FDA’s Device Export Draft Draws Jeers

The FDA posted a draft guidance in August dealing with certificates for export of medical devices, a move prompted by the Food and Drug Administration Reauthorization Act, but the response from industry and regulatory attorneys was anything but favorable. Among the complaints about the draft is that it collides with how the FDA typically handles a device maker’s proposed corrections, but others said the draft does not comply with the statute.

The draft deals with how device makers can revive a request for a certificate for export after a difficult inspection, and one of the responders, Stacey Backlund of BTG International in Philadelphia, pointed out that denials of certificate for export are not in the class of significant regulatory decisions. Consequently, these are not subject to the 30-day time limits for filing and review of petitions, but Backlund was hardly the only regulatory consultant to make the point.

Allyson Mullen of Hyman, Phelps and McNamara made the same point about 30-day turnarounds in her comments to the docket, but Mullen also said that the agency’s response to a proposed set of corrections after an inspection is often dead silence, which leaves the device maker in a nearly insoluble predicament. The Advanced Medical Technology Association was no fan of the draft, either, arguing that the FDA went beyond the language in FDARA in that the draft required that the agency accept a proposed set of corrections as adequate. AdvaMed’s Steve Silverman said such an expectation is implausible if only because corrective actions tend to morph over time.

Silverman went on to note that the draft excludes certificates for devices that are manufactured outside the U.S., which he said clashes with the statute as amended by FDARA. Silverman said the statute directs the FDA to handle certificates for export for devices that are manufactured in any establishment in any location, so long as that establishment is registered with the FDA. It is not clear when the agency expects to finalize this guidance, however.

FDA; Clinical Data not so ‘Quik’

The FDA has rolled out a pilot program for the Quality in 510(k) review program, which is known as the Quik 510(k) program, an alternative to the standard 510(k). The agency said this program – which entails a 60-day decision – is not suitable for combination product applications, but also that regulatory filings that require clinical data might not be good candidates for a Quik 510(k), either.

This pilot will not subject applicants to the refuse-to-accept review used on traditional 510(k)s, but sponsors are expected to respond promptly to any requests from the agency for additional information for the application in question. Any applications deemed ineligible by the Office of Device Evaluation will be handled under the normal 90-day review time frame, but this pilot is limited to a relatively small number of well-understood devices that appear under 40 product codes. In vitro diagnostics are not part of the pilot, and sponsors must use the electronic filing mechanisms in order to qualify.

Third Parties Still an Issue in MDLs

For those in the life sciences, multi-district litigation has proven to be a complex and unruly process, but one of the more prominent issues is that of third-party funding for litigation. This is nothing new, as third-party litigation funding was the subject of concern at least as far back as 2014, but this and several other issues are of concern to attorneys who defend drug and device manufacturers.

Lawyers for Civil Justice was one of several organizations that urged the Advisory Committee on Civil Rules to require disclosure of third-party funding in 2014, but Alex Dahl of the Strategic Policy Council said on a recent webinar that the presence of third parties in multi-district litigation is still not routinely disclosed to defendants. There are a number of other issues that plague the MDL system as well, such as a lack of vetting of individual cases, and by some accounts, between 30 and 50 percent of the individual claims in MDLs are nothing more than junk claims.

The question of third parties was on tap at both the November 2017 and April 2018 meetings of the Civil Rules Advisory Committee, which included an extensive discussion of this and other issues. The committee formed a subcommittee to examine the third party problem, but it is not clear where the subcommittee might land on this and several other issues with MDLs, including the problem of prospectively identifying which complaints in an MDL are without merit. Still, there is at least one district court, the Northern District of California, which has a standing order mandating disclosure of third parties, seemingly setting a precedent for the subcommittee to act.

April Showers: SCOTUS, FDA Spring into Action

Temperatures in our nation’s capital are returning to some vague sense of normalcy, which may or may not have anything to do with the normal functions of the Supreme Court and the FDA. Either way, both these entities have delivered some important news in the month of April, although it will be May or later before the related effects will make themselves felt. In the spirit of the vernal renewal of life, we offer the following.

Inter Partes Review Survives Challenge at SCOTUS

One of the most significant developments in the area of intellectual property in recent weeks was the Supreme Court decision in the case of Oil States Energy Services LLC v. Greene’s Energy Group LLC, which challenged the constitutionality of the inter partes review process. Had the Court decided in favor of Oil States, the IPR process would have been declared unconstitutional, thus bringing an end to one of the more controversial aspects of the America Invents Act (AIA).

The 7-2 opinion penned by Justice Clarence Thomas said that trials and other procedures addressing patent validity need not take place in an Article III court, but also that an IPR hearing does not violate the Seventh Amendment right to a jury trial. Thomas pointed to the ex parte reexamination of patents as an example of administrative proceedings that do not take place in a courtroom, a procedure that has been part of routine practice at the Patent and Trademark Office since 1980. He also cited the existence of the inter partes reexamination, which was replaced by the IPR process via the AIA.

Justice Neil Gorsuch wrote the dissenting opinion with the concurrence of Chief Justice John Roberts, stating that no courts other than federal courts were empowered to invalidate a patent until 1980. Gorsuch said the outcome does not “represent a rout, but it at least signals a retreat from Article III’s guarantees,” going on to argue that enforcement of Article III is principally about “ensuring that people today and tomorrow enjoy no fewer rights against governmental intrusion than those who came before.”

Gorsuch wrote the majority opinion in another IP case delivered on April 24, SAS v. Iancu, which held that the Patent Trial and Appeal Board must make a determination on each of the claims challenged by a petitioner in an IPR. In contrast to Oil States, this case squeaked by in a 5-4 vote, but the newest Supreme Court justice is definitely making his mark on the Court’s handling of patent law despite a lack of certainty on his views when he was appointed last year.

Gilead Up, Nargol Down at SCOTUS

We previously reported that two cases pertaining to the False Claims Act were the subjects of petitions for cert at the Supreme Court, and not unexpectedly, the Court passed on a chance to hear Medical Device Business Services, Inc. v. United States ex rel. Nargol. The Court said Justice Alito had taken no part in deciding whether to hear the case, although no explanation for that was given. The Court’s interest in Gilead v. Campie seems to have quickened, however, given that the justices have asked the Solicitor General to file a brief.

It may be too soon to speculate as to how the Trump administration would advise the Court regarding Gilead, but the 8-0 outcome in the Supreme Court’s review of Escobar would suggest that Solicitor General Noel Francisco has a limited amount of wiggle room for suggesting that the standard for materiality in False Claims Act cases ought to be relaxed. Conversely, however, federal attorneys are loathe to give up any leverage where FCA cases are concerned, and it might be pertinent to recall that the Thompson memo arose from an administration that might have been presumed to be less unfriendly to business than the administrations that preceded and followed.

In the end, the Solicitor General has the option to opine on nothing more than whether the Court should hear the case. The reader will hopefully excuse the cliché that this case “bears watching” as the Court will at the very least provide some additional clarity regarding the current standard for materiality.

FDA Issues First Inspection Report under FDARA

The legislation for the most recent series of FDA user fee agreements stipulated that the agency publish data on inspections for drugs and devices needed to approve that drug or device, and while the data are interesting, they are perhaps most useful as a baseline for evaluating the agency’s performance in this area over the next few years.

The report, which fulfills Section 902 of the Food and Drug Administration Reauthorization Act of 2017 (FDARA), covers calendar year 2017 only, not an unexpected limitation given the novelty of the requirement. The report states that for new drug and abbreviated new drug applications, the median elapsed time between the agency’s internal request for an inspection and the date of the inspection was 102 calendar days. Drug makers may be accustomed to such delays, but might not be happy with them all the same.

The median elapsed time for issuance of forms 483 for inspections with compliance issues was seven calendar days from the start of the inspection, and the agency pointed out that 483s are typically issued upon the close of the inspection. Perhaps more problematic is that 191 days on average passed between the date of the 483 and the date of any related warning letter, while any regulatory meetings to review the inspections on average took place 169 days later.

Ergo, the numbers suggest that a drug maker could end up waiting 300 days from the date of an internal FDA request for inspection to see a warning letter for that inspection, which sounds like a significant problem when trying to get a new drug to market. The report does not cover inspections related to biologics license applications, but does include data on inspections for supplemental drug filings.

The report states that FDA used the complete response (CR) letter to deny 94 new drug applications and supplemental filings for chemistry, manufacturing and controls in calendar 2017, a relatively small denominator in comparison to the more than 2,460 CR letters issued last year. However, the agency said it had issues another 194 facility-related CRs for a total of 288 facility-related CR letters in 2017, although there is little information on what sort of facility-related issues drove those additional 194 CRs. In any case, these numbers are likely to shift at least somewhat thanks to the concept-of-operations paradigm now in force at the Center for Drugs.

The dust-up between the FDA and device makers regarding inspection delays is well known – and the total number of original PMAs in any given year is presumably still fewer than 50 – so it’s no surprise that the numbers for device inspections differ significantly from those for drugs. The agency needed only a median of 35 days between the request for the inspection and the first day of that inspection, and the average time to issuance of a 483 was five days. As was the case for the drug inspection numbers, data pertaining to supplemental filings were included.

At first glance, it seems odd that Congress had included pre-clearance inspections for 510(k) applications in Section 902 if one takes the FDA at its word when it states that clearance of a device “does not require a pre-clearance inspection.” While the statement is sufficiently generic to be more or less defensible, it seems somewhat contradicted by the March 25, 2014, draft device classification rule, in which the agency acknowledged that it had conducted pre-clearance inspections for 510(k) applications, although it had done so only on “rare occasions.”