E.U. Regulators Tackle Big Data, Definitions

Data may save lots of lives over the course of the 21st century, but the volume of data has created a number of headaches for regulators and life science companies alike. In response, two European regulatory entities have teamed up to take on these vital questions, and their report suggests it was no trivial matter just deciding upon a definition of the term “big data.”

The European Medicines Authority (EMA) and the Heads of Medicines Agency (HMA), the latter of which is a group of E.U. competent authorities, posted the report on the activities of the HMA/EMA Joint Big Data Task Force. The group formed six working groups to consider the data derived from a number of sources, such as genomics and clinical trial data, and set certain standards for regulatory acceptability of those data. Data standardization is a matter of some interest, as is the ages-old problem of data sharing.

The report states that there is an emphasis on providing some linkage between genomic data and clinical outcomes, but the authors say this will create pressure to provide timely updates of clinically relevant genomic information in medicinal product labels. There is also a keen interest, however, in defining performance standards for companion diagnostics, an ever-more pressing consideration as highly expensive cancer therapies continue to find their way to market.

The report includes information from a survey of stakeholders regarding their familiarity with big data, and it appears a number of the competent authorities in the survey enjoy “very limited expertise” on the subject. This lack of expertise is due to a perception that there is little need for it at present, but this dynamic is changing. Eight of the 24 competent authorities surveyed said they have no in-house expertise in biostatistics, but indicated they see a need for such expertise arising within the next five years; the study authors pointed out that such assets are already a necessity.

A total of 37 life sciences companies responded to the survey, with the group nearly evenly split between companies with more than 250 employees and those with 250 or fewer. This dividing line yielded quite different sets of considerations, with the larger companies expecting that big data will have the most significant impact on target identification and patient stratification, while their smaller counterparts emphasize outcome identification and patient-reported outcomes.

The two groups also had different concerns regarding data validity and the challenges associated with the use of big data, but shared concerns regarding regulatory harmonization and a need for regulatory guidance. The report concludes that the ability to manage big data will, in the future, be critical for the advance of regulatory science, but the authors also pointed to a need for a “systemic, coordinated, and integrated European approach” to such questions. While good intentions will prove vital to any such effort, the authors say that there is still a need to prioritize the various tasks of learning to manage and use big data, and that the current effort is moving along “in the right direction but not in a consistent and consolidated way.” The authors stated, “[W]e therefore need to guard against reverting to the status quo.” Comments on the joint task force report are due April 15.

BIO, PhRMA Not Opposed to AKS Proposal

Makers of drugs and biotech therapeutics might have been expected to resist the Trump administration’s proposal regarding the anti-kickback statute, but that proves not to be the case. Two leading trade associations have voiced their support for the proposal, although they each indicated they would take a closer look at the proposal before lending it their full-throated support.

It has been argued on more than one occasion that rebates paid to pharmaceutical benefits managers are rebates rather than kickbacks, a point made by at least one observer. There have been instances in which drug makers paid fines to deal with allegations they used rebates to gain exclusive listings in PBM formularies, but that is not the usual run of business where these rebates to PBMs are concerned.

The latest proposal by the Department of Health and Human Services includes a removal of the safe harbor for rebates paid to several entities, including PBMs, although PBM service fees would enjoy a safe harbor along with rebates provided directly to beneficiaries enrolled in federal government health programs. HHS Secretary Alex Azar said in a statement the proposal is “a major departure from a broken status quo that serves special interests,” and which “moves toward a new system that puts American patients first.” The proposal would further provide more transparency about such transactions, and Azar seemed to taunt Congress on this point, stating that members of both parties who have sought to lower prescription drug costs “have criticized this opaque system for years, and they could pass our proposal into law immediately.”

Despite the seeming promise of disruption of the existing system, both the Biotechnology Innovation Organization and the Pharmaceutical Research and Manufacturers of America issued statements that were generally supportive of the proposal. BIO President/CEO Jim Greenwood said in a Jan. 31 statement that the association “strongly supports the goal” of the proposal, but advised that BIO is taking a close look at the proposal. Greenwood said the current system creates some perverse incentives that feed the drug pricing problem, urging HHS to adopt a system that provides affordable access.

PhRMA emphasized a need to ensure that the $150 billion in annual rebates and discounts are used to lower costs for patients at the pharmacy. PhRMA President/CEO Steve Ubl stated that the existing approach favors products with high list prices, but he also pointed to the pressing problem of price hikes associated with drug products used for diabetes, which has been a significant flashpoint in recent months. Despite the supportive tone, Ubl said PhRMA would also take a close look at the proposal before offering specific comments.

FDA Rewrites Title of Abbreviated 510(k) Draft

The FDA’s device center managed to wrap up a 2018 draft guidance dealing with abbreviated 510(k) applications, but ended up renaming the document in the process. The net effect is seemingly to put another nail in the substantial equivalence coffin, which some might argue has been a policy priority for the Center for Devices and Radiological Health dating back to 2011.

The 2018 draft guidance bore a title that explicitly mentioned the abbreviated 510(k) program and suggested that a determination of substantial equivalence would be more easily obtained by demonstrating conformance with performance criteria. The final guidance is dubbed the Safety and Performance-Based Pathway, which advises that third party reviewers can be invoked for these devices, which was not acknowledged in the draft.

One of the more notable differences between the draft and the final is that the latter suggests that the performance criteria requirements for Declarations of Conformity might be more explicitly product-specific than perhaps was understood upon the emergence of the draft. The final guidance says a DoC ought to suffice to support a finding of substantial equivalence “unless noted otherwise in the relevant Safety and Performance Based Pathway guidance.” While there is a seemingly related provision in the draft – which states that the FDA may “establish performance criteria through guidance and/or special controls” – the revision appearing in the final seems to lend more teeth to the notion that at least some procodes will be the subjects of product-specific performance criteria.

Precisely when the agency might promulgate such guidance is not explained, but the implications of this and other recent policy changes at CDRH include that the historical understanding of the role of substantial equivalence is no longer in vogue at the Office of Device Evaluation. Only time will tell whether reviewers at ODE can resist the urge to use performance criteria as a means of imposing more regulatory hurdles for class II devices

January Jitters; Brexit, FDA Budget Provoking Anxiety

January is often a slow month for med tech news, but this month is proving the exception, largely for the wrong reasons. From the English Channel to the Potomac River, the news raises more questions than it answers, leaving device makers with even more than the usual degree of uncertainty over matters on the near horizon.

Brexit Blues Persist

The Brexit is still a thorny problem for companies doing business in the U.K. thanks to a failed vote on a deal with the European Union that would have provided an orderly exit. The Brexit will take place one way or the other on March 29, but the only question is whether it will be a “hard Brexit,” thus leading to strained economic and political relations between the island nation and the 27 nations that will remain in the E.U. after that date.

Members of Parliament voted down the Brexit deal by 432-202 on Jan. 15, but Prime Minister Theresa May has so far declined to bring the matter to a second referendum. The E.U. is still working under an established overhaul of the medical device regulations, but the U.K. Medicines and Health Care Products Regulatory Agency has a tougher lift ahead of it. In an updated advisory, MHRA said that in the absence of a Brexit deal, it would grant U.K.-based notified bodies the authority to recognize any devices that were approved prior to March 29. The agency also said it will have a regulatory system up and running March 30, which will reflect all the key elements of the E.U. regulatory system.

What is not clear, however, is whether the no-deal scenario will add to the cost of devices shipped either way across the English Channel. At the very least, a no-deal Brexit will make life even more complicated for device makers doing business in both the E.U. and the U.K., given that industry is already on the hook for renewals of existing marketing licenses under the terms of the E.U. regulatory overhaul. Even if there are no new tariffs to grapple with, the ongoing problem with notified body bandwidth will grow even more nettlesome in this not-so-brave new world.

Precert Pilot Posted

Despite the ongoing shutdown of a large part of FDA operations, the agency published the pilot version of the software precertification program in early January, a document that would seem to answer a number of questions raised by earlier versions of the precert program. However, the latest version raises some significant new questions, including whether the proposed pilot adds work for applicant companies compared to the traditional approach of obtaining the agency’s approval for a moderate-risk device.

The release of the pilot was significant enough to bring FDA commissioner Scott Gottlieb forward with a press release stating that the pilot would involve a more tailored process that takes into account the device type. Some stakeholders may be miffed to see that the IMDRF definition of software as a medical device (SaMD) is still in vogue at the FDA, but possibly more problematic is the proposal to use the de novo pathway for applicant SaMD products. This move may be seen as part of the agency’s larger disregard for the 510(k) process, but in any event, the use of the de novo process in addition to the organizational certification process seems to indicate that participation will offer no improvement in time to market over the current approach.

Regulatory attorney Brad Thompson said in an interview that the pilot version is difficult to reconcile with the previous iterations of the precert program, but he also said the pilot comes across as a concept paper rather than a finished product, even only for the purposes of the pilot. Thompson said industry will need more answers than the FDA has provided at this point before they can be expected to line up for the pilot.

Shutdown Lingers

The partial government shutdown has already outlasted all previous versions, and FDA commissioner Scott Gottlieb has done his social media part to keep stakeholders abreast of how the agency is handling the problem. The agency has also posted several items to keep employees and stakeholders up to date, and as of Jan. 18, nearly a third of agency employees had been furloughed.

Nine percent of FDA employees are excepted, which is to say they are working without pay, while another 37 percent are exempt from the budgetary effects of the shutdown. Approximately 23 percent are in a category described as partially exempt/excepted/furloughed, leaving the agency with what seems to be in the area of a 40 percent staffing shortage.

How long the impasse between the Trump administration and Congressional Democrats will last is anyone’s guess, but the FDA also put out a statement indicating that the furlough should not last beyond Feb. 19. Whether the principle players in the latest budget showdown can live up to that prediction will occupy Wall Street, Main Street and Washington until a resolution is reached. In the meantime, any premarket applications received by the agency after Dec. 22 will be held up in queue, making this latest shutdown showdown a potentially costly one for device makers.

A Look Ahead to 2019

2018 was anything but a slow year for regulatory developments in the world of medical technology, but there is still plenty to look forward to for 2019. Following are several key developments that will do much to shape the prospects for industry going forward.

Rules of Civil Procedure Revised

This first item is not an FDA regulatory matter, but refers to something that took place in early December 2018, although the real impact is unlikely to be felt until 2019 starts to unwind. The Advisory Committee on Civil Rules had amended several of the Federal Rules of Civil Procedure earlier in the year, and those changes, including those applied to Rule 23, went into force Dec. 1.

One of the changes to Rule 23 allows the use of one or more electronic methods of contacting members of a class action regarding settlements, but a more significant change is in the method for dealing with bad objectors. Up to Dec. 1, a court had to approve the withdrawal of each individual objection to a settlement, but that requirement is no longer in force. Those whose objections are seen as an impediment to a reasonable settlement can simply withdraw their objections without forcing the court through a time-consuming review of the objection. While there are other issues related to the Federal Rules of Civil Procedure that are in need of redress, these latest changes should at least expedite the process considerably.

Device Tax Again Topical

Despite that it is not scheduled to resume until after 2019, the 2.3 percent tax on medical devices is again in the news thanks to the prospect that it might be pushed back an additional five years. That is the stated intent in connection with legislation that would provide some fixes for the tax overhaul signed into law at the end of 2017.

That legislation, which arose from the House Ways and Means Committee, seems to have been pushed aside by the latest budget impasse, however, although the fact that the tax does not resume for another year should give industry some comfort. Device makers will argue that their budgeting for activities such as research and development require more than a 12-month window, but it is not at all clear whether House Democrats are interested in H.R. 88 as currently written, if at all. Consequently, it seems at least somewhat likely that the device tax suspension will once again come down to the 11th hour.

As an aside, the budget problem involves the FDA budget, and one line of thinking is that the stand-off between the White House and Capitol Hill has better odds of resolution once the 116th Congress is sworn in on Jan. 3. In the meantime, user fees are funding much of the agency’s work, but routine manufacturing facility inspections may be held up in the meantime.

FDA’s Clinical Lab Regulation

This issue has been percolating for several years now, and includes an FDA discussion paper published in early 2017. That effort has been supplanted by a “technical assistance” provided to Congress in August 2018.

The original impetus for the FDA’s technical assistance was to help Congress refine the Diagnostic Accuracy and Innovation Act, but that bill has given way to the Verifying Accurate Leading-edge IVCT Development Act of 2018. Both bills were primarily sponsored by Reps. Diana DeGette (D-Colo.) and Larry Bucshon (R-Ind.) although the VALID Act is still in the form of a discussion draft, according to DeGette’s congressional webpage.

The bill makes reference to a precertification concept similar to that seen in digital health, which would be applied to moderate-risk tests, while high-risk tests would still be subject to the more traditional premarket review processes. Other interested parties include Sen. Orrin Hatch (R-Utah), who said in a statement that supporters will push the bill in the 116th Congress, suggesting that 2019 might finally be the year that the agency’s clunky approach to diagnostics regulation will receive a much-needed overhaul.

Guidance Agenda for 2019

The FDA’s device center is always busily compiling a new round of guidances, but one of the priority guidances of interest as announced in the device guidance agenda is a draft for demonstrating substantial equivalence through the use of performance criteria. This draft will pertain to abbreviated 510(k)s, according to the CDRH guidance agenda, but this draft might be as important as any that will emerge in this new year, thanks in part to what some observers are likely to see as an end run around the statute. The agency announced it would revisit the 510(k) program in an November announcement which also evinced some hostility toward the substantial equivalence standard.

There are a number of existing guidances that may be up for review as well, including the 1999 guidance for surgical mesh 510(k)s. That document is on the agenda for the obvious reason, including that the agency has up-classified these meshes for at least one indication, not to mention the ongoing patient concerns about mesh implants that have gone bad.

Barrage of Adverse Event Coverage Hits Device Industry

The International Consortium of Investigative Journalists has taken aim at the medical device industry with a series of articles on device recalls and adverse events, a series that has not gone unnoticed among device makers. The initial question for device makers is whether these reports will affect how regulatory authorities review devices, but it appears that at least one regulatory entity has acted on the report with a call for tighter premarket scrutiny.

The ICIJ, a 200-plus member watchdog group founded in 1997 by the Center for Public Integrity, has previously published on tax havens in the 2015 report titled the Panama Papers. The latest set of reports, the Implant Files, focuses principally on medium- and high-risk implanted medical devices, taking on subjects such as breast implants and transcatheter aortic valves, but the organization also picked out Dublin-based Medtronic for a report on alleged abuses.

Yet another report takes on the device regulatory picture in the European Union, which is still implementing the Medical Device Regulations that will not be fully in force for another two years for non-diagnostic medical devices. One of the difficulties of the data unearthed by the ICIJ is that there is no denominator for the increase in the total number of medical devices in use over the past few years, but the reports also suffer from the long-standing problem of the absence of information that clarifies whether the adverse event was principally or entirely the fault of a malfunctioning device.

Health Canada Among the First to React

Despite the concerns regarding the difficulty of interpreting raw adverse event data, the reaction among regulators has been fairly swift. Health Canada posted a Nov. 29 statement from Ginette Petitpas Taylor, Canada’s Minister of Health, who said she was “deeply concerned” by the Implant Files coverage, although she said that Canada “has one of the best regulatory systems in the world for medical devices.”

Nonetheless, Taylor said she had directed Health Canada to draft a plan that would, among other things, amend the premarket review process to require more clinical data for medical devices. Health Canada will also increase its capacity for medical device inspections and bolster its postmarket surveillance capacity, while greater transparency for medium-high and high-risk devices is also on the agenda. Taylor said the agency will publish its response “in the coming weeks.”

The reaction in Western Europe has come from a number of sources and includes a claim on the ICIJ website that the health ministers for Denmark and Italy have vowed to take action despite that the MDR overhaul is still in the works. Stakeholders in several nations have reacted to the news with calls for tighter government scrutiny, including the U.K. Royal College of Surgeons, which urged the Medicines and Health Care Products Regulatory Agency to implement an exhaustive registry for all implanted devices. MHRA has not declared how it will deal with regulations after the Brexit, which itself is not scheduled to go into force until early 2019.

For its part, the FDA has responded to media inquiries by stating that it is limited in its ability to rapidly access data for adverse events, a predicament that the National Evaluation System for health Technology (NEST) is designed to resolve. However, the FDA also announced several moves in conjunction with its medical device safety initiative earlier this year.

In its latest announcement, the agency said it is considering a ban on the use of predicates older than 10 years in 510(k) filings, along with measures that would more or less put an end to the use of the substantial equivalence paradigm. All this is drawing fire from the regulatory bar, some members of which have voiced the view that these proposals might require more than mere consultation with Congress. The agency is not stating whether these latest proposals were prompted by the ICIJ report, but the timing is difficult to ignore, particularly given the seeming improbability that it will be able to implement some of the more far-reaching of those proposals.

FDA’s Statement on Its Modernization of Its 510(k) Program

Jordan Lipp, Esq. |Attorney, Managing Member | Childs McCune

On November 26, 2018, the FDA released a statement on its views on the modernization of its 510(k) process. Historically, the 510(k) process is the FDA’s clearance of a medical device to be sold in the United States, if the FDA finds the device is substantially equivalent to a previously approved (or grandfathered in) device.

In the FDA’s recent statement, FDA Commissioner Scott Gottlieb, M.D. and Director of the Center for Devices and Radiological Health Jeff Shuren, M.D., explained that “[t]he most impactful way that we can promote innovation and improved safety in the 510(k) program is to drive innovators toward reliance on more modern predicate devices…” As such, they explained that they “believe that newer devices should be compared to the benefits and risks of more modern technology; that is why we’re looking at ways to promote the use of more recent predicates.” So, the FDA is considering putting on its website which cleared devices are based upon predicate devices that are more than 10 years old, and it is seeking public feedback on this plan.

The FDA is also planning in early 2019 to finalize guidance establishing an alternative 510(k) process, called the “Safety and Performance Based Pathway,” which will permit manufacturers of certain devices “to rely on objective safety and performance criteria to demonstrate substantial equivalence” based upon a contemporary baseline. The goal, as described by the FDA, is for the FDA and manufacturers to look to the future as opposed to looking to the past as the baseline for safety and efficacy.

The FDA’s statement also discussed the recent increase in the size of the 510(k) submissions, the increase in review time of these submissions while a simultaneous decrease in the time until clearance, and its actions in “up-classifying” certain devices from Class II to Class III (i.e., taking an existing device out of the 510(k) process and requiring the more vigorous Class III premarket approval.) For those in the industry, the six-page long statement, linked here, is worth reviewing.

Supreme Court Cases to Watch This Term

Courtney Young, Esq. | Senior Attorney, Medmarc Risk Management

This term (which began last month), the Supreme Court will hear a number of cases that may affect the life sciences industry. Here are a few we will be watching.

Air and Liquid Systems Corp. v. DeVries

The issue in this case is whether defendants in a products liability case can be held liable under maritime law for injuries caused by products they did not make, sell, or distribute. The Court heard argument in this case on October 10. The case involves equipment sold by various manufacturers and installed several years ago on Navy ships. To function properly, the equipment required asbestos insulation, which was installed shortly after equipment. The plaintiffs are a group of individuals who worked on the ships at the time and were allegedly injured by the asbestos.

Merck Sharp & Dohme Corp. v. Albrecht

This is another preemption case, and an important one for makers of drugs and, potentially, PMA devices. The issue here is whether a plaintiff’s state-law-based failure-to-warn claim is preempted if the FDA rejected the drug manufacturer’s proposal to warn about the specific risk the state-law claim alleges should have been warned about. Argument has not been scheduled in this case yet.