China, FDA Sources of New Regulatory Developments

As two recent developments make clear, fledgling regulatory frameworks for medical devices are in a state of churn in several nations, but the more mature regulatory systems are anything but static. The first of these two latest developments bodes well for industry where a massive Asian market is concerned, but the second would seem to suggest that digital health has a number of hurdles to overcome in the U.S.

China Overhauls Medical Device Regulations

China’s State Drug Administration recently announced several proposed changes to its regulatory framework for devices and diagnostics, but the changes arrived as Washington and Beijing haggle over trade in a dispute that could lead to a significant boost in tariffs.

One of the more significant of the proposed SDA changes is that industry would not have to obtain approval for manufacturing in China prior to obtaining marketing approval for that device. Another important change is that the SDA would no longer require that the manufacturer also serve as the holder of the certificate, which would free up device makers to do business with local representatives who are in a better position to avoid delays. These two changes alone would seem to represent a significant reduction in time and/or hassle to market.

Another significant change is that SDA may accept clinical studies conducted outside China, although this provision would not apply to high-risk devices. Precisely how much this helps device makers is not clear inasmuch as clinical studies are categorically mandated only for high-risk devices. One bit of seemingly good news on the moderate-risk device front is that provincial authorities will no longer be tasked with premarket review, a switch that hopefully will create a more predictable process.

The agency also said it intends to form a dedicated facility inspectorate by hiring inspectors on a full-time basis. The impact of this change might not be obvious in the near term, but the fact that these inspectors will not be distracted with other matters might at least lend more consistency to inspections.

By some accounts, the draft rule would eliminate the nation-of-origin rule that has rankled device makers for a number of years. Device makers in the U.S. have argued for some time that nation-of-origin rules left device makers in other nations at a competitive advantage. That particular problem may soon be a thing of the past. SDA is taking comment on the proposal through July 24.

Device makers have worked for years to pry open the Chinese market with middling success, but the ongoing trade controversy could be a setback. Among the targets of the Trump administration’s tariff list on Chinese products are medical devices, and U.S. device makers are concerned that a retaliatory tariff may be in the offing. The predicament is serious enough that Rep. Erik Paulsen (R-Minn.) penned a May 15 letter to the U.S. Trade Representative recommending caution, given that the trade deficit for medical technology is relatively narrow and actually favors the U.S. in some categories. Trade discussions between Washington and Beijing are ongoing, however, and both sides still have ample room in which to negotiate.

Legality of FDA’s Precert Program Questioned Again

The FDA’s effort to streamline its review of software as a medical device (SaMD), a vital cog in its overall digital health enterprise, revolves around a program for precertification of SaMD vendors, but the latest update has prompted observers to question again whether the agency can legally step around its current authorities to deploy the program. At stake is the future of a program seen as critical to sustaining the digital health pipeline, although some might question whether there will be a challenge to what some argue is the FDA’s extralegal approach to digital health regulation.

As previously discussed in the May 17 blog, the agency’s digital precert program would replace a product-by-product review process with one that certifies the vendor’s quality program instead. This approach carries with it a presumption that the FDA will more closely track outcomes and adverse events associated with the SaMD in question, and possibly exercise more rapid remediation of any problems than might otherwise be the case.

Version 0.2 of the precert program emerged in late June, proposing to revise the two levels of precert accreditation. Previously, the FDA had proposed a leaner precert process for companies with histories of successful navigation of the agency’s premarket and postmarket requirements, but the latest update would eliminate prior regulatory experience as a determinant, and instead allow entities that score well on a number of key performance indicators to employ the less cumbersome process.

The questions surrounding the legality of the precert program were not long in coming. In an Aug. 16, 2017, post at the blog for Health Affairs, a trio of authors described the precert program as “an experiment in medical product regulation” that lacks any statutory backing, even with passage of the 21st Century Cures Act, which FDA commissioner Scott Gottlieb has cited as an authorizing text.

The authors of the Health Affairs editorial are not the only ones who have misgivings. Bradley Thompson of Epstein Becker Green gave voice to a similar concern recently. Thompson, who has represented several ad hoc medical technology alliances over the past few years, suggested the precert pilot as currently understood would amount to a suspension of both statutory and regulatory authority.

Obviously industry will not want to make waves in connection with the precert program, but there are other stakeholders with different incentives. Public Citizen and the National Center for Health Research are well known for looking askance on device approvals, and so can be expected to track the precert program as it moves along. Any related litigation would end up in the U.S. District Court for the District of Columbia – which is known for giving federal agencies the benefit of the doubt – but a lawsuit could impede the precert program considerably, even if it did not derail the program entirely.

Rosenstein Takes Aim at ‘Piling On’ in New Memo

The Department of Justice has issued a number of more or less memorable memos when it comes to federal corporate prosecutions, and Deputy Attorney General Rod Rosenstein said in a recent public appearance that one of his goals in accepting the job was “to make sure there would be no Rosenstein memo!” Nonetheless, the new DoJ policy of not piling on to corporations that are the targets of multiple government agencies is significant enough that Rosenstein’s ambition is likely to be thwarted.

Memo modifies USAM

Rosenstein’s memo inserts new text to the U.S. Attorney’s Manual (USAM), and so might be construed to be more prescriptive than suggestive, but he indicated that the intent is to clarify existing policy rather than to break any new ground. The memo starts with the statement that as is the case with civil and criminal enforcement, corporate enforcement should proceed under the assumption that an equitable result takes into account the totality of the circumstances, and thus should include a consideration of actions undertaken by other government authorities.

The May 9 memo offers a new section in Title 1 of the USAM, which states that federal attorneys have an ethical obligation to avoid using “criminal enforcement authority unfairly” in an effort to extract additional monetary penalties. Rosenstein stated that federal attorneys should coordinate with each other and with state and local authorities so that the penalties each office pursues do not in the aggregate exceed a rational penalty for the violative conduct. He also advised that attorneys avoid the hazard of undue delay in pursuit of larger fines and penalties, while the cross-referenced addendum to Title 9 of the USAM suggests attorneys “should consider whether non-criminal alternatives” would achieve the desired result.

Rosenstein’s prepared remarks for a May 9 appearance at the American Conference Institute is largely directed toward enforcement of the Foreign Corrupt Practices Act, and he stated that DoJ “should try to reward companies that try in good faith to deter crime.” He said the addition of a section on FCPA prosecutions to the USAM notifies prosecutors in several offices, not just the fraud office, of the new policy, but also that the move increases transparency and consistency. As an example, Rosenstein pointed to an action in which the Department declined to pursue further penalties against a corporate entity that had already disgorged $9 million to the Securities and Exchange Commission.

Piling on, Rosenstein said, is a disservice to individuals in the affected entities who seek to cooperate and put the matter behind them in a reasonable frame of time. He said the new policy does not permit federal attorneys to “invoke the threat of criminal prosecution solely to persuade a company to pay a larger settlement in a civil case,” which he added is less a policy change and more of a reminder to federal attorneys that the Department is committed “to principles of fairness and the rule of law.”

Conversely, Rosenstein said duplicative penalties sometimes are necessary “to achieve justice and protect the public,” and that corporate cooperation with other law enforcement entities is no substitute for cooperation with the Department.

The matter of coordination with other entities has prompted the formation of a DoJ working group that Rosenstein said will include senior officials at the FBI along with representatives of various Department offices. He offered little more in the way of detail other than to state that the objective is to make internal recommendations about white-collar crime and corporate enforcement. Precisely which of the related questions this WG will examine is apparently a story for another day.

Plaintiff FOIAed again in Seventh Circuit

Fictional villains are fond of cursing the fact that they were foiled yet again by their nemeses, but a plaintiff who filed a suit against the FDA and two employees over records requested under the Freedom of Information Act (FOIA) fared no better. In this instance, the question was in part whether the requested information disclosed trade secrets, but the agency has not always emerged from these lawsuits with a win.

Henson v. Dept. of Health and Human Services came out of the Seventh Circuit Court of Appeals June 15, and included two employees of the FDA. According to the Seventh Circuit decision, the district court had determined that the Food, Drug and Cosmetic Act does not give litigants a cause of action against employees of the federal government, a conclusion with which the appeals court agreed.

The plaintiff had sued the FDA for documents pertaining to class III continuous glucose monitoring devices, and the FDA procured approximately 8,000 documents for the requestor on the first request, along with another 7,000 documents upon receipt of an amended request. The Seventh Circuit said the plaintiff had failed to provide specific examples of disagreement with the agency’s Vaughn index for the withheld documents, just one of several troubles the plaintiff encountered in pressing the matter. The court required the agency to produce the Vaughn indices as a “precautionary step,” but cautioned, “that is not how future cases should proceed as a matter of course.”

The circuit court and the district court agreed that information regarding the materials used to manufacture components of the glucose monitor were exempt from disclosure under FOIA. The two courts likewise came to the same conclusion on whether intra- or interagency memos are subject to FOI requests. Regarding the plaintiff’s argument as to whether the scope of FOI requests includes information from other patients that had offered the FDA or the manufacturer their feedback on the device, the circuit court said the FDCA “requires transparency from the government – not the manufacturer’s patients and employees.”

As previously mentioned, these FOI cases have not always gone the FDA’s way. In 2014, the U.S. District Court for the Central District of California decreed that the agency was required to produce a number of unredacted, product-related documents in a lawsuit filed by the AIDS Healthcare Foundation in connection with a prophylactic treatment for HIV made by Gilead. While Gilead did not at the time have much competition in the realm of pre-exposure prophylaxis, the company had argued that the disclosures ordered by the court would give competitors an unfair advantage. That case would eventually land in the Court of Appeals for the Federal Circuit, which ruled May 11 that the Foundation’s attempt to break patents held by Gilead and other drug makers lacked standing.

Staking Claims: PTO Saving Patents, FDA Saving Lives

The world suffers no shortage of hyperbole, and sometimes those in the U.S. government get in on the act, too. Following are two stories of goverment agencies taking action in the month of May, with one agency easing up on a purportedly lethal administrative mechanism while the other asserts that its regulatory proposal would be quite the opposite of lethal.

PTO Revisits ‘Broadest Reasonable’ Standard

Those who saw the inter partes review process as an illegitimate shortcut to destruction of legitimate patents may have been cheered to see the U.S. Patent and Trademark Office declare that it would revisit its standard for interpreting claims that are the subject of an IPR, a welcome piece of news for patent holders.

Much of the criticism of the IPR process revolves around the notion that the process is a highly efficient patent-killing machine, and the use of broadest reasonable standard for interpreting the claims contested in an IPR was part of the problem. The difficulty for litigants was that matters appearing in an IPR or other PTO procedures might also be at play in the courts, thus setting up the prospect for differential outcomes due to PTO’s use of the broadest reasonable interpretation (BRI) standard.

Andrei Iancu, director of the PTO, said in remarks to a patent policy conference in April that the agency was taking a close look at various patent-related proceedings and the standards employed throughout those proceedings. The overall objective would be to increase the predictability of “appropriately scoped claims,” Iancu said, explaining that one of the agency’s tasks will be to close the gap between the prior art uncovered during the original patent examination and the prior art unearthed in litigation.

The PTO notice acknowledges that the BRI standard differs from the standards used in federal district courts and the International Trade Commission, and that nearly 87 percent of the patents caught up in proceedings instituted by the America Invents Act were also in play in the courts. This high rate of overlap, the agency said, suggests a need to use the same standard for claims interpretation. PTO also pointed to the outcome in the 2005 en banc hearing at the Federal Circuit for Phillips v. AWH Corp. as a stimulus to take a closer look at the viability of the BRI standard.

The agency said its views of the matter have also been shaped by a rethinking of the relative merits of extrinsic and intrinsic evidence. This portion of the PTO’s notice of proposed rulemaking states that the need to comport with Phillips means that the verbiage found in a claim will be interpreted by the “ordinary and customary meaning” of the words found in those claims. The PTO states that extrinsic evidence, such as expert testimony, may be useful, but not moreso than intrinsic evidence, and that the proposed rule would apply not only to IPR proceedings, but also to post-grant reviews and to proceedings for covered business method patents.

FDA Floats Life-Saving Combo Appeal process

The FDA has proposed to revise the process for appealing a determination regarding a combination product application, but the net effect of the proposed rule is anything but certain. One of the provisions of the proposed rule would eliminate what the agency characterized as a redundancy from the appeals process, but there are other feature of the proposed rule that invite closer scrutiny, such as the argument that one of the values of the rule is that it may save lives.

Up to now, the Part 3 appeals process for combination products has allowed a sponsor to appeal to the Office of Combination Products when the sponsor is unhappy with the OCP’s initial determination as to whether the product is primarily a drug, a device or a biologic. The FDA said it would delete section 3.8 from Part 3 altogether simply because appeals to the OCP cannot include information that was not part of the initial filing, and thus the outcome is likely to be unchanged. The notice also says that this part of the process led to some confusion regarding whether the sponsor can take the matter over the OCP’s head in the event of an adverse determination.

While the draft rule makes several claims on the subject of a net savings to industry after the first year, one of the more interesting observations on the part of the FDA is that if adopted, the rule would provide a public health benefit in the form of “illnesses and deaths avoided as a result of finalizing the proposed rule,” a curious observation to say the least. Conversely, one clear-cut benefit of the proposed rule is that it makes explicit that a sponsor need not contact the OCP if the product’s primary mode of action is clear.

One of the interesting parts of the rule in procedural terms is that only a sponsor would be allowed to file a request for designation for a particular combination of drug and device products. This would seem to foreclose any prospect of an industry collaboration, but another question in this context is whether the confidentiality of premarket submissions would disallow the disclosure of the status of a particular combination upon approval of that application.

Another proposed change to the regulation, yet another response to Section 3038 of the 21st Century Cures Act, is that the FDA would review a combination product under a single application when appropriate, although the Cures Act did not foreclose the possibility of a component-by-component review. As currently written, the regulation states that the agency can require that an application’s components be reviewed separately, but the FDA said it may simply delete this language from the regulation “to avoid confusion.”

The difficulty for regulated industries is that the FDA would only belatedly issue guidance or rulemaking as the agency’s staff gain experience implementing the changes imposed by the Cures Act. It might be assumed that the combination of legislatively imposed changes, and the proposal to excise language not directly required by that legislation, will in the near term engender more confusion rather than less.

Hits and Misses for May 2018

Given the volume of news affecting the life sciences, there are always some favorable outcomes and some that trend in the opposite direction. Following are a few recent developments of note, including one that provided good news for the companies in question, and another that is still unfolding.

Fifth Circuit Blasts Pinnacle Hip Decision

In the area of liability law, the big miss over the past couple of weeks for litigants was the decision by the Fifth Circuit Court of Appeals regarding the Pinnacle hip multi-district litigation. The outcome is of course a significant win for DePuy Orthopedics and its parent, Johnson & Johnson, but the case was remanded to a lower court for reconsideration, and so the device makers are not off the hook just yet.

The court expressed quite a bit of ire over the handling of the case at the trial court, particularly regarding allegations the companies bribed the regime of Saddam Hussein in Iraq, but there were a few issues with paid witnesses that plaintiff’s attorneys had indicated were testifying without compensation. The outcome relieves the companies of a $151 million liability, which was itself a fraction of the $502 million originally arrived at in this case. The principle message to be learned from this outcome is that attorneys for plaintiffs can’t indulge in every whimsical allegation that comes to mind if they want these lawsuits to stay on an even keel.

FDA floats digital precert model

The precertification pilot program for software as a medical device drew raves from stakeholders when the FDA announced the program in September 2017, and the agency has now delivered on a draft working model of a full program. Whether developers see this as a hit or a miss might be conditional on several things, including whether the vendor has prior experience with device applications. The draft states that developers with previous experience in the device business will be subject to less scrutiny, something that information technology companies may see as discriminatory.

The precert concept relies on an organization’s demonstrated commitment to a culture of quality, but the agency said in a statement accompanying the draft working model that such a designation would mean that the organization in question “could potentially submit less information” on the product prior to going to market. The FDA addressed the question of third-party precertification with another response that amounts to “definitely maybe.” This uncertainty also underscored the agency’s remarks regarding whether certified sponsors will be subject to inspections, another conspicuous deviation from the precert pilot.

Opinions vary regarding whether this new paradigm for regulated software is as painless as some believe, given all the optimism surrounding the pilot. One regulatory attorney told a media outlet recently that the FDA document seems an implicit trade of faster times to market in exchange for more regulation. Regulatory attorney Bradley Merrill Thompson of Epstein Becker Green also said, “industry has to review this proposal with eyes wide open.”

In a somewhat related development, the FDA published a draft guidance for multiple function device products, and the Federal Register notice states that the FDA’s Bakul Patel is the contact point for the draft, making clear that this is principally about software devices and software functions that are secondary to the device primary function. Patel is the associate director for digital health at the agency’s device center, hence the authorship makes clear the focus of the draft despite that a device with no software at all could be a multi-function device.

The draft defines the term “function” as “a distinct purpose of the product,” but that distinct purpose could be a mere subset of the intended use or could make up the entire intended use. The most interesting part of the draft, which was made necessary by Section 3060 of the 21st Century Cures Act, is that it states that the “device function-under-review” will be the principle point of interest, although the agency will assess the impact of these other functions on the function under review, even when those other functions would otherwise enjoy enforcement discretion or would not be subject to regulation.

Sponsors will have to conduct a risk analysis of the potential impact of these non-reviewed functions on the function under review, but these non-reviewed functional aspects of the device won’t be subject to post-market surveillance activities. Still, device makers will have to document design considerations for non-reviewed functions, such as software architecture, as well as any relationships between the reviewed and non-reviewed functions, such as shared computational resources.

While the draft may be an improvement on regulatory silence on the matter, it would seem to raise the question of why the entirety of the Quality Systems Regulation is not applicable to a device function that is nonetheless subject to risk analyses and some of the more labor-intensive documentation requirements that fall under the QSR.

April Showers: SCOTUS, FDA Spring into Action

Temperatures in our nation’s capital are returning to some vague sense of normalcy, which may or may not have anything to do with the normal functions of the Supreme Court and the FDA. Either way, both these entities have delivered some important news in the month of April, although it will be May or later before the related effects will make themselves felt. In the spirit of the vernal renewal of life, we offer the following.

Inter Partes Review Survives Challenge at SCOTUS

One of the most significant developments in the area of intellectual property in recent weeks was the Supreme Court decision in the case of Oil States Energy Services LLC v. Greene’s Energy Group LLC, which challenged the constitutionality of the inter partes review process. Had the Court decided in favor of Oil States, the IPR process would have been declared unconstitutional, thus bringing an end to one of the more controversial aspects of the America Invents Act (AIA).

The 7-2 opinion penned by Justice Clarence Thomas said that trials and other procedures addressing patent validity need not take place in an Article III court, but also that an IPR hearing does not violate the Seventh Amendment right to a jury trial. Thomas pointed to the ex parte reexamination of patents as an example of administrative proceedings that do not take place in a courtroom, a procedure that has been part of routine practice at the Patent and Trademark Office since 1980. He also cited the existence of the inter partes reexamination, which was replaced by the IPR process via the AIA.

Justice Neil Gorsuch wrote the dissenting opinion with the concurrence of Chief Justice John Roberts, stating that no courts other than federal courts were empowered to invalidate a patent until 1980. Gorsuch said the outcome does not “represent a rout, but it at least signals a retreat from Article III’s guarantees,” going on to argue that enforcement of Article III is principally about “ensuring that people today and tomorrow enjoy no fewer rights against governmental intrusion than those who came before.”

Gorsuch wrote the majority opinion in another IP case delivered on April 24, SAS v. Iancu, which held that the Patent Trial and Appeal Board must make a determination on each of the claims challenged by a petitioner in an IPR. In contrast to Oil States, this case squeaked by in a 5-4 vote, but the newest Supreme Court justice is definitely making his mark on the Court’s handling of patent law despite a lack of certainty on his views when he was appointed last year.

Gilead Up, Nargol Down at SCOTUS

We previously reported that two cases pertaining to the False Claims Act were the subjects of petitions for cert at the Supreme Court, and not unexpectedly, the Court passed on a chance to hear Medical Device Business Services, Inc. v. United States ex rel. Nargol. The Court said Justice Alito had taken no part in deciding whether to hear the case, although no explanation for that was given. The Court’s interest in Gilead v. Campie seems to have quickened, however, given that the justices have asked the Solicitor General to file a brief.

It may be too soon to speculate as to how the Trump administration would advise the Court regarding Gilead, but the 8-0 outcome in the Supreme Court’s review of Escobar would suggest that Solicitor General Noel Francisco has a limited amount of wiggle room for suggesting that the standard for materiality in False Claims Act cases ought to be relaxed. Conversely, however, federal attorneys are loathe to give up any leverage where FCA cases are concerned, and it might be pertinent to recall that the Thompson memo arose from an administration that might have been presumed to be less unfriendly to business than the administrations that preceded and followed.

In the end, the Solicitor General has the option to opine on nothing more than whether the Court should hear the case. The reader will hopefully excuse the cliché that this case “bears watching” as the Court will at the very least provide some additional clarity regarding the current standard for materiality.

FDA Issues First Inspection Report under FDARA

The legislation for the most recent series of FDA user fee agreements stipulated that the agency publish data on inspections for drugs and devices needed to approve that drug or device, and while the data are interesting, they are perhaps most useful as a baseline for evaluating the agency’s performance in this area over the next few years.

The report, which fulfills Section 902 of the Food and Drug Administration Reauthorization Act of 2017 (FDARA), covers calendar year 2017 only, not an unexpected limitation given the novelty of the requirement. The report states that for new drug and abbreviated new drug applications, the median elapsed time between the agency’s internal request for an inspection and the date of the inspection was 102 calendar days. Drug makers may be accustomed to such delays, but might not be happy with them all the same.

The median elapsed time for issuance of forms 483 for inspections with compliance issues was seven calendar days from the start of the inspection, and the agency pointed out that 483s are typically issued upon the close of the inspection. Perhaps more problematic is that 191 days on average passed between the date of the 483 and the date of any related warning letter, while any regulatory meetings to review the inspections on average took place 169 days later.

Ergo, the numbers suggest that a drug maker could end up waiting 300 days from the date of an internal FDA request for inspection to see a warning letter for that inspection, which sounds like a significant problem when trying to get a new drug to market. The report does not cover inspections related to biologics license applications, but does include data on inspections for supplemental drug filings.

The report states that FDA used the complete response (CR) letter to deny 94 new drug applications and supplemental filings for chemistry, manufacturing and controls in calendar 2017, a relatively small denominator in comparison to the more than 2,460 CR letters issued last year. However, the agency said it had issues another 194 facility-related CRs for a total of 288 facility-related CR letters in 2017, although there is little information on what sort of facility-related issues drove those additional 194 CRs. In any case, these numbers are likely to shift at least somewhat thanks to the concept-of-operations paradigm now in force at the Center for Drugs.

The dust-up between the FDA and device makers regarding inspection delays is well known – and the total number of original PMAs in any given year is presumably still fewer than 50 – so it’s no surprise that the numbers for device inspections differ significantly from those for drugs. The agency needed only a median of 35 days between the request for the inspection and the first day of that inspection, and the average time to issuance of a 483 was five days. As was the case for the drug inspection numbers, data pertaining to supplemental filings were included.

At first glance, it seems odd that Congress had included pre-clearance inspections for 510(k) applications in Section 902 if one takes the FDA at its word when it states that clearance of a device “does not require a pre-clearance inspection.” While the statement is sufficiently generic to be more or less defensible, it seems somewhat contradicted by the March 25, 2014, draft device classification rule, in which the agency acknowledged that it had conducted pre-clearance inspections for 510(k) applications, although it had done so only on “rare occasions.”

Three for 2018; New Year Off to a Fast Start

Those in the life science industries know better than to sleep on the courts and the FDA, and the first quarter of 2018 serves to nicely reinforce this lesson. Following are three stories of interest to drug and device makers, but while its clear that the outcomes of these developments are of tremendous importance, it is not at all clear where these three stories will land in the end.

Gilead Moves Closer to Cert 

One of the more notorious cases relating to the Federal Rules of Civil Procedure is Campie v. Gilead, but the Supreme Court will have at least two such cases to choose from thanks to a petition Medical Device Business Services, Inc. v. United States ex rel. Nargol. The problem for this latter case is that it seems to overlap with Gilead, and Gilead has been distributed for conference for April 13, suggesting that Nargol will for now stand as decided at the Court of Appeals for the First Circuit.

Gilead had petitioned for cert on Dec. 26, 2017, while Medical Device Business Services, once known as Nargol v. DePuy Orthopaedics Inc., completed its petition for cert Feb. 5 after requesting an extension in the first half of December 2017. MDBS v. Nargol takes up the issue of the Federal Rule of Civil Procedure 9(b), a dispute triggered by the fact that the two relators in this False Claims Act case never filed a billing claim for the purportedly violative device, and apparently do not even practice medicine in the U.S. The relators, who served as expert witnesses in a case against MDBS, built their claims largely around an extrapolation of one medical claim to all the billings for the company’s Pinnacle hip device, and the petitioner points to a split among the circuit courts as justification for a hearing at the Supreme Court.

Gilead Sciences Inc. petitioned for cert after the Ninth Circuit reversed a lower court’s dismissal of the case, which revolves around the use of an unapproved supplier of an active pharmaceutical ingredient. The company eventually cleared the new API source with the FDA, but not until two years after Gilead started doing business with the supplier. In this instance, the relators are former employers, and Gilead cites the Supreme Court decision Universal Health Services v. Escobar as a precedent, which MDBS does not. All in all, it seems likely that the Supreme Court will take Gilead if it takes either of these cases.

Intended Use Rule Back on Back Burner

The FDA’s intended use problem continues seemingly unabated with the announcement that the agency would suspend the intended use rule indefinitely pending a closer look at some of the underlying issues. The tobacco-related portions of the January 2017 final rule are unaffected, but the portions of the rule dealing with drugs and devices are once again in regulatory limbo. The agency said it has in the meantime reverted to the previous understanding of the question of intended use.

The Federal Register notice regarding this indefinite suspension states that some had criticized the inclusion of the totality-of-evidence standard seen in the January 2017 final rule, principally because that standard had not appeared in the 2015 draft and thus its introduction in the final rule violated the Administrative Procedures Act. While there are a number of other issues raised by stakeholders, the totality-of-evidence standards was perhaps the most contentious, and if anything can be said about the FDA’s current predicament, it’s that the agency cannot afford to sit on this issue indefinitely because some states are moving ahead with their own laws pertaining to commercial speech, federal preemption notwithstanding. Those in the life science industries will want to stay tuned.

Least Burdensome Draft Draws Fire

The docket for the latest draft guidance for the FDA’s least burdensome standard has closed, but a number of observers are quite skeptical as to whether the agency means what it says about the principle of least burdensome.

The FDA’s Center for Devices and Radiological Health released the latest draft guidance at the end of 2017, acknowledging at the outset that the standard was encoded in the statute in 1997 via the Food and Drug Administration Modernization Act. Two subsequent pieces of legislation, including the 21st Century Cures Act, also applied pressure on the agency to formalize the least burdensome standard. Nonetheless, Jeffrey Gibbs of Hyman, Phelps & McNamara said in comments to the docket that the agency has engaged in “boilerplate recitation” of the standard without actually following through.

Gibbs charged that experience has repeatedly shown that the agency has inconsistently, at best, applied the least burdensome standard in a range premarket filings, including 510(k) and PMA submissions. He argued that the agency’s reviewers have routinely failed to explain the need for data beyond that used to clear a predicate device in the case of 510(k) submissions, and similar devices in the context of PMA applications.

Gibbs urged the agency to offer applicants a conference call within five days of the issuance of a request for additional information for premarket filings, a proposal he said builds off a pilot program that offers applicants “a short teleconference” within 10 days of the request. He said this pilot offers only about 15 minutes of teleconference time with the application’s reviewers, an amount of time he suggested is inadequate.

The Medical Imaging & Technology Alliance said the draft invoked the question of medical necessity when the agency has to consider what sort of least burdensome enforcement action is needed to deal with violative devices. MITA’s executive director, Patrick Hope, countered that medical necessity is a standard for payers to determine, and that the association is “concerned about the potential for scope creep” should the medical necessity question play a role in the agency’s decisions.