Will Physician Payment Sunshine Act Data Usher in a New Era of False Claims Act Litigation?

This post was authored by Scot Hasselman, Elizabeth Carder-Thompson, Katie Pawlitz and Jillian Riley.

While attention has been focused on Medicare physician payment data released by CMS yesterday, upcoming Sunshine Act data will shine a new spotlight on financial relationships between physicians and pharmaceutical and medical device companies – with potential FCA implications.

Last week marked the deadline for pharmaceutical and medical device manufacturers and group purchasing organizations (GPOs) to register with and submit aggregate 2013 payment and investment interest data to the Centers for Medicare & Medicaid Services (CMS) on certain financial relationships between themselves and physicians and teaching hospitals, as required by the Physician Payment Sunshine Act.1 In May, manufacturers and GPOs will be required to submit to CMS detailed 2013 payment data. With some exceptions, CMS will be making these data public by September 1, 2014. While the publicly available data are intended to provide more transparency for patients – to allow them to have a better understanding of the financial relationships between physicians and pharmaceutical and medical device companies – patients will certainly not be the only group interested in this public information. The Department of Health and Human Services (HHS) Office of the Inspector General (OIG), Department of Justice (DOJ), and relators’ attorneys will likely utilize these data to initiate investigations and support complaints under the federal False Claims Act (FCA). As with the recent release of the 2012 Medicare Part B Physician Fee Schedule data, members of the media will likely make inferences about certain financial relationships.

The U.S. government recovered $3.8 billion in settlements and judgments from civil cases involving fraud against the government in the fiscal year ending Sept. 30, 2013.2 Fiscal 2014 looks to be a record-breaking year, with ever-increasing civil settlements by major pharmaceutical companies.3

As the reporting deadlines approach, it is worth considering an interesting, and largely unknown, potential implication of the public availability of these data: How will it affect future FCA litigation? The publically available Sunshine Act data could become relevant to FCA litigation in a variety of ways; two in particular are discussed below.

Anti-Kickback Statute Violations

The data could give rise to suspicions of violations of the federal Anti-kickback Statute (AKS). The AKS makes it a criminal offense to knowingly and willfully offer or pay remuneration to induce the referral of, or arrange for the provisions of, federal health care program business.4 In other words, the law prohibits any person or entity from giving, receiving – or offering to give or receive – anything of value in return for or to induce referrals for businesses covered by Medicare, Medicaid, or any other federally funded health care program. Violators of the AKS face imprisonment, criminal, and civil fines, as well as exclusion from federal health care programs.5

It is easy to see how publishing information regarding payments from pharmaceutical and medical device manufacturers to physicians and teaching hospitals could implicate the AKS, and by extension, the FCA. The Patient Protection and Affordable Care Act (ACA) made explicit that violations of the AKS are also violations of the FCA.6 Any payment from a pharmaceutical or medical device manufacturer to a physician who prescribes a product manufactured by the company providing the payment could be viewed as potentially inappropriate remuneration intended to influence prescribing behavior.

Off-Label Promotion

Publically available information reported as a result of the Sunshine Act may also have off-label promotion implications. Notably, reports to CMS must include the name of the drug or the type of device that forms the basis of the payment.7 Tying the payment to a particular drug or type of device could raise suspicions of off-label promotion. A pharmaceutical or medical device manufacturer that promotes its products for uses for which the product has not yet been approved by the United States Food and Drug Administration (FDA), i.e., off-label uses, is at risk of FCA liability. A false claim can arise when a manufacturer promotes a product for off-label, non-covered uses (that is, for a use that both has not been approved by FDA and is not covered by the federal health care programs). Payments going to physicians who specialize in an area that is outside the scope of a pharmaceutical or medical device’s approved indication could necessarily raise suspicions that the manufacturer is promoting the product for unapproved uses.

Potential Limits

Besides the risk of government identifying potential issues for further investigation and prosecution as a result of reported Sunshine Act data, private parties may also mine the publically available data. One substantial impediment to relators’ attorneys using Physician Sunshine Payment data in FCA litigation is the limitation that publicly available data cannot form the basis of a whistleblower claim.8 This is known as the public disclosure bar, although the effectiveness of this defense has been diminished with recent FCA amendments.

That said, the Sunshine Act data, even if not the basis of a claim, could nonetheless impact the litigation in many ways. For example, it could provide additional evidence for the government to review in reaching its decision whether to intervene in a qui tam action. Both OIG and DOJ could review the data before it is publicly available to assist in the determination that a given matter warrants intervention. Additionally, the publicly available data – beyond providing flavor in support of an FCA claim and assisting with meeting the heightened pleading standard associated with fraud allegations9 – could be a potential mine for plaintiff attorneys to locate areas of focus. Relators’ attorneys will no doubt track the data to ascertain potential problem drugs or companies about which they can then dedicate efforts to uncovering fraud and abuse in the federal health care system.

Going Forward

It remains to be seen how all of these risks will play out going forward. Courts will have to decide how these new data will fit into FCA litigation. OIG and DOJ will have to determine how much to rely on the new information. And relators’ attorneys will need to make decisions about how many resources to dedicate to mining the Sunshine Act data.

One potential consequence that we are already starting to see occur is that pharmaceutical and medical device manufacturers may halt or limit payments to physicians, and/or that physicians themselves will be reluctant to accept such payments, e.g., for research, for expenses associated with training on a device, and the like. Companies may decide to do so for a variety of reasons, including avoiding the administrative burdens associated with tracking and reporting such payments for purposes of the Sunshine Act, fear of FCA litigation, or for public relations reasons. Many physicians simply do not want their names publicized. It remains to be seen how these trends will evolve.

1 42 C.F.R. § 403.908(a).
2 DOJ Press Release, available at: http://www.justice.gov/opa/pr/2013/December/13-civ-1352.html. 3 See, e.g., DOJ Press Release, available at: http://www.justice.gov/opa/pr/2013/November/13-ag-1170.html.
4 42 U.S.C. § 1320a-7.
5 Id.
6 42 U.S.C. § 1320a-7b(g). Note that manufacturers may submit “assumptions documents” as part of Sunshine reporting. Although CMS stated in the preamble to the Sunshine regulations its belief that the contents of such documents “should not be made public,” it acknowledged that it could provide access to the documents during an audit or investigation by other HHS divisions, the Office of Inspector General, or the Department of Justice.
7 42 C.F.R. 403.94(c)(8).
8 31 U.S.C. § 3730(e)(4).
9 Fed. R. Civ. P. Rule 9(b).

April Congressional Hearings

Recent Congressional hearings on health policy issues include the following:

  • House Energy and Commerce Committee hearings on the “Helping Families in Mental Health Crisis Act”; the FDA’s proposed changes to generic drug labeling; and legislation intended to improve predictability and transparency in Drug Enforcement Agency and FDA regulation (H.R. 4299, H.R. 4069, and H.R. 4250).
  • House Ways and Means Health Subcommittee hearing on final Treasury Department regulations implementing the employer mandate and employer information reporting requirement provisions of the ACA..

In addition, on April 9, 2014, the Senate Health, Education, Labor and Pensions Committee is holding a hearing on “Addressing Primary Care Access and Workforce Challenges: Voices from the Field.”

FDA Proposal Amends Medical Device Classification Rules

This post was written by Jennifer Pike.

On March 25, 2014, the Food and Drug Administration (FDA) published a proposal to amend its regulations governing the classification and reclassification of medical devices. In addition to conforming the regulations to recent changes made by the 2012 Food and Drug Administration Safety and Innovation Act (FDASIA), the proposed rule makes changes unrelated to FDASIA. Among other changes to 21 CFR Part 860, FDA proposes to:

  • Amend several definitions at 21 CFR § 860.3, including the definitions of Class I, Class II and Class III to reflect the key principle underlying device classification that a reasonable assurance of safety and effectiveness is necessary for all three classes, but that the level of regulation necessary to provide such assurance is specific to the level of risk.
  • Amend the definition of Class III to clarify which devices fall in this category.
  • Establish special controls for Class II devices by replacing the term “performance standards” in 21 CFR § 860.7.
  • Amend 21 CFR § 860.84 to remove from the classification process the requirement to answer the classification questionnaire and provide information using the supplemental data sheet.
  • Revise the procedure at 21 CFR § 860.130 to reflect the FDASIA requirement that devices reclassified under 513(e) of the Food, Drug and Cosmetic Act be reclassified using an administrative order procedure.
  • Revise the process under 21 CFR § 860.133 for the filing of a premarket approval for Class III preamendment devices to conform to FDASIA.

Comments to the proposed rule may be submitted in writing, or at www.regulations.gov, on or before June 23, 2014.

March Congressional Health Policy Hearings

Congressional panels continue to hold hearings to address various health policy issues, including the following:

Drug Companies are Reminded - FDA is Following Facebook

Our Life Sciences Legal Update blog reports today that the FDA’s Office of Prescription Drug Promotion has warned a Swiss drug company about statements the company made on its Facebook page, suggesting that consumers talk to their doctor about a drug without disclosing the risks associated with the product (risks serious enough to require a boxed warning on the label). The FDA action is a reminder that that FDA’s advertising and promotion rules apply regardless of how or where the product is promoted, and the FDA is monitoring social media sites for such activities. For more information, see the full post.

There are HOW many calories in that? FDA Seeks Comments on Proposal to Update Nutrition Facts Food Label

As mentioned on our Life Sciences Legal Update blog, the Food and Drug Administration (FDA) announced today it has proposed significant updates to the Nutrition Facts label for foods intended to expand and highlight the information consumers need to make well-informed food choices.  FDA also is proposing changes to how serving sizes themselves are calculated. FDA will be accepting comments on the proposed regulations for 90 days.  To read the entire post, click here.

FDA to Overhaul an OTC System That "Isn't Working"

This post was written by Kevin M. Madagan and Jillian W. Riley

The Food and Drug Administration (FDA) has just announced that it will hold a public hearing March 25 and 26, 2014 to obtain input on the Agency’s current process for reviewing over-the-counter (OTC) drugs. This is a significant advancement in FDA’s long-standing plan to overhaul the OTC drug system. According to the announcement, the Agency’s OTC drug review “needs a critical examination at this juncture to examine whether and how to modernize its processes and regulatory framework.”

Teeing up the importance of the public hearing, Dr. Janet Woodcock, the Director of FDA’s Center for Drug Evaluation and Research (CDER), informed the Wall Street Journal that the Agency was “looking for creative ideas about how to improve the process.”1 According to Dr. Woodcock, “The current system isn’t working well for the public or for us.”  Additional details are available after the jump.


The FDA’s announcement highlights a number of challenges associated with the current OTC drug review process (sometimes referred to as the OTC Monograph Process, OTC Monograph, or OTC Drug Review), a process that has not changed in more than 40 years. FDA sees the biggest challenges as the following:

  • The large number of products currently on the market for which there are not yet final monographs. Much of the OTC marketplace is still not covered by final monographs, and data may be insufficient for FDA to determine safety and/or efficacy. An unintended consequence of the enforcement discretion given to products marketed in accordance with tentative final monographs (TFMs) is that it creates negative incentives for sponsors to conduct studies or otherwise respond to safety concerns, as to do so may slow the final monograph process.
  • The current system’s limitations on FDA’s ability to change the monograph to address new safety or efficacy issues. The current process is not sufficiently agile to adapt quickly to new safety concerns that arise either during the rulemaking process or after issuance of a final monograph.
  • The inability of the current OTC Drug Review to easily accommodate innovative changes to OTC products. According to the notice, the FDA generally thought at the time it established the OTC drug review process “that safety and effectiveness evaluations for the various active ingredients would be fairly straightforward and would not need continuous reexamination over time.” Yet, FDA has learned that this is not the case. Scientific advances have given rise to new information about how drugs interact with the body, changing how FDA evaluates drugs. This is particularly relevant in the context of pediatric OTC products, as the preferred approach to pediatric dosing has changed since the OTC drug review was instituted. The current OTC drug review process relies on extrapolated data from an adult population to determine pediatric dosing, however, as opposed to the currently accepted practice of relying on data from actual use in the pediatric population.


After discussing what it views as the current shortcomings with the system, the FDA asks for input as to how it can improve and modernize the OTC process. FDA is looking for changes to the existing framework or ideas for a complete replacement. The Agency presents some ideas as a starting point for discussion, as noted below. The FDA wants to hear all ideas – from detailed proposals to initial thoughts as to why the current process is not fully successful, noting that public comments “need not be comprehensive to be useful.”

The following are some of FDA’s preliminary proposals to modernize the OTC drug review program for which it seeks public input:

  • Identify a streamlined process that would allow a prompt resolution of existing tentative final monographs. FDA is considering ways to more efficiently bring TFMs to closure.
  • Issue monographs by administrative order. FDA is examining streamlining the monograph process to mimic the device reclassification process put in place by the Food and Drug Administration Safety and Innovation Act. Under this proposed process, monographs could be established by administrative order, after issuance of a proposed order for public comment.
  • Issue regulations to require product-specific information and expand the use of guidance. FDA is raising the possibility of new regulations that could require sponsors to submit limited information about individual products prior to marketing. This could be similar to, but less detailed than, a new drug application (NDA).
  • Expand the NDA deviation process. The OTC drug review process provides for an NDA deviation process. A sponsor applies for this deviation by showing that the product complies with all the conditions of a monograph except for the deviation, and provides FDA adequate data to demonstrate the safety and effectiveness of the product with the deviation. FDA questions why industry has not utilized this option and seeks input as to whether this process could be improved to increase utilization.


FDA will hold the public hearing March 25 and 26, 2014, at FDA’s White Oak Campus in Silver Spring, Maryland. The registration deadline is March 12, 2014, and FDA will be accepting comments until May 12, 2014.

1 http://online.wsj.com/news/articles/SB10001424052702304275304579395813156008466?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702304275304579395813156008466.html (this article requires a subscription).

Coming to a TV Near You? FDA Seeks Public Input on Limiting Risks Presented in Direct-to-Consumer Television Ads

This post was written by Jennifer Pike.

In a notice published in the Federal Register on February 18, 2014, the Food and Drug Administration (FDA) asked for feedback on a proposed research study related to prescription drug television advertisements. The study, Disclosure Regarding Additional Risks in Direct-to-Consumer (DTC) Prescription Drug Television (TV) Advertisements (Ads), would investigate the impact of limiting the risks presented in DTC prescription drug TV ads to those that are serious and actionable. The ads would also include a disclosure statement to alert consumers that there are other product risks not included in the ad.

Current FDA regulations (21 CFR § 202.1) require that TV and radio ads present a product’s major risks in audio, or audio and visual parts of the ads (“major statements”). FDA is concerned that these major statements are too long, resulting in reduced consumer comprehension, minimization of important risk information, and potentially, therapeutic noncompliance due to fear of side effects. At the same time, and in conflict with the above, FDA is concerned that DTC TV ads do not include adequate risk information. FDA believes that providing limited risk information in ads will promote improved consumer perception and understanding of serious and actionable drug risks.  Comments to the study should be submitted in writing, or electronically at www.regulations.gov, by April 21, 2014.

FDA Provides Direction on "Dear Doctor" Letters

This post was written by Jillian W. Riley.

On January 16, 2014, the Food and Drug Administration (FDA) issued a final guidance document for industry providing specific recommendations on the content and format of Dear Health Care Provider (DHCP or “Dear Doctor”) letters. DHCP letters are an important means of communicating new information to the health care provider community about a product that is already on the market. The guidance provides insight into (1) when to send a DHCP letter, (2) what information should be included, (3) how to organize the letter, and (4) how to format the letter. The recent guidance finalizes a draft guidance FDA published in November of 2010. 

The guidance stresses the importance of collaborating with FDA when crafting DHCP letters to ensure that a DHCP letter is appropriate under the circumstances, that the target audience has been identified, and that the message is clearly conveyed. Additionally, the guidance provides template examples to aid industry in drafting a clear and effective DHCP letter.

FDA Seeks Comments on Drug Company Social Media Guidance

As reported on our Life Sciences Legal Update blog, the FDA has issued draft guidance addressing the unique challenges of drug promotion in the age of social media. Specifically, the draft guidance addresses how to submit interactive promotional media for postmarket review.  Comments on the document, “Draft Guidance for Industry on Fulfilling Regulatory Requirements for Postmarketing Submissions of Interactive Promotional Media for Prescription Human and Animal Drugs and Biologics,” are due April 14, 2014.

CMS, FDA Extend Pilot Program for Parallel Review of Medical Products

In October 2011, CMS and the FDA formally launched a voluntary parallel review pilot program for sponsors of medical devices. At the time, the agencies stated that they intended to run the pilot program for two years, with the possibility of an extension. In a December 18, 2013 notice, the FDA and CMS announced that they were extending the program for another two years in light of the significant interest in the pilot. The agencies are working through the process with the approved pilot program participants, and they will formally evaluate the program after a “representative group of participants have completed the pilot process.”

FDA Releases Final Guidance on Qualification Process for Drug Development Tools

This post was written by Jennifer Pike.

The Food and Drug Administration (FDA) has announced the availability of a final guidance document which describes the qualification process for drug development tools (DDTs) intended for use, over time, in multiple drug development programs. DDTs are methods, materials, or measures that aid drug development. Examples of DDTs include biomarkers and patient reported outcome instruments.

The purpose of the guidance document is to describe the formal process that FDA will use in working with sponsors of DDTs to guide them as they refine the tools and rigorously evaluate them for use in the regulatory process. The guidance also provides a framework for interactions between FDA and sponsors to support work towards qualification of DDTs, as well as explains the kinds of data that should be submitted to support qualification of a DDT and creates a mechanism for FDA’s formal review of the data to ultimately qualify the DDT. For purposes of the guidance, the submitter of a DDT is the person, group, organization (including the federal government), or consortium that takes responsibility for and initiates a DDT qualification proposal using the procedures described in the guidance.

The creation of the DDT qualification process is one of multiple initiatives FDA has undertaken, as a result of its 2004 FDA’s Critical Path Initiative, to support the development of new DDTs. DDTs can help streamline the drug development process, improve the chances for clinical trial success, and yield more information about a treatment or disease. Comments to the guidance may be submitted at any time at www.regulations.gov.

Drug Distribution Security Legislation Signed into Law

This post was written by Kevin Madagan.

On November 27, 2013, President Obama signed into law H.R. 3204, the “Drug Quality and Security Act” (the “Act”), bipartisan drug distribution security legislation. Among other things, the sweeping measure: clarifies current federal law and regulatory oversight regarding pharmacy compounding; establishes a uniform, national drug tracking and tracing framework; mandates national licensure standards for wholesale distributors and third-party logistics providers; and preempts state product tracing requirements. The following is an overview of the Act and highlights of initial FDA implementation guidance.

Clarification of federal law and regulatory oversight regarding pharmacy compounding

The Act clarifies current federal law and regulatory oversight by distinguishing between traditional compounders and outsourcing facilities. It also requires enhanced communication between FDA and state regulators about compounding entities.

An outsourcing facility is a facility that compounds sterile drugs by or under the direct supervision of a licensed pharmacist, is registered with FDA as an outsourcing facility, and complies with all standards governing such facilities. Outsourcing facilities will need to comply with certain adverse event reporting requirements and report biannually (June/December) to FDA the drugs compounded during the previous 6-month period. FDA will subject outsourcing facilities to risk-based inspections. The benefit to registering as an outsourcing facility is that drugs compounded in such facilities will be exempt from new drug requirements, labeling requirements, and track and trace requirements. However, new labeling standards will apply to drugs compounded in outsourcing facilities. For instance, the label for a drug compounded in an outsourcing facility will need to contain the statements: “This is a compounded drug” (or a reasonable comparable alternative statement that prominently identifies the drug as a compounded drug) and “Not for resale.” The statement “Office Use Only” will be required on the labels of drugs that are dispensed or distributed other than pursuant to a prescription for an individual identified patient.

The Act requires enhanced communication between FDA and state regulators about compounding facilities. Specifically, state boards of pharmacy must submit information to FDA describing any “actions taken against compounding pharmacies” for issues pertaining to compounding, including, for example, “the issuance of a warning letter, or the issuance of sanctions or penalties, by a state for violating the state’s pharmacy regulations pertaining to compounding.” State boards of pharmacy must also submit any information “expressing concerns” that a compounding pharmacy “may be” acting contrary to federal pharmacy compounding laws. The federal government must consult with the National Association of Boards of Pharmacy before implementing these mandatory reporting standards, and then must “immediately” notify “state boards of pharmacy” when it receives one of these mandatory reports or when it determines that a pharmacy is acting contrary to federal pharmacy compounding laws.

FDA recently issued numerous statements and draft guidance documents about how it interprets and intends to implement these and other requirements of the Act.

Uniform, national drug tracking and tracing framework

The Act establishes a uniform, national drug tracking and tracing framework to track prescription drugs from the manufacturer to the pharmacy. It does this by requiring manufacturers to serialize prescription drugs at the unit level. The Act then establishes unit-level product tracing requirements for “downstream” pharmaceutical supply chain members (drug manufacturers, repackagers, wholesale distributors, and dispensers).

National licensure standards for wholesale distributors

Beginning January 1, 2015, the Act requires any person who owns or operates an establishment that engages in wholesale distribution to report the following information to the Secretary on an annual basis: (1) each state by which the person is licensed and the appropriate identification number of each such license; (2) the name, address, and contact information of each facility at which, and all trade names under which, the person conducts business. Wholesale distributors must also report to the Secretary “within a reasonable period of time and in a reasonable manner” (as determined by the Secretary) any “significant disciplinary actions, such as the revocation or suspension of a wholesale distributor license,” taken by a state or the federal government.

For the purpose of ensuring uniformity with respect to wholesale distribution standards, the Act requires the Secretary to establish additional wholesale distribution standards governing: (1) the storage and handling of prescription drugs, including facility requirements; (2) the establishment and maintenance of records of the distribution of such drugs; (3) the furnishing of a bond or other equivalent means of security; (4) mandatory background checks and fingerprinting of facility managers or designated representatives; (5) the establishment and implementation of qualifications for key personnel; (6) the mandatory physical inspection of any facility to be used in wholesale distribution; and (7) the prohibition of certain persons from receiving or maintaining licensure for wholesale distribution (e.g., persons convicted of a felony for conduct relating to wholesale distribution). In addition, if a state chooses not to establish a licensing program for a wholesale distributor, the federal government must license the distributor and collect reasonable fees to cover the costs of administering a federal licensing program for entities in such states.

National licensure standards for third-party logistics providers

Beginning one year after the date of enactment of the Act, a facility of a third-party logistics provider must report to the federal government on an annual basis: (1) the state by which the facility is licensed and the appropriate identification number of such license; and (2) the name and address of the facility and all trade names under which such facility conducts business. If a state chooses not to establish a licensing program for a third-party logistics provider, the federal government must license the provider and collect reasonable fees to cover the costs of administering a federal licensing program for entities in such states. The Act also allows for a third-party accreditation program to be developed to license providers and requires the federal government to issue regulations regarding the standards for licensing third-party logistics providers. Third-party logistics providers will be subject to periodic inspection by their licensing authority and must provide the applicable licensing authority, upon a request by such authority, a list of all product manufacturers, wholesale distributors, and dispensers for whom the third-party logistics provider provides services.

Preemption of state product tracing requirements

The product tracing requirements set forth in the Act preempt state product tracing requirements, including paper or electronic pedigree systems. Preemption resolves a long-standing problem facing the drug distributor industry: the increasingly complex, and often conflicting, state pedigree requirements, many of which are not fully established or have staggered implementation deadlines.

Congressional Hearings Focus on HealthCare.gov Enrollment, Other Policy Issues

Congressional committees continue to focus on the experience of consumers and insurers since the HealthCare.gov insurance portal launched on October 1, along with potential issues related to the security of personal data transmitted through the site. For instance, House hearings this week include an Oversight and Government Reform Committee hearing on “ObamaCare Implementation: The Rollout of HealthCare.gov”; a Homeland Security Committee on “Cyber Side-Effects: How Secure is the Personal Information Entered into the Flawed Healthcare.gov?"; and an Energy and Commerce Committee hearing titled “Obamacare Implementation Problems: More than Just a Broken Website.” Next week, the Energy and Commerce Committee also will examine the security of the HealthCare.gov site

In other policy areas, on November 14, the House Small Business Committee is holding a hearing on “Self-Insurance and Health Benefits: An Affordable Option for Small Business.”  On November 15, the Energy and Commerce Subcommittee on Health will review the FDA’s implementation of the Food and Drug Administration Safety and Innovation Act, and on November 19 the panel will focus on federal regulation of mobile medical apps and other health software. 

FDA Proposes New Rule to Exercise its Administrative Detention Authority for Drugs

This post was written by Jennifer Pike.

On July 15, 2013, the Food and Drug Administration (FDA) published in the Federal Register a proposed rule that would amend 21 CFR Part 1 to implement FDA’s detention authority with respect to drugs intended for human or animal use. FDA’s detention authority is authorized by amendments made to the Food, Drug, and Cosmetic Act by the Food and Drug Administration Safety and Innovation Act. Once finalized, FDA would be able to detain drugs encountered during an inspection that are reasonably believed to be adulterated or misbranded. According to FDA, the authority is intended to protect the public by preventing distribution or subsequent use of drugs encountered during inspections that are believed to be adulterated or misbranded, until FDA has had time to consider what action it should take concerning the drugs, and to initiate legal action, if appropriate. Comments on the proposed rule should be submitted in writing, or electronically at www.regulations.gov, on or before September 13, 2013.

New Draft Guidances from FDA Address Expedited Review, Safety Labeling and More

This post was written by Jennifer Pike

The FDA has recently issued a number of new draft guidance documents that provide insight on a range of issues, including expedited drug review programs, medical device reporting, importation of unapproved drugs for market launch, and safety labeling changes. A brief summary and link to each draft guidance document is provided below:

  • Expedited Programs for Serious Conditions: Drugs and Biologics – This draft guidance provides a single resource for information on policies and procedures related to FDA’s expedited drug development and review programs: fast track designation, breakthrough therapy designation, accelerated approval, and priority review. The draft guidance is intended to help industry better understand each program, including when the programs can be used and the features of each.
  • Medical Device Reporting for Manufacturers – This draft guidance describes and explains the current FDA regulation that addresses reporting and recordkeeping requirements applicable to manufacturers of medical devices for certain device-related adverse events. The document provides answers to frequently asked questions and includes a section on common reporting errors.
  • Pre-launch Activities Importation Request – This draft guidance describes FDA’s policy regarding requests for the importation of unapproved finished dosage form drug products by an applicant preparing the product for market launch, based on anticipated approval of a pending application (e.g., NDA, ANDA, BLA). It also describes the procedures for making such requests and the factors that FDA will consider in granting such requests.
  • Safety Labeling Changes: Implementation of Section 505(o)(4) of the FD&C Act– Section 505(o)(4) of the Federal Food, Drug, and Cosmetic Act, which was added by section 901 of the Food and Drug Administration Amendments Act of 2007, authorizes FDA to require certain drug and biological product application holders to make safety-related labeling changes based on new safety information that becomes available after approval of the drug or biological product. This draft guidance explains how FDA intends to implement section 505(o)(4), including a description of the types of safety labeling changes that ordinarily might be required under this section, how FDA plans to determine what constitutes new safety information, the procedures involved in requiring safety labeling changes, and enforcement of the requirements for safety labeling changes.

Draft FDA Guidance Recommends Cybersecurity Risk Assessments and Management Plans for Premarket Medical Device Submissions

This post was written by Kevin Madagan and Jennifer Pike.

The Food and Drug Administration (FDA) has announced the availability of a new draft guidance document entitled "Content of Premarket Submissions for Management of Cybersecurity in Medical Devices." The draft guidance identifies cybersecurity issues that medical device manufacturers should consider in preparing premarket submissions for medical devices – including Premarket Notifications (510(k)), Premarket Approval Applications (PMA), Product Development Protocols (PDP), and Humanitarian Device Exemption (HDE) submissions– in order to provide effective cybersecurity management and to reduce the risk that device functionality is intentionally or unintentionally compromised. The draft guidance highlights the need for effective medical device cybersecurity given "the increasing use of wireless, Internet- and network-connected devices and the frequent electronic exchange of medical device-related health information."

FDA’s draft guidance relates to a recommendation by the Government Accountability Office (GAO) in August 2012 that FDA develop and implement a plan to expand its focus on information security risks, with a particular focus on security risks resulting from intentional threats (e.g., hacking, malware).

Comments on the draft guidance should be submitted in writing, or online at www.regulations.gov, by September 12, 2013.

In a related matter, FDA recently released two Safety Communications (available here and here) concerning cybersecurity for medical devices and hospital networks. The Safety Communications recommend that medical device manufacturers and health care facilities take steps to reduce the risk of failure due to cyberattack, which could be initiated by the introduction of malware into the medical equipment or unauthorized access to configuration settings in medical device and hospital networks. Specifically, the Safety Communications recommend the following:

  • Device Manufacturers.  Device manufacturers should "remain vigilant" about identifying risk and hazards and take "appropriate steps" to reduce the risk of device failure due to cyberattack. This includes reviewing cybersecurity practices and policies to "assure that appropriate safeguards are in place," such as:

--Taking steps to limit unauthorized device access to trusted users only, particularly for those devices that are life-sustaining or could be directly connected to hospital networks;

-- Protecting individual components from exploitation and developing strategies for active security protection appropriate for the device’s use environment;

-- Using design approaches that maintain a device’s critical functionality, even when security has been compromised ("fail-safe" modes); and

-- Providing methods for retention and recovery after an incident where security has been compromised.

  •  Hospital Networks/Health Care Facilities.  Hospital networks and health care facilities should evaluate their network security and take steps to protect the network. This includes:

--  Restricting unauthorized access to the network and networked medical devices;

-- Making certain appropriate antivirus software and firewalls are up-to-date;

-- Monitoring network activity for unauthorized use;

-- Protecting individual network components through routine and periodic evaluation, including updating security patches and disabling all unnecessary ports and services;

-- Contacting the specific device manufacturer if a cybersecurity problem related to a medical device is suspected; and

-- Developing and evaluating strategies to maintain critical functionality during adverse conditions.

Reed Smith will be issuing additional updates in the near future about these recent cybersecurity developments.

FDA Amends Orphan Drug Regulations

This post was written by Jennifer Pike.

On June 12, 2103 the Food and Drug Administration (FDA) published a final rule amending the orphan drug regulations (21 CFR Part 316). The amendments are intended to clarify regulatory provisions and make minor improvements to address issues regarding orphan drug designation and orphan drug exclusivity.

The final rule largely finalizes the amendments as proposed in October 2011. Reed Smith previously prepared a client alert summarizing the proposed rule and discussing the potential impact of the proposal on the drug, biological product, and biotechnology industries. In the final rule, the FDA has revised the proposed rule by, among other things:

  1. Adding a definition of "orphan subset" that is consistent with the explanation of orphan subset in the proposed rule;
  2. Clarifying the existing regulation in accordance with FDA’s long-standing practice that a designated drug is eligible for orphan exclusive approval only if the same drug has not already been approved for the same use or indication;
  3. Removing language stating that to demonstrate clinical superiority in terms of "major contribution to patient care," the drug must provide safety and effectiveness "comparable to the approved drug," because the language incorrectly implied that FDA would require direct proof of comparability (e.g., through non-inferiority trials);
  4. Updating the contact information required in requests for designation and for permanent-resident agents;
  5. Clarifying that a designation request need only include "relevant" in vitro laboratory data and data from "clinical experience" with the drug;
  6. Clarifying that FDA will notify the sponsor in writing whenever FDA considers a designation request voluntarily withdrawn;
  7. Codifying FDA’s longstanding interpretation that FDA can refuse to grant a designation request if the request is otherwise ineligible for designation under Part 316;
  8. Stating that that FDA’s publicly-available posting of designated drugs will include whether a drug is no longer designated if the drug loses designation after the effective date of the final rule;
  9. Making explicit an option that has always existed for sponsors – that sponsors may voluntarily withdraw a designation request, or an actual designation, at any time by submitting a written request to FDA; 
  10. Clarifying that the scope of orphan drug exclusivity is limited to the indications or uses for which the designated drug is approved;
  11. Clarifying that that a designated drug that is otherwise the same as a previously approved drug receives 7-years market exclusivity ("orphan drug exclusivity") upon approval only if the sponsor of the second-in-time drug demonstrates upon approval that its drug is clinically superior to the previously approved drug; and
  12. Updating the FDA address listed in the regulations and adding an online address for the Orange Book.

The final rule is effective on August 12, 2013.

House Approves Drug Distribution Security Plan

This post was written by Kevin Madagan and Jennifer Pike.

The U.S. House of Representatives has approved by voice vote H.R. 1919, Safeguarding America’s Pharmaceuticals Act of 2013. H.R. 1919 is a bipartisan bill intended to improve drug distribution security and protect against counterfeit pharmaceuticals. According to the bill’s sponsor, Rep. Bob Latta (R-Ohio), the bill would replace an unworkable patchwork of state laws by establishing a uniform national standard of tracing requirements for manufacturers, wholesale distributors, pharmacies and repackagers based on changes in ownership. The bill would also establish a collaborative process between the Food and Drug Administration and stakeholders to research ways to secure pharmaceutical distribution.

This voice vote follows on the heels of the recent unanimous vote by the Senate Health Education Labor and Pensions (HELP) Committee to combine the HELP Committee’s current draft of “S. 957, Drug Supply Chain Security Act” with their draft of “S. 959, Pharmaceutical Compounding Quality and Accountability Act” and move the legislation to the Senate floor for consideration.

FDA Issues New Draft Guidance Documents on Access to Investigational Drugs

This post was written by Jennifer Pike.

On May 9, 2013, the Food and Drug Administration (“FDA”) announced the availability of two new draft guidance documents answering common questions on FDA’s implementation of regulations related to access to investigational drugs. The first draft guidance, entitled “Charging for Investigational Drugs Under an IND – Qs & As,” addresses FDA’s implementation of 21 C.F.R. § 312.8 and answers the most frequently-asked questions about charging for investigational new drugs under an investigational new drug (IND) Application (IND). The regulation, which went into effect in October 2009, clarifies the circumstances under which charging for an investigational new drug in a clinical trial is appropriate. It also sets forth criteria for charging for an investigations drug and clarifies what costs can be recovered for an investigational drug.

The second draft guidance, entitled “Expanded Access to Investigational Drugs for Treatment Use – Qs & As,” answers the most frequently-asked questions related to FDA’s implementation of its expanded access regulations (21 CFR Part 312, Subpart I). The regulations, which went into effect on October 2009, contain the requirements for the use of investigational new drugs or approved drugs where availability is limited by a risk evaluation and mitigation strategy, when the primary purpose is to diagnose, monitor, or treat a patient’s disease or condition.

Comments on the draft guidance documents should be submitted in writing, or electronically at www.regulations.gov, on or before July 8, 2013.

Older Entries

April 15, 2013 — April Congressional Health Policy Hearings & Markups

April 15, 2013 — FDA Draft Guidance on Biosimilar Product Development Now Available

March 12, 2013 — FDA Issues New Guidance Documents

January 29, 2013 — FDA Issues Final Rule on Current Good Manufacturing Practice Requirements for Combination Products

January 29, 2013 — FDA Announces 2013 Generic Drug Active Pharmaceutical Ingredient and Finished Dosage Form Facility User Fee Rates

January 29, 2013 — New FDA Draft Guidance Addresses Combination Product Postapproval Modification Submissions

January 14, 2013 — Obama Administration's Regulatory Agenda Points to Busy 2013 for HHS

January 11, 2013 — FDA Requests Comments on Review of Medical Device Submissions

January 11, 2013 — FDA Issues Final Guidance Documents on Drug and Medical Device Submissions

January 11, 2013 — FDA Releases Draft Guidance Documents on Providing Submissions in Electronic Format

January 11, 2013 — FDA Draft Guidance Addresses Clinical Trial Enrichment

January 11, 2013 — FDA Issues Two Final Guidances on Safety Reporting Requirements

January 11, 2013 — FDA To Hold Workshop on Accessible Standardized Medical Device Labeling (April 29-30)

December 18, 2012 — FDA Issues Two New Draft Guidance Documents Related to the Conduct of Clinical Trials

December 18, 2012 — New FDA Draft Guidance Documents Address Product Safety and Risk Minimization

November 28, 2012 — FDA Addresses Food and Drug Administration Safety and Innovation Act (FDASIA) Implementation

November 28, 2012 — Upcoming FDA Public Meeting: Framework for Pharmacy Compounding/State and Federal Roles (Dec. 19)

November 12, 2012 — November Congressional Health Policy Hearings

October 31, 2012 — FDA Issues Generic Drug User/Backlog Fee Notices

October 16, 2012 — GAO Flags Concerns about Implantable Medical Device Information Security

October 16, 2012 — OIG Examines Dietary Supplement Claims, Registration with FDA

October 15, 2012 — Short-Term Government Funding, FDA User Fee & Safe Doses Bills Signed into Law

September 27, 2012 — Generic Drug User Fee Fix Cleared by Congress

September 27, 2012 — FDA Meetings on Patient-Focused Drug Development Initiative

September 6, 2012 — FDA Final Rule Implementing Device Registration and Listing Requirements

September 6, 2012 — Draft Guidance Regarding Self-Identification of Generic Drug Facilities and Q&A on Generic Drug User Fee Amendments

September 5, 2012 — FDA Establishes FY 2013 User Fee Rates for Biosimilars and Prescription Drugs

September 5, 2012 — FDA Guidance on FY 2013 Medical Device User Fee Small Business Qualification and Certification

September 5, 2012 — FDA Issues Guidance for Comment on Refuse to Accept Policy for 510(k)s

July 31, 2012 — Medical Device User Fee Rates for FY 2013

July 31, 2012 — FDA Issues Draft Guidance Regarding Acceptance & Filing Review for PMA Applications

July 16, 2012 — FDA Proposes Unique Device Identification System for Medical Devices

July 16, 2012 — FDA Draft Guidance the Medical Device Pre-Submission Program/Meetings with FDA Staff

July 16, 2012 — FDA Small Entity Compliance Guidance: Toll Free Number Labeling for Drugs

July 16, 2012 — FDA Draft Guidances Describe Product-Specific Bioequivalence Recommendations

July 16, 2012 — FDA Draft Guidance Document on Transferring Clinical Investigation Oversight to Another IRB

July 16, 2012 — FDA Guidance Addresses Genotoxicity Testing and Data Interpretation for Human Drugs

June 28, 2012 — Congress Clears FDA Safety & Innovation Act

June 18, 2012 — OIG Examines Scientific Disagreements at CDRH Regarding Medical Device Reviews

May 31, 2012 — House, Senate Approve FDA User Fee/Drug Safety Bills

May 11, 2012 — House Panel Unanimously Approves FDA User Fee Act

May 11, 2012 — FDA Final Rule on Disqualification of Clinical Investigators

May 11, 2012 — FDA Issues Final Rule on Sterility Testing of Biological Products

May 11, 2012 — FDA Guidance on Medical Device Pre-market Approval

May 11, 2012 — FDA Seeks Information on Risks, Benefits of Metal-on-Metal (MoM) Hip Replacements

May 11, 2012 — FDA Reports on Post-Approval Drug Safety Monitoring

May 11, 2012 — International Collaboration Highlighted in FDA Global Engagement Report

April 23, 2012 — GAO Examines FDA Device Review Process

April 2, 2012 — House Approves IPAB Repeal/Medical Liability Reform Legislation

March 30, 2012 — FDA Announces Delayed Enforcement of ACA Drug Sample Distribution Reporting Requirement

March 29, 2012 — Congressional Health Policy Hearings

March 29, 2012 — FDA Draft Guidance on Classifying Significant Postmarket Drug Safety Issues

March 29, 2012 — FDA Issues Guidance Update on Communication to the Public about Drug Safety

March 29, 2012 — Draft FDA Guidance Targets Direct-to-Consumer Television Marketing

March 14, 2012 — FDA Issues Three Draft Guidance Documents on Biosimilar Product Development; Announces May 11 Public Hearing

March 14, 2012 — FDA Draft Guidance on Safety Data Collection for Late Stage Premarket & Postmarket Investigations

March 14, 2012 — Congressional Hearings on Drug Issues.

March 14, 2012 — FDA Public Hearing Regarding Regulation of Clinical Trials (April 23-24)

February 13, 2012 — FDA Issues Guidance on New Informed Consent Requirements

February 10, 2012 — Final Rule Regarding Labeling Requirements for Products Held in Strategic National Stockpile

February 10, 2012 — FDA and Industry Reach Agreement in Principle on Medical Device User Fees

February 10, 2012 — FDA Q&A/Draft Guidance for Industry Related to PET Drug Products

February 10, 2012 — FDA Report on Exploratory Program to Increase Access to Agency Compliance and Enforcement Data

February 10, 2012 — February Congressional Health Policy Hearings

January 25, 2012 — Fall 2011 Regulatory Agenda (Belatedly) Released

January 25, 2012 — FDA Seeks Comments on Prescription Drug Promotion Survey

January 25, 2012 — FDA Completes Work on Three Drug User Fee Programs

January 25, 2012 — FDA Guidance on Product Name Placement in Advertising and Promotional Labeling

January 25, 2012 — E&C Health Subcommittee Plans FDA User Fee Hearings in February

January 23, 2012 — E&C Health Subcommittee Plans FDA User Fee Hearings in February

January 5, 2012 — GAO Report on Pediatric Medical Devices

January 4, 2012 — FDA Rule Expands Drug Manufacturer Notification Requirements for Potential Drug Shortages

December 29, 2011 — FDA Guidance Regarding Responding to Unsolicited Requests for Off-Label Information

December 29, 2011 — FDA Issues Draft Guidance Regarding Evaluation of Sex Differences in Medical Device Clinical Studies

December 29, 2011 — FDA Provides Draft Guidance on Evaluating Substantial Equivalence in Premarket Notifications

December 29, 2011 — FDA Guidance Regarding CDRH Appeals Process

December 13, 2011 — FDA Publishes Notice on Biosimilar Biological Product User Fees

December 13, 2011 — FDA Draft Guidance on Artificial Pancreas Device Systems, Hepatitis B Screening of Blood/Blood Components

December 12, 2011 — FDA Public Meeting on Generic Drug User Fees (Dec. 19)

November 10, 2011 — FDA Announces Review of Bar Code Final Rule

November 10, 2011 — President Issues Executive Order Regarding Drug Shortages

October 28, 2011 — Correction Notice on CMS/FDA Parallel Review Pilot Program

October 25, 2011 — FDA Proposes Amendments to Orphan Drug Rules

October 14, 2011 — FDA Issues Final Guidance on Risk Labeling for Prescription Drugs and Biological Products

October 14, 2011 — FDA Issues Draft Guidance to Clarify De Novo Classification Process

October 14, 2011 — FDA Seeks Comments on Proposal to Increase Transparency

September 26, 2011 — PDUFA Reauthorization Meeting (Oct. 24)

September 26, 2011 — Draft FDA Guidance on Exculpatory Language in Informed Consent

September 26, 2011 — FDA Guidance on Reproductive and Developmental Toxicities

September 1, 2011 — HHS Issues Final Plan to Reduce Regulatory Burdens

September 1, 2011 — FDA Issues Strategic Plan for Regulatory Science

July 29, 2011 — Congressional Health Policy Hearings

July 28, 2011 — FDA Issues Draft Guidance Regarding When to Submit a 510(k) for a Change to an Existing Device; Guidance Follows 510(k) Working Group Recommendations

July 26, 2011 — FDA Issues Draft Guidance Regarding Mobile Medical Applications

July 26, 2011 — FDA Issues Guidance and Final Rule Regarding Focused Ultrasound Stimulators for Aesthetic Use

July 26, 2011 — FDA Announces Open Registration for Clinical Investigator Training Course

July 18, 2011 — FDA Issues Draft Guidance Related to IVD Companion Diagnostic Devices

July 18, 2011 — FDA Proposed Rule Would Eliminate Certain Drug Pedigree Requirements

July 18, 2011 — July Congressional Health Policy Hearings/Markups

June 28, 2011 — FDA Proposed Rule to Amend Sterility Test Requirements for Biologicals