FDA Reacts to Coronavirus as Stimulus Bill Passes

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

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

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

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

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

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

Bill Would Ban FDA Regulation of LDTs

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

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

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

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

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.

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.