FDA Issues Pandemic Policy for Supplements

The FDA’s device center has put forth a number of policy documents to handle the effects of the COVID-19 pandemic, and one of the latest takes up the filing of supplements for PMA and humanitarian device exemption devices. As is the case with a number of other guidances for the pandemic, this guidance spells out the conditions under which sponsors need not file for changes to devices in some instances, but device makers must document all those changes nonetheless.

The policy for PMA and HDE devices allows the manufacturer to make changes to the device without a 30-day notice or a supplement if a design change was motivated by a need to address a lack of components caused by supply chain disruptions. Manufacturing site changes can be undertaken without a supplementary filing if that site change was necessary to provide employees with sufficient room to practice social distancing.

Manufacturers can make changes to the materials used in the device that are necessitated by changes in manufacturing, assuming that manufacturing change was brought on by the conditions imposed by the pandemic. This holds only if the change in material does not suggest an impact on device safety or performance, however.

Conversely, the manufacturer cannot make a change to a device’s intended use under this policy, and even the changes that qualify under this pandemic policy must be documented per routine record-keeping activities, such as device history records. The sponsor must also report all changes, exempt or not from supplementary flings, in the annual report due for that device. Interestingly, the FDA had just completed its revised guidance for PMA annual reports in December 2019.

PTO Says No to AI as Inventor

The U.S. Patent and Trademark Office announced last year that it was seeking feedback on whether artificial intelligence could be an inventor, but the agency ultimately declined to go along with the concept. Underlying the decision was the fact that the statute makes specific reference to entities that would qualify as a natural person or persons, but PTO was not the only patent office to pass on the proposal.

The PTO opened the proposal for public comment in August 2019 at the behest of the inventors of the DABUS algorithm, Stephen Thaler of Imagitron LLC. The algorithm, which Thaler described as a creativity machine, is a general-purpose algorithm that Thaler claimed was not trained for any specific invention or field of endeavor. When Thaler first filed for a patent in 2019, the examiner returned the application for failure to identify the inventor by a legal name.

The problem for Thaler, according to the PTO, is that Title 35 of the U.S. Code defines an inventor or inventors as “the individual or … individuals who invented or discovered the subject matter of the invention.” The agency said Section 101 of Title 35 states that “whoever invents or discovers” a useful article may obtain a patent, and that other portions of Title 35 make reference to pronouns such as “himself” and “herself.”

The PTO pointed to case law in support of its position as well, including a 2013 decision by the Court of Appeals for the Federal Circuit. The PTO observed that Thaler had himself acknowledged that an AI system enjoys no property rights under current law, which the agency said “further calls into question whether the submitted assignment document satisfies the requirements” spelled out in several portions of the Code of Federal Regulations.

Thaler had no better luck in other patent offices, including the U.K. Intellectual Property Office, which came to a similar conclusion in December 2019. The U.K. IPO’s handling of the matter largely mirrored that of the PTO’s approach, initially rejecting the application because “a person must be identified” on an application. The agency’s deputy director, Huw Jones, acknowledged that there is a legitimate question as to how such issues ought to be handled, but recommended that the debate be handled legislatively and “not shoehorned arbitrarily into existing legislation.”

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.

FY 2021 Budget Proposal Hits NIH, Mostly Flat for FDA

The Trump administration’s budget proposal for fiscal 2021 in large part reflected the administration’s past proposals for various agencies at the Department of Health and Human Services. While the proposal largely flat-funds the FDA, the cuts to the NIH budget would be significant, but are likely to be overridden by Congress once again.

The OMB budget proposal for NIH for fiscal 2020 had encoded a cut of 12 percent over the previous fiscal year, but Congress reversed that, adding 6 percent to the tally for a total of $41.5 billion. The emphasis on increased NIH budgets was to some extent justified by the notion that increased funding is critical to sustain the U.S. lead in the life sciences, but the need to provide American patients with the latest therapies and diagnostics per the 21st Century Cures Act also fed the emphasis on larger NIH budgets.

In keeping with past budget proposals, the White House has floated an NIH budget of $38.7 billion, which tallies to a cut of roughly seven percent. That news was greeted with a letter of petition to Congress to override the budget proposal and increase the NIH budget to nearly $45 billion. This would represent a boost of $3 billion over the allocation for the current fiscal year and would allow for “meaningful growth above inflation.”

The Ad Hoc Group for Medical Research counts a number of medical professional societies among its membership, such as the American Colleges of Cardiology and Radiology, but also the American Cancer Society and a long list of academic research centers. In all, the letter enjoyed the support of more than 330 organizations.

One possible source of upward pressure on the NIH budget is an update to the 21st Century Cures Act, dubbed Cures 2.0. Rep. Fred Upton (R-Mich.) posted a discussion paper stating that Cures 2.0 is intended to modernize Medicare coverage of and access to the latest therapies, but Upton and Rep. Diana DeGette (D-Colo.) also emphasized digital health. While this document does not explicitly call out NIH funding, the first Cures bill carried a mandate to increase such funding, a mandate that will be difficult to resist, given the bipartisan appeal of greater funding for NIH.

That emphasis on digital health is likely to be used to push more funding for the FDA as well, which is still struggling with regulation of digital health. It might be noted as well that HHS Secretary Alex Azar lent the administration’s support to the latest drug pricing bill by Sens. Chuck Grassley (R-Iowa) and Ron Wyden (D-Ore.)

Analysis Sees Slight Increase for CDRH

The Alliance for a Stronger FDA posted a review of the likely impact of the budget proposal on the FDA, which indicates that the budget authorizations for the Center for Drugs and the Center for Biologics would both be level with FY 2020. The Center for Devices and Radiological Health would see an increase of $21 million under this proposal, up to $416 million, although the National Center for Toxicological Research would lose $1 million for a budget authority of $66 million.

Per the statutory authorities, the funding for 21st Century Cures activity at the FDA would drop from $75 million in FY 2020 to $70 million in the coming fiscal year. The Alliance based its assessment on one of the several documents posted by OMB, which indicates the FDA will receive $2.7 billion in user fees in FY 2021.

One significant change the budget proposal would impose upon the FDA would be to eliminate oversight of tobacco and related products. That proposal drew considerable blowback from a number of sectors, and would require that the Senate confirm the administrator of such an agency. Whether such a change would enhance federal government oversight of these products is unknown, but the American Heart Association was only one of several organizations that blasted the move. The AHA statement recommended that the Trump administration focus more on youth tobacco use and nicotine addiction, and on ensuring the FDA “exercises the authority it has been granted to protect public health.”

FDA Inks Combo Product Feedback Guidance

The FDA and industry have been at loggerheads over various issues surrounding combination products, but a new draft guidance may help resolve some of those conflicts. The draft deals with industry requests for feedback on combination product applications, but does not take up the product jurisdiction question, which is again the subject of litigation.

The draft guidance introduces the phrase “combination product agreement meeting,” or CPAM, one of several types of meetings sponsors can invoke in obtaining feedback from the agency on scientific and regulatory questions. Center-specific interactions are also mentioned in the draft, and the agency said that CPAMs should complement rather than replace application-based mechanisms for each center. CPAMs also are not appropriate for resolving any disputes that are usually taken up by the lead center’s dispute resolution or appeals processes.

The guidance further states that sponsors should channel all communications to the designated point of contact, or POC, even if the sponsor’s query takes up a question that is better addressed by a center other than the lead center. The draft is a response to Section 3038 of the 21st Century Cures Act, which covers a number of elements of the combination product review question.

In addition to defining the term “primary mode of action” and mandating that the FDA not use the mere presence of chemical action to justify designating the product a drug, Section 3038 of the Cures Act calls on the agency to issue guidance that characterizes a “structured process for managing presubmission interactions with sponsors.” That guidance is due within four years of enactment of the Cures Act and limits the comment period to 60 days. President Barack Obama signed the legislation in December 2016.

Meanwhile, another product jurisdiction case is in play in the courts, suggesting the agency still has its hands full persuading industry of its interpretation of the primary mode of action question.

DOJ Recovered $3 Billion in FCA Cases in 2019

The Department of Justice has enacted several changes to its approach to False Claims Act litigation over the past few years, but federal attorneys nonetheless managed to claw back more than $3 billion in settlements and judgments in 2019, according to a recent statement. As might be expected, the bulk of that sum was obtained in actions related to industries in healthcare, and 2019 marked the tenth consecutive year in which at least $2 billion was reclaimed in such settlements.

Assistant Attorney General Jody Hunt said $2.6 billion of the amount reclaimed in 2019 involved hospitals, doctors, and makers of drugs and devices, adding that the volume of activity reflects the Trump administration’s emphasis on deterring fraud and abuse. A large portion of the recoveries revolved around opioid analgesics, although even the nursing home industry did not escape scrutiny. The statement indicated that 633 whistleblower lawsuits were filed in 2019, averaging to roughly a dozen new cases each week.

Despite the DOJ’s praise for the volume of recoveries, the amount in 2019 falls far short of the $4.7 billion recovered in 2016. That amount was reportedly the third highest amount in history at the time, and only slightly more than half ($2.5 billion) came from healthcare prosecutions, approximately the same amount recovered from these industries in 2019.

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.