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).

 

Congress Sets Aside $8.3 Billion for Coronavirus

The U.S. federal government’s response to the COVID-19 outbreak has been criticized in some quarters as laggardly, but Congress sent a supplemental spending package to the White House in early March to address the disease. The package provides $8.3 billion to combat the coronavirus disease 2019 (COVID-19), which would expand telehealth and give the FDA $61 million to deal with the virus.

The bill, passed March 4 by the House of Representatives and signed March 6 by President Donald Trump, provides $7.8 in discretionary spending along with another $500 million in reallocated mandatory funds. A breakdown provided by the Congressional Budget Office confirms that the FDA would receive $61 million, an amount that comes with no expiration date. Some of the other funds are limited in term, although the spend-by date for most of these funds is Sept. 30, 2023, giving the related agencies ample time to make use of the monies.

Telehealth will receive a considerable boost under the terms of the House bill, with $490 million allocated over the current and next two fiscal years. The CBO document notes that this set of funds appears as authorizing legislation rather than appropriations legislation, although this spending would not be subject to the usual pay-go spending rules. CMS announced March 17 a set of guidelines for the use of telehealth under the newly expanded authorities.

The COVID-19 outbreak has prompted the FDA to issue an immediately-in-effect guidance for testing, which gives labs 15 days to notify the agency of the use of a test upon validation. In an accompanying statement, FDA commissioner Stephen Hahn said the policy “strikes the right balance,” given the urgency of the matter, and that the FDA will follow up with a “critical independent review” of any tests conducted under the emergency use authorization (EUA) program. That policy was updated March 16 to allow state governments to oversee labs in their states, and to allow for the use of serological tests despite concerns about elevated rates of false negative results.

The Centers for Medicare & Medicaid Services said it has approved a second code under the Healthcare Common Procedure Coding System (HCPCS) for the test for filing claims. The agency said in a March 5 statement that HCPCS code U0002 will handle tests conducted at non-CDC labs, while the previously announced code, U0001, is used for testing handled by CDC labs.

New LDT Regulation Bill Emerges

The FDA has made clear its interest in regulating lab-developed tests for decades, but that interest has not always translated into a practicable regulatory regime. That may all change sometime over the next two years thanks to a revised version of the Verifying Accurate, Leading Edge IVCT Development (VALID) Act, which Reps. Larry Bucshon (R-Ind.) and Diana DeGette recently unveiled.

The March 5 statement by Degette and Bucshon, the authors of the previous version of the VALID Act, states that the bill would enable precision medicine and give the FDA more leeway to make use of the EUA mechanism to speed test development in crises. A companion bill is also underway in the Senate, suggesting that passage is of both bicameral and bipartisan interest.

The legislation offers express preemption over state law, although it is not clear whether this would be similar to the preemption already in existence for non-diagnostic PMA devices where state liability law is concerned. One of the key questions for this legislation – as well as any legislation dealing with the FDA’s software precertification program – is the question of timing. Much of this type of legislation is typically handled via the legislation authorizing new FDA user fee agreements, but the next agreement will not need passage until 2022.

The common run of things for promulgation of new regulations is a minimum of six months for the posting of a draft regulation and the associated feedback, although an entirely new regulatory framework might consume a year. The process for development of enacting guidance would likely add to that.

Whether Congress can get past its institutional tensions and the suite of distractions long enough to pass the VALID Act before the end of CY 2020 is anyone’s guess, but the upcoming elections suggest that this bill will have to move to the Oval Office before the August congressional recess unless stakeholders are on board with the bill as is. However, the American Clinical Laboratory Association has made the demand that any legislation make a distinction between lab-developed tests and in vitro diagnostics, a position that is almost certain to be opposed by other trade associations and by the FDA, both of which have made the case for a level playing field between the two.

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.”

Coronavirus Prompting Reaction in Washington

The newest mutation to the coronavirus has had a massive impact in China and has prompted a reaction from the World Health Organization (WHO). The impact on makers of devices and diagnostics has been minimal so far, but the signs are that this could change quickly if the virus continues to proliferate.

The 2019-nCoV virus has prompted two press briefings by a U.S. federal government task force led by HHS Secretary Alex Azar, developments that followed a Jan. 31 declaration of emergency by WHO. Much of the concern about the virus is that it can be transmitted even from those who are asymptomatic, but the test for the virus developed by the U.S. Centers for Disease Control and Prevention has proven less than fully reliable.

Robert Redfield, director of the CDC, said in a Jan. 31 press briefing that the CDC test will return both positive and negative results on a patient who has been confirmed to carry the pathogen. The U.S. government response has been questioned, given that influenza is still proving more lethal, but Anthony Fauci of the National Institute of Allergy and Infectious Diseases said influenzas predictably fade as winter gives way to spring, whereas the trajectory of the new coronavirus is unknown.

The FDA recently issued an emergency use authorization for the CDC test, a reverse-transcriptase polymerase chain reaction test to be used with swabs from the upper and lower respiratory tracts. The CDC posted a press release two days later in which the agency said the test will initially be shipped to roughly 200 domestic sites and another 200 sites located in other nations. The test provides results within four hours, CDC said.

The Department of Health and Human Services posted a Feb. 6 announcement stating that HHS is taking submissions for diagnostics that would receive federal funding under the Biomedical Advanced Research and Development Authority (BARDA) program. This program requires that the test in question would have to be available on a platform already cleared by the FDA, and that the test would be ready for live use within 12 weeks of receipt of the award.

Congress Prods FDA for Assurances

Capitol Hill has demonstrated some concern about the impact of the coronavirus outbreak on the availability of medical products from China. Two members of the Senate, Florida Republican Marco Rubio and Connecticut Democrat Chris Murphy said in a Feb. 6 statement that they have a series of questions they would like answered by Feb. 18. Among the questions is whether the FDA has the resources to determine whether the impact of the coronavirus in China will affect the availability of drugs and devices for U.S. patients.

Murphy and Rubio noted that China is the source of the majority of active pharmaceutical ingredients used to produce drugs in the U.S., and that 10% of devices used in the U.S. are also imported from China. FDA commissioner Stephen Hahn said in the Feb. 7 press briefing that there was no evidence of any slowdown in the supply chain of the various products in question at that point in time, but he noted that the situation “is fluid” and that this could change in short order.

Perhaps as disturbing as any other recent event associated with the coronavirus is the discovery that more than four in 10 coronavirus patients in a hospital in China had contracted the virus while at the hospital. The majority of the patients presumed to have contracted the virus at the hospital site were employees of the hospital, although this single-site study might not reflect the broader experience in China. Nonetheless, the authors say that as many as 10 health care workers had presumably been infected by a single patient.

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.

Device Tax Repealed

After a decade of controversy and infrequent collection, the 2.3% tax on medical devices has been repealed as part of a series of spending bills for fiscal 2020. The bipartisan opposition to the tax made its demise seem inevitable, but the tax did not go down without a fight.

The U.S. House of Representatives passed two spending bills early in the week of Dec. 17, which in addition to the repeal of the device tax called for repeal of the Cadillac tax on premium health plans. Another tax that fell to the spending package was the health insurance tax, and the loss of all three represents a significant blow to the funding mechanisms for the Affordable Care Act. However, a number of other provisions of the ACA have fallen prey to the congressional axe, including the Independent Payment Advisory Board, which was removed by the Bipartisan Budget Act of 2018.

While the device tax was part of the statute for a decade, it has been infrequently levied on device makers thanks to routine congressional intervention. The latest two-year suspension, the second consecutive 24-month reprieve, was scheduled to expire Dec. 31, and industry and a number of medical societies and others had pleaded with Congress to do away with the tax.

In a Sept. 24, 2019, letter to leaders in the House and Senate, these stakeholders argued that the tax was not only bad for the U.S. economy, it also flew against the recent emphasis on advancing the state of medical science. While the authors do not directly cite the 21st Century Cures Act as a source of tension with the tax, they nonetheless argued that the imposition of the tax from 2013 to 2015 forced the abandonment of numerous R&D projects. Consequently, they said, “patients were denied new treatments.”

The Senate signed off on the spending package Dec. 19 and President Trump finally inked the White House’s approval late in the evening Dec. 20, shortly before funds for government operations were to expire. Scott Whitaker, president/CEO of the Advanced Medical Technology Association, advised Trump in an Oct. 17, 2019, letter that another suspension of the tax would merely renew the uncertainty surrounding the tax. Whitaker said another two-year suspension would force device makers to “plan and act as if the tax will ultimately be imposed on them.”

Some Sources of Uncertainty Remain

The demise of the tax comes shortly after the Senate affirmed Stephen Hahn as the new commissioner of the FDA. Hahn was confirmed in a Dec. 12 vote that affirmed the Trump administration’s nominee with a 72-18 majority, bringing to a close another source of uncertainty for device makers. Hahn’s background is in oncology, a sharp departure from the policy-driven expertise of his predecessor, Scott Gottlieb.

Despite these larger developments, device makers are facing a number of questions as the new year comes into view. The FDA software precertification pilot program is still apparently underway despite the agency’s vow to wrap up the pilot by the end of 2019, and the discussion draft regarding artificial intelligence has not yet advanced past the stage of an FDA talking point.

Another major sticking point for device makers is the matter of patent subject matter eligibility, which is the subject of a petition for cert to the U.S. Supreme Court. While the impact of recent Supreme Court case law has affected software in addition to in vitro diagnostics, the Patent and Trademark Office has developed examiner guidelines that have eased the pressure on software patents. Nonetheless, IVD developers and the Court of Appeals for the Federal Circuit are unmollified over what they see as a jurisprudential animus against diagnostic and other life science patents. Whether the Supreme Court will revisit the matter is unclear, but the case in question will be distributed for conference as of Jan. 10, 2020.

Senate Confirms Hahn as Next FDA Commissioner

The U.S. Senate has confirmed Stephen Hahn as the next commissioner of the FDA, bringing to a close a process that was unofficially in the works for approximately three months. Hahn takes the helm of an agency that has a number of controversial tasks before it, including the precertification program for software as a medical device and the ethylene oxide (EtO) problem.

The Dec. 12 Senate vote tallied at 72 votes to confirm and 18 to oppose, with Sens. Patty Murray (D-Wash.) and Tina Smith (D-Minn.) voting in opposition. Murray, Smith and Sen. Elizabeth Warren (D-Mass.) were the three authors of the correspondence with the FDA regarding the precertification program, but the Senate scorecard indicates that Warren did not take part in the vote, likely due to her campaign for the party’s nomination for next year’s presidential election.

Hahn takes the job at a time of increasing restiveness on Capitol Hill on several fronts, including the e-cigarette/vaping problem and the ongoing struggle to get ahead of the opioid epidemic. Drug pricing is a hotly debated issue on Capitol Hill as well, with reimportation only one of several proposals making the round in the House and Senate. Another issue – one over which the FDA has no control, but about which Hahn might nonetheless hear – is that the latest negotiation over the U.S.-Mexico-Canada Agreement on trade would leave each of the member nations at liberty to set their own policies regarding biotechnology patent exclusivity, a move adamantly opposed by industry.

While the problems surrounding medical device safety are largely the administrative province of Jeff Shuren, director of the Center for Devices and Radiological Health, some of these issues will likely require Hahn’s time and attention as he grapples with the varying imperatives at play in Congress. The EtO controversy shows no signs of abating despite that the Environmental Protection Agency has issued an advanced notice of proposed rulemaking on the question, a process that will likely run through most of 2020 before drawing to a conclusion.

EPA Posts Notice of Proposed Rule for Ethylene Oxide

Expectations regarding the EPA’s advanced notice of proposed rulemaking (ANPRM) for the use of EtO in medical device sterilization might have carried the hopes and fears of a wide range of stakeholders, including fears of much stricter regulation. That particular concern does not appear well founded at present, but a number of members of Congress are forming their own group to address the use of EtO in an effort to drive a more aggressive regulatory stance toward the sterilant.

The EPA posted a Dec. 5 press release making note of the FDA’s activity in this area, but also calling for nominations to a small business panel that would advise the agency on any impact a final rule would have on small entities. In addition to reviewing the existing regulations governing EtO, EPA will work with state and local agencies to determine whether immediate steps are needed to deal with any potential health hazards. EPA administrator Andrew Wheeler also pointedly referred to the importance of this chemical to public health, likely a nod to the medical device sterilization question.

The reaction on Capitol Hill to the EPA document is likely to be driven by a group of House members, numbering fewer than 10 as of late November, whose opposition to the use of the sterilant is a matter of record. In a Nov. 20  statement, the Ethylene Oxide Task Force said it will push legislation that would require the EPA to issue “strict” EtO emission standards. H.R. 1152 has struggled to gain traction since its introduction in February, however, and the bill’s listing at Congress.gov indicates that the companion Senate bill (S. 458) enjoys the sponsorship only of Illinois Democrats Dick Durbin and Tammy Duckworth.

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.