking.

The concept paper also refers to the post-authorisation phase for medicinal products. During this phase, it is essential that companion diagnostics used for treatment with a medicinal product are adequately validated and sufficiently assured. The proposed guideline will examine concordance testing and bridging studies, including testing of stored patient samples.

The envisaged guideline will also provide a glossary defining specific terms like: analytical, clinical validation, clinical utility, concordance studies and validation sets.

The concept paper has been released for public consultation. Medical product developers, notified bodies or any other interested parties can submit their comments until 15 November 2017.

FCC Proposes $82 Million Fine for Illegally “Spoofed” Robocalls

The U.S. Federal Communications Commission has adopted a Notice of Apparent Liability (“NAL”) imposing a $82 million penalty against Best Insurance Contracts (d/b/a Wilmington Insurance Quotes) and its owner/operator Philip Roesel for allegedly making more than 21 million prerecorded robocalls with illegally “spoofed” caller ID information in an attempt to sell health insurance.

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Lord Justice Jackson suggests extending Aarhus Rules to all JR claims… again

On 31 July, Lord Justice Jackson published a report containing a series of proposals on civil litigation costs. While mainly focused on fixed recoverable costs, the report also contained a radical suggestion: to extend the claimant-friendly rules applying to environmental claims (which derive from the Aarhus Convention) to all judicial review claims. However, this is not the first time this idea has been proposed: Jackson LJ first made the case for extending Aarhus to all JRs in 2009.  Below, we look at the 2009 proposal and what has changed since then.

The Aarhus Convention

The Aarhus Convention is a pillar of environmental law. It was signed in 1998, came into force on 30 October 2001, and was ratified by the United Kingdom in 2005. With 47 signatories, the Aarhus Convention covers almost all of Europe and some of Central Asia.

A novel type of instrument for environmental justice, the Aarhus Convention requires, among other things, that review procedures for environmental claims should be fair, equitable, timely and – crucially – not prohibitively expensive.

The 2009 Jackson Report and the unimplemented proposal on costs

In December 2009, Lord Justice Jackson published an extensive and ground-breaking report on civil litigation costs and case management procedures. Civil litigation costs, the report concluded, are often disproportionate and impede access to justice in some areas. Jackson LJ offered proposals for a coherent package of reforms, designed to control costs and promote access to justice: the so-called “Jackson reforms”.

One proposal concerned the costs of claims brought under Aarhus Convention. Jackson LJ suggested qualified one way costs shifting (i.e. claimant recovers costs if s/he wins, and does not have to pay costs if s/he loses) as a way to comply with the “no prohibitive expense” requirement.  Jackson suggested that this was “the simplest and most obvious way to comply with the UK’s obligations under the Aarhus Convention in respect of environmental judicial review cases”.  He also suggested that this system should be extended to all judicial review claims, and not just those brought under the Aarhus Convention.

Following the Report, the Court of Appeal continued to state (see here at [17] or here at [33]) that it was undesirable to have different costs rules for different types of JR.  A consensus started to emerge that there should be a uniform regime for all judicial review cases.

Since Jackson’s first report, there have been three notable developments.

(i) On 1 April 2013, an optional regime was introduced for environmental JR claims by section VII of CPR Part 45, under which a claimant’s liability was capped at £5,000 (or £10,000 when claiming as or on behalf of a business) and a defendant’s liability was capped at £35,000.

(ii) On 8 August 2016, a new regime of ‘judicial review costs capping orders’ came into force. This enables the court to impose caps on each party’s liability, having regard to a wide variety of circumstances, including a claimant’s means.

(iii) On 28 February 2017, the Aarhus rules, the optional regime mentioned at (i) introduced to comply with the “no prohibitive expense” requirement of the Aarhus Convention, were amended. Claimants wishing to benefit from the rules must now submit a statement of means, including any financial support provided by others. In the light of that information, the court has power to vary the default cost caps.

The 2017 Supplemental Jackson Report

On 31 July 2017, Jackson LJ published a supplemental report on fixed recoverable costs (accessible here).

The 2017 report starts by noting that the Government has not taken up his recommendation that qualified one way costs shifting be introduced for all judicial review claims.   He goes on to highlight the importance of judicial review as a crucial means by which citizens can challenge the lawfulness of public authorities’ decisions, actions and omissions. Given the special place of judicial review in our constitutional system, Jackson says, an effectively functioning system of judicial review is central to the rule of law.

The problem, in Jackson’s view, is that JR is becoming less, rather than more, accessible.  This is particularly the result of the current system of legal aid funding, which has such strict financial limits that “many deserving claimants of modest means do not qualify for assistance“.  This makes the need for reform on costs for judicial review, so that they reflect the societal and constitutional value of such proceedings, all the more pressing.

What next?

For obvious reasons, the Government might not be keen on facilitating financial access to claims for judicial review proceedings. The 2017 report notes that government lawyers consulted for the report were not enthusiastic about the idea of extending the Aarhus costs regime to all judicial review claims.

But judicial review is important, and Jackson LJ’s latest report emphasises that once again.  As the voices in support of his ideas continue, the Government may begin to find them harder to ignore.

Italy opens the door to corporate ownership of pharmacies – a revolution for the Italian Pharma distribution

By Law passed today, August 2nd, 2017 (Law for the improvement of the competition on the market), further to a recommendation of the Italian Competition Authority (“ICA“), the Italian legislature enacted provisions for the improvement of the competition in several fields, including the distribution of medicinal products by territorial pharmacies.

  1. How the sector was previously regulated

The ICA noted in its proposal of law sent to the Parliament in 2014 that, among others aspects, the legal restrictions to the ownership of a pharmacy business were detrimental to the competition on the market with regard to the distribution of medicinal products.

Ownership of a pharmacy business could be vested on natural persons who were licensed pharmacists. It was therefore not possible for corporate entities to own a pharmacy. Limited liability cooperative societies and non-corporate entities could own a pharmacy as long as the members were licensed pharmacists.

Pharmacists could not own more than one pharmacy. Each limited liability cooperative society could not own more than four pharmacies in the province where the society had its registered office. Due to the restrictions of law, the owner was usually the managing director of the pharmacy (e.g. the owner could employ other licensed pharmacists for carrying out the ordinary activity but the managing director had to be one of the owners).

These limitations must be put into context of the general regulation of pharmacies, which is still in force and has not been changed by the new law.  To this regard, it is worth noting that the opening of new pharmacies is still subject to the assignment of the authorisation upon participation to tenders, issued by the regional authority for newly instituted authorisations or authorisations returned to the authority, or for the eligibility of a professional to run a pharmacy. Further provisions rule, for example, the number and location of pharmacies in a given district.

It does not come as a surprise that such legal framework, in addition to the restriction on the subject who may own a pharmacy, has – so far – impeded the development of privately owned pharmacy chains on the Italian market.

  1. Restrictions on the ownership of pharmacies have been repealed

The big change introduced by the new law is certainly that corporate entities may now own a pharmacy business, including the relevant authorisation. Furthermore, the limit of maximum four pharmacies that may be owned by an association or non-corporate entities has been repealed. As a consequence, there are currently no limits as to the number of pharmacies that may be owned by corporate entities or associations of pharmacists. However, it is now provided for that each owner cannot directly or indirectly control than 20% of the pharmacies located within the same region or an autonomous province. The limit has been imposed in order to ensure the competition on the market in the relevant district.

Moreover, the new law does not require anymore that the managing director of the pharmacy is an owner of the pharmacy, being however still necessary that the appointed individual is a licensed pharmacist qualified as eligible to run a pharmacy according to Italian law. Clearly, this provides a greater leeway to corporate owners for the organisation of the business, as it should not be difficult for corporate investors to find on the Italian market professionals in possession of the needed requirements. Finally, the new law has repealed the restrictions to the opening hours of pharmacies that now are allowed to provide a round-the-clock service to their customers.

  1. Other restrictions are here to stay

Pharmacy business in Italy remains a highly a regulated activity. Most of the restrictions provided for by the law, e.g. as to the number of authorisations that are issue in a given district by the competent authorities, distribution on the territory, tenders for their assignment and qualification for the eligibility to own a pharmacy, have remained untouched.

As the unamended provisions were enacted having in mind a clearly different legal framework, the legislative changes may require an additional effort in the interpretation in order to understand how and to which extent the old law should be applied to corporate owned pharmacies.

  1. New investment opportunities in sight on the Italian market

The limitations that still remain in force should not prevent new investors from entering the Italian pharmacy business by acquiring existing authorisations and on-going businesses. The door is now open to new business models in the pharmaceutical distribution, including the establishment of pharmacy retail chains.

The opportunities associated to the recent legislative change needs to be further investigated, considering also the commercial and corporate structures that Italian law may offer to a potential investor in the pharmacy business. The exercise needs to be performed taking into account, at the same time, the complexity of the national regulation.

In Shot Across the Bow, U.S. Sanctions Venezuela’s Maduro

One day after the Venezuelan government held elections for a Constituent Assembly that the United States has asserted is aimed at rewriting the national constitution, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated the President of Venezuela, Nicolas Maduro.  Last week, OFAC designated 13 current and former Venezuelan government officials ahead of the Constituent Assembly. See more here. Continue Reading

Scientific progress enables EMA to improve guidance on medicinal products containing genetically modified cells

The European Medicines Agency (EMA) has released a concept paper concerning a proposed revision of the current guideline on quality, non-clinical and clinical aspects of medicinal products containing genetically modified cells. The proposed revision will update the previous Guideline of 2012.

EMA’s concept paper is intended to address the issue that the current guideline does not reflect scientific progress that has been made since its entry into force. The current guideline focuses on genetic modifications by traditional methods, based on the use of vectors carrying recombinant nucleic acids. However, five years after the entry into force of the current guideline newer genome-editing tools are available. The use of these tools to genetically modify cells ex vivo for clinical applications has already begun and is expected to increase rapidly. These tools may use different starting materials and are able to allow more precise gene modifications. The current guideline does not address these specific issues as it offers only “very general recommendations” on genome-editing tools. Furthermore, EMA outlines that genome editing techniques raise new concerns such as off-target genomic modifications for which guidance is necessary.

The recently released concept paper also makes reference to the dramatic increase that has occurred in the use of genetically-modified cells for cancer immunotherapy. According to EMA, increasing CAR-T cells or recombinant TCR T cells require that the current guideline be revised. Additionally, a number of medicinal products based on CAR-T cells are already authorised. As a result, the current guideline needs to be further revised in order to provide experience specific to CAR-T cells.

The concept paper has been released for three months external consultation. Bio-pharmaceutical industries, academia or other developers of gene and cell therapy medicinal products can provide their comments until 31 October 2017.


FCC Extends TCPA Liability to Technology Platform Provider

The U.S. Federal Communications Commission has adopted a Forfeiture Order (“Order”) imposing a nearly $2.9 million penalty against Dialing Services, LLC (“Dialing Services”) for making prerecorded voice calls to wireless phones without the “prior express consent” of the called parties.  This Order is notable because the FCC targeted the technology platform provider rather than the provider’s customer.

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