FDA to Resume Domestic Device Inspections

The FDA was forced to announce in March 2020 that it would suspend inspections of drug and medical device manufacturing sites because of the COVID-19 pandemic, but the agency has partially reversed that decision in a July 10 statement. FDA commissioner Stephen Hahn said the pause that had been applied to inspections did not prevent the agency from conducting mission-critical inspections, although routine surveillance inspections had been shuttered for four months.

The FDA has been tracking state and local conditions with the aid of a rating system designed to establish which locations are reasonably safe for a site inspection. This COVID-19 advisory rating system makes use of real-time data to provide a qualitative assessment of the number of cases in an area. These data are shared with the agency’s partners on the state level who handle some inspectional activities, presumably including inspections of mammography facilities.

The rating system is broken down into three levels of risk on a county-by-county basis, starting with the category of counties where inspections will only take place when those inspections are deemed mission-critical. The second tier of inspections takes into account whether the agency can send field investigators who have not identified themselves as vulnerable to poor outcomes for infection with the SARS-CoV-2 virus. The last tier is for counties that are open to a resumption of normal activities. The agency’s objective is to resume surveillance inspections the week of July 20, although the FDA said that conditions on the ground would continue to drive the level of inspectional activity.

FDA Posts Two Draft Updates

Regulatory science has not completely stagnated in the COVID-19 pandemic, a fact of life demonstrated by two draft guidances the FDA published for updates to existing guidances. One of these is a July 13 update for 510(k) submissions for devices that provide atherectomy for the peripheral vasculature, comments for which are due Sept. 11.

The scope of the draft is limited to intraluminal artery strippers that fall under the MCW product code, which includes four technologies, including rotational atherectomy devices. Sponsors can use ISO 10993 to test for biocompatibility, and ISO 14971 for risk evaluation and management. Devices that are packaged with a pre-installed internal battery will have to fulfill several performance testing recommendations, including shelf life, and the sponsor will have to determine the impact of sterilization on the battery when the battery will be left in the device during sterilization procedures.

The FDA states that it has no intention of imposing changes to the existing guidance that are not specified in this latest draft. Interestingly, the existing final guidance was issued in February 2020, less than two years after the previous draft had been published.

The second updates draft published in the month of July is the July 14 draft for clinical and non-clinical investigations into devices for treatment of benign prostatic hyperplasia (BPH), which will also limit updates to the existing to the contents of the draft. This draft will update the recommendations for devices that are covered by four product codes (KNS, PEW, PZP and NOY), and includes updates to recommended approaches to animal studies.

Among the draft recommendations is that animal studies should include both gross and histological examinations of the treated area by a pathologist who is blinded to the treatment. The draft states that animal studies of thermotherapy devices should include evaluations of how well the device limits the volume of affected tissue by checking parameters such as blood flow and tissue heterogeneity. There are also recommendations for animal studies of stents used for BPH.

Also included in the updates draft for BPH devices are recommendations for pilot and pivotal studies, including a recommendation that the sponsor make use of a randomized, controlled study design for the pivotal study. While the standard of care for the population under investigation might be the most appropriate control treatment, the FDA said the risk-benefit ratio of the investigational device should be comparable to that of the control treatment. The comment period for this draft closes Sept. 14.

FDA Sets 50% Efficacy Benchmark in Vaccine Guidance

The FDA has released a guidance for development of vaccines in response to the COVID-19 pandemic, which among other things suggests the agency will push harder to ensure that any such studies enroll pregnant women and minorities. The guidance also calls for an effectiveness rate of 50%, a benchmark which exceeds those of most recent influenza vaccines used in the U.S.

The June 30 FDA press release states that the agency may use the accelerated approval pathway for licensing a vaccine for the SARS-CoV-2 virus, but that any application would have to identify an immune response or other measure “that is reasonably likely to predict clinical benefit.” The agency left open the possibility that a vaccine could be distributed under the emergency use authorization program (EUA), but the guidance seems to suggest that the FDA is reluctant to grant an EUA authorization for the first vaccine specific to this virus.

The guidance states that issuance of an EUA prior to completion of a large randomized trial could inhibit demonstrations of effectiveness, and that such a study may be needed to clarify the effect of the vaccine on vaccine-associated enhanced respiratory disease. Conversely, the FDA said an EUA may be appropriate once the study has returned sufficient data to demonstrate safety and effectiveness, even if the manufacturer has not yet submitted all the data from that study.

Patients who are at higher than average risk of severe adverse events may be excluded from early-phase studies, but those patients may have to be included in late-phase studies. Trials of all stages will have to include pregnant women and women who are not actively avoiding pregnancy, along with several other sub-groups, including racial and ethnic minorities and elderly patients. Randomized, controlled trials will have to enroll evenly between placebo and the candidate vaccine, and the FDA said an approved vaccine can be used as a control for subsequent vaccine studies.

In the discussion of statistical considerations, the guidance calls for a 50% efficacy endpoint both at the completion of the study and at any interim analysis, a superior metric to 11 out of 15 of the vaccines listed at the CDC website. The most recent influenza vaccine to exceed that mark is the 2013-14 vaccine for the H1N1 virus, which provided an effectiveness rate of 52%.

The FDA said the terms of the guidance will continue to apply after the public health emergency has been withdrawn, and that any revisions will be made within 60 days of the termination of the emergency. The guidance makes some concessions on manufacturing considerations, including the use of a virtual site inspection, depending on that manufacturing site’s compliance history.

High-throughput Testing Emphasized

The FDA’s EUA program for testing and diagnostics is still a key component in the U.S. federal government’s efforts to rein in the COVID-19 pandemic, and the agency is now focused on bringing high-throughput testing into the picture. Timothy Stenzel, director of the FDA’s Office of In Vitro Diagnostics and Radiology said on a June 24 town hall that the FDA is also working on an EUA template for molecular testing for the pandemic, which would also help to enable the volume of testing needed to reopen the economy.

According to the FDA’s transcript of the town hall, the agency has received a number of questions about the distinction between testing for diagnosis, screening and surveillance. Stenzel asked that test developers comb through existing guidance and templates for answers to their questions prior to contacting the agency, and said the emphasis is on point-of-care and high-throughput testing systems. The agency’s review of such systems is contingent on receipt of an EUA filing that contains sufficient data for review, including separate reporting for the various antibody isotypes stimulated by the virus.

The FDA made good on Stenzel’s promise, adding two templates for molecular testing at the template webpage. The July 2 update provides one template each for commercial manufacturers and labs, and there are provisions in the documents for asymptomatic testing for screening purposes and for testing of specimen pools.

The PREP Act and the Revocation of an Emergency Use Authorization

In recent weeks, the FDA has revoked Emergency Use Authorizations (EUAs) for several products meant to combat COVID-19.  These include the June 15, 2020 revocation [fda.gov] of the oral formulations of chloroquine phosphate and hydroxychloroquine sulfate and the June 16, 2020 revocation [fda.gov] of the Chembio Diagnostic Systems Inc.’s DPP COVID-19 IgM/IgG System.

The fact that FDA is revoking its authorization for drugs and medical devices may have implications for the immunity granted under the Public Readiness and Emergency Preparedness Act (“PREP Act”) (42 U.S.C. § 247d-6d and 6e) for products that have had their authorizations revoked.  This blog explores this issue.

Background on PREP Act and the EUA Statute.

Some background on both the PREP Act and EUA statute is important in order to understand the issue.  The PREP Act provides nearly blanket immunity under certain circumstances for manufacturers, distributors, and administrators of certain drugs, medical devices, and biologics meant to counteract an epidemic or pandemic.  This immunity is provided not only to approved drugs and cleared medical devices, but also investigational drugs and medical devices, as well as drugs and medical devices that have been authorized by the FDA under its EUA authority.

So, what is the FDA’s EUA authority and how does it work?  In short, if the Secretary of Health and Human Services declares a public health emergency, the FDA can authorize the use of a non-approved/non-cleared product, or authorize an off-label use of an otherwise approved/cleared product, for the limited purpose of combatting the public health emergency.  21 U.S.C. § 360bbb-3.  Once authorized for emergency use, the products can be sold and used under the conditions of the EUA authorization until one of three events occur: either (i) the product becomes approved or cleared via a traditional pathway, (ii) the public health emergency ends, or (iii) the FDA revokes its emergency use authorization.  Id.  The FDA can revoke an authorization if there is no longer a need for the product, the evidence supporting the authorization is no longer met, or other circumstances make revocation appropriate to protect public health and safety.  Id. at (g)(2).  Even if the health emergency ends or the FDA revokes its authorization, continued use of the product with respect to a specific patient can continue if found necessary by the patient’s attending physician.  Id. at (f)(2).

The EUA statute partially addresses the issue of a manufacturers’ obligations if the product is revoked or the public health emergency ends.  If the public health emergency ends, the EUA statute provides that the “Secretary shall consult with the manufacturer of such product with respect to the appropriate disposition of the product.”  Id. at (b)(2)(B).  The statute does not address this issue if the FDA revokes its authorization, though the FDA’s interpretation of the statute is that it will similarly consult with the manufacturer if it revokes the authorization on the appropriate disposition of the product.  Emergency Use Authorization of Medical Products and Related Authorities, Food Drug Cosm. L. Rep. 300052.

FDA’s COVID-19 Response.

With this background on the statutes out of the way, let’s turn to the FDA’s response to COVID-19 under these statutes.  On February 4, 2020, Secretary Azar declared a public health emergency for COVID-19, which enabled the FDA to begin issuing EUAs for products intended to combat COVID-19.  85 FR 7316.  Since the beginning of the COVID-19 pandemic, the FDA has authorized [fda.gov] over 150 products under its EUA authority.  These products fall into six categories: (i) In Vitro Diagnostic Products, (ii) High Complexity Molecular-Based Laboratory Developed Tests, (iii) SARS-CoV-2 Antibody Tests, (iv) Personal Protective Equipment and Related Devices, (v) Ventilators and Other Medical Devices, and (vi) Drug Products.

These 150+ products, as such, fall within the definition of a “covered countermeasure” under the PREP Act, and thus largely fall within the protections of the PREP Act.  42 U.S.C. § 247d-6d; see also 85 FR 15198.  However, the question arises whether the products for which EUA authority was revoked enjoy the same immunity as non-revoked EUA products under the PREP Act.

What Happens Under the PREP Act if the FDA Revokes its EUA Authorization?

Neither the PREP Act itself nor the EUA statute directly address the issue of what happens under the PREP Act if the FDA revokes its EUA authorization.  However, buried deep in the PREP Act are two references to EUA revocation.  These references strongly suggest that EUA revocation does not, in and of itself, remove PREP Act immunity.

The references to EUA revocation in the PREP Act appear in the section that addresses the willful misconduct exception to immunity.  As background, the PREP Act contains an immunity exception that provides that there is no immunity when a manufacturer or distributor engaged in “willful misconduct” with respect to the covered product.  In turn, the statute provides a lengthy definition of what constitutes willful misconduct.  42 U.S.C. § 247d-6d(c-d).  Among the circumstances described, is the initiation of an “enforcement action” by the federal government that resulted in a “covered remedy.”  Id. at (c)(5).  An “enforcement action” is defined as a laundry list of items, such as an injunction or mandatory recall of a product.  Among the listed items that constitute an enforcement action is “a revocation, based on willful misconduct, of an authorization under section 564 of such Act [21 USCS § 360bbb-3].”  Id. at (c)(5)(B)(i) (block parentheticals in original).  In other words, only a revocation of an EUA that was “based on willful misconduct” can constitute an “enforcement action.”  Id.  Conversely, in the laundry list of items included in the definition of “covered remedy,” the following appears, among others: “a revocation of an authorization under section 564 of such Act [21 USCS § 360bbb-3].”  Id. at (c)(5)(B)(i)(I) (block parentheticals in original).

As such, the PREP Act contemplates that a product whose authorization has been revoked for a reason other than willful misconduct – perhaps because FDA finds that there are significant clinical performance problems with it – is still entitled to immunity.  Otherwise, there would be no reason to define the method by which the authorization must be revoked in order to lose immunity.  A plaintiff attempting to demonstrate that PREP Act immunity does not apply needs to show more than just the EUA revocation in order to prove willful misconduct.  Rather, the plaintiff must show that the revocation was “based on willful misconduct” as defined in the Act.  Id. at (c)(5)(B)(i).  The recent revocation letters from the FDA contain no such language.

This conclusion that immunity remains following the revocation of an EUA is bolstered by the purpose of the PREP Act.  The policy behind the PREP Act is to provide immunity so as to encourage companies to make products that help reduce the severity of pandemics.  And, if all that must occur for a product to no longer receive the PREP Act protection is that it loses its EUA authorization status, that would run contrary to the purpose of encouraging companies to make products and seek EUA authorization.  Similarly, a product can lose its authorization once the pandemic is over in the same manner as if it was revoked during the pandemic.  And certainly, products that are no longer needed after the declared public health emergency has ended continue to have protection under the PREP Act for their use during the pandemic.  Otherwise, the PREP Act would provide no protection at all.

This conclusion is further bolstered by the fact that the PREP Act states that its “sole exception to the immunity from suit” is for “willful misconduct,” Id. at (d), which is a much higher standard than the standard for revoking an EUA.  Compare 42 U.S.C. § 247d-6d(c) (setting forth the willful misconduct standard) with 21 USCS § 360bbb-3(g)(2) (setting forth the revocation standard). While the “sole exception” language should not lull manufacturers into believing the PREP Act always provides protections, this “sole exception” language does show that willful conduct is far more serious than a simple revocation of an EUA.

In spite of the foregoing, none of the above points are a guarantee that a court may not reach a contrary result.  After all, the PREP Act does not specifically say that it extends to products whose EUAs have been revoked.  Rather, this is only a result by necessary implication from the definition of willful misconduct, as well as the policy behind the PREP Act and the EUA statute.

Next Steps After Revocation.

If an EUA is revoked, the manufacturer should work with FDA on the appropriate disposition of the product.  See 21 U.S.C. § 360bbb-3(b)(2)(B); Emergency Use Authorization of Medical Products and Related Authorities, Food Drug Cosm. L. Rep.  300052.  While the product can continue to be used for a specific patient if found necessary by the patient’s attending physician, what must be done with the product that remains in the marketplace after the EUA has been revoked needs to be addressed with FDA.

It is important for the manufacturer to be aware that in the laundry list of actions that constitutes “an enforcement action” under the PREP Act’s willful exception is “a mandatory recall of a product because [a] voluntary recall was refused.”  Put another way, if forced to do a mandatory recall as opposed to a voluntary recall, a manufacturer increases the likelihood that it will not enjoy the full protections of the PREP Act.

Written by Jordan Lipp, Partner at Childs McCune

FDA Moves on Home Sample Collection for COVID-19

The FDA has broken new ground on numerous occasions as a result of the COVID-19 pandemic, including with the release of a voluntary template for at-home sample collection kits under the emergency use authorization program. There are limitations to the use of home sample collection kits for the pandemic, however.

The agency’s May 29 press release indicated that test developers can provide a test for samples obtained by the user in their domicile only if that test is authorized under the EAU program, or when used in connection with a study overseen by an IRB. Jeff Shuren, director of the Center for Devices and Radiological Health, said home collection samples are the subject of several concerns, including whether the sample can be shipped without degradation.

The FDA template states that the sample can be drawn from the anterior nares or saliva, and that a developer that wants to manufacture a sample collection kit for other types of respiratory specimens (or non-respiratory sources) should contact the agency regarding a validation a strategy. The developer of that home collection kit should also contact the Pipeline and Hazardous Materials Safety Administration regarding compliance with regulations pertaining to hazardous materials shipping, the FDA said.

CDC Advises Caution on Serological Test Interpretation

U.S. federal government activity has been more or less constant even after omitting the FDA’s updates, such as the routinely updated antibody test guidelines posted by the Centers for Disease Control and Prevention. CDC pointed out recently that interpretation of a serological test can be hazardous if local seroprevalence is in the mid-single digits. In addition to advising that there is no clear answer as to which antibody isotype is most advantageous for COVID-19 surveillance, the update page also states that when prevalence is at 5%, a serological test with 90% sensitivity and 95% specificity might offer a positive predictive value of only 49%.

This can be improved upon by the use of a test with a specificity of 99.5% or greater, or by pre-test screening to eliminate those at a low probability of infection, while another option is to run a second test on any individuals who test positive. A repeat testing strategy based on an orthogonal algorithm would require that the second test be a different test than the first, but CDC also advised that tests for immunoglobulin A (IgA) are not seen as particularly reliable, at least until more information emerges about the dynamics of IgA in the context of the SARS-CoV-2 virus.

The Federal Communications Commission announced May 28 that it had approved another 53 funding applications for telehealth programs specifically set aside for the COVID-19 pandemic. The funding for these programs was provided by the Coronavirus Aid, Relief and Economic Security (CARES) Act, and this latest round of telehealth program awards will account for $18.22 million out of the total of more than $68 million granted to date under this program.

The FCC’s COVID-19 telehealth program has $200 million to work with under the terms of the CARES Act, although the entirety of that funding source need not be expended. This was the eight set of telehealth programs announced by the FCC, the first of which was announced April 16.

Precisely how long these telemedicine programs will be needed in such numbers is difficult to pin down, but the Advanced Medical Technology Association recently highlighted a survey suggesting that three in four Americans would not hesitate to undertake a face-to-face visit with their physician. Patients have been skipping cardiology care sessions, cancer screenings, and other essential care visits as a consequence of the pandemic, but the vast majority of the 593 respondents believe the time has come to go see the doctor. Roughly half of those surveyed in a separate poll said they or someone in their household has postponed or skipped entirely a medical visit in recent months.

PTO Eyes Prioritized Patents to Combat Covid-19

The FDA and other agencies at the U.S. Dept. of Health and Human Services have taken a number of measures to push back against the COVID-19 pandemic, but an agency at the Dept. of Commerce is also getting into the fight. The Patent and Trademark Office recently unveiled a prioritized patent examination pilot that will put COVID-fighting applications to the front of the queue, with a special emphasis on small and micro entities.

The May 8 PTO statement indicates that the agency will waive the fees ordinarily associated with priority patent applications, but also that these applications will be processed within six months, assuming the applicant responds to PTO queries promptly. PTO director Andrei Iancu said small businesses and independent inventors “are often the difference makers when it comes to cutting-edge technology,” but “are also in most need of assistance” as the pandemic wears on.

In the accompanying Federal Register notice, PTO said the scope of the program is limited to products that are subject to an FDA premarket review process, such as emergency use authorizations, premarket approvals and new drug applications. Biologics license applications are also within the scope of the program, but continuing original patent applications are apparently excluded. Filings must include no more than four independent claims and no more than 30 total claims. Multiple dependent claims are also out of consideration, and applicants that file for an extension for time to file a reply will lose their place in this expedited program.

FDA Resets Serology Test Policy for Pandemic

The FDA has maintained a steady pace of policy changes in connection with the COVID-19 pandemic, including a May 4 policy that calls on makers of some serological tests to file for an EUA for their tests. The change followed congressional criticism that many of these tests did not work as advertised, but also followed an extended period during which a large number of tests came to market and thus there was a less pressing need for a relaxed policy.

In an accompanying statement, the FDA said the original testing policy under the emergency use authorization program was borne of a need to provide sufficient regulatory flexibility to bring surveillance testing to the medical front lines. A number of serology tests have arrived with claims of FDA approval or authorization despite lacking such a regulatory acknowledgment, but other tests were shown to perform poorly despite otherwise avoiding the agency’s ire.

Consequently, commercial test developers have 10 days to file for authorization under the EUA program after notifying the agency of the results of test validation, or 10 days after the date of publication of the May 4 policy. High-complexity labs that develop their own tests must still forward validation data to the agency, although they are not required to seek authorization via the EUA program. The FDA recommends they do seek inclusion in the EUA listing, however.

The testing policy was updated again May 9 with the news that the first antigen test for the SARS-CoV-2 virus had gained a place in the EUA policy, and the FDA said more such tests will soon be thus authorized. The anticipation regarding antigen testing is that it will rapidly increase the total volume of tests made to the American public, a critical piece in the effort to bring the pandemic under control. However, the agency advised that antigen testing is even more prone to false negatives than molecular testing for viral RNA, and a negative result for an antigen test may have to be checked by a molecular test – usually a polymerase chain reaction (PCR) test – prior to any clinical decision-making.

Still, the FDA noted that antigen tests are less expensive to deploy than PCR tests and usually provide more rapid turn-around. Antigen tests may boost overall testing capacity by millions per day, but the FDA noted that these are intended as diagnostic tests even as the agency noted that they may also aid in the effort to “identify infection rates closer to real time.”

ONC, CMS Delay Compliance Dates for EHR Interoperability

The COVID-19 pandemic has incurred a number of regulatory casualties in recent weeks, and the final rules for electronic health records (EHRs) promulgated earlier this year are two of the latest among those. Not all aspects of these rules were on the same original compliance deadline, however, and vendors will have to delve into the details of these respective delays to keep them straight.

The Office of the National Coordinator and the Centers for Medicare & Medicaid Services posted a joint statement about the delayed implementation date. ONC director Don Rucker said his agency will offer three months of enforcement discretion to EHR vendors “at the end of … certain compliance dates,” a concession to the pandemic. In contrast, CMS administrator Seema Verma stated that hospitals will generally have an additional six months to implement the related requirements.

The ONC announcement was accompanied by a tabular presentation of revised compliance deadlines, many of which simply add three months onto the original six-month deadline. The roll-out of application programming interface (API) functionality was originally subject to a 24-month compliance date, but now enjoys 27 months of regulatory relief. Many other requirements, such as the information blocking requirement, were initially on a six-month delay from the date of the final rule, but this requirement will not be in force until the end of the year at the earliest. The ONC rule appears in the Federal Register with a date stamp of May 1 and an effective date of June 30.

The CMS stated that the requirements for the patient access API are now in force as of Jan. 1, 2021, the same date as the provider directory API. The CMS requirement for information blocking enjoys a less crisply defined compliance date of “late 2020,” while payer-to-payer data exchange functions must be up and running by Jan. 1, 2022.

FDA Posts AE Reporting Policy

Among the pandemic-related considerations undertaken by the FDA is a policy document spelling out the agency’s expectations regarding adverse event (AE) reporting. The terms of the policy apply to medical products and dietary supplements, and deals with the prospect that COVID-driven absenteeism might hamper a company’s AE reporting program.

The policy, which updates a 2012 guidance addressing influenza outbreaks, allows companies to focus their AE reporting efforts on products related to the COVID-19 pandemic. Affected companies are expected to develop a continuity of operations plan (COOP), which should spell out AE reporting and updates for any events that are stored during the pandemic. Companies should document the start and ending dates of their nations’ emergency declarations as well as the impact of absenteeism on AE reporting.

The FDA says it “does not plan to object” if a company is unable to file AE reports on time due to absenteeism caused by they pandemic, but the affect entities have to file those reports within six months of restoration of normal order of a company’s operations. Companies that can report at least some AEs in a timely fashion must do so, and firms that can file all required reports are expected to make timely reports. If the agency expresses concern about reports in connection with specific products or a particular set of circumstances, the FDA will offer no leniency on the standard reporting requirements, the guidance states.

EMA Proposes Delay of MDR Implementation

As the world grapples with the newest version of the coronavirus, regulatory agencies across the globe are reacting with a number of moves, mostly to relax existing regulatory requirements. In contrast, the European Medicines Agency is considering a delay in the implementation date of the as-yet unimplemented Medical Device Regulations, a change that would ease device makers’ concerns on several fronts.

MedTech Europe had posted a plea for a delay from the implementation date, originally set for May 26, 2020, citing the need to address the COVID-19 pandemic. However, device makers were already wary of the practicalities of that original implementation date, largely because of the difficulty in enlisting a sufficient number of notified bodies. The association’s plea was seconded by a range of members of the European Parliament, who made the case that the priority should be device availability until the pandemic becomes manageable.

The proposal to delay implementation for a year was announced March 25, with the acknowledgement that the notion would have to clear the European Parliament. MedTech Europe lent the development its full-throated support, stating March 25 that this change would allow industry to maintain the pressure on the pandemic. Nonetheless, MedTech Europe made the argument that a similar delay is called for in connection with the In Vitro Diagnostic Regulation as well, given the demands of the pandemic on the testing capacity in the EU member states.

Congress Pressing FDA on Serological Testing

The FDA has granted emergency use authorization to a number of diagnostics for the SARS-CoV-2 virus, but until recently, those have all been molecular tests conducted with polymerase chain reaction methods. That approach has drawn the interest of at least one member of Congress, who is urging the FDA to take a more active role in ensuring that serological testing becomes more widely available.

Rep. Diana DeGette (D-Colo.), who is a member of several subcommittees of the House Energy and Commerce Committee, said in an April 10 statement that she had previously made known her views on serological testing to several senior Trump administration officials. She said serological testing for antibodies will prove crucial in returning the country to more routine economic activity, and urged FDA commissioner Stephen Hahn to press the case for serological testing with President Trump. Specifically, DeGette recommended that Hahn suggest the use of the Defense Production Act to boost production of the equipment and supplies needed for serological testing, which would allow those who have already been exposed and have recovered to return to work without incurring any undue hazard.

DeGette may or may not be concerned about the FDA’s stance on the question of false positives associated with serological testing, but the agency said in an April 7 statement that it has been in contact with more than 70 test developers about serological tests. The statement, attributed to Hahn, acknowledges the role that serological tests will play in the months ahead, but also points to concerns about false claims regarding FDA approval or emergency authorization.

Whether the FDA has sufficient data to back the use of serological testing as a population-level surveillance strategy is not entirely clear, but it has an ally in that effort in the form of the National Institutes of Health. NIH said in an April 10 statement that it will commence with a study of the presence of antibodies for SARS-CoV-2 in those who have had no prior confirmed diagnosis, but there is a question of how quickly these data will become available.

According to the NIH, the study will enroll as many as 10,000 subjects who will be consented via telephone, although enrollment is limited to those aged 18 years and older. The study will tests for two immunoglobulins via enzyme-linked immunosorbent assay, and enrollees can handle the blood draw via a home collection kit. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said the study should shed light on the “true magnitude of the COVID-19 pandemic” by characterizing the rate of non-diagnosed illness.

The registration of this study at clinicaltrials.gov indicates that enrollment may be completed with as few as 1,000 patients despite the ten-fold higher number noted in the NIH press release. Whether the final enrollment volume will be closer to the lower or upper stated enrollment targets will not be clear for some time, as the estimated primary completion date is March 31, 2022, the same date as the projected full study completion date.

FDA Reacts to Coronavirus as Stimulus Bill Passes

The FDA is scrambling to meet the demands imposed by the COVID-19 outbreak, including a series of guidances dealing with a variety of issues. However, the predicament has also prompted two pieces of legislation, one an economic stimulus package and the other a bill that would tie the FDA’s hands where regulation of lab-developed tests is concerned.

After considerable wrangling, the U.S. Senate and the House of Representatives sent the Coronavirus Aid, Relief, and Economic Security Act (CARES Act, or H.R. 748) to the Oval Office, which President Trump signed into law March 27. This was the latest – but perhaps not the last – of legislative packages to offset the damage done by the SARS-CoV-2 virus.

The FDA has ramped up a series of guidance documents to deal with the pandemic. One of the earliest policy documents was a Feb. 29 guidance by the FDA’s device center, which the agency updated March 16 to give the states more leeway to ramp up testing. The pandemic was widely seen as potentially crimping ongoing clinical trials, leading the FDA to post a guidance to deal with such concerns. In a March 18 statement, the agency acknowledged that protocol deviations may be unavoidable, and that study protocols may thus have to be amended. One of the related changes the FDA will allow is the use of telemedicine for some patient follow-up appointments.

Another piece of the regulatory puzzle for coronavirus in the U.S. is the FDA’s enforcement policy for ventilators and other respiratory devices. This policy guidance spells out the conditions under which product labels and device functionality of ventilators and other respiratory devices would not be subject to the usual enforcement standards. The emphasis here, the agency said, is to allow manufacturers to add production lines to existing sites and to allow manufacturing at alternate sites. Among the 13 product codes listed within the scope of the document are those for oxygen conservers and anesthesia gas machines.

The agency’s device center has routinely updated a coronavirus FAQ for diagnostic testing, including updates on swabbing procedures and sites that would be acceptable for testing. In a March 23 statement, the FDA made note of a concern that the SARS-CoV-2 virus could be passed along during fecal microbiota transplantation procedures. There is also some concern that cancer patients may be at greater risk of contracting COVID-19 due to compromise of their immune systems.

The FDA also took action on respirator masks in a March 27 statement to the CDC, which authorizes the use of all disposable filtering facepiece respirators that have been approved by the National Institute for Occupational Safety and Health. The scope of this policy includes NIOSH-approved respirators that have passed product expiry, assuming these items are not damaged and have been stored in the appropriate conditions. Two days earlier, the FDA dropped an enforcement policy document for the use of face and respirator masks, which includes some conditions for reprocessing of these items.

Bill Would Ban FDA Regulation of LDTs

Sen. Rand Paul (R-Ky.) has drafted a bill that would disallow FDA regulation of lab-developed tests, at least in part a reaction to the agency’s laggardly response to the SARS-CoV-2 virus. Paul said in a March 18 statement that S. 3512 would remove “unnecessary government barriers that have drastically slowed the response to the COVID-19 outbreak. The Verified Innovative Testing in American Laboratories (VITAL) Act of 2020 would affirm that the Public Health Service Act “governs all aspects” of lab-developed testing procedures, according to the associated fact sheet.

The bill states that “all aspects of a laboratory-developed testing procedures shall be regulated” under Section 353 of the Public Health Service Act, and that “no aspects of laboratory-developed testing procedures shall be regulated under the Federal Food, Drug, and Cosmetic Act.” This would apply during public health emergencies as well as during periods of normal activity.

Paul’s bill comes shortly after two members of the House of Representatives resurrected the Verifying Accurate, Leading-edge IVCT Development (VALID) Act, which has been modified from previous iterations to address the COVID-19 outbreak. Reps. Diana DeGette (D-Colo.) and Larry Bucshon (R-Ind.) said their legislation would create a new product category for diagnostic and lab tests, but they also point to the need to allow labs to respond quickly to public health crises. The bill would allow developers to electronically file their tests for FDA review.

There is a companion bill for the VALID Act in the Senate, but there is also some question as to whether either of these bills will pick up any traction this year, given the impact of the coronavirus on congressional schedules. It might be noted that discussions regarding the fiscal 2021 budget have been displaced by the COVID-19 outbreak at least for the time being, and that the upcoming election is likely to bring a halt to routine legislative activity by the end of August.

Pandemics and Force-Majeure Clauses

With the Coronavirus (COVID-19) pandemic, medical device companies are facing disruptions to their supply chains, vendors who simply stop providing services, and a denuded work force.  Who is responsible when the supply chain fails due to a pandemic?  What should a company do when its vendors stop all work because their employees must stay home?  And what can a company do when it can’t meet its supply obligations due to its own employees in quarantine?

Due to the current challenges presented by the COVID-19 pandemic, an oft-forgotten contract clause, usually found among the miscellaneous clauses at the end of a contract, has suddenly taken a front seat.  This is the “force-majeure” clause of a contract, also sometimes known as the “Act of God” clause.  A force-majeure clause addresses the allocation of risk between the contracting parties if the contract cannot be performed due to an unanticipated or uncontrollable event.

This blog provides a quick primer for attorneys and businesspeople on force-majeure clauses, which are not usually on the forefront of medical device companies’ minds.  A classic example of a force-majeure clause, as set forth in Corbin on Contracts, is as follows: “Neither party shall be liable for its failure to perform hereunder if said performance is made impracticable due to any occurrence beyond its reasonable control, including acts of God, fires, floods, wars, sabotage, accidents, labor disputes or shortages, governmental laws, ordinances, rules and regulations.”  14 Corbin on Contracts § 74.19 (2019) (further citations omitted).

There are several key components of a force-majeure clause, which are discussed next.

Mutual or One-Way Force-Majeure Clauses – Force-Majeure clauses can be drafted to benefit one party to a contract, or they can be drafted to benefit both sides of a contract.  The example from Corbin on Contracts, above, is a mutual force-majeure clause.  It can benefit either party when there is a force-majeure event (such as a pandemic).

However, not all force-majeure clauses are mutual.  Many are written excusing only one side from performance should a force-majeure event occur.  For example, the above clause could instead have been written “Party A shall not be liable for its failure to perform hereunder if said performance is made impracticable due to any occurrence beyond its reasonable control, including acts of God, fires, floods, wars, sabotage, accidents, labor disputes or shortages, governmental laws, ordinances, rules and regulations.”

Epidemic Language in Force-Majeure Clauses – Many force-majeure clauses specifically reference force-majeure events to include occurrences such as “epidemics” and “quarantine restrictions.”  Many other force-majeure clauses do not.

However, as long as the force-majeure events are written in a broad manner, there is a strong likelihood that courts will consider the COVID-19 pandemic to be a force-majeure event, regardless of whether the specific word “epidemic” is contained in the force-majeure clause.

Similarly, force-majeure clauses often require that the force-majeure event is something beyond the control of the performing party.  As an example, a component part supplier in China may well be able to invoke a force-majeure clause from the COVID-19 pandemic.  On the other hand, a supplier of services to a medical device company (such as an accounting firm) may be less able to invoke such a clause as suppliers of services can often continue to work from home.

Notice – Many force-majeure clauses have a notice requirement.  The notice requirement means that in order to invoke the clause, a party must provide notice to the other parties.  For example, hog shipments did not occur due to an outbreak of Porcine Reproductive and Respiratory Syndrome.  As most hog suppliers did not provide written notice of a force-majeure event, those suppliers could not invoke the force-majeure clause when sued for not delivering hogs per their contractual agreement, even though there was no dispute that the outbreak was a force majeure event.  SNB Farms, Inc. v. Swift & Co., 2003 U.S. Dist. LEXIS 2063, at *30-31 (N.D. Iowa Feb. 7, 2003).  Meeting notice requirements is critical.

Effect of Force-Majeure Clause – Force-majeure clauses can do more than simply excuse a party from performing under a contract.  A standard provision is that a force-majeure event does not excuse performance under the contract, but simply extends the obligation until after the event is over.  As such, a supplier may not be obligated to supply materials during the force-majeure event (e.g., the COVID-19 pandemic) if it is unable to obtain the materials.  Once the materials become available, however, it must resume shipment.

Lack of a Force-Majeure Clause – What happens when the contract does not contain a force-majeure clause?  The common law defense of impossibility of performance can still protect a non-performing party, when the non-performing party did not cause the event rendering performance impossible.  The term “impossibility” means not only strict impossibility but impracticability because of extreme and unreasonable difficulty, expense, injury or loss involved.  As such, the circumstances of what performance is, or is not, rendered impossible by the COVID-19 pandemic will likely revolve around the nature of the contract and the possibilities open to the parties.

Conclusion – As medical device companies address the supply chain and similar issues raised by COVID-19, prudence dictates that they and their attorneys focus on the details and ramifications of force-majeure clauses.

 

An Overview of Liability Immunity for Products Meant to Counter COVID-19 Under the PREP Act

Device manufacturers (as well as drug manufacturers, distributors, and health care providers) are struggling to answer many questions regarding their potential products liability in responding to the COVID-19 pandemic. Fortunately, as discussed below, the PREP Act and the recent declaration by the Secretary for the Department of Health and Human Services provides significant immunity from COVID-19 lawsuits.

In 2005, Congress passed the Public Readiness and Emergency Preparedness Act (“PREP Act”).[1] The PREP Act provides liability immunity to a large group of entities and individuals for the manufacture, distribution, prescription, and use of drugs, biological products, or devices meant to combat a pandemic.[2]

This liability immunity is written almost as broadly as an immunity provision can be written. The protected entities are called “covered persons.”[3] And, covered persons are “immune from suit and liability under Federal and State law with respect to all claims for loss caused by, arising out of, relating to, or resulting from the administration to or the use by an individual of” the drugs, biological products, or devices used to combat the pandemic.[4] The liability immunity covers all actions except for the “willful misconduct” of a covered person.[5]

This immunity extends, for two obvious examples, to (i) a negligence lawsuit against a manufacturer in creating a vaccine meant to treat a pandemic or (ii) a health care provider in prescribing the wrong dose of a drug meant to treat COVID-19.[6] However, the immunity extends much further than just these obvious cases. It would apply, for example, to a “slip-and-fall injury or vehicle collision by a recipient receiving a countermeasure [e.g., drug or device] at a retail store serving as an administration or dispensing location.”[7]

In order for the PREP Act immunity to apply, the Secretary for the Department of Health and Human Services (“Secretary”) must declare a public health emergency.[8] On March 10, 2020, the Secretary made such a declaration for COVID-19.[9] This declaration was effective as of February 4, 2020 and will continue through October 1, 2024.[10]

COVID-19 is not the first declaration of a public health emergency by the Secretary. For example, the Secretary declared a public health emergency in response to an outbreak of the H1N1 influenza virus.[11] Litigation involving that declaration is instructive.

Courts generally enforced the PREP Act during the H1N1 outbreak. For example, when a parent of a kindergartner who was inoculated for H1N1 flu without her parent’s consent filed a lawsuit in New York state court against the health department that administered the vaccine, the Appellate Division of the Supreme Court of New York held that the lawsuit was preempted by the PREP Act.[12] For another example, a plaintiff sued his physician and employer, who in turn sued the vaccine manufacturer, for being vaccinated without informed consent for the H1N1 influenza virus. The federal court in Missouri held that the PREP Act barred the claims against the vaccine manufacturer. This ruling divested the federal court of jurisdiction to decide the remaining claims.[13] These cases demonstrate the power of the PREP Act to protect companies and individuals from lawsuits involving countermeasures to COVID-19.

[1] 42 U.S.C. 247d-6d and 42 U.S.C. 247d-6e. For an overview of the PREP Act from the U.S. Department of Health & Human Services, seehttps://www.phe.gov/Preparedness/legal/prepact/Pages/default.aspx.

[2]Id.

[3] Covered persons include companies and individuals that manufacture, distribute, plan, prescribe, administer, or dispense the drug, biological product or device meant to combat the pandemic. 42 U.S.C. 247d-6d(i)(2).

[4] 42 U.S.C. 247d-6d(a)(1).

[5] 42 U.S.C. 274d-6d(d)(1). Willful misconduct is defined as conduct that is: “(i) intentionally to achieve a wrongful purpose; (ii) knowingly without legal or factual justification; and (iii) in disregard of a known or obvious risk that is so great as to make it highly probable that the harm will outweigh the benefit,” 42 U.S.C.S. § 247d-6d(c)(1)(A), and such conduct must proximately cause the death of serious physical injury. 42 U.S.C. 274d-6d(d)(1).

[6]See 85 FR 15198 at 15200.

[7] 85 FR 15198 at 15200.

[8] 42 U.S.C. 274d-6d(a)(1) and (b).

[9] 85 FR 15198.

[10] 85 FR 15198 at 15198, 15202.

[11] 74 FR 50968.

[12]Parker v. St. Lawrence Cty. Pub. Health Dep’t, 2012 NY Slip Op 7934, 102 A.D.3d 140, 954 N.Y.S.2d 259 (App. Div. 3rd Dept.).

[13]Kehler v. Hood, No. 4:11CV1416 FRB, 2012 U.S. Dist. LEXIS 74502, 2012 WL 1945952 (E.D. Mo. May 30, 2012).