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Focus on Regulation

EU Referendum: English High Court refuses British expats’ application for judicial review of “15 year rule”

The High Court has rejected a legal challenge to legislation excluding British citizens who have lived abroad for more than 15 years from voting in the EU Referendum.

The British expat Claimants, who had lived in other EU member states for over 15 years, claimed that the EU Referendum Act 2015 breached their rights to free movement under EU law.

The High Court held that:

  • section 2 of the Act, which adopts the 15-year rule, was capable of engaging EU law;
  • the 15 year rule was not a restriction on the Claimants’ rights of free movement as EU citizens: it was “totally unrealistic to suggest that this rule could have the effect of deterring or discouraging anyone considering whether to settle or remain in another Member State”; and
  • even if the 15 year rule were a restriction on those rights, it would be objectively justified because Parliament could “legitimately take the view that electors who satisfy the test of closeness of connection set by the 15 year rule form an appropriate group to vote” on the question posed in the EU referendum. In addition, there would be “significant practical difficulties” in adopting a new electoral register because, by way of example, current practice is for electoral registers to be retained for 15 years, meaning that there would be no straightforward means of checking the previous residency status of British citizens currently subject to the 15-year rule.

The Claimants intend to pursue a leapfrog appeal direct to the Supreme Court. In principle, the threat to the EU referendum date therefore remains.

Big News: Small UAS Rule at OIRA for Final Review

In a major new development, the FAA has sent the Small UAS NPRM to the White House for a final interagency review.  This means that a final small UAS rule is coming soon – and that NOW is the last opportunity to influence the rule before it is released.

Before any significant regulatory action takes effect, it first must go through a review process at the Office of Information and Regulatory Affairs (OIRA) at the White House.  OIRA is located within the Office of Management and Budget (OMB) within the Executive Office of the President.  It is commonly said that OIRA is the most important agency in Washington, DC that nobody has heard of.  OIRA reviews draft regulations before they are implemented and reviews and evaluates cost/benefit analyses to determine whether the benefits of a rule would justify the costs.

We are now at an extremely important step in the rulemaking process, which provides industry stakeholders with one final opportunity to provide additional input before the final rule is released.

The period for OIRA review is limited by Executive Order 12866 to 90 days.  Under the Executive Order, the review period may be extended indefinitely by the head of the rulemaking agency; alternatively, the OMB Director may extend the review period on a one-time basis for no more than 30 days.  According to OIRA, the average review period is 53 days.  OIRA received the FAA’s Small UAS NPRM for review on April 20, 2016.

As part of its review process, any member of the public—including UAS manufacturers, operators, and users—can request a meeting with the agency to discuss the proposed rule, what it should contain, and how the rule will impact them. The meetings are conducted by the OIRA Administrator or his designees, and a log of all meetings is publicly available.

A meeting with OIRA provides a golden opportunity for stakeholders to make their voices heard on key UAS policy issues.  Companies that want to provide input on issues such as certification of pilots and visual observers, registration of UAS, approval of operations, federal preemption of UAS policy issues, and operational limits for UAS now have the chance to provide their ideas directly to the White House.  It is also helpful for stakeholders to reinforce the importance of expediency in moving the rulemaking forward.

If you would like to communicate your views to the White House during this review period, let us know. We would be happy to help.

Brexit and human rights – does Theresa May have a point?

One of the surprises in Theresa May’s comments yesterday was the distinction she drew between the European Union and the European Convention on Human Rights – making clear that, in her view, it was the latter that was the greater cause for concern in the sphere of national security. All too often, no such distinction is drawn.

Reform of the UK’s respective relationships with the EU and international human rights organisations, such as the ultimate enforcer of the Convention: the European Court of Human Rights, remains at the top of the UK’s political agenda. For any valuable public debate on these issues to be had, the important distinctions — and connections — between the EU and the Convention need to be understood.

Dating back to 1950 and drafted in large part by English lawyers, the Convention is the primary source of human rights law in the UK. It has forty-seven signatories, including many states that are not members of the EU.  It is this Convention that, since 1998, has been directly enforceable in UK law as a result of the Human Rights Act passed by the UK Parliament.

As stated above, although UK Courts must themselves apply the Convention, it is ultimately enforced by the European Court of Human Rights in Strasbourg. Any alleged victim, who has exhausted their domestic legal remedies, can bring a claim in the Strasbourg Court against a signatory state for breach of their Convention rights — and the Court can award damages and/or order the state to rectify the breach. The Court’s judgment is binding in international law – although not universally honoured by signatories.

The EU’s court, the Court of Justice of the European Union (CJEU), is not the primary arbiter or enforcer of the Convention. Its role is limited to ensuring the uniform interpretation of, and compliance with, the EU Treaties.  As such, it will answer questions of EU law referred to it by national courts and decide cases brought to it by the EU institutions or member state governments. However, since 2009, the CJEU will also apply the fundamental rights incorporated into EU law by the Lisbon Treaty, such rights replicating and building on the Convention rights (among other things).  As such, since the coming into force of the Lisbon Treaty, the Convention rights have also formed a part of the general principles of the EU.

That will not change if, as Theresa May suggests, the UK were to remain in the EU but withdraw from the Convention – a move that the European Commission has indicated could “raise concern as regards the effective protection of fundamental rights” in the UK.

The international protection of human rights in Europe is complex and interconnected. A clear understanding of the institutional framework is necessary to facilitate an informed debate on the implications of reform.  This is just one of the areas in which the legal terms being thrown around in the Brexit debate need de-mystifying.

Antitrust in WeChat times

This post was contributed by Qing Lyu.

WeChat is a very popular messaging app in China, similar to WhatsApp and Facebook Messaging in other parts of the world. It has social networking, gaming, e-commerce and mobile payment functionalities.  The app plays an increasingly important role in social – and business – interactions in China.  As a result, it is not surprising that WeChat has also acquired relevance in antitrust terms.

According to a press release by the National Development and Reform Commission (NDRC) – one of China’s three antitrust agencies – on April 13, 2016, the participants in a car inspection cartel in Shaanxi Province exchanged information about their price fixing plans in a WeChat group chat, before holding face-to-face cartel meetings.

Separately, in a 2016 article in its official magazine, China Price Supervision and Anti-Monopoly, NDRC confirmed it is using WeChat to collect information on the latest antitrust cases – especially those in foreign jurisdictions – as one of the mechanisms to monitor market developments and – potentially – probably start antitrust investigations.

Among WeChat’s various features, the “WeChat official account” essentially works like a blog allowing a company or an individual to post articles. Many law firms, academic institutions and individuals are now running WeChat official accounts, posting own alerts or reports from third-party sources – including several antitrust-related blogs.

In short, WeChat is becoming an important platform for exchange of information, including in relation to antitrust, of which companies should be aware.


Draft Guideline on the sterilisation of the medicinal product, active substance, excipient and primary container

On 11 April 2016 a draft Guideline on the sterilisation of the medicinal product, active substance, excipient and primary container (“the Draft Guideline”) were published by the European Medicines Agency (“EMA”).

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European Medicines Agency’s draft strategy for antimicrobial monitoring

On 7 April 2016, the European Medicines Agency (“EMA”) announced the launch of a public consultation in the process of drafting Vision and Strategy of the European Surveillance of Veterinary Antimicrobial Consumption (“ESVAC”) (“the Draft Strategy”).

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New VA Policy Regarding TAA Non-Compliant Covered Drugs

The Department of Veterans Affairs (VA) recently announced a fundamental shift in policy that will now require manufacturers to list Veterans Health Care Act (VHCA) covered drugs (i.e., innovators) on Federal Supply Schedule (FSS) contracts, even where the country of origin of the covered drug is a non-designated country under the Trade Agreements Act (TAA). The VA has set rigorous deadlines that require manufacturers to act on the new policy almost immediately, as described below.

New policy: The VA’s new policy is a major departure from its prior policy, under which covered drugs that are TAA non-compliant could not be listed on an FSS contract. The VA’s most recent guidance, in the form of a post on the agency’s website, provides that the agency is “now requiring that all covered drugs, regardless of county of substantial transformation, be available on a 65 I B FSS contract.” This means that VA is now accepting covered drugs that were previously excluded due to their TAA non-compliant nature. Continue Reading

The EU Referendum: Comply with the campaigning rules

What’s the issue?

Statutory restrictions on referendum campaign spending come into effect on Friday, 15 April 2016. Whether or not your business has taken, or intends to take, a public stance on Brexit, you will need to manage the risk of inadvertently falling foul of the rules, even when operating on a business as usual basis.

The basics

  • There is no prohibition on businesses engaging in the EU Referendum debate and/or campaigning for either side.
  • During the official campaign period (Friday 15 April – 23 June 2016), spending on campaigning activities is subject to strict limits, regulated by the Electoral Commission.
  • It will be a criminal offence for anyone who has not first registered as a campaigner to spend more than £10,000 on “referendum expenses” if the person authorising it knew, or ought to have known, that the expenses would exceed the statutory limit.
  • A referendum expense is an expense that is incurred:
    • in connection with a specified activity, which includes market research or polling, holding events, and publishing informational materials; and
    • for a “referendum purpose” – i.e. the expense was intended to or otherwise in connection with promoting or bringing about a particular outcome in the EU Referendum (the “purpose test“).
  • The test applies on an activity-by-activity basis. As a result, a business that has taken a public stance and has promoted a particular outcome may still undertake activities that do not count as referendum expenses.
  • The Electoral Commission has published guidance to help individuals and businesses comply with the rules (available here and here).

Specified activities

The list of activities in Part 1 of Schedule 13 of the Political Parties, Elections and Referendums Act 2000 (“PPERA“), as amended (available here) is broad.  It includes:

  • any material that provides general information about the referendum, deals with any of the issued raised by the referendum, puts any arguments for or against any particular outcome or is designed to encourage voting at the referendum;
  • market research or canvassing conducted for the purpose of ascertaining polling intentions; and
  • events organised so as to obtain publicity in connection with a referendum campaign or for other purposes connected with a referendum campaign.

The rules do not expressly exclude activities, such as events or publications, that are directed only at employees and/or clients (ie not directed at the public at large). However, Electoral Commission guidance suggests that the intended audience of referendum-related activities will be relevant to the consideration of whether the activity is done for a “referendum purpose”.

The purpose test

The definition of referendum purpose contains two elements: “intention to promote or bring about a particular outcome” or “connection with promoting or bringing about a particular outcome”. While the second element suggests that the test may be met even where there was no relevant intention, the Electoral Commission guidance appears focused on the question of intention.

However, it also appears that the Commission will primarily look at objective evidence of the apparent intention.

As a consequence, businesses will need to take care to avoid inadvertently undertaking referendum-related activities during the referendum period that could be construed as promoting one side of the debate, even where this was not the intention. The mere fact that you intended the activity to be neutral as to the referendum outcome and/or have stated that your business is neutral will not suffice if the content and nature of the activity objectively indicates a referendum purpose.

An activity is more likely to be caught if…

  1. your analysis uses positive and negative language when considering the respective outcomes of the referendum;
  2. you use the activity as part of a wider campaign to promote one side of the debate;
  3. in the case of an event, only speakers representing one side of the debate were invited or representation is unequal;
  4. it is marketed in such a way that could be construed as making a value judgment as to the preferred outcome;
  5. it is marketed widely to the public, rather than on a narrow, client-focused basis.

An activity is less likely to be caught if…

  1. your analysis and the marketing and promotion of the activity is objective and neutral;
  2. it is intended to inform the debate, rather than persuade or otherwise influence voters;
  3. it is conducted as part of a professional service to clients or not otherwise widely publicised in the media or to the public at large;
  4. in the case of an event, speakers from both sides of the debate are invited and those attending are given equal opportunity to contribute;
  5. the analysis concerns what organisations will do in the event of a particular outcome or how to prepare for that outcome, rather than making a value judgment as to which outcome is preferred.

What counts as a cost of an activity?

The types of specific expenditure counted as a referendum expense is the same for registered campaigners and non-campaigners. Possible expenses include:

  • relevant overheads and administrative costs, such as increased telephone or utility bills;
  • in respect of the holding of events, the hiring costs of premises, costs of the provision of goods, services and/or facilities at the event and the costs of any reimbursed travel, food or accommodation expenses in connection with the event; and
  • the design, production and distribution costs of printed materials.

Any items, services or facilities bought before the referendum period, but used during the period in circumstances where, if they were bought during the period, they would otherwise be counted as a referendum expense, will be counted. Items, services or facilities bought during the referendum period but paid for after the period will also be counted.


The criminal offence applies only where the person authorising the expense knew, or ought reasonably to have known, that incurring the expense would exceed the spending limit during the period. This could provide a defence to businesses where they have taken a reasonable view about whether a referendum-related activity is for a “referendum purpose” based on legal advice.

What does registering as a campaigner mean?

Businesses that have taken a public position on the EU Referendum debate may choose to register as a campaigner. Registering as a campaigner means that a business would have a higher spending limit during the referendum period of £700,000.  However, registered campaigners are required to declare which side of the debate they support in their registration form and are also subject to disclosure rules on campaign funding and spending.

FDA Issues Data Integrity Guidance, Providing Views on Expected Data Integrity Controls and Oversight

Earlier today, the U.S. Food and Drug Administration (FDA) issued a Draft Guidance addressing a topic affecting the entire pharmaceutical industry—Data Integrity.  The guidance, entitled Data Integrity and Compliance with CGMP, Guidance for Industry (Draft Guidance), and styled as a series of questions and answers, is the first guidance document FDA has issued specifically concentrating on Data Integrity.  While it does not cover every issue companies may face with regard to Data Integrity, it does provide some initial insight into what FDA expects to see during an inspection.

As the pharmaceutical industry knows well by now, ensuring Data Integrity—as a part of current good manufacturing practice (GMP)—in drug development and manufacturing is one of FDA’s top enforcement priorities.  And a lack of Data Integrity in applications and GMP records is viewed with the utmost seriousness within FDA.  Indeed, at a July 2014 conference on “Understanding cGMPs” held at Hogan Lovells and sponsored by the Food and Drug Law Institute (FDLI), Howard Sklamberg, FDA’s Deputy Commissioner for Global Regulatory Operations and Policy, stated his belief that a lack of Data Integrity is often “just fraud.”

We have repeatedly seen FDA’s heightened focus on Data Integrity during inspections.  And during such inspections, FDA is not just looking for actual evidence of data deletion or manipulation.  Rather, FDA is spending significant time assessing whether companies have implemented proper controls and oversight to ensure Data Integrity and good documentation practice.  This is consistent with FDA’s long-standing position that the Agency does not need to establish that a drug is actually deficient to prevail in a GMP case.  Accordingly—in the context of Data Integrity—if a company lacks adequate controls and oversight to ensure Data Integrity, FDA views this as GMP violation, even if FDA has not found any instances of actual data deletion or manipulation.

And this is precisely what the Draft Guidance focuses on—FDA’s expectations for Data Integrity controls and oversight.  The areas FDA highlights include:

  • ALCOA.  Companies should establish Data Integrity controls to ensure that data are Attributable, Legible, Contemporaneously recorded, Original or a true copy, and Accurate.  Draft Guidance at 2.  Among other things, this means that data must be documented and saved at the time of performance.  Draft Guidance at 8.  For example, chromatograms should be sent to long-term storage upon run completion instead of at the end of the day’s runs, and analysts should not record information on one piece of paper and later transcribe it to a controlled lab notebook.  Id.
  • Metadata and Audit Trails.  Metadata—i.e., the contextual information required to understand data, such as date/time stamp and user ID of the person who conducted the test that generated the data—should be maintained throughout a record’s retention period.  Draft Guidance at 3.  Notably, FDA’s draft guidance states that metadata could include audit trails, meaning that FDA expects companies to also maintain audit trails throughout a record’s retention period.  Id. 
  • Audit Trail Review Function.  In many cases, FDA has identified Data Integrity issues—e.g., trial injections, deletion of certain injections, or deletion of entire injection sequences—by reviewing electronic audit trails during inspections.  Thus, FDA recommends that companies’ quality units also review audit trails, especially audit trails that capture changes to critical data.  Draft Guidance at 6 – 7.  The draft guidance states that such audit trails should be reviewed with each record and before the final approval of the record.  Id.  
  • Computer System Controls/Limiting Administrator Privileges.  FDA also recommends that companies implement computer system access controls.  For example, the system administrator role, including any rights to alter files or settings, should be assigned to personnel independent from the individuals responsible for the record content.  Draft Guidance at 5.  This means that, in FDA’s view, laboratory personnel, even laboratory supervisors, should not have administrator privileges on laboratory computer systems.  And no employee should share a login account with any other employee.  Draft Guidance at 6.  Similarly, employees should not share account login information with each other.
  • Test/Prep Runs.  The Draft Guidance memorializes FDA’s position, expressed in numerous 483s and warning letters, that actual samples should never be used in test, prep, or equilibration runs unless permitted by a written procedure and the sample is from a batch different from the one being tested.  Draft Guidance at 9.  Companies should establish controls that clearly prohibit employees from using actual samples to perform analyses, and, through quality oversight, ensure that such controls are being followed.
  • Addressing Data Integrity Deficiencies.  To address data integrity issues during inspections or in warning letters, FDA recommends that companies hire third-party auditors, perform a comprehensive review to determine the scope of the problem, and remove the individuals responsible for the data integrity deficiencies.  Draft Guidance at 10.  FDA also recommends that companies implement global corrective action plans.  Id.  This underscores FDA’s belief that Data Integrity issues are often indicative of a weak quality culture.
  • Self-Identification and Reporting.  FDA encourages individuals to report suspected data integrity issues to the Agency.  Id.

The message is clear—FDA takes Data Integrity and good documentation practice very seriously, and companies must be proactive in ensuring that adequate Data Integrity controls and oversight are implemented prior to an FDA inspection.  This Draft Guidance provides some initial insights into FDA’s expectations, and what companies can do to meet them.

Product Design and Safety Considerations

The FDA issued its final guidance for the industry on Safety Considerations for Container Labels and Carton Labeling Design to Minimize Medication Errors, three years after the draft was first published. It is the first of three planned guidances intended to minimize or eliminate, at the product design stage, medication errors, which are estimated to account for 44,000-98,000 deaths per year in the United States. To minimize medication errors relating to product design and container closure design, today’s guidance is intended to improve patient safety. The guidance lists specific factors to consider when designing a product and its container, focusing on the end users and the environments in which the product will be used. It also recommends a proactive risk assessment that takes into account how and why product errors have occurred with similar products. Continue Reading