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.

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.

Custom Devices, Combo Product Surveillance in the News

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

Custom Devices Topical for IMDRF, Anvisa

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

Anvisa announced the draft guidance for custom devices in September 2018, which according to a consultant’s analysis will require registration for custom-made, adaptable, and patient-matched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

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

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

Inspections a Concern for Combo Postmarket Surveillance

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

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

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

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

Innovation on Tap at FDA, HHS

Few major U.S. federal government initiatives move as quickly as hoped, but those initiatives are nonetheless crucial for stakeholders in the life sciences intent on bringing innovative products to the clinical setting. The Department of Health and Human Services recently unveiled a program that could bring new drugs and devices to the market more rapidly than has been the case up to now, while the FDA provided an update on its digital health plan that reinforced the notion that the plan will indeed take time to put into place, even as the agency makes changes with the intent of streamlining the plan.

HHS Eyes Faster Medical Product Access

The Department of Health and Human Services said in a recent announcement that it will hold a two-day meeting June 20-21 to obtain stakeholder feedback on how to decrease the time needed for drugs and devices to make their way into clinical use. This is one of the programmatic areas under the ReImagine HHS initiative, and among the topics to be discussed is whether the department should play a role in connecting medical product developers with private payers and Medicaid managed care plans.

HHS said this portion of the proceedings is in response to complaints from both developers and payers that the process of communication between the two sides is inefficient. The FDA’s device center already has an office to facilitate communications with private payers during the device development process, so this move on the part of HHS would presumably scale up the CDRH version and expand it to include pharmaceuticals and biotech therapeutics. Another subject for discussion is “knowledge sharing,” which again is intended to bolster the rate of transmission of medical product innovation to the marketplace, in this case by giving the public more access to both confidential and already publicly available HHS information.

Device makers have complained over the years that public health programs have stifled access to therapies and diagnostics that could represent a meaningful improvement over the current state of the art, and among the initiatives already underway to fix those problems are some changes to the Medicare local coverage determination process. The Centers for Medicare & Medicaid Services also proposed in the draft inpatient prospective payment system for fiscal 2020 to provide coverage to any products that are accepted into the FDA breakthrough devices program. The breakthrough devices coverage concept seen in the 2020 inpatient draft reflects an industry proposal designed to aid small device makers in developing the evidence needed to meet the reasonable and necessary standard for Medicare coverage. The combination of these developments suggests that HHS Secretary Alex Azar has determined that healthcare innovation is hindered by the size of government and the complexity of its regulatory instruments, and that patients are suffering as a consequence.

Precert Test Plan May

The FDA is inching along with its precertification program for software as a medical device, announcing recently that it will accept applications for the precert test plan that will unfold over the balance of the current year and possibly into next year. However, the agency said it will accept applications for the precert program that run dual tracks with either the 510(k) or the de novo program, the former of which was not an explicit part of the precert concept until recently.

The FDA had previously appended the de novo petition process to the precert program in a move some argued was prompted by a desire to avoid accusations that the precert concept was entirely extralegal. The addition of the 510(k) pathway seems to offer no additional benefit in that regard, however, although it would bring on some test cases that reflect the majority of class II device applications, those that are based on a predicate rather than those that represent a technological novelty.

The announcement reiterates that companies involved in the testing phase will not actually obtain precertification merely by virtue of participation in the test phase, although applicants need not subject themselves to the full gamut of precertification evaluation modules. However, the FDA said that participants in the test phase may be limited to companies that have a track record in developing software products, seemingly leaving software start-ups out in the cold. Also of note is that this test plan may run beyond 2019, a sign that regulatory innovation is no less a feat than innovation in medical technology.

FDA Revisits Combination Product Controversies

The FDA’s efforts to regulate combination products have run across some legal challenges, but more often the agency finds it difficult to implement regulations for combo products because of the complexities inherent to such products. In a recent notification, the FDA said it would continue to exercise enforcement discretion for some postmarket safety reporting requirements, but the agency ran afoul of the primary mode of action question yet again in a new draft guidance that takes up the product designation problem.

Another Day, Another Reporting Delay

The agency announced in April that it would continue to exercise enforcement discretion for a number of the postmarket reporting requirements for combo products, but the policy has been lingering for at least a year. The question arose in March 2018, when the agency posted a draft guidance that attempted to provide some direction for the December 2016 final rule for the same subject. This subject ranges back at least as far as 2009, however, the year of a proposed rule for combination product postmarket reporting, demonstrating that this topic has perplexed the agency for a decade.

Much of the difficulty revolves of course around the fact that there is no single combination product type, and there are differences in how each type makes itself felt upon the regulatory burden of the makers of each constituent part. The 2018 draft’s treatment of postmarket reporting for an approved component of an investigational combination product varies from the use of that component in an already-approved combination as well, and the net effect is to present stakeholders with three very different scenarios within a single document. Thus, some have called for a separate guidance for cross-labeled combination products at the very least, a proposal the agency may be unwilling to adopt.

One of the difficulties for the FDA is that stakeholders are not entirely united as to how the agency should approach these questions, but the deadlines for adverse event reporting requirements are already different for drugs and devices. These differences have fed calls for a pan-agency approach to the question of postmarket reporting requirements, a proposition that may strike some as only slightly less ambitious than a pan-agency approach to good manufacturing practices. Either way, the latest document is an immediately-in-effect policy statement that provides enforcement discretion through July 31, 2020, for combination products that fall under Medical Device Reporting requirements, and through Jan. 31, 2021 for products that employ the Vaccine Adverse Event Reporting System.

No Cure for the Cures Act

The FDA took another stab at the combination product designation question in a February draft guidance dealing with the principles of combo product premarket pathways, but as is often the case, the agency’s effort failed to win any converts among drug and device makers, due in large part to the question of a combination product’s primary mode of action (PMOA). That particular discussion has an interesting legal history, mostly involving France’s Prevor, which fought the agency to at least a draw in two visits to the U.S. District Court for the District of Columbia.

One of the notable features of the February draft guidance is that it stipulates that applicants provide enough data in an application to allow the centers of jurisdiction to review each component as though it were a separate application. The draft seemed largely mum on the cross-labeled combination product category, however, so much so that at least one observer questioned whether the FDA had intended to exclude cross-labeled products from the scope of the draft.

More than one trade group questioned the draft’s provisions that would seem to give the FDA wide discretion in assigning a combination product to a center that would ordinarily be inappropriate for the product’s PMOA. This question has roiled relations between the agency and industry at least as far back as 2004, the year the FDA opened a docket to deal with the PMOA question. A decade and a half of further consideration does not seem to have answered some of the underlying issues despite that the 21st Century Cures Act called on the FDA to resolve these problems.

The Cures Act directed the agency to assign primary jurisdiction for a combination product to the center that would be most appropriate for the component deemed to present the PMOA. Critics of the February 2019 draft guidance seem to have determined that the agency is resisting this legislative directive with all the regulatory muscle it can muster. The view of stakeholders may be that this draft guidance is unworkable in its present form, leaving industry with the prospect of another of those lingering draft guidances that is ultimately neither finalized nor withdrawn.