SUPPORT Act Hits More Than Just Opioids

The FDA has posted a draft guidance in response to legislation directed to the opioid epidemic, which will supplant a similar guidance finalized in 2011. Despite the presence of the legacy guidance, the October 2019 draft enacts a new statutory feature that allows the agency to require postmarket studies for drugs and biologics to answer questions about any apparent reduction in efficacy.

Section 3041 of the SUPPORT Act, which was crafted as a response to the opioid epidemic, amended the statute so that the definition of an adverse drug experience includes scenarios in which the therapeutic agent’s efficacy is reduced over time. Any such data regarding diminished effectiveness would have to be included in product labels per the data generated by post-approval studies.

The text of the legislation as it appears at Congress.gov offers little insight as to how the FDA is to interpret the phrase “reduced effectiveness.” This would seem to leave this question to the agency’s discretion, although the draft guidance also omits any suggestion as to how the agency will interpret the term.

Another point of consideration in connection with the SUPPORT Act and the FDA draft guidance is whether Congress had intended to apply this reduced effectiveness framework to all prescription pharmaceuticals and biologics. The text of the statute as amended by the SUPPORT Act does not seem restricted to opioids, but there is little doubt as to the intention of Congress in passing the legislation. Absent another change to the statute, it will be entirely at the FDA’s discretion as to how broadly it will enforce this edict, assuming the final guidance provides no clarity.

Few Quick Answers for Metal Implants

The FDA’s device center has also been busy of late, particularly on the advisory committee front. Among the recent FDA advisory hearings was a two-day hearing on the use of metals in device implants, including dental amalgams, and as is often the case with these hearings, there were at least as many questions as answers by the end of the proceedings.

Two messages came through loud and clear, however, one of which was that the time has passed for the use of mercury in dental amalgams. The other message was that labels for devices such as hip implants should disclose all the materials used in the device, not just the materials used to coat patient-contacting surfaces.

The FDA posted a summary of the Nov. 13-14 meeting which included an expression of interest in tests that would disclose whether a patient is likely to experience an immunological reaction to the metals commonly used in device implants. However, the science has not yet established the biomarkers that would disclose such propensities, leaving this goal more aspirational than operational at present. Part of the underlying difficulty is that collection of the requisite data will be costly and time consuming, suggesting that several more years are likely to pass before the science is up to the task.

The FDA’s meeting summary fails to disclose the intensity of the opposition to the use of mercury in dental amalgams, although a Nov. 18 statement gives some idea of the seemingly growing hostility toward mercury. It might be noted, however, that the oft-cited cessation of mercury in amalgams for pediatric use in the European Union was undertaken at least as much for environmental concerns as for patient safety considerations. The FDA’s position as of the date of the meeting was that there are few compelling data to suggest that the small amount of mercury used in amalgams presents any real threat to patient well-being.

An industry representative on the advisory committee backed the disclosure of all materials used in implanted devices, something the FDA could presumably mandate with its current statutory authorities. Nonetheless, a fundamental scientific question still hovers over the immune response hypothesis outside the context of a localized immunological reaction. As the summary notes, there was a discussion of “the biological plausibility of systemic immune responses arising from the presence of a metal implant and though some panelists agreed that it was possible, others expressed uncertainty.”

FDA Proposes Type V Master File for Combo Products

The FDA’s drug center has proposed the use of the type V drug master file (DMF) to report changes to the device portion of a drug-device combination product, a proposal that could prove more efficient than the current process. One of the considerations driving the draft guidance is that drug manufacturers often rely on a single device platform for delivery of multiple drug agents, and the use of the type V DMF would streamline the process of updating the agency on any changes to that device.

The draft guidance takes up matters such as administrative information and the protocol for advising the holder of the device premarket authorization of the intent to include that information in the DMF filing. The FDA stated that the use of this form is not compulsory, although the use of a single device platform for multiple drugs suggests that drug makers would be motivated to use the form. The scope is limited to combination products for which the FDA’s Center for Drug Evaluation and Research has primary jurisdiction, and the draft indicates that its terms may be appropriate for combinations in which the device consists at least in part of “electronics and/or software” that meet the definition of a device.

One of the keys to the use of the CDER draft will be in determining when the FDA’s device center has deemed a software function to have met the definition of a device. Under the 21st Century Cures Act, the statutory definition has been more clearly laid out, although the FDA is still reacting to that legislative mandate. As an example, the Center for Devices and Radiological Health recently posted its draft guidance for clinical decision support (CDS) software, which spells out some of the conditions under which a CDS would and would not be regulated. That draft is not yet in final form, however.

The type V master file is perhaps the least commonly used of the DMF submission types, and can be used to update the agency on a risk evaluation and mitigation strategy (REMS). However, a related REMS draft guidance issued in 2017 is still not available in final form, making the type V DMF a document with a substantial body of uncertainty behind it. The comment period for the type V DMF combination product draft closes Dec. 30.

No Easy Answers for EtO Dilemma

Despite the FDA’s preoccupation with digital regulation, the quandary over the use of ethylene oxide (EtO) has grabbed the rapt attention of device makers and the agency even though the problem has attracted no discernible attention from Capitol Hill. A recent FDA advisory hearing suggests that device makers won’t be able to readily shift to another sterilization method, although the Illinois state legislature nearly passed legislation that would have severely restricted the use of this sterilant in the Prairie State.

The 24-hour summary of the Nov. 6-7 advisory hearing stated that the FDA might consider allowing device makers to use less EtO when a less rigorous sterility assurance level might be appropriate. The difficulty with some of the available alternatives is that many of them exhibit a deleterious effect on many device materials, and the capacity for most of the alternatives is limited and cannot be expanded rapidly. Entirely novel approaches to terminal sterilization would require years to develop and implement, and the net effect is to suggest that there can be only marginally reduced reliance on EtO in the near term.

A report in the Chicago Tribune indicates that a committee in Illinois state Senate rejected a bill from the state House that would have banned hospital use of EtO by 2023, and would have required a sterilization facility to relocate to a less densely populated area. However, the sponsors of the legislation vowed to resurrect the bill next year. Sterigenics Inc., has already shuttered its high-volume operation in Willowbrook, Illinois, while two sites in Georgia have also been under pressure to suspend or cease EtO sterilization operations.

The Advanced Medical Technology Association has responded to the predicament with a number of press releases, but the group has also set up a section of its website for access to information about the EtO predicament. Among those is a webpage that depicts a number of sources of EtO that far exceed the EPA’s limits, a list that includes lawn mowers and charcoal grills.

Stephen Hahn Nominated for FDA Commissioner

The ongoing saga over the occupant of FDA commissioner’s office has taken another turn, although one that has been discussed in the media for some time. Stephen Hahn, chief medical director of the MD Anderson Cancer Center in Houston, has been named the Trump administration’s nominee for the job, continuing the trend of physicians who hold the position either permanently or as an interim commissioner.

Hahn’s name has populated the rumor mill since at least September, and he is the fourth consecutive physician to be nominated as the full-time FDA commissioner. He would also be the second consecutive oncologist to sit in the commissioner’s chair after Ned Sharpless, who will return to his previous position as director of the National Cancer Institute.

Prior to Sharpless, Scott Gottlieb, Robert Califf, Peggy Hamburg and Andrew von Eschenbach were each MDs who served as commissioners for more or less brief terms. Von Eschenbach and Sharpless have both served as director of the NCI, although Gottlieb and Hamburg were primarily known for policy and administrative work, respectively, prior to taking the FDA commissioner’s post.

Califf, a cardiologist who served in an administrative capacity at the Duke Clinical Research Institute, took over at the FDA in the last year of the Obama administration. Califf had already been employed at the agency prior to his appointment, however, a distinction that does not apply to Hahn. Nonetheless, Hahn may also find himself in a short-term situation as President Trump faces a number of political headwinds that could affect his chances for reelection. Should a new president be sworn into office in January 2021, the FDA could find itself in need of yet another new commissioner.

HHS’s Giroir the Acting Commissioner

As the Senate prepares to vet Hahn, Assistant Secretary for Health Brett Giroir will direct operations at the FDA, a move that may be favored by those attempting to grapple with the opioid crisis. Giroir has spearheaded the opioid response at HHS, although the nomination of Hahn may be construed as affirming the federal government’s emphasis on finding cures for cancer. HHS said in a Nov. 1 statement that Sharpless was required to step down due to the 210-day limit for acting federal agency directors imposed by the statute.

Just as Califf was grilled over his relations with drugmakers, Hahn is likely to face a number of difficult questions, although some of those may center around the dismissal of several Chinese researchers at Anderson. The NIH emphasis on thwarting medical science espionage led to the dismissal of three researchers from China earlier this year, a move that was decried in some quarters as an example of xenophobia.

Another issue that will confront Hahn in confirmation hearings is the drug pricing controversy, something Gottlieb approached carefully and with an emphasis on generic drug reviews. Hahn is certain to be pressed to address both the opioid crisis and the running controversy over efforts by drugmakers and biotech companies to delay competition from generics.

Perhaps the most immediate pressure will come from the waning availability of medical devices as a result of the closure of sterilization facilities that use ethylene oxide, although this problem has yet to capture any meaningful attention on Capitol Hill. The FDA’s precertification program for software as a medical device is also certain to feed some of the questions Hahn will face at Senate hearings, particularly given the recent letter from three members of the Senate regarding the program.

The Oct. 30 letter to Sharpless poses several questions about the precert pilot program, with much of the emphasis on the legality of the precert program. For example, the letter asks whether the FDA believes Congress had authorized the de novo program to allow the FDA to “establish pilot programs that fundamentally alter the FDA’s existing method of device review and approval.” Perhaps the most salient aspect of this letter for Hahn’s purposes is that the authors of the letter, Sens. Patty Murray, Elizabeth Warren, and Tina Smith, are all members of the Senate committee that will vet Hahn for the job, the Senate Health, Education, Labor and Pensions Committee.

Drug, Device Makers Shut Out on AKS Draft Rule

Despite months of anticipation, makers of drugs and devices found they were excluded from a draft rule for the Anti-Kickback Statute that would have allowed industry to take part in value-based arrangements. The news comes as a blow to manufacturers hoping to carve out additional market share, but the issue for one of the affected government agencies was that any such provisions could prove anticompetitive.

The Office of Inspector General at HHS unveiled the AKS rule on Oct. 9, the same day the Centers for Medicare & Medicaid Services posted its draft rule pertaining to Stark self-referral law. Both draft rules are part of the Trump administration’s Regulatory Sprint to Coordinated Care, which encompasses not just health care delivery reform, but also access to telehealth and other services seen as underutilized to the detriment of Medicare beneficiaries.

The proposed modifications to the regulations for Stark law would ease the restrictions around a hospital’s donations of cybersecurity software to physician practices, among other things. CMS said in an accompanying statement that this cybersecurity exception would hold regardless of whether the provider was still billing Medicare under fee-for-service (FFS) care.

Perhaps the most surprising aspect of either draft rule, however, was that the OIG’s draft said makers of drugs and devices would be excluded from taking part in value-based arrangements with hospitals and physician practices over concerns that such agreements would “tether clinicians or patients” to a specific product.

The Advanced Medical Technology Association posted an Oct. 9 response to the drafts, stating that the proposed updates to Stark and AKS regulations are “crucial steps” toward value-based care. However, AdvaMed also said it would review the rules in more detail with an eye toward “finding additional ways to strengthen value-based care across the health care system.”

Device tax topical again

The news about the Trump administration’s moves on Stark and AKS regulations were not the only issues for device makers in October as the current suspension of the 2.3% medical device tax will expire Dec. 31. Industry is imploring Congress and the White House to permanently repeal rather than suspend the tax yet again, and a recent statement by AdvaMed sheds light on the question of a legislative vehicle for that repeal.

The release of the latest report on the purchasing manager’s index served as a point of concern in an Oct. 17 statement by AdvaMed, which said the index for September 2019 came in at 47.8. That level is the lowest since 2009 and is seen as a sign that the economy may be slowing. AdvaMed argued that the reimposition of the device tax would add more drag to the economic outlook for device makers.

In a separate press release, AdvaMed’s president/CEO, Scott Whitaker, said AdvaMed had sent a letter to President Trump, urging the administration to aid the effort to repeal the tax. Whitaker said in the letter that Treasury Secretary Steve Mnuchin had floated the idea of another tax reform package, although Whitaker came up short of citing another tax reform push as a legislative vehicle for repeal of the device tax.

Still, the AdvaMed letter states that the administration could incentivize economic activity by “preventing a tax increase on health care as you and your administration decrease taxes in 2020.”

This was no isolated push to put an end to the device tax, however, as AdvaMed, the Medical Device Manufacturers Association and roughly 600 other organizations signed a letter to the House and Senate leadership making the case for full repeal of the tax. Several medical societies backed this appeal as well, including the American College of Radiology.

FDA Recasts Abbreviated 510(k) for Safety and Performance

The flood of draft and final guidances published by the FDA’s device center in September was the largest for any given month in recent memory, but among these was a rewrite of a final guidance with only seven months of wear and tear behind it.

The latest guidance, titled “Framework for the Safety and Performance-Based Pathway,” is part of the agency’s focus on overhauling the 510(k) program, and substantially reduces the need to compare the subject of a 510(k) application to a predicate device. The document states that sponsors will have to cite a predicate device in applications filed under the safety and performance-based pathway, but that comparisons to the predicate will be considerably less important than demonstrations that the new device conforms to the specifications prospectively developed by the FDA.

The FDA had initially described the antecedent guidance as an expansion of the abbreviated 510(k) program, and indeed, both final guidances share the same docket at regulations.gov. One of the critical differences between the abbreviated 510(k) route and the safety and performance path is that the FDA has agreed to issue device-specific standards for the use of this new premarket mechanism. The anticipation is that this process will be less cumbersome than the legacy 510(k) paths, the traditional, special and abbreviated 510(k) mechanisms, although the need for device type-specific guidance will limit the number of devices that are eligible for the program in the near term.

There are four device types that will be the first to enjoy this relatively streamlined approach to premarket review. The difficulty for the FDA in terms of managing this program will be the need to go through the comment process for the guidances needed for each device type. One of the inaugural device types for the safety and performance-based process is the cutaneous electrode for recording purposes, perhaps the lowest-risk member of the group.

Also on the list are conventional Foley catheters, spinal plating systems, and orthopedic, non-spinal metallic bone screws and washers. Each of the four product specification sets is the subject of a draft guidance with a comment period that closes Dec. 19. The agency will conduct a webinar Nov. 7 to go over the overarching and the product-specific draft guidances. While this program should make it easier for the FDA to meet its turn-around times for 510(k) applications overall under the current and future user fee agreements, it seems likely the resources needed to stand up this program will in the short run prove to be at least as much a distraction as a help to the agency.

ASCA Pilot Nears Ready for Launch

Also appearing in the third week of September was the FDA’s draft guidance for the ASCA (accreditation scheme for conformity assessment) pilot, a program designed to more frequently leverage standards for medical device application reviews. The focus of this program is to certify accreditation bodies that will in turn evaluate medical device testing labs to ensure those labs’ standards will accurately evaluate a device’s performance characteristics.

The ASCA program – which was described in the commitment letter signed by the FDA and industry representatives as part of the current device user fee schedule – should aid considerably in the agency’s efforts to align its regulatory policies with those of the international community. The ASCA program relies in large part on the ISO 17000 series for implementation, including ISO 17025, which applies to certification of testing labs.

The device maker should in many instances seek to obtain a declaration of conformity for any device it submits to a testing lab for evaluation, but the FDA indicated that it reserves the right to revisit the testing should premarket review staff have any misgivings about the testing. A testing lab might also have its certification revisited if a device it tested becomes the subject of recalls or a large number of adverse event reports. The agency is accepting feedback from stakeholders through Dec. 23, and will conduct an Oct. 28 webinar to provide further details.

September a Guidance Drop Month for FDA

September was an unusually busy month for the FDA’s device center, which released more than 20 draft and final guidances in the final 30 days of fiscal 2019. Several of these documents are related to the de novo device program, but the agency also updated its approach to the humanitarian device program as required by recent legislation.

Humanitarian Use Guidance Updated
The final guidance for the FDA’s humanitarian device exemption (HDE) program explains how the agency determines whether the sponsor has demonstrated a probable benefit, although the final encodes the new limit for humanitarian use devices of 8,000 per year as seen in the 21st Century Cures Act. Another change due to statutory mandates, in this case the Food and Drug Administration Reauthorization Act of 2017, is that the sponsor need not rely on a local institutional board, a change intended to offer some efficiencies in the conduct of multi-site clinical investigations.

The HDE guidance is applicable to devices reviewed by both the Center for Devices and Radiological Health and the Center for Biologics Evaluation and Research. HDE applications will be reviewed within 75 days under this policy, a much quicker turn-around than is available to PMA devices at 180 days. Device makers are now allowed to make a profit on these devices unless the volume sold exceeds the annual distribution number limit of 8,000, and manufacturers are required to file an annual report on profitability only if the price charged for the device exceeds $250.

De Novo Program Rates Three Guidances
The agency also released three guidances pertaining to the de novo premarket program, including the final guidance spelling out the actions both device makers and the agency can take in relation to these applications. Also topical for the agency’s purposes is how those actions might affect review goals under the current user fee program.

The FDA said the clock will stop on a de novo application should the agency have questions that cannot be answered in a reasonable amount of time, although the guidance does not provide any metrics for “reasonable.” The hold goes into effect when the FDA issues the request, and the guidance states that a request for additional information stops the review clock and “marks the end of an FDA review cycle.” The clock will resume once the agency is in receipt of a complete response from the sponsor.

De novo submissions are now subject to user fees, and the target turn-around time for de novo petitions is 150 days, although the percentage of applications that must meet that deadline varies by year. For fiscal 2018, the target ratio of applications that met the 150-day target was 50%, but that goes up to 70% in the final fiscal year of this user fee schedule, which is FY 2022. The review staff assigned to that application will be available to discuss any problems with the sponsor if it is still outstanding at 180 days, at which point the reviewers will discuss next steps, including the deadlines for completion of those next steps.

The final guidance for acceptance review of de novo applications employs the same refuse-to-accept (RTA) principles that govern RTA policies for 510(k) and PMA applications. One important difference for the de novo version is that the sponsor has to document that there is no cleared predicate on the market, assuming the device in question is not a class III device. The FDA staff is tasked with determining whether any 510(k) or PMA applications are in process for devices with the same technology and same indication for use.

There are a number of considerations for de novo applications that are combination products, including whether the drug component for a drug-device combination product is the subject of a patent. The guidance includes a checklist which the sponsor is advised to complete prior to filing the application with the FDA. The checklist starts with four questions regarding whether the device in question is a combination product, highlighting the agency’s interest in resolution of any combination product questions before the de novo reaches the FDA.

PTO Seeking Comment on AI as Patent Owner, Inventor

The U.S. Patent and Trademark Office still has its hands full over the question of the Supreme Court’s views on life science patents, but the agency must now begin to grapple with an entirely new set of dilemmas. PTO recently announced it is seeking feedback on the status of artificial intelligence (AI) as an inventor and as a patent owner, two questions that may defy answer in the near term.

U.K. Researchers Argue for Change

Researchers at the University of Surrey in Surrey, U.K., announced at the beginning of August that they had filed for patent protection for two inventions autonomously created by an algorithm known as DABUS. The inventions are for relatively simple products – one is a beverage container with a design based on fractal geometry, while the other is a device for attracting the attention of would-be rescuers – but the team at Surrey has applied for patents for these items in the patent offices for the U.K., the U.S., and the European Union.

According to the statement, the U.K. Intellectual Property Office has already concluded that the inventions pass the preliminary test for inventiveness, although the agency has not yet taken up the question of whether non-human entities can be cited as an inventor. So far, this is as much as the researchers at Surrey are asking the agency to consider.

Ryan Abbott of the University of Surrey School of Law said in the statement, “there would be no question the AI was the only inventor if it was a natural person,” and argued that DABUS should be listed as an inventor. Abbott said developers of an algorithm should be designated the assignee or owner of any patents produced by that algorithm, arguing that such an outcome would reward innovation and “keep the patent system focused on promoting invention by encouraging the development of inventive AI, rather than on creating obstacles.”

The question is not an entirely novel one as indicated by a discussion of the question in a law journal last year, but the difficulty for patent offices is that the statutes under which these agencies work seem to leave them with little leeway. The statute in the U.S. states that a patent can be awarded to “whoever” invents something useful, while the law in the U.K. make reference to “persons” as inventors. Thus much of the debate is likely to center on a need for legislation.

PTO Broaches Ownership Question

The American patent office announced Aug. 27 that it seeks feedback on whether further guidance from the agency is needed to “promote the reliability and predictability” of patent applications filed on behalf of AI. PTO also poses the question of whether new forms of patent protection are needed, adding that some of the issues surrounding software inventions are relevant for the discussion of AI patents.

There is a need for clarity regarding terminology as the PTO noted that the term “AI inventions” is used to denote both inventions that utilize AI and those that are developed by AI. PTO also is inquiring into the circumstances in which humans might be designated co-inventor with the algorithm, as well as whether the laws and regulations are in need of revision to address the question of inventorship.

However, PTO went further, asking whether an algorithm can and should be allowed to be designated the owner of the invention. As intractable as such a problem may be, some of the more prosaic questions are likely to prove challenging as well, such as whether a change is needed in the written description requirement regarding the level of detail provided about the algorithm. PTO noted that this question could prove difficult to answer, given that some deep learning systems may have layers of functions that are obscured, and that some functions may evolve without human assistance or intervention. PTO is taking comment through Oct. 11, but it seems likely that the debate over AI inventorship and ownership has only just begun.

Controversies in Limbo: Paclitaxel and the Lab Rate Reset

Occupants of the med tech industry are all too aware that the issues that affect their livelihoods often take quite a while to play out, a fact of life that can permanently damage a manufacturer’s fortunes. Following are two such episodes, one involving the paclitaxel problem for devices used in the femoropopliteal arteries and the other a scrum arising from a congressionally mandated reset of the Medicare clinical lab fee schedule.

Uncertainty Persists After Latest FDA Update on Paclitaxel

The controversy over the use of paclitaxel in drug-eluting balloons and drug-eluting stents for the lower limbs seems no closer to a resolution after the FDA posted a new update on the matter. The emphasis now is on consent and labeling, the agency said, but the question of whether the presumed mortality signal related to these devices is little closer, if any, to resolution than it was at the beginning of the year.

The FDA’s Jan. 17, 2019, letter to physicians made reference to the medical journal article alleging that a higher mortality rate was seen in DCB and DES devices using paclitaxel as an antiproliferative, an association that began to emerge in some data sets at about two years. The agency held a two-day advisory hearing on the question during which several prominent cardiologists said the purported connection between paclitaxel and mortality compared to uncoated balloons and stents was poorly backed by the evidence. One clinician, Renu Virmani of the CVPath Institute in Gaithersburg, Md., said she had conducted more than 100 autopsies of patients who had been treated with paclitaxel-bearing devices in the coronary arteries and that none of those deaths were due to the antiproliferative. Virmani, whose remarks can be seen in the FDA transcript for the second day of the hearing, said those fatalities were instead caused by the patient’s underlying coronary artery disease.

The agency’s latest update, posted Aug. 7, is aimed at health care professionals, but the agency stated it is working with device makers and researchers on adding to the evidence base. At present, that evidence includes three randomized trials which enrolled slightly fewer than 1,100 patients, and the agency said the crude mortality rate at five years for these studies was nearly 20 percent for paclitaxel-coated devices and 12.7 percent with uncoated devices. This translates into a 57 percent increase in mortality risk, but the FDA also noted that a meta-analysis performed by Vascular InterVentional Advances Physicians on patient-level data arrived at a hazard ratio of 1.38. This analysis, the FDA said, was based on data provided by manufacturers.

The effect on device makers has been noticeable, with one device maker stating on an investor conference call that sales of their DCB device were cut by 50 percent, while another company lost out on a Medicare new technology add-on payment because of the association between paclitaxel and mortality. Despite the impact on utilization and thus sales, the FDA has acknowledged that there is no apparent connection between dose and mortality, and that there is as yet no demonstrated mechanism of causation.

The FDA announcement advised clinicians that the benefits of these devices may outweigh the risks for patients at “particularly high risk” of restenosis and repeat procedures to deal with the underlying disease. Sponsors of ongoing studies will likely have to amend their informed consent documents, which along with the media coverage could hamper trial enrollment and completion.

Appeals Court Sides with ACLA in Lab Rate Lawsuit

The Protecting Access to Medicare Act of 2014 called on the Centers for Medicare & Medicaid Services to reset the rates paid for lab tests by surveying labs for the rates paid by private payers, but the agency’s efforts to comply with that mandate were mired in controversy nearly from the outset. The American Clinical Laboratory Association filed a lawsuit against the agency in the U.S. District Court for the District of Columbia, but lost in that suit, although an appeals court recently overturned that dismissal.

The D.C. District Court dismissed the lawsuit in September 2018 due to a purported lack of subject matter jurisdiction, but the U.S. Court of Appeals for the District of Columbia reversed that finding in part. The appeals court said that while the rates provided by Medicare under the clinical lab fee schedule are not subject to judicial review, PAMA did not clearly provide that insulation from legal challenge to the methods used by CMS to collect the private payer data.

There is legislation in the House of Representatives that would suspend the rate reset effort another year, and would require that the National Academy of Medicine advise CMS on the question of sampling. The Laboratory Access for Beneficiaries Act of 2019 (H.R. 3584) was introduced to the House Ways and Means and Energy and Commerce Committees in June, but has the support of only 13 sponsors as of Aug. 11. There does not appear to be a companion bill in the Senate, either, according to the bill’s listing at Congress.gov. ACLA said in a July 30 statement that the D.C. District Court should “act quickly” to respond to the appeals court decision, but also that Congress should “immediately halt the data reporting process.”

Custom Devices, Combo Product Surveillance in the News

Manufacturing a medical device is one thing, but doing so without crossing swords with the multiple regulatory jurisdictions now in operation is no mean feat, either. Custom devices are suddenly of interest for two regulatory entities so far in 2019, but the FDA’s final guidance for combination product postmarket safety reporting is another consideration on which device makers dare not sleep.

Custom Devices Topical for IMDRF, Anvisa

There are certainly more complicated regulatory requirements than those pertaining to custom medical devices, but Brazil’s regulatory agency, the National Sanitary Surveillance Agency (Anvisa) and the International Medical Device Regulators Forum both posted draft guidances for custom devices recently, making compliance rather complicated for companies doing business in multiple markets. Anvisa and the IMDRF are only the latest entries in this space because the American FDA and its counterparts in the U.K., Australia and Canada have each already put their own stakes in this regulatory ground.

Anvisa announced the draft guidance for custom devices in September 2018, which according to a consultant’s analysis will require registration for custom-made, adaptable, and patient-matched devices. Makers of class III and IV custom devices will have to undergo inspections, but this requirement will not be extended to class I and II devices. There has been a backlog of Anvisa inspections of all types for several years, but the agency said the backlog will soon be a thing of the past.

The IMDRF draft guidelines, with a consultation period that closed July 24, deal with regulatory pathways for custom devices and offer definitions for custom devices and related terms. The document also provides language for additive manufacturing and devices customized at the point of care, but the IMDRF said a number of regulatory bodies “are noticing questionable use of custom-made device exemptions,” including a growing volume of custom devices that fall into higher risk classifications.

The IMDRF’s discussion of additive manufacturing is brief, but it promotes the concept of a medical device production system (MDPS) when that equipment is used outside of a traditional manufacturing site. The draft said that regulation of such a system might be determined by the type of device that system is intended to produce, although the manufacturer of the system would still be liable for validating the use of that MDPS for a given device. There is seemingly the prospect of split and/or overlapping regulatory liability as well, however, as suggested by a passage in which the IMDRF said that responsibility for the medical device’s safety and performance is “with the manufacturer of the MDPS, along with the other responsibilities placed on a manufacturer in the jurisdiction where the MDPS is used.”

Inspections a Concern for Combo Postmarket Surveillance

The FDA needed three years to convert a 2016 rule governing postmarket surveillance of combination products into a working final guidance, but there was some language in the 2018 draft that carried over to the final guidance despite industry opposition. Another issue for some, however, was whether the Office of Combination Products at the FDA would ensure that FDA field investigators are on the same page where the guidance’s key principals are concerned.

The Combination Products Coalition gave voice to a number of concerns, but the group’s regulatory attorney, Bradley Merrill Thompson of Epstein, Becker & Green, also requested that the FDA clarify a few questions regarding the reporting timelines for combination products. Thompson suggested at one point that the FDA provide additional clarity as to when certain of the draft’s provisions are directed toward cross-labeled combination products. Thompson said the FDA is should take steps to provide field investigators understand the implications of the final guidance’s most important provisions.

In contrast, the Advanced Medical Technology Association made note of reservations regarding a sponsor’s liability for reporting when the device component of a combination product has malfunctioned. AdvaMed’s Steve Silverman suggested that the draft had crossed the unduly burdensome line by requiring the sponsor of a drug- or biologic-led combination device to evaluate the possibility that a malfunctioning device component would malfunction when used with other drugs or biologics.

Silverman said one problem with this approach is that the use of a given device with different drug or biotech products means there are differences in storage conditions, just one example of the complications arising from responding to a malfunction. Silverman also said that the requirement as spelled out in the draft removes the device maker – which is fairly certain to be in a better position to handle such a task – from the task of determining the risk of device failure when paired with other therapeutic agents. Despite the feedback from Silverman, a former director of the Office of Compliance at the FDA’s device center, this provision appears in the final guidance as well.

DC District Court Sides With Pharma Over WAC Rule

The U.S. federal government’s pressure on drug makers has ratcheted up considerably over the past few years and included a rule that would have forced pharmaceutical manufacturers to list the wholesale acquisition cost of their products in any direct-to-consumer ads. That effort on the part of the Trump administration came up short in a lawsuit heard recently in the U.S. District Court for the District of Columbia in a decision that went against the administration before the question of compelled commercial speech was even considered.

The Department of Health and Human Services and the Centers for Medicare & Medicaid Services said in the pricing disclosure final rule that the intent of the rule was to give Medicare beneficiaries “relevant information” about the cost of drugs so as to enable beneficiaries to minimize their out-of-pocket spending. The scope of the final rule included prescription drugs and biotech products as covered by both the Medicare and Medicaid programs, although the rule also acknowledged that manufacturers were at liberty to advise viewers that their final costs might differ from the wholesale acquisition cost (WAC).

Conversely, the litigants, which included the Association of National Advertisers and three pharmaceutical companies, argued that listing WACs in ads would not only confuse the drug price question for beneficiaries of both programs, but indeed that HHS had anticipated that the rule would actually mislead beneficiaries.

The court said in its decision that the plaintiffs put forth two arguments, the first of which was that the federal government had exceeded its authority in that the statute neither expressly nor implicitly granted the federal government the power to mandate such disclosures under the Social Security Act. Judge Amit Mehta said that given that the federal government had failed to pass this first hurdle, there was no need to review the question of the First Amendment challenge posed by the plaintiffs, which they had said revolved around the HHS’s failure to demonstrate that it could not achieve its ultimate objective by other means. The rule was set to go into force July 9, but the decision was published July 8, thus foreclosing any chance to enforce the rule.

Mehta indicated that attorneys for the federal government declined to cite Chevron U.S.A., Inc. v. Natural Defenses Resource Council, Inc., a defense that revolves around the proposition that when Congress speaks lucidly to the executive branch, some deference is owed to the executive branch’s efforts to act on that legislative imperative. Instead, attorneys for the federal government are said to have cited Mourning v. Family Publications Services, Inc., which provides a rather broader mechanism that is said to support the validity of regulatory actions so long as those actions can be construed to be “reasonably related” to the directing portion of the statute. Mehta would have none of it, however, indicating that Mourning is at best secondary to Chevron and ultimately insufficient to carry the government’s argument.

One of the problems with the executive branch’s argument in Mehta’s view was that the rule would have regulated the conduct of parties that are not direct participants in either the Medicare or the Medicaid programs. He stated further that the government’s argument that the statute allows the government to act in effort to “minimize unreasonable expenditures” falls flat because the statute does not empower the federal government to regulate the health care market itself or any actors therein as a means of reducing costs.

The predicament faced by CMS and HHS here is somewhat reminiscent of the fate of the least costly alternative policy under the twin cases of Hays v. Leavitt and Hays v. Sebelius, neither of which went the way the federal government had hoped. In that conflict, the Chevron defense was raised, albeit to little useful effect. Precisely where this latest outcome leaves the administration in its effort to tamp down on drug prices is difficult to forecast, but it might be noted that the FDA was for a number of years presumed to be the federal government agency in the best position to act on drug prices. Indeed, members of FDA advisory panels have proposed that costs should factor into their votes in support of or against an applicant product, but the FDA has never explicitly demonstrated any appetite for such authority, with or without the support of federal advisory committees.