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Focus on Regulation

January Advancements for Small Modular and Advanced Nuclear Reactors

January has already proven an eventful month for developers of small modular reactors (SMRs) and non-light water (i.e., advanced) reactors.

The U.S. Nuclear Regulatory Commission (NRC) is finally starting to see significant movement in regards to SMRs.  NuScale’s January 12 submission of its design certification application for a 50 MWe SMR design garnered significant news attention.  Also of note, on the same day the Tennessee Valley Authority’s (TVA’s) early site permit application for a SMR power plant at Clinch River, Tennessee was docketed by the NRC.

For advanced nuclear reactors, earlier this month the Nuclear Energy Innovation Capabilities Act was introduced in the House and Senate to spur technology development related to advanced reactors.  The companion bills, H.R.431 and S.97, were introduced by Representative Randy Weber and Senator Mike Crapo and have bipartisan support.  Although the text is not publicly available yet, in a press release from the House Committee on Science, Space, and Technology, Randy Weber stated that “[t]his legislation requires the Department of Energy to prioritize its R&D infrastructure on capabilities that will enable the private sector to develop advanced reactor technologies.”

Separate legislation geared towards improving the regulatory framework for advanced reactors progressed in Congress in 2016, but has since been dormant during the political transition (a detailed entry discussing this legislation is available here).  If one or both of these efforts is able to move forward this year, it could prove very helpful to the advanced reactor community.

For more on legislative developments related to SMRs and advanced nuclear reactors, please contact the authors.

UK MHRA to develop quality standards for biological medicines

The UK Medicines and Healthcare products Regulatory Agency (“MHRA”) has published a draft strategy for developing pharmacopoeial public quality standards for biological medicines.

Public quality standards form part of the regulatory framework governing the quality of all medicines. Both documentary and physical standards exist to ensure that medicines are of acceptable quality for use by patients. Documentary standards set minimum quality attributes such as identity, potency and purity, and also include descriptions of analytical methods used to demonstrate these criteria. In the UK, documentary pharmacopoeial quality standards are published in the British Pharmacopoeia.

The MHRA recognises the increasing importance of biological medicines and is therefore developing a strategy for documentary pharmacopoeial quality standards specifically for biological medicines. The new strategy aims to ensure consistent manufacturing and acceptable levels of safety and efficacy across biological medicines through the development of new standards for manufacturers, regulatory authorities and independent testing laboratories. It is also intended to encourage innovation through standards for the use of new innovative technologies.

Key elements of the strategy include:

  • An assessment of current and potential alternative approaches for the development of general and medicine-specific standards;
  • Collaboration with industry and other stakeholders in the establishment of standards and to increase the MHRA’s existing knowledge on quality control practices used by manufacturers;
  • A review of the current biological standards and the need for new and revised standards; and
  • Collaboration with national initiatives and international regulatory and pharmacopoeial agencies to adopt best practices.

The MHRA will also continue to develop physical standards for biological medicines, published by the National Institute for Biological Standards and Control.

Stakeholders are invited to submit comments on the biological medicines market, the need for standards and how the MHRA can collaborate with stakeholders. The consultation closes on 10 April 2017. The consultation document and response form are available here.

Connected Cars are Coming. Quickly.

One of the highlights at this year’s Consumer Electronics Show (CES) was the parade of new connected vehicle technologies.  Automakers and their suppliers rolled out a number of innovative capabilities that promise to shape the next generation of driving, make transportation safer and more efficient, revitalize our cities, and reduce air pollution.  Often lost amidst the “oohs” and “ahhs” these new capabilities inspire, however, is their dependence on radio spectrum and the policies that govern its use.

The new connected vehicle capabilities come in decidedly different flavors.  Some, for example, seek to enhance the automobile user’s experience.  Chrysler’s Portal is an all-electric vehicle that customizes the in-vehicle experience using biometrics and facial recognition, allows occupants to listen to their own music, and has a “community” screen for content sharing.  Honda’s NeuV includes artificial intelligence, can converse with passengers, and allows owners to rent out their cars when they are not in use.  And BMW’s HoloActive Touch replaces the vehicle dashboard with a floating holograph display that responds to human gestures.

Others seek to reduce or eliminate the need for a human automobile “operator” – at least in the traditional sense.  For example, the Portal and NeuV are partially autonomous vehicles, which allows them to operate on their own as long as a human is available to intervene.  By contrast, Ford reiterated its intent to put a large number of fully autonomous vehicles – vehicles without pedals or steering wheels – on the road by 2021.  And NVIDIA unveiled a new platform for autonomous vehicles, DRIVE PX 2, which features machine learning and artificial intelligence capabilities and can process 24 trillion deep learning operations per second.

Most of these capabilities depend on spectrum.  Take Google’s self-driving car, for instance.  It relies on vehicle-resident technologies, such as radar and lidar, to gather information about its surroundings and “see” where it is going.  Radar and lidar require spectrum and, in the U.S., must adhere to Federal Communications Commission (FCC) rules.  The FCC currently allows vehicular radar to operate on the 76-77 GHz band.  In 2015, the FCC recognized vehicular radar’s growing role by proposing to expand the band to 76-81 GHz.  This would also help harmonize the FCC’s rules with international rules created for vehicular radar at the 2015 World Radio Conference, making it easier and cheaper to sell and operate the same equipment across the globe.

Another, potentially complementary technology is vehicle-to-vehicle (V2V) communications.  One of our Uber drivers at CES explained that “self-driving cars sound great, but what we really need are cars that talk to each other.”  That is what V2V is all about.  It is part of a family of intelligent transportation systems (ITS) that allow cars to talk to each other, to roadway infrastructure (V2I), and to pedestrians (V2P).  V2V can warn cars in advance that they are approaching other cars at an intersection, whereas vehicle-resident technologies like radar and lidar might not allow the cars to see each other until it is too late.

Like vehicular radar, V2V requires spectrum.  The FCC has reserved 75 MHz (the 5.9 GHz band) for V2V and other ITS applications.  The automobile industry is currently developing, testing, and starting to deploy such applications.  For its part, the National Highway Traffic Safety Administration attempted to encourage V2V deployment last month by proposing to require V2V capabilities in new cars and trucks.  Meanwhile, the FCC is testing sharing proposals to see if unlicensed Wi-Fi technologies can share the 5.9 GHz band with V2V and other ITS technologies without interfering with those safety systems.

Mark Fields, Ford’s President and Chief Executive Officer, projects that connected vehicles will have as profound an impact on how we work, play, and travel as the changes wrought by Henry Ford more than a century ago.  He may be right, especially if sound spectrum policies encourage continued innovation and deployment.  Judging by the technologies on display this year at CES, it could be an exciting ride.

New Federal Law Prohibits Contracts With “Anti-Yelping” Provisions

Late last year, President Obama signed into law the Consumer Review Fairness Act (“CRFA”).   Intended to protect individuals who write unflattering online reviews of businesses, the CRFA voids contractual provisions in form contracts that: (1) prohibit non-disparagement; (2) impose liquidated damages or fines for posting disparaging reviews; or (3) exert control over the review through an assignment of intellectual property rights.  Importantly, it also prohibits companies from offering form contracts with these provisions.

The CRFA empowers the Federal Trade Commission (“FTC”) and the states to enforce the law, and the FTC is directed to issue nonbinding best practices for compliance with the CRFA.

The CRFA is a congressional response to several highly publicized cases in which businesses have attempted to sue individuals for writing negative reviews on Yelp and similar platforms.  One recent example involves a pet-sitting company that unsuccessfully sued its customer for $1 million based on a Yelp review she had written, invoking a non-disparagement clause in the service contract.   As another example, a wedding venue received backlash in 2014 for fining couples $500 for each negative online review written by their guests.  And in 2013, an online retailer attempted to fine a Utah couple $3,500 for a negative review, which reportedly affected the couple’s credit rating.

In recent years, state legislatures and federal regulators have moved to prohibit these practices.  In 2015, the FTC sued Roca Labs over its attempts, through the use of non-disparagement clauses, to prevent negative reviews of its supplements.  California and Maryland, among other states, have also recently passed “right to Yelp” laws.  The CRFA follows on the heels of such efforts.

Despite the tenor of the CRFA and related laws, companies still have legal options at their disposal to manage important reputational concerns.  The CRFA explicitly preserves a company’s ability to seek removal of material that is false, misleading, libelous, defamatory, proprietary or sensitive in nature, or unrelated to the good or service at issue.

Review of NRC Final Vision Statement on Advanced Reactors

In late December the staff of the U.S. Nuclear Regulatory Commission (NRC) issued an updated and seemingly final “NRC Vision and Strategy Statement” for non-light water (a.k.a. advanced) reactors (Final Vision Statement).  We previously reviewed the Draft Vision Statement, as well as comments received on it from advanced reactor companies, in an October blog post.  While much of the vision statement remains the same in the final version, in core areas there are significant departures from the draft.

As we discussed in the October post, the core aspects of the Draft Vision Statement were the creation of a “conceptual design assessment” (CDA) and staged standard design approval process for advanced reactors.  In the Draft Vision Statement, these were found in Section 5, titled “Non-LWR Regulatory Review Options and Flexibilities.”  This section also provided a helpful overview of the NRC regulatory process and ways it could be applied to advanced reactors.  In the Final Vision Statement, this section has been completely removed.  Also eliminated are the sample deployment timelines for advanced reactors under the 10 C.F.R. Part 50 and Part 52 processes, which were found in Section 6.

These changes may be the result of comments received on the Draft Vision Statement, also discussed in our October post.  Commenters on the Draft Vision Statement, which included the Nuclear Energy Institute, Transatomic Power, and X-energy, generally criticized the NRC process as too slow.  They instead proposed revised timetables that anticipated advanced reactors under construction in the 2020s.  Certain commenters indicated that the NRC should be prepared to receive pre-application submissions in just a couple years from now, much earlier than estimated in the Draft Vision Statement.  The commenters also challenged the CDA and staged review process, arguing that they must have meaningful results to be justified.  Transatomic Power further recommended that the CDA concept be ditched.

The Final Vision Statement still advertises that a CDA and staged review process may be implemented for advanced reactors in the future, but now there is no formal discussion of what they may look like.  The Final Vision Statement, as with the draft, only suggests that any such approaches will remain, at least initially, within the scope of the current regulatory environment: “Activities in both of these areas are initially expected to be within the scope of the current regulations, with possible development of a revised regulatory framework for non-LWRs in the long-term.”

In lieu of specific timelines, the Final Vision Statement now states more generally that “the NRC plans to achieve its strategic goal of readiness to effectively and efficiently review and regulate non-LWRs by not later than 2025,” in order to allow for construction “by the early 2030s.”  It acknowledges that the advanced reactor community may wish to submit design applications and start construction “in the near-term”—i.e., earlier than the U.S. Department of Energy’s (DOE’s) goal of having two non-LWR designs reviewed and ready for construction in the early 2030s.  But the Final Vision Statement does not address the issue in detail.  Instead, it only states: “the NRC will work with vendors on design-specific licensing project plans and the NRC may accelerate specific readiness activities, as needed.”  As in the Draft Vision Statement, the NRC states that it is capable of reviewing such applications earlier, but these “will not benefit from the efficiencies gained as the non-LWR vision and strategies are implemented.”

Additional changes were made in the Final Vision Statement, particularly in the Section 4 discussion of agency near-, mid-, and long-term strategies to enhance technical readiness.  These changes focus the strategies a little more on identifying regulatory gaps as well as on improving readiness to review fuel fabrication and fuel cycle issues related to advanced reactors.  These may have been in response to comments, discussed in our October post, that the Draft Vision Statement left out a sufficient discussion of fuel fabrication facilities.  Nonetheless, the NRC strategies discussed in the Final Vision Statement remain at a very high level.

The Final Vision Statement appears to reflect that the NRC took in the criticisms to its draft CDA and staged review process for advanced reactors, but it leaves no clear replacement for the removed information.  In addition, the Final Vision Statement reflects that the NRC is still sticking to the DOE timeline for development of advanced reactors, which envisions construction only in the early 2030s, although it leaves open the door for earlier action if applications do actually come in.

This timeline is likely to be disappointing to many advanced reactor companies who anticipate submitting applications to the NRC sooner than the DOE timetable expects.  To the extent the advanced reactor community wants to seek earlier action from the NRC, it should continue to communicate with the agency about anticipated timelines for specific projects.   More generally, the community can submit formal comments and letters, as well as participate in NRC-sponsored events, such as the March 2017 NRC Regulatory Information Conference, and the April 2017 DOE-NRC Advanced Reactor Workshop.

For more information about the NRC Final Vision Statement on advanced reactors, or about advanced reactor and nuclear power licensing in general, please feel free to contact the authors.

U.S. Department of Education Issues Guidance on Student Eligibility for Closed School Discharge

Department of EducationOn December 7, 2016, the U.S. Department of Education (“ED”) issued an Electronic Announcement providing guidance about the eligibility requirements that apply if a student wishes to receive a closed school discharge of a Title IV loan.

In general, a student borrower may receive a discharge of a Title IV loan if the borrower (1) was unable to complete his or her program of study because the school closed while the borrower was enrolled or (2) withdrew from the school not more than 120 days before the school closed.

However, a borrower is not eligible for a closed school discharge if he or she is completing a “comparable program of study” at another school either:

• Through a teach-out agreement with the school,
• By transferring academic credits/hours earned at the closed school to the school, or
• By “any other comparable means”.

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U.S. Department of Education Denies Charlotte School of Law Recertification for Federal Student Aid Eligibility

charlotte focus on regulation blog postOn December 19, 2016, the U.S. Department of Education (“ED”) announced that following an 18-month review, it had denied Charlotte School of Law (“CSL”) recertification to participate in federal student financial aid programs under Title IV of the Higher Education Act. The denial ended CSL’s participation in the Title IV programs effective December 31, 2016.

In a letter to the President of CSL, a for-profit law school located in Charlotte, North Carolina, ED provided two reasons for the denial:

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New French Sunshine Regulations About To Kick In

The French sunshine regulations require industry to report certain agreements along with the fees and other benefits provided to various stakeholders in the healthcare sector. These regulations also govern the declarations of interests that experts must file in relation with their interactions with the industry.

Sunshine regulations were amended in January 2016 to increase transparency. Some specifics of these changes have been partly established by an implementing decree dated 28 December 2016. These changes, along with forthcoming additional details, will enter into force through the publication of a ministerial order, at the latest on 1 July 2017.

A revised framework will apply to the reporting of fees paid by the industry

The decree provides that the companies have to disclose fees paid to stakeholders amounting to 10 euros or above. This is not completely new. The French Administrative Supreme Court had already ruled in 2015 that sunshine regulations required the disclosure of such fees. This was debated, since the regulations did not expressly state that. The industry had expressed some reservation regarding the practical implementation of such disclosure, but authorities insisted that such fees need to be reported. Part of the industry had hoped that the decree would dispense reporting of fees under the legal regime prevailing before the changes brought by the 2016 regulations. But the decree does not include such dispense, hence reporting of fees being legally deemed required since 2012 (albeit under different rules). This has created practical issues for companies that have not traced the payment of fees from the outset of the regulations in 2012. The implementing decree dated 28 December 2016 clarifies the situation for future disclosures.

Other notable changes

The industry must report:

  • the total amount of agreements entered into with stakeholders;
  • the date of signature of the agreement, and its end date, if set when the agreement is signed by the parties;
  • the precise purpose of the agreement, according to a classification to be set forth in a forthcoming ministerial order.

As a reminder, the identification of indirect and final beneficiary of the benefits and fees granted will need to be disclosed. The decree provides that stakeholders contracting with the industry will have to provide the information allowing the identification of such indirect and final beneficiaries, if any.

The decree provides some practical relief for companies, since reporting the information in relation with agreements entered into with stakeholders will no longer be within 2 weeks of their signature. In practice, companies will have to disclose the above information, including those in relation with such agreements, at the latest:

  • on 1 September, for the agreements entered into, the fees paid and the other benefits granted in the course of the first semester of the current year;
  • on 1 March of the following year, for the agreements entered into, the fees paid and the other benefits granted in the course of the second semester of the previous year.

How to get ready for what is next

Companies should:

  • continue making sure they trace and report fees paid to stakeholders. The reporting that needs to be carried out currently must be made in application of the 2015 French Supreme Court decision. As soon as the ministerial order enters into force, the fees will need to be reported under the new regime resulting from the 2016 regulations;
  • anticipate the adaptation of their tools (where needed) so that they will be able to classify and report the purposes of the agreements in accordance with the ministerial order;
  • update agreements to be compliant with the new requirements,
  • notably to manage the provision of the information allowing the identification of indirect and final beneficiary of the benefits and fees granted, when applicable.


FDA Clarifies Requirements Regarding Submission of Manufacturing Establishment Information

On December 29, 2016, FDA issued a new draft guidance regarding drugs and biologics entitled “Providing Regulatory Submissions in Electronic Format—Submission of Manufacturing Establishment Information.” 81 FR 96013 (Dec. 29, 2016). The guidance provides an overview of the requirements for a valid electronic submission of manufacturing establishment information (MEI) under section 745(a) of the Federal Food, Drug, and Cosmetic Act (FDCA) as amended by the Food and Drug Administration Safety and Innovation Act (FDASIA). Continue Reading

UK MHRA publishes “top tips” for manufacturing authorisation applicants

The UK Medicines and Healthcare products Regulatory Agency (“MHRA”) has published guidance for companies submitting a Manufacturing Authorisation application or variation on common mistakes made by applicants, to help reduce delays in processing applications.

The MHRA is required to grant or refuse applications for manufacturing authorisations within 90 days of receiving a completed application. The MHRA receives over 800 manufacturing authorisation related applications each year and over 30% of these require further information before the MHRA can begin processing the application, causing delays.

The MHRA has identified 6 common mistakes made in applications and has provided guidance to help companies address these:

  1. Ensure that application forms are complete and attach all the supporting documentations.
  2. Only include activities that the company is capable of performing at the time of the application (and not those that it might perform in future).
  3. Ensure that the nominated key personnel have experience at the relevant site and knowledge of the site’s Pharmaceutical Quality System.
  4. Only name contract laboratories in the application if they are performing an inspectable activity such as testing of finished products prior to batch release or stability testing of finished products.
  5. Storage only sites for stability samples that do not conduct any testing and are not being stored for wholesale dealing purposes do not need be included in the application.
  6. Sites should be ready for inspection. The QP/QA team must have carried out a full scope self-inspection to confirm the site’s readiness for inspection and have an action plan in place to address any deficiencies identified.

The last point is particularly important as Inspectors must issue a GMP Certificate or a Statement of Non-Compliance (“SoNC”) within 90 days of the inspection. If the site is not ready or the Inspector is not satisfied with any corrective and preventative actions proposed by the QP/QA team, the Inspector may recommend that the application be refused or a SoNC issued. The applicant will incur additional costs as well as delays if a follow-up inspection is required or a new application has to be submitted.

The full guidance is available here.