In October, the US National Oceanic and Atmospheric Administration (NOAA) brought together NOAA licensees and prospective licensees and representatives from across the federal government for a workshop on U.S. satellite licensing and compliance regulations. The first of its kind, this three-day event was designed to promote transparency and awareness about government processes and to improve engagement with regulators. The event received widespread support from senior government officials and was well attended by industry.
On November 2, FDA and the Department of Defense’s (DoD) Office of Health Affairs signed a Memorandum of Understanding (MoU) that formally establishes the framework under which the DoD and FDA will implement Public Law 115-92, which was enacted in 2017. The law gives the DoD new opportunities to advocate to FDA for expedited development, review, and Emergency Use Authorization (EUA) for medical products that could help protect and treat U.S. military forces; we analyzed that legislation in a blog post here.
Perhaps more significantly, FDA has chosen to build on the new law to facilitate development and FDA review of medical products with military applications that may also have broader use for general populations. In FDA’s initial Work Plan for the new law, FDA committed to issue guidance to facilitate development of medical products for “austere environments” relevant to the military. In fact, the Work Plan states that the guidance will “include information on how the approval can be expanded to the general population, when relevant. The latter is important for the ultimate availability and sustainability of the DoD medical product development enterprise.”
Under the terms of this MoU: Continue Reading
On October 18, the Federal Trade Commission (FTC) announced it settled charges against California-based Regenerative Medical Group, Telehealth Medical Group, and the founder of both companies, Dr. Bryn Jarald Henderson, based on deceptive stem cell therapy claims. In its complaint, the FTC alleged Henderson and the companies made unsupported claims, including that “amniotic stem cell therapy” can treat serious diseases, including Parkinson’s disease, autism, macular degeneration, cerebral palsy, multiple sclerosis, and heart attacks. Henderson and the companies even claimed that the treatment could “reverse autism symptoms” and cure blindness. The FTC asserted that the claims are not supported by scientific evidence in violation of the FTC Act, which prohibits false advertising and deceptive practices. The settlement: Continue Reading
In a big win for the Food and Drug Administration (FDA), the D.C. Circuit of the United States Court of Appeals reinforced FDA’s position on what constitutes a “meaningful difference” between prescription and over-the-counter (OTC) versions of a drug product. Under FDA’s longstanding interpretation, section 503(b) of the Food, Drug, and Cosmetic Act (FDCA) “does not permit the same active ingredient to be simultaneously marketed in both a prescription drug product and a nonprescription drug product, unless a meaningful difference exists between the two that makes the prescription product safe only under the supervision of a licensed practitioner.”
In a judgment filed on Oct. 30, 2018, the court upheld an order FDA issued on Apr. 2, 2018, withdrawing approval of five abbreviated new drug applications (ANDAs) for prescription polyethylene glycol 3350 (PEG3350) laxative products. Although there were differences in the labeled duration of use between the prescription ANDA products and an approved OTC version of the drug, the court agreed with FDA that these were not “meaningful” differences, and that the ANDA products were therefore misbranded under the FDCA due to being labeled as “Rx-only” products. Continue Reading
On 26 October 2018, the European Medicines Agency (EMA), advised marketing authorisation holders to submit type I variations prior to the temporary closure of the EMA. The EMA will relocate from London to Amsterdam and will be closed between 21 December and 2 January 2019.
The UN intergovernmental working group tasked with developing a binding international treaty on business and human rights recently concluded its fourth round of negotiations in Geneva (15-19 October 2018). In contrast to the third session, where the “Elements” of the proposed treaty were published only three weeks before the working session began, delegations were provided with the “Zero Draft” treaty in July 2018 (see our previous post here), giving them ample opportunity to consider the text in advance of the session.
In his opening remarks, the Chair-Rapporteur noted that “like any project of legal text, the Zero Draft is a fully improvable document which can and should be enriched with [delegates’] contributions, constructive criticisms and concrete proposals of improvement…” (translated from original statement made in Spanish). Delegates certainly operated with this in mind: there was significant discussion and dialogue on the specific provisions of the Zero Draft treaty. A number of unresolved issues from previous negotiating rounds re-emerged and continued to be a sticking point in discussions, some of which are discussed in this post.
The limited scope of the Treaty’s application to transnational businesses
The treaty only applies to “human rights violations in the context of any business activities of a transnational character” (draft Article 3). A number of delegates, most notably the European Union, reiterated their opposition to this limitation, arguing that all businesses (both domestic and transnational) should be made subject to the treaty. Some delegates responded by referring to the mandate of the working group under Human Rights Council Resolution 26/9 which refers specifically to transnational corporations and argued that the treaty appropriately focussed on transnational companies, as their complex structures and supply chains have historically allowed them to operate outside the scrutiny of national legal frameworks. However, it is difficult to square this argument with the spirit of the UNGPs which, by contrast, applies to “all business enterprises, both transnational and others, regardless of their size, sector, location, ownership and structure.”
Beyond this point of principle, there are still details to be ironed out. For instance, it is unclear whether the definition of “business activities of a transnational character“, which is restricted to “for-profit economic activity“, would include State-owned enterprises. The scope of the treaty and the relevant definitions will no doubt continue to be a point of contention in further rounds of negotiation.
Treaty reach and the issue of extra-territorial jurisdiction
Although territoriality and nationality (reflected in draft Article 5(1)) are familiar grounds of jurisdiction in international law, there was a lack of consensus on the scope of national courts’ exercise of adjudicative jurisdiction over human rights claims. In particular, there was concern about the exercise (and possible abuse) of extra-territorial jurisdiction. The UNGPs themselves are circumspect in this regard, with the commentary to Principle 2 noting that “[a]t present States are not generally required under international human rights law to regulate the extraterritorial activities of businesses domiciled in their territory and/or jurisdiction. Nor are they generally prohibited from doing so, provided there is a recognized jurisdictional basis.” The treaty thus provides an opportunity to clarify and develop a consistent international approach to the principles of jurisdiction applicable to business and human rights claims.
The meaning of “domicile” as set out in draft Article 5(2) is likely to be subject to further debate. The current definition is consistent in some respects with other international instruments on civil jurisdiction; for example, Article 63 of the EU’s Brussels I Recast Regulation also defines domicile by reference to a business’ “statutory seat” or “central administration”. However, other limbs of the definition lack sufficient clarity. There is no guidance on what might constitute a “substantial business interest” or the meaning of “subsidiary, agency, instrumentality, branch, representative office or the like“. As such, the Zero Draft gives rise to potentially wide-reaching jurisdiction without adequate consideration of the appropriate limits, a matter which will need to be addressed in subsequent drafts to ensure the treaty is consistent with the rule of law.
There was awareness amongst delegates about other surrounding issues which are well-trodden in the field of private international law, such as the application of the doctrine of forum non conveniens (enabling courts to refuse jurisdiction on the grounds of a more appropriate forum being available), lis alibi pendens (the issue of parallel proceedings) and forum shopping. There is scope for cross-fertilization of international law here, although serious thought and consideration will be required as to how the final treaty would interact with existing private international law instruments in this sphere.
Another significant concern was draft Article 10(11), which requires States to adopt domestic provisions which would allow for universal jurisdiction to be exercised over human rights violations that amount to crimes. Its inclusion was controversial and did not have widespread acceptance; it remains to be seen whether the article will be retained in the final text.
Mandatory human rights due diligence
The proposed obligation of mandatory human rights due diligence in draft Article 9 presents an opportunity to address the gap highlighted by the working group in its July report to the UN General Assembly, who noted that despite human rights due diligence becoming a “norm of expected conduct for all business enterprises […] the majority of business enterprises around the world remain unaware, unable or unwilling to implement human rights due diligence as required of them in order to meet their responsibility to respect human rights.” The contours of that obligation, however, will need to be further refined.
In the view of some delegates, the due diligence descriptors in draft Article 9(2) were not entirely consistent with the UNGPs and other due diligence guidance. For instance, the four steps set out in the UNGPs have not been fully translated into the draft treaty. Any misalignment between the treaty and existing soft law instruments in this area will need to be addressed to ensure greater legal certainty for businesses going forward.
Any lawyer will tell you that drafting by committee is always a difficult task, which is even more compounded when one must agree a treaty by taking into account the input of States, NGOs and business organisations, each with their own respective set of interests. However, one should bear in mind the aptly chosen name for the text: the “Zero Draft” is merely the starting point, and it will be important to have continued engagement from all interested parties to develop and refine the document. Expect there to be further parsing of the language of the text in the upcoming rounds of negotiations.
On October 12, FDA published guidance for sponsors, investigators, and IRBs titled “Impact of Certain Provisions of the Revised Common Rule on FDA-Regulated Clinical Investigations.” The guidance outlines FDA’s expectations for clinical research that is subject to both the FDA’s human subject protection regulations and DHHS’ recently revised Common Rule, which takes effect in January 2019. FDA’s rules on human subject protection govern clinical investigations regulated by FDA under sections 505(i) and 520(j) of the FDCA, as well as studies used to support applications for research or marketing permits for products regulated by FDA, while the DHHS Common Rule covers DHHS federally funded research. FDA’s recent guidance discusses informed consent requirements, expedited review procedures, and IRB continuing review.
Importantly, this guidance makes clear that research subject to FDA rules must continue to abide by those regulations, even when they are more restrictive than the Common Rule. For instance, FDA maintains the requirement, eliminated in the revised Common Rule, that some low-risk studies undergo an annual check-up known as “continuing review.” However, IRBs should apply Common Rule measures governing structure and content of informed consent documents, which do not conflict with any FDA regulations. As one example, the revised Common Rule includes a new requirement that all the key information in informed consent forms be at the top of the form; FDA does not yet require this.
FDA to update rules to match Common Rule provisions
In order to harmonize FDA’s regulations for the Protection of Human Subjects and Institutional Review Boards (IRBs) with the recently revised final HHS Common Rule, FDA plans to issue three more guidances. The White House’s fall 2018 regulatory agenda, released October 17, indicated FDA plans to go through the formal proposed rulemaking process to finalize these rules, meaning the agency will accept and consider public comments before issuing the guidances in final form. The three planned FDA guidances are:
- RIN 0910-AI07, “Part 50 Protection of Human Subjects and Part 56 Institutional Review Boards,” which would add new definitions and conforming language to FDA rules.
- RIN 0910-AH52, “Institutional Review Board Waiver or Alteration of Informed Consent for Minimal Risk Clinical Investigations,” which would align FDA rules with the Common Rule provision permitting an IRB to waive or alter the informed consent requirements under certain conditions for minimal risk clinical investigations in order to support the development of new products to diagnose or treat disease, or to address unmet medical needs.
- RIN 0910-AI08, “Institutional Review Boards; Cooperative Research,” which addresses the “single IRB” provision in the Common Rule (the provision that requires each research institution participating in a multi-site study to use the same IRB). This planned guidance is the only one of the three guidances deemed “economically significant” and the only one that was always intended to have a comment period.
President Trump today touted “bold” plans to lower drug prices in unspecific terms. Simultaneously, CMS issued an Advance Notice of Proposed Rulemaking (ANRPM), describing options to test Medicare reimbursement based on an “International Pricing Index” (IPI), under which U.S. drug prices would be benchmarked against 16 other countries that reportedly have lower drug prices. This proposal would only apply to drugs administered in doctors’ offices and outpatient hospital departments, including cancer treatments and injectable treatments, but it would not affect most prescriptions purchased at local pharmacies. Participation in the model would be mandatory for physicians and hospitals in certain geographic areas. According to HHS, the plan would save Medicare $17.2 billion over five years, with the cost of some drugs dropping by as much as 30 percent.
CMS Administrator Seema Verma attacked drug price hikes and “perverse” Medicare incentives in announcing the ANPRM, and said the new approach will eliminate incentives for doctors to prescribe more expensive drugs by reimbursing physicians with a flat fee instead of paying a percentage of a drug’s cost. The ANPRM proposed changing the 4.3 percent (post-sequester) drug add-on payment in the IPI model to reflect 6 percent of historical drug costs translated into a set payment amount.
Comments on the ANPRM will be accepted until December 24. CMS contemplates issuing a proposed rule in Spring 2019, with the potential model starting in Spring 2020.
CMMI to test direct price negotiations with drug makers
President Trump also said HHS would take the “revolutionary” move of allowing Medicare to directly negotiate prices with drug companies. The ANPRM describes how the plan involves using the Center for Medicare & Medicaid Innovation (CMMI) to test permitting private sector vendors to negotiate with drug makers, similar to how health insurers negotiate drug prices in Medicare’s Part D program.
ASPE finds Medicare Part B drugs 1.8 times more expensive in U.S.
In advance of Trump’s speech, HHS’ Office of the Assistant Secretary for Planning and Evaluation (ASPE) published a report this morning that found manufacturers’ prices to wholesalers and distributors for drugs with the highest spending under Medicare Part B in the U.S. are 1.8 times higher than in other countries. HHS Secretary Alex Azar tweeted this morning that the report shows “the current international pricing system has put America in last place.” Azar said Medicare spent about $8 billion more for drugs in the study than if the prices paid by the program were scaled to international prices. Azar is also scheduled to speak tomorrow at the Brookings Institution.
More drug pricing reforms to come
President Trump has previously railed against the pharmaceutical industry over drug pricing, saying the companies were “getting away with murder.” The Administration is also moving to require drug makers to disclose prices in their consumer advertising, as we discussed here. In addition, on October 10, Trump signed into law two bills – the “Know the Lowest Price Act” and the “Patients’ Right to Know Drug Prices Act” – aimed at preventing “gag clauses” in agreements between pharmacies and pharmacy benefit managers (PBMs), which some pharmacists said kept them from disclosing cheaper drug options to consumers. Meanwhile, in 2017, FDA approved more than 1,000 low-cost generics, with even more approved so far this year.
As the Administration continues its heightened focus on drug pricing reform, we will keep you apprised of further agency and legislative actions.
On Tuesday, FDA announced the entry of a consent decree of permanent injunction against Keystone Laboratories, Inc. of Memphis, Tennessee for manufacturing OTC hair care and skin care products in violation of Current Good Manufacturing Practice (cGMP) requirements and for failing to include required labeling. Under the 24-page decree, a federal court enjoined the defendants, including the company’s owner and president, from manufacturing or distributing any drug until the terms of the decree are met.
The enforcement action demonstrates that, even for relatively lower-risk OTC drug products, FDA will sometimes take strong enforcement action to correct pervasive cGMP and labeling violations. Although most FDA cGMP injunctions in the past have focused on prescription drug products, this action is consistent with FDA’s recent increase in attention to OTC drugs, over the last couple of years, including additional inspections and warning letters to both domestic and foreign OTC drug manufacturers.
Although the lengthy period of non-compliance is noteworthy, as is the pervasiveness of the violations, we take FDA’s action as a signal of increasing priority being placed on OTC drug compliance. Last month FDA released CDER’s internal policy on prioritizing manufacturing sites for inspection based on risk. Although the inherent risk of the drug products being manufactured is a risk factor in this policy, so too are the compliance history and patient exposure, which can be large for certain OTC drug products. Consider further that legislation being considered in Congress, which has already passed the House, would give FDA additional user fee resources to regulate OTC drugs, some of which could be devoted to additional cGMP inspections. Continue Reading
The concept paper
The EMA has published a “Concept paper on preparation of a revised guideline on the evaluation of medicinal products indicated for treatment of bacterial infections.” In the Concept Paper, the EMA proposes to merge the “Guideline on the evaluation of medicinal products indicated for treatment of bacterial infections (CPMP/EWP/558/95 Rev 2)” with the “Addendum to the guideline on the evaluation of medicinal products indicated for treatment of bacterial infections (EMA/CHMP/351889/2013).” Continue Reading