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Focus on Regulation

Moving UAS Policy Forward: Opportunities for Small Business

Today, Hogan Lovells’ Global Unmanned Aircraft Systems (UAS) Practice Chair Lisa Ellman testified to the House Small Business Subcommittee on Investigations, Oversight and Regulations on “Opportunity Rising: the FAA’s New Regulatory Framework for Commercial Drone Operations.”

Lisa discussed the remarkable recent growth in the commercial unmanned aircraft industry, the exciting opportunities for small businesses across the country that were unleashed by Part 107 opening the skies to commercial UAS, or drones, and the challenges for the industry that remain.

Lisa’s testimony is here and video of the hearing is available here:

DOE Advisory Board Approves Draft Report on the Future of Nuclear Power

During its quarterly meeting on September 22, the U.S. Department of Energy’s (DOE’s) Secretary of Energy Advisory Board approved a Draft Report of the Task Force on Nuclear Power (Draft Report), as reported by Platts Nuclear News Flashes.   The Draft Report, which has a special focus on non-light water “advanced reactors,” now heads to Secretary Moniz for his review.  In its Draft Report, the Task Force recognized that nuclear energy is vital for achieving a planetary reduction of carbon dioxide emissions, but found that two things must happen for nuclear power to remain competitive: first, the overnight cost of financing a new plant must decrease, and second, “electricity markets must recognize the value of carbon-free electricity generation based on the social cost of carbon emissions avoided.”

According to the Task Force, the cost issue is primarily a problem for advanced reactors; as current light water reactor designs would not require significant additional support “assuming market imperfections are resolved.”  The team nonetheless acknowledged that overnight capital costs (OCCs) for light water reactors can and should come down in America, noting that while new U.S. plants have an OCC of greater than $5,000/kWh, South Korea has managed to keep such costs at $2,500/kWh.  For advanced reactors, the Task Force concluded that the federal government should launch on an aggressive program to promote the technological readiness of advanced reactors, with the program separated into four phases.

The Task Force’s suggested advanced reactor program would first focus on down-selecting those technologies with the best chance for exceeding light water reactors on cost, safety, and performance; then on construction and operation of test reactors; before finally moving onto the licensing and construction of commercial prototypes.  The government’s cost share (the program assumes private sector involvement) is estimated in the Draft Report to be over $5 billion per reactor technology type, with the government paying most of the costs for the earlier phases.  Although expensive, the Task Force countered that other technologies, such as wind and solar, have benefited significantly from government support, and such support is similarly justified for advanced reactors as long as there is a reasonable chance of success.

To further assist the development of advanced reactors, the Task Force supported a phased licensing process at the U.S. Nuclear Regulatory Commission (NRC), as well as recent DOE-NRC efforts to establish design criteria for advanced reactors.  The Task Force estimated that the best opportunities for time savings and regulatory certainty could come through improving the earlier-end NRC design review process, preferably through guidance.  The Draft Report also suggests that any program to speed the development of advanced reactors allow for greater contracting flexibility in the types of assistance offered, less adherence to the Federal Acquisition Regulations, access to DOE technical expertise, and the ability to hire and fire project staff on commercial terms.

The Task Force’s recommendation regarding electricity markets was clear – recognize nuclear power financially for its climate change benefits.  In terms of how to do so, it offered three levers: (1) price CO2 production at a level linked to the federal government’s Social Cost of Carbon (estimated to be around $41 per metric ton of CO2); (2) convert renewable-portfolio standards to low-carbon portfolio standards, with New York’s Zero-Emissions Credit program as an example; and (3) redesign regional transmission organization policies and procedures.  The Task Force defended government involvement on the grounds that current markets do not accurately price the harms from greenhouse gasses.

Only time will tell whether the bold measures outlined in the Draft Report will be adopted by Secretary Moniz or the country.  However, as we have noted in an earlier post, the promotion of nuclear power, and advanced reactors in particular, is increasingly a bipartisan initiative, although no single means to do so has emerged.  This Draft Report can go far in developing a clear path forward.  In particular, the Task Force’s embrace of the Social Cost of Carbon, already adopted in New York’s recent Zero-Emissions Credit initiative, could prove influential for policymakers.

EMA determines plasma- and urine- derived medicines safe from Zika contamination

On 21 September 2016, the European Medicines Agency (“EMA”) issued a press release to announce that the assessment it carried out along with competent authorities in the EU Member States have confirmed that patients who take plasma-derived or urine-derived medicines do not face increased risk of contamination with the Zika virus.

Background

Plasma-derived medicines, manufactured from human blood, are used to treat some serious blood conditions and to help fight infections. They include coagulation factors, that help blood to clot, and immunoglobulins, proteins that help antibodies develop.

Urine-derived medicines, manufactured from pooled human urine, include certain hormone-based treatments and urokinase products to help break up blood clots.

Therefore, both plasma- and urine-derived medicines are drugs produced from body fluids, which might be sourced from parts of the world where the Zika virus is prevalent. The assessment of the EU regulators was intended to determine, in case of plasma or urine coming from donors who had contracted the Zika virus, that there is no risk of the virus contaminating the final product and thus affecting the patients being treated with the product.

The EU regulators assessment

EMA’s Committee for Medicinal Products for Human Use (CHMP) assessed the potential risk arising from Zika virus for plasma-derived medicinal products. The Coordination Group for Mutual Recognition and Decentralised Procedures – Human (CMDh), responsible for the examination and coordination of questions relating to the marketing authorisation of human medicines in two or more EU Member States, coordinated the assessment by EU Member States on the potential risk from Zika virus for urine-derived medicinal products.

The CHMP concluded in its assessment that manufacturing processes used for plasma-derived products efficiently inactivate or remove the virus from the final product. These manufacturing processes include the use of solvents or detergents, pasteurisation (liquid heat inactivation) and virus filtration. As the CHMP considers these processes to be sufficient to ensure that patients are not contaminated with the Zika virus, no additional safety measures such as the testing or exclusion of certain plasma donors was considered necessary.

As regards urine-derived products, the CMDh concluded its assessment with the finding that the manufacturing processes for these products, containing complementary steps with inactivation/removal capacity, are sufficient to ensure Zika virus safety of these products. Thus, no additional safety measures such as the screening or exclusion of certain plasma donors was considered necessary for these products as currently authorised in the EU. The CMDh however states that, in view of the current spread of Zika virus, product-specific risk assessment should be updated on a regular basis.

The conclusions of these assessments on the virus safety of plasma- and urine-derived medicines can be found in the report from the CHMP’s Biologics Working Party (BWP) dated 21 September 2016.

For further information visit: http://www.ema.europa.eu/docs/en_GB/document_library/Report/2016/09/WC500213035.pdf

Drones on Campus: Navigating the FAA’s New Small UAS Rule

On September 21, Hogan Lovells’ Unmanned Aircraft Systems lawyers Lisa Ellman, Patrick Rizzi, Matthew Clark, and Elizabeth Meer presented a webinar on Drones on Campus: Navigating the FAA’s New Small UAS Rule.

Colleges and universities across the country are finding new and innovative ways to use unmanned aircraft or “drones.” To name just a few, higher education institutions are using drones to support research and learning in areas like precision agriculture, wildlife habitat monitoring, and aerial surveying and mapping. They are using drones to film football practices, inspect their infrastructure, and shoot promo marketing videos. Continue Reading

FDA Issues Draft Guidance on Co-Development of Antimicrobial Drugs and Antimicrobial Susceptibility Test Devices

On September 21, 2016, FDA issued a draft guidance titled “Coordinated Development of Antimicrobial Drugs and Antimicrobial Susceptibility Test Devices – Draft Guidance for Industry and Food and Drug Administration Staff.”  This draft guidance describes FDA’s suggested steps for seeking approval of an antimicrobial drug and any related antimicrobial susceptibility test (AST) devices in order to maximize the possibility that the drug and device will be approved and cleared in close temporal proximity.

AST devices are useful both on a personal level—informing the appropriate clinical use of antimicrobial drugs—and on a societal level—identifying the emergence of drug resistance and monitoring overall antimicrobial susceptibility changes.  FDA has not traditionally considered ASTs or other microbiology diagnostics to be companion diagnostic devices (which are essential for the safe and effective use of a drug).

Suggested Co-Development:  FDA recommends that drug sponsors, during the early drug development stages, discuss coordinated development opportunities with AST device manufacturers for multiple reasons.  First, this provides device manufacturers access to biological samples and provides drug sponsors access to AST device technology which may be useful during clinical trials.  Second, availability of the drug to multiple device manufacturers for AST device development may increase the number of AST devices that are available after approval of the drug.

Coordination of Review and Approval:  In order to have the best chance of obtaining drug approval and device clearance at around the same time, FDA suggests the following steps be taken:

  1. The drug sponsor and device manufacturer should submit their coordinated development plans to CDER and CDRH (respectively) for review and comment—the drug submission to CDER should be made via CDER’s pre-IND consultation program for the Office of Antimicrobial products, and the device submission should be made via CDRH’s pre-submission program.
  2. Companies that are co-developing antimicrobial drugs and ASTs should request a joint meeting that would include the drug sponsor, device manufacturer, and personnel from both CDER and CDRH.
  3. The device manufacturer should, in its 510(k) submission, provide appropriate permissions to FDA from the drug sponsor to cross-reference information in the drug sponsor’s NDA to facilitate AST device review.

Nevertheless, the process is still dependent on CDRH’s communication with CDER during CDRH’s pre-submission process, as well as each center’s review processes.  FDA makes clear that the drug and device will be reviewed independently and, therefore, there is no guarantee that approval and clearance will be close in terms of timing.

FDA requests that comments be submitted by November 21, 2016.  If you have any questions about the draft guidance or would like to submit comments, please feel free to contact one of the Hogan Lovells attorneys listed above.

House Committee Approves Nuclear Production Tax Credit Extension

Today, the U.S. House of Representatives Ways & Means Committee approved H.R. 5879, a bill to extend the production tax credit for new nuclear power plants. It would remove any deadline on awarding the 6,000 MW of nuclear capacity available under the tax credit. The Committee commented that the bill “ensures the effective operation of the tax credit for nuclear energy production.” From here H.R. 5879 will continue to move through the legislative process, hopefully soon to the House floor. The text of the bill as provided by the Committee can be found here. For questions on the bill or advanced reactor issues in general, please contact the authors.

FDA Is Looking at the Money Trail: Agency Describes Potential Investigator Bias Based in Part on Industry Payments

Last week, the U.S. Food and Drug Administration (FDA) issued a briefing document in advance of a joint advisory committee meeting held on Wednesday, September 14, 2016. See FDA Briefing Document. It was a joint meeting of the Psychopharmacologic Drugs Advisory Committee and the Drug Safety and Risk Management Advisory Committee and was held to discuss “Serious Neuropsychiatric Adverse Events with Drugs for Smoking Cessation.” Id. See title of report. Pfizer, the manufacturer of Chantix (varenicline), a product intended to help patients quit smoking, has asked FDA to remove a box warning of potential psychiatric risks to patients, including suicide and suicidal ideation. Pfizer provided data from a post-marketing study of 8,000 subjects at 140 sites around the world that was designed to assess the real-world risk of suicidal behavior associated with the use of smoking cessation drugs to support its request that the boxed warning be removed. Continue Reading

Statute of Liberty: LIBERTY to prioritise safeguarding of the HRA

These are interesting, and challenging, times for human rights law in the UK. There has been a remarkable growth in awareness of human rights as offering protections to those throughout society, and on an international scale. It is an issue that is now firmly on the agenda in boardrooms, and in the media. But there are also signs of popular disillusionment, reflected in the political mood.

Despite or perhaps because of its growth, the future of human rights law again looks uncertain, following announcements by the new Justice Secretary that repeal of the Human Rights Act is firmly on the table once more.

Against this changing landscape, Hogan Lovells, together with the Human Rights Lawyers Association, invited Martha Spurrier, the newly appointed director of civil liberties association Liberty, to share her thoughts on the future of human rights in the UK and her priorities for her new role. In conversation with Baroness Helena Kennedy, and in response to some thought-provoking questions from the audience, Ms Spurrier shared some of the key action points on her “five year plan”, top of the list being resisting the repeal of the Human Rights Act.

In this blog, we share some of the key points to emerge from the discussion between Ms Spurrier and Baroness Kennedy. 

The ‘Europe’ issues: repealing the Human Rights Act and Brexit 

Repeal of the Human Rights Act 1998 (the “HRA“) remained a Conservative manifesto pledge in 2015, as it was in 2010. When Theresa May took over as Prime Minister, she had indicated that she would scrap plans to repeal the HRA. However, recent comments from Justice Secretary, Liz Truss, suggest that repeal of the HRA remains a manifesto commitment that the Conservatives are still looking to deliver with the intention to introduce a British Bill of Rights in its place.

Ms Spurrier made it very clear: saving the HRA is a major priority for Liberty and she described those who argue that a British Bill of Rights can provide the same level of protection as “naïve”. Such a Bill, she believes, would be a “poor cousin” of the HRA – and has the potential significantly to weaken human rights protection in Britain.

Ms Spurrier and Baroness Kennedy discussed how the UK’s decision to leave the European Union might impact the proposal to repeal the HRA. Ms Spurrier said that while the Government is busy “consciously uncoupling” the UK from the EU, the issue of repealing the HRA is likely to be put on hold. Her view was that the Government would be likely to remain quiet about the HRA, so as to avoid spending time and resources on another controversial ‘Europe’ issue. However, Ms Spurrier warned that, if the UK Government were to seek to remain in the single market (and therefore to accept freedom of movement), then the HRA might once again be on the table as a bargaining chip to placate Eurosceptics within the Conservative party. For that reason, Liberty was not going to be complacent about the future of the HRA.

Baroness Kennedy highlighted that Brexit might raise greater awareness about acquired rights, with an increasing number of people fighting to keep the protection afforded by the HRA in light of the potential threat to their existing rights, particularly workers’ rights, which are largely based on European Union law.

Ms Spurrier explained that, as a cross-party, non-political organisation, Liberty remains neutral on whether the Leave vote was “right”, and instead is focusing on ensuring that there is no weakening of the rights and protection of UK citizens and migrants alike as a result of Brexit.

Who watches the watchmen? Surveillance and the need to police the police 

Despite a certain level of opposition from civil society, the Investigatory Powers Bill is now in its final stages, and is expected to come into force in its current form. The Bill, which is currently in the House of Lords, would introduce what Ms Spurrier called “the most intrusive and invasive [legalised] surveillance regime in the world“. In particular, Ms Spurrier highlighted the “bulk hacking” powers contained in the Bill which essentially enable those wielding those powers to amend third party data without the knowledge or consent of those individuals. That could amount to, for example, changing data on a person’s smartphone so that it looked like they had sent a text or email that they had, in fact, never sent. Ms Spurrier highlighted the Hillsborough disaster and subsequent cover-up by the authorities as an example of how those powers could be abused – particularly in circumstances where those authorities were attempting to deflect criticism of their actions.

Secret courts and mission creep 

Ms Spurrier also highlighted her concerns around the growing use of secret courts. First introduced for terrorism cases, mission creep has resulted in their use becoming increasingly widespread, which is a significant cause of concern for civil liberties advocates. Ms Spurrier noted with concern how secret hearings were now even being held in the Information Tribunal.

Human rights: what can businesses do?

Private companies are being increasingly scrutinised for their human rights conductas a result of a growing body of standards, from the Modern Slavery Act 2015 to the UN Guiding Principles on Business and Human Rights.

A growing number of businesses are embedding these standards into the fabric of their operations.

Ms Spurrier and Baroness Kennedy agreed that the role of businesses in human rights compliance is likely to increase over the next decade. They discussed what private businesses can do to stay ahead of the curve. For Ms Spurrier, the answer was clear: they can lead by example. The current Government is keen to attract business to the UK and to maintain the global influence of the City. Maintaining good standards of citizenship and diversity is a good way for the business world to send a strong signal to the Government, and to fully embrace its potential “norm-setting role”.

The event at which Ms Spurrier was speaking was hosted at Hogan Lovells on 13 September 2016. A full video of the discussion is available here. For more information about the work of the Hogan Lovells Business and Human Rights practice, please contact Charles Brasted or Julianne Hughes-Jennett.

Congress Considering Extension to Nuclear PTC

The U.S. House of Representatives is considering legislation, H.R. 5879, to extend the production tax credit for new nuclear power plants by removing any deadline on awarding the 6,000 MW of nuclear capacity available under the tax credit.  The text of the bill can be found here.  The House Ways & Means Committee is due to consider the legislation in the coming week.  For questions on the House Bill, or advanced reactor issues in general, please contact the authors.

Advanced Nuclear Reactor Legislation Moving Forward in Congress

This Monday evening, September 12, the U.S. House of Representatives passed H.R. 4979, the Advanced Nuclear Technology Development Act of 2016, a bill geared towards creating a viable path forward for advanced reactors (the House Bill).  The House Bill is sponsored by Representative Robert Latta, an Ohio republican, and 18 co-sponsors.

The House Bill, which includes fusion as part of the suite of “advanced reactors,” has multiple important features.  First, it creates a Congressional finding that “[t]he development of advanced reactor designs would benefit from a performance-based, risk-informed, efficient, and cost-effective regulatory framework with defined milestones” (emphasis added). These are long-sought wishes for the advanced reactor community, which has complained that the current regulatory framework is geared towards large light water reactors and acts as a barrier towards innovation.

In addition, the House Bill requires DOE and the NRC to enter into a memorandum of understanding to share expertise, computer modeling resources, and notably, facilities.  In this regard, the House Bill seeks that not only DOE maintain and develop facilities to support the development of advanced reactors, but also that the NRC has access to those facilities, as needed.

The House Bill would also require DOE to provide a report to the House and Senate within 180 days of enactment “assessing the capabilities of [DOE] to authorize, host, and oversee” private advanced reactor projects.

Of particular interest is section 6, entitled “Advanced reactor regulatory framework,” which requires the NRC within one year to submit to Congress “a plan for developing an efficient, risk-informed, technology-neutral framework for advanced reactor licensing.”  This report must discuss, among other things, options on how to expedite the application process, potential cost-sharing plans, and options for the use of “phased review processes,” in which the NRC can “review and conditionally approve partial applications, early design information, and submittals.”  Moreover, the effort the NRC puts towards developing this new regulatory framework will not be charged to the industry fee base until after 2020.  These activities, therefore, would presumably be funded by Congress.

The regulatory regime advocated by Congress in Section 6 of the House Bill could be game-changing for the advanced reactor community.  The NRC has acknowledged that the current regulatory regime and design criteria are geared towards light water reactors, creating immense regulatory uncertainty for new entrants.  Moreover, the current non-phased NRC regulatory approach creates a chicken-and-egg problem: the cost of licensing is so high no new entrant can afford it on its own; at the same time, funding to support the steps towards licensing a new reactor is nearly impossible to attain without a license; regulatory uncertainty associated with non-light water reactor designs further exacerbates this problem.

The House Bill is not a perfect package, but it is a necessary and welcome piece of legislation for the nuclear community.  Congressional action will go a long way in giving the NRC a clear mission statement for advanced reactors, in a time when the agency has been otherwise cutting related programs due to budget stress.

The House Bill goes next to the Senate.  There, Senator James Inhofe has sponsored a separate bill, S. 2795, entitled the Nuclear Energy Innovation and Modernization Act (the Senate Bill).  On June 23, 2016, the Senate Bill was reported out of Committee and put on the legislative calendar for full Senate consideration.  The Senate Bill shares many of the same fundamental goals as the House Bill, particularly the creation of a technology-inclusive, risk-informed, phased advanced reactor licensing framework, to be created off of the industry fee base.  But it is structured very differently.  Moreover, the Senate Bill includes certain provisions not in the House Bill, concerning research reactors, the NRC’s fee structure, and cost-sharing options, among others.

Given the differences between the two bills, and the current election-year climate, it will no doubt take some time before a final bill is signed.  Nonetheless, it is clear that advanced reactor legislation is moving forward as a bipartisan initiative with a common goal to create a flexible and performance-based, technology-neutral, phased approach to nuclear reactor licensing.  Congressional action is necessary to help ensure U.S. energy security and technological leadership, and that nuclear power can play a key role in the nation’s response to climate change.

For questions on the House Bill, or advanced reactor issues in general, please contact:

Amy Roma

Amy.Roma@hoganlovells,com

202-637-6831

Sachin Desai

Sachin.Desai@hoganlovells.com

202-637-3671