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Focus on Regulation

Trump Administration Re-Certifies Iranian Compliance with Nuclear Agreement; Imposes Sanctions on Additional Entities for Other “Malign” Activities

On July 17, the Department of State communicated to Congress that Iran remains in compliance with its obligations under the Joint Comprehensive Plan of Action (JCPOA), the nuclear agreement reached over Iran’s nuclear program by the world’s major powers that went into effect in January 2016. Under U.S. law, the Administration is required to make this certification—or not—every 90 days, making this the second time that the Trump Administration has issued such a certification to Congress. In conjunction with certifying Iran’s compliance with the JCPOA, the Trump Administration announced that it renewed waivers of certain nuclear-related secondary sanctions necessary to continue the sanctions relief under the nuclear agreement. Secondary sanctions generally are directed toward non-U.S. persons for specified conduct involving Iran that occurs entirely outside of U.S. jurisdiction. Continue Reading

FDA Makes Two Announcements on Electronic Tracking of Prescription Drugs to Comply with the Drug Supply Chain Security Act

On July 20, 2017, FDA published two announcements in the Federal Register related to the development of an electronic, interoperable system to identify and trace certain prescription drugs distributed within the United States, pursuant to Congressional mandates in the Drug Supply Chain Security Act (DSCSA).  The notices announce a new pilot program to evaluate electronic tracking methods and a series of meetings for FDA to solicit stakeholder input on developing such a system.

Passed in November 2013, DSCSA introduces a variety of new requirements for manufacturers, wholesale distributors, repackagers, dispensers, and third-party logistics providers to track and trace certain prescription drugs as they move through the supply chain and to verify the identity and history of product as it is distributed.  One of its provisions requires that a system for the “interoperable, electronic tracing of product at the package level” go into effect by November 27, 2023.  See 21 USC 360eee-1(g)(1).  Once operational, the system must permit the exchange of transaction information and transaction history between manufacturers, wholesale distributors, third-party logistics providers, repackagers, and dispensers “in a secure, interoperable, electronic manner.”  Id.  As part of the process of developing this system, FDA is directed to conduct at least 5 public meetings to gather ideas on strengthening the safety and security of the supply chain and to oversee at least 1 pilot program “to explore and evaluate methods to enhance the safety and security of the pharmaceutical distribution supply chain.”  21 USC 360eee-1(j)(1).  In these notices, FDA announces the commencement of both efforts.

For the pilot projects, FDA is recruiting participants from the pharmaceutical distribution supply chain and other stakeholders.  FDA asks participants to propose the design and execution of their own pilot project, but will share “learnings” among all members.  FDA encourages participants to focus their proposed projects on the interoperable, electronic tracing of product at the package level.  FDA has identified a long list of issues to examine in the areas of Product Identifier, Barcode Quality, Interoperability, Data/Database/System Issues, Aggregation/Disaggregation, Verification/Notification, Exception Handling/Errors/Inconsistencies, and Special Scenarios.  To apply, interested stakeholders should submit a request with contact information, names of all partnering entities that would participate, the types of partnering entities participating, the number of employees for each partnering entity that would participate, proposed start and finish dates, a commitment to begin the project within 4 months of acceptance by FDA, a list of products to be used in the project, a list of locations where the project will be performed, and a description of the pilot project, including its goals, objectives, processes to be studied, and evaluation methods.  Pilot projects should not exceed 6 months in duration.  Participants are expected to submit status reports during the project and a final report within 30 days of completion.

For the public meetings, FDA has announced a schedule of three public meetings to discuss topics related to the safety and security of the pharmaceutical supply chain.  The proposed meetings are as follows:

  • August 23, 2017: Discuss “What supply chain security should look like in 2023” and “What is needed for enhanced drug distribution security.” Advanced registration closes July 31, 2017. A comment period on these topics will remain open until September 22, 2017.
  • December 5-6, 2017: Discuss “What is needed for electronic interoperability,” “Standards for product tracing,” “Data architecture options for an electronic interoperable system,” and “The management and maintenance of product tracing data.” Advanced registration closes October 27, 2017. A comment period on these topics will remain open until January 5, 2018.
  • February 28, 2018: Discuss “The use of aggregation and interference for enhanced product tracing and verification” and “Building capacity for a unit-level system for product tracing and verification.” Advanced registration closes January 26, 2018. A comment period on these topics will remain open until March 30, 2018.

All meetings will be held on FDA’s White Oak campus and will be simultaneously webcast.

The pilot program and meetings provide an opportunity for interested stakeholders to provide feedback and raise concerns with the agency about the design and implementation of the electronic information exchange system. This gives stakeholders the chance to comment early on, while FDA is still developing an idea of how the system might look. On the other hand, participation in the pilot program, as announced by FDA, involves complying with many demands, and it is unclear at this time what, if any, benefit will be realized by participants.

If you have questions or would like to discuss options, please contact the authors.

Senate HELP Committee Questions NLRB Nominees on Higher Education Issues

During the Obama Administration the National Labor Relations Board (“NLRB” or the “Board”) opened wider the gates of private colleges and universities to organized labor.  In 2014 the Board made it easier for faculty to unionize by making it harder to prove faculty are management.  In 2015, while rejecting a petition for recognition by student athletes at Northwestern University, the Board left open the possibility that Division I student athletes are employees under the National Labor Relations Act.  And in 2016 the Board reversed precedent and ruled that graduate—and even perhaps undergraduate—student teaching and research assistants are employees eligible to form unions.  Unions saw opportunities; some colleges and universities saw the potential transformation of academe. Continue Reading

FCC Proposes Increased Service Obligations on Wireless Licensees Seeking Renewal

The Federal Communications Commission (“FCC”) has released a draft Second Report and Order and Further Notice of Proposed Rulemaking on renewal requirements and permanent discontinuance rules for a variety of wireless services.[1]  The Draft Further Notice proposes new rules—such as additional renewal term construction obligations to enhance rural build-out—that, if adopted, would have far-reaching implications for wireless licensees.

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Chinese walls? Germany reinforces the control of foreign investments

On 12 July 2017, the German Federal Government significantly reinforced the barriers for the acquisition of German companies by non-EU companies. The new Regulation for the Amendment of the Foreign Trade and Payments Regulation (“AWV”) will impose new reporting obligations for M&A transactions. There are now concerns about the openness of Germany to foreign investment and the additional burden that the new rules will impose on companies. Continue Reading

HRLA panel discusses growing significance of commercial human rights post-Brexit

Before a central London audience earlier this month, Charles Brasted, partner and head of public law and policy at Hogan Lovells, and leading QCs Tim Ward, Jessica Simor and Gerry Facenna reflected on the likely impact of the UK’s withdrawal on commercial human rights law and the constitutional settlement in England and Wales. There was something for everyone in the balanced and varied positions assumed by the panel members: some emphasised the flexibility of the common law as an effective means of responding to the loss of EU law rights; others noted the Brexit-driven rise of executive power at the expense of the UK’s constitutional foundations.

Brasted sought to stress the growing importance of human rights arguments to businesses seeking to challenge government decisions and noted that all may not be lost come Brexit: “Our relationship with the European Court of Human Rights and Convention will be unchanged by Brexit broadly. I will shy away from speculating as to whether the long threatened human rights reforms of the Tories are closer or further than they were before. I merely note they have proven somewhat undeliverable to date“. The conclusion? Public law challenges grounded in Convention rights are safe (for now) and have become a wholly conventional basis for commercial judicial review.

However, he went on to underline the significance of EU treaties and EU law principles in the context of challenges to UK public law decisions, regulation and legislation – treaties and principles which will likely cease to apply in post-Brexit Britain. Not only do they provide strong remedies in damages, they provide safeguards against state actions that inhibit competition and commercial freedom. And while the judiciary has been keen to emphasise the non-statutory common law basis of certain EU law concepts, it may struggle to fill the void that Brexit will create in our system of administrative law.

Indeed, the European Union (Withdrawal) Bill, which was published last week and constitutes the focus of the Government’s strategy for legislating for withdrawal, confirmed the Government’s intention to ensure the Charter of Fundamental Rights of the European Union does not form part of UK law following Brexit. In light of the more extensive protection granted by the Charter, as compared to the Convention, it is highly likely that avenues of public law challenge will be reduced.

Jessica Simor QC, in contrast, chose to hone in on a single theme: loss. The loss of constitutional rights enjoyed by business; the loss of procedural rights; and the loss of democratic rights due to Henry VIII clauses. For the last sixty years, businesses have been guaranteed the four fundamental freedoms, the constitutional core of the single market, underpinned by the most important of all human rights – the right to non-discrimination and the right of access to the courts. But come March 2019, the remaining EU27 will be free to discriminate against goods and services from the UK, a third country floating beyond the Union’s north-western border.

After briefly discussing the loss by companies of their ability to enforce trade rights through direct actions in the courts, and the possible loss of their ability to enforce civil judgments via the Brussels Regulation, Simor moved on to the focus of her argument: the loss of democracy and the rule of law as a consequence of Henry VIII clauses. Such clauses allow the executive to amend primary legislation using secondary legislation with no parliamentary scrutiny, and the pre-election White Paper indicated that a then supine parliament would readily grant such powers for an ill-defined set of (formerly Great) Repeal Bill-related purposes. This, she claimed, is very much at odds with democratic norms. But in a wry conclusion, she observed that even Henry VIII did not obtain such powers. The Statute of Proclamations (said to be the origin of the concept of the Henry VIII clause) provided him only with a right to have his prerogative writs enforced by a Council and specifically guaranteed acquired rights would not be removed. Moreover, it ultimately failed and was repealed after only 8 years on the statute book.

The now-published Repeal Bill confirms Simor’s prescient analysis. Ministers are to be empowered to amend primary legislation to deal with “deficiencies in retained EU law” arising from withdrawal, to remedy any breach of the UK’s international obligations caused by withdrawal, and to implement the terms of the withdrawal agreement reached with the EU. And that’s just for starters. The Government has also proposed a more general power to allow ministers, by regulations, to “make such provision as the Minister considers appropriate in consequence of this Act“. Yet while these powers are likely to prove highly controversial (particularly the latter), it is worth noting that an alternative method of speedily transposing EU law into UK law without deficiencies is yet to be proposed.

Finally, Gerry Facenna QC of Monckton Chambers sought to allay the audience’s fears with an exploration of the common law equivalents to the two core commercial human rights: the right to property, in all its various forms, and the right to privacy and confidentiality. In light of the protections in domestic common law and under the Convention, companies may not be losing very much in terms of fundamental rights protection, he argued, although there are undoubtedly substantive EU commercial rights that will be lost. Similarly, he noted that the Supreme Court in particular has been moving toward emphasising the common law protections for procedural rights relied on by business.

It is hard to disagree with anything said by the speakers at the event, but if you would like to make up your own mind, you can watch the recording here. And for regular updates and analysis on the latest Brexit developments, check out the Hogan Lovells Brexit Hub here.

Moving Beyond #Ad: Instagram Unveils New Tool for Disclosing Endorsements

Instagram recently rolled out a new feature to a select group of its users who use the social media platform for promotional purposes. This tool allows influential users to add a new subheading to posts that reads “Paid partnership with…” It is designed to help users clearly and conspicuously tag the brand that sponsors a post. The announcement comes just two months after the Federal Trade Commission (FTC) focused its attention, for the first time, on influential Instagram users and raised concerns about whether certain users were violating FTC Endorsement Guidelines. Instagram claims its new feature will bring “more transparency to commercial relationships” between Instagram influencers and the brands they promote. Continue Reading

Why the Repeal Bill is central to making Brexit a success

Leaving the EU will require the most comprehensive re-writing of the UK’s statute book ever undertaken. Parliament must unpick over 40 years of integration between the UK and the EU legal systems and ensure no gaps are left in the process.  The Government’s solution, the highly anticipated, formerly ‘Great’, Repeal Bill, is due to be published this Thursday, 13 July 2017.  The Bill is likely to be the most constitutionally significant legislation enacted by the UK Parliament since the European Communities Act 1972, which took the UK into the European Economic Community and which the Repeal Bill is set to repeal and replace.

In advance of the Bill being published, we look ahead to what the Bill is expected to do, what happens next and the consequences of Parliament failing to pass the Repeal Bill into legislation before the UK leaves the EU.  Read more here and for a visual explanation of how EU law is currently incorporated into UK law and what needs to change post-Brexit, click here.

FCC Proposes Historic $120 Million Fine for Illegally “Spoofed” Robocalls

The Federal Communications Commission has proposed a historic $120 million fine against an individual, Mr. Adrian Abramovich, who reportedly made more than 100 million unlawful “spoofed” robocalls in violation of the Truth in Caller ID Act. On June 22, 2017, the Commission approved a Notice of Apparent Liability for Forfeiture finding Mr. Abramovich apparently liable for violations of the Act and Commission rules. On the same day, the Enforcement Bureau issued a Citation and Order notifying Mr. Abramovich that he violated the Telephone Consumer Protection Act (TCPA) by making prerecorded telemarketing calls to emergency phone lines, wireless phones, and residential phones without consent.

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House Subcommittee on Health Opens Floor for Discussion of FDA Regulation of Off-Label Speech

The House Subcommittee on Health has announced a hearing entitled “Examining Medical Product Manufacturer Communications” for Wednesday, July 12, 2017, at 10:15am EDT, in which it intends to examine two discussion-draft bills seeking to amend the Federal Food, Drug, and Cosmetic Act (“FDCA”) to clarify how drug and device manufacturers can legally discuss uses of their products that are not described in their labeling.  This hearing represents the latest development in the recent flurry of activity surrounding the U.S. Food and Drug Administration’s regulation of manufacturer communications related to unapproved uses of their products since FDA’s issuance of two draft guidances and a First Amendment memorandum right before the change in administration earlier this year.

The first bill seeks to limit the definition of intended use of drugs and devices by amending FDCA Section 201A to prevent the intended use of a drug or device from being determined by reference to (1) actual or constructive knowledge that the product will be used “off-label” in a manner that differs from the use for which it is cleared, approved, or licensed; (2) non-public manufacturer statements about the product that are not included in any promotional materials or statements to third parties; or (3) communications considered to be scientific exchange.  The proposed bill also would add a scientific exchange “safe harbor” for dissemination of off-label information about a drug or device.

The second bill seeks to amend the definition of false or misleading labeling by amending FDCA Section 502(a), which allows for provision of certain health care economic information to entities making coverage decisions, to explicitly include devices, as well as drugs.  It also includes a new paragraph exempting the provision of such information to these entities from the misbranding provisions of the act if the information is based “on competent and reliable scientific evidence and relates to an investigational use of a drug or device.”  The proposed language goes on to define specific criteria for when information related to an investigational use of an approved, cleared, or licensed drug or device may be provided.

Interested parties can attend the hearing in person in room 2322 of the Rayburn House Office Building or via webcast, which will be available at http://energycommerce.house.gov/.