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Focus on Regulation

Medical Device Contractor Settles FCA Allegations Based on TAA Violations

On Thursday, August 8, 2019, the Department of Justice (“DoJ”) announced that Danish medical device company Ambu, Inc. (“Ambu”) will pay $3.3 million to settle False Claims Act (“FCA”) allegations that it violated the Trade Agreements Act (“TAA”) (19 U.S.C. § 2518) by selling products to the Defense Logistics Agency (“DLA”) and the Department of Veterans Affairs (“VA”) that were made in China and Malaysia.  The TAA restricts the Federal government’s purchase of “end products” to only those (1) manufactured in the United States or wholly manufactured in a “designated country,” or (2) ‘‘substantially transformed’’ in the United States or a designated country.  China and Malaysia are not designated countries.

According to the DoJ press release, Ambu executives certified that its products came from TAA compliant countries despite allegedly knowing that most of the products were manufactured in noncompliant locations.  Between December 2011 and March 2015, more than 80% of the product sold by Ambu to the Federal government came from noncompliant countries.

FCA settlements are not new to the healthcare industry.  Nearly 90% of recoveries during 2017 and 2018 under the FCA came from the healthcare industry, according to an analysis by Bloomberg Law.  The TAA focus of the allegations, however, is notable. Continue Reading

European Commission draft implementing regulation on the reprocessing of single-use medical devices: public consultation is open

On 23 July 2019, the European Commission published the draft Commission Implementing Regulation (hereafter “Draft”) regarding Common Specifications for the reprocessing of single-use medical devices.

The Draft is to implement the requirements of Article 17(3) of the Medical Devices Regulation 2017/943 (hereafter “MDR”). Article 17 MDR provides that under certain conditions, health institutions can reprocess single-use medical devices.

One of the requirements is that the European Commission adopts “Common Specifications” (hereafter “CS”). The Draft provides for the CS.

The European Commission has published the Draft and intends to collect input from stakeholders as part of a public consultation running until 20 August 2019. Continue Reading

FDA and EMA Address Quality and Manufacturing Challenges for Breakthrough Therapies Undergoing Expedited Approval

On July 31, 2019, the U.S. Food and Drug Administration (FDA) and the European Medicines Agency (EMA) published a joint report on their efforts to support the development of and expedite access to breakthrough therapies that address unmet medical needs.  In addition to outlining the tools currently available to manufacturers seeking expedited approval of breakthrough therapies, the report recognizes the need for further regulatory innovation to advance emerging scientific knowledge and support timely access to new medicines without compromising established quality and manufacturing standards.

To obtain marketing approval for breakthrough therapies, sponsors face challenges to obtain clinical, non-clinical, and manufacturing information that meets the standards for regulatory approval on compressed timelines.  FDA/EMA recognize this, and on November 26, 2018 held a workshop on FDA’s Breakthrough Therapy Designation (BTD) and EMA’s Priority Medicines (PRIME) programs.  The aim of the workshop was to facilitate discussion with industry stakeholders on challenges associated with quality, manufacturing, and data requirements during early development, and possible scientific and regulatory approaches to address them.

With regard to challenges related to quality and manufacturing data, the report provides FDA/EMA’s perspectives and outlines follow-up initiatives being considered for process validation and control strategy, current good manufacturing practices (cGMP) compliance, comparability and stability data, and regulatory tools to support early access.  The key takeaways relating to quality and manufacturing data are provided below:

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European commission publishes Additional Guidance regarding the Medical Devices Vigilance System

The three medical devices Directives, the Directive for Active Implantable Medical Devices (AIMD), the Directive for Medical Devices (MDD) and the In Vitro Diagnostic Medical Devices Directive (IVDD), provide for the requirement for a European Medical Devices Vigilance System. The Medical Devices Vigilance System is the European system for the notification and evaluation of incidents and Field Safety Corrective Actions (FSCA) involving medical devices.

The Medical Devices Vigilance System aims at reducing the likelihood of occurrence and reoccurrence of an incident elsewhere. This is done by the implementation of FSCA across the EU Member States where the device is in use, in contrast to actions taken on an individual EU Member State basis.

The European Commission has published new Additional Guidance  (the ‘Guidance’) complementing the 2013 MEDDEV 2.12-1 rev 8 guidelines on the Medical Devices Vigilance System. The Guidance clarifies certain sections of the initial guidelines and introduces new notions.

The Additional Guidance provides for: Continue Reading

UN Working Group publishes revised draft of business and human rights treaty: commentary on scope, prevention and legal liability

On 16 July, a UN working group published a revised draft of its business and human rights treaty (following the “Zero” Draft published in July last year). Our post looks at some of the key developments, with a particular focus on its scope and the provisions on prevention and legal liability. We conclude by asking what happens next and providing some practical guidance to business. Continue Reading

Will FDA be forced to implement a drug importation program?

Over a year ago, HHS Secretary Alex Azar requested that FDA establish a working group to explore how drug importation “could help address price hikes and supply disruptions.” The FDA working group was not assigned the task of developing a broad drug importation program. Instead, the working group’s remit was specifically limited to considering potential importation of drugs that are (1) off-patent; (2) have no exclusivity remaining; (3) face no generic competition; and (4) can be imported with adequate assurances of safety and effectiveness. Scott Gottlieb’s statement further narrowed the scope of the working group’s task to: “Any policy that involves the importation of drugs would be temporary until adequate competition enters these categories.”

Although there has been little visible sign of the working group’s activity, now the HHS Secretary is facing pressure to approve State drug importation plans that will likely be much broader than the original scope of drug importation that the working group had been asked to consider. These State drug importation plans are likely to be contrary to longstanding HHS and FDA positions opposing such programs based on safety concerns and inadequate cost savings. Moreover, HHS certification of the State plans would need to overcome certain legal barriers that exist under current Federal law. Continue Reading

Ill-Suited: Private Rights of Action and Privacy Claims

“For years, the plaintiffs’ bar has conjured multibillion-dollar class action lawsuits out of largely intangible privacy harms. This wave of litigation is increasingly driven by federal and state statutes that include private rights of action and allow for excessive statutory damages. Given the willingness of some courts to let cases proceed despite a lack of allegations or evidence of concrete harm, this litigation trend shows no sign of abating.”

The U.S. Chamber of Commerce Institute for Legal Reform has published “Ill-Suited: Private Rights of Action and Privacy Claims,” a white paper authored by Hogan Lovells’ Mark W. Brennan, Alicia Paller, Adam Cooke, and Joseph Cavanaugh explaining why private litigation is a poor enforcement tool for privacy laws.  As detailed in the paper, when it comes to privacy interests, “harms” are largely inchoate and intangible, and the wrongdoers are often unknown or unidentifiable. Even where class members may have suffered a concrete injury, the data indicates that they are unlikely to receive material compensatory or injunctive relief through private litigation. Meanwhile, plaintiffs’ counsel often walks away with millions of dollars, court dockets are unduly cluttered, and companies are forced to expend resources on baseless litigation.

Whereas a stream of harmful consequences flow from private rights of action for privacy laws, agency enforcement provides the right balance between protection, penalties, deterrence, and progress.

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Practical Pointers: Social Media Guidelines for Public Officials (and the People who Advise Them)

Social media has transformed the ways legislators and their staff interact with constituents. Through social media platforms, our elected officials share insights into the legislative process, communicate with constituents, and even provide life-saving updates during times of crisis. Politicians can also use social media to grow their following and influence public discourse—as when a Texas state senator leveraged social media to turn her filibuster into a national social media event.

Social media use by elected officials isn’t without legal, political, and reputational hazards, however. In part to mitigate against the risks posed by social media gaffes, federal agencies, associations of elected officials, and social media companies themselves have all published model social media policies or addressed specific challenges politicians can face while spreading their message online. At the same time, few resources provide a comprehensive catalogue of the myriad risks elected officials and their staffs may encounter on social media platforms.

Below are best practices to help public officials reap the benefits of social media while guarding against embarrassment or liability for improper online activity. While far from a definitive guide to how legislators and their staff should behave online, these practices can help elected officials and the people who advise them to navigate the diverse legal and ethical quandaries of social media.

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U.S. Department of Education Announces Changes to College Scorecard, Plans for Future Expansion

In late May the U.S. Department of Education (the “Department”) announced several changes to its College Scorecard, a tool that is intended to help students and their families make informed decisions about post-secondary enrollment.  Then, on July – in a final rule in which the Department announced that it would rescind its “gainful employment” regulations effective July 1, 2020 – the Department explained that it plans to expand the program-level and institution-level data available from the College Scorecard in the future.  The purpose of the expansion is to help students “make enrollment choices informed by debt and earnings data, thus enabling a market-based accountability system to function” and to “help taxpayers understand where their investments have generated the highest and lowest returns.”

In addition to updating the College Scorecard with the most recent data on certain existing metrics, as of May 2019 the Department added information about additional types of institutions and new categories of data: Continue Reading

D.C. Circuit Rejects “Academic Deference” Argument In Tenure Denial Discrimination Cases

On June 14, 2019, the United States Court of Appeals for the District of Columbia Circuit rejected the argument that a university should be entitled to special academic deference in employment discrimination claims concerning denial of tenure brought under Title VII of the Civil Rights Act of 1964 (“Title VII”). Mawakana v. Bd. Of Trustees of the Univ. of the Dist. Of Columbia, No. 18-7059 (D.C. Cir. June 14, 2019). Continue Reading