FDA Revisits Intended Use Rule

The FDA’s policy for determining a manufacturer’s intended use has strained relations between the agency and industry in the past, but the agency said in a press release that the latest version clarifies that simple knowledge of off-label use does not suffice to infer intended use. The press release highlights this as a significant change despite that essentially the same language appears in the version of the rule published five years ago.

A previous version of the intended use rule was released in September 2015, and led with a discussion of the agency’s regulation of tobacco, only belatedly discussing pharmaceutical products and medical devices. The 2015 edition states that the FDA can consider any objective evidence to determine intended use, including direct and circumstantial evidence.

The text of the 2015 rule states that circumstantial evidence is often sufficient to determine a manufacturer’s intent even in the absence of express claims about off-label use. However, this portion of the 2015 rule states also that the agency would not infer intention “based solely on the firm’s knowledge” of off-label use.

Interestingly, the agency’s press release for the Sept. 22, 2020, rule states that a firm’s knowledge of an unapproved use of a medical device or pharmaceutical, “standing alone, is not sufficient to establish the product’s intended use.” The FDA said this update should provide a greater degree of certainty and predictability for regulated industry.

The statement contends that the new rule does not reflect a change in the agency’s policies, but is intended to reemphasize the FDA’s long-standing approach to the question. The preamble to this latest version provides some examples of evidence that would not be deemed adequate to infer the manufacturer’s intent. The new rule would replace the version issued in 2017, which carried its own controversies.

The Jan. 9, 2017, final rule states that the agency would rely on the totality of the evidence to determine a manufacturer’s intent, a provision that was not well received. One commenter stated that the totality of the evidence standard had not previously been discussed in connection with the intended use rule, and that this standard was not a logical outgrowth of any prior communications on the FDA’s part. Because this standard was not discussed in a draft version, its introduction in the final rule violated the Administrative Procedures Act, said Richard Samp and Mark Chenoweth of the Washington Legal Foundation. The FDA is taking comment on the draft rule through Oct. 23.

DOJ Revisits APA a Second Time

The U.S. Department of Justice expressed its views of the current understanding and use of the Administrative Procedures Act in early August, but the matter wasn’t closed as of the date of that Aug. 11 statement. This was followed quickly by an Aug. 26 statement that provided details on two executive orders that are intended to provide guidance on adherence to the terms of the APA, a question that has arisen in the context of FDA guidance and rulemaking on several occasions.

Attached to the Aug. 11 statement was a report on a summit regarding the APA, which provided some insights into the concerns held by a number of parties about the evolution of the act. One source of concern was that compliance with federal regulation adds $2 trillion in costs to the economy each year, perhaps not surprising given the staggering volume of guidance and rulemaking across the federal government.

There is also some legislative interest in bringing independent federal agencies under the umbrella of the APA, such as the Securities and Exchange Commission. However, the larger point of interest for the DOJ consists in part of thwarting the use of guidance to create novel liabilities for the private sector without going through the normal notice-and-comment process required of rulemaking. The underlying theme in this regard is the 2017 Sessions memo, and Executive Order 13891 is intended to codify that principle.

Another consideration expands on the 2018 Brand memo, which pushed back on the use of agency guidance in affirmative civil enforcement. The second Executive Order announced Aug. 26 likewise codifies the Brand memo, but also provides a set of procedures for DOJ staff regarding the review and clearance of department guidance. Going forward, DOJ will be required to post all guidance documents on a web portal set up specifically for that purpose, but also creates a process by which the public can petition for withdrawal of a guidance.

Deputy Attorney General Jeffrey Rosen said guidance broadly is helpful to regulated parties, but observed that “backdoor regulation by guidance document is improper.” Rosen stated further that the Executive Orders will ensure “that guidance documents will not be used to impose novel legal requirements as a shortcut around the rulemaking process.”

Three for 2018; New Year Off to a Fast Start

Those in the life science industries know better than to sleep on the courts and the FDA, and the first quarter of 2018 serves to nicely reinforce this lesson. Following are three stories of interest to drug and device makers, but while its clear that the outcomes of these developments are of tremendous importance, it is not at all clear where these three stories will land in the end.

Gilead Moves Closer to Cert 

One of the more notorious cases relating to the Federal Rules of Civil Procedure is Campie v. Gilead, but the Supreme Court will have at least two such cases to choose from thanks to a petition Medical Device Business Services, Inc. v. United States ex rel. Nargol. The problem for this latter case is that it seems to overlap with Gilead, and Gilead has been distributed for conference for April 13, suggesting that Nargol will for now stand as decided at the Court of Appeals for the First Circuit.

Gilead had petitioned for cert on Dec. 26, 2017, while Medical Device Business Services, once known as Nargol v. DePuy Orthopaedics Inc., completed its petition for cert Feb. 5 after requesting an extension in the first half of December 2017. MDBS v. Nargol takes up the issue of the Federal Rule of Civil Procedure 9(b), a dispute triggered by the fact that the two relators in this False Claims Act case never filed a billing claim for the purportedly violative device, and apparently do not even practice medicine in the U.S. The relators, who served as expert witnesses in a case against MDBS, built their claims largely around an extrapolation of one medical claim to all the billings for the company’s Pinnacle hip device, and the petitioner points to a split among the circuit courts as justification for a hearing at the Supreme Court.

Gilead Sciences Inc. petitioned for cert after the Ninth Circuit reversed a lower court’s dismissal of the case, which revolves around the use of an unapproved supplier of an active pharmaceutical ingredient. The company eventually cleared the new API source with the FDA, but not until two years after Gilead started doing business with the supplier. In this instance, the relators are former employers, and Gilead cites the Supreme Court decision Universal Health Services v. Escobar as a precedent, which MDBS does not. All in all, it seems likely that the Supreme Court will take Gilead if it takes either of these cases.

Intended Use Rule Back on Back Burner

The FDA’s intended use problem continues seemingly unabated with the announcement that the agency would suspend the intended use rule indefinitely pending a closer look at some of the underlying issues. The tobacco-related portions of the January 2017 final rule are unaffected, but the portions of the rule dealing with drugs and devices are once again in regulatory limbo. The agency said it has in the meantime reverted to the previous understanding of the question of intended use.

The Federal Register notice regarding this indefinite suspension states that some had criticized the inclusion of the totality-of-evidence standard seen in the January 2017 final rule, principally because that standard had not appeared in the 2015 draft and thus its introduction in the final rule violated the Administrative Procedures Act. While there are a number of other issues raised by stakeholders, the totality-of-evidence standards was perhaps the most contentious, and if anything can be said about the FDA’s current predicament, it’s that the agency cannot afford to sit on this issue indefinitely because some states are moving ahead with their own laws pertaining to commercial speech, federal preemption notwithstanding. Those in the life science industries will want to stay tuned.

Least Burdensome Draft Draws Fire

The docket for the latest draft guidance for the FDA’s least burdensome standard has closed, but a number of observers are quite skeptical as to whether the agency means what it says about the principle of least burdensome.

The FDA’s Center for Devices and Radiological Health released the latest draft guidance at the end of 2017, acknowledging at the outset that the standard was encoded in the statute in 1997 via the Food and Drug Administration Modernization Act. Two subsequent pieces of legislation, including the 21st Century Cures Act, also applied pressure on the agency to formalize the least burdensome standard. Nonetheless, Jeffrey Gibbs of Hyman, Phelps & McNamara said in comments to the docket that the agency has engaged in “boilerplate recitation” of the standard without actually following through.

Gibbs charged that experience has repeatedly shown that the agency has inconsistently, at best, applied the least burdensome standard in a range premarket filings, including 510(k) and PMA submissions. He argued that the agency’s reviewers have routinely failed to explain the need for data beyond that used to clear a predicate device in the case of 510(k) submissions, and similar devices in the context of PMA applications.

Gibbs urged the agency to offer applicants a conference call within five days of the issuance of a request for additional information for premarket filings, a proposal he said builds off a pilot program that offers applicants “a short teleconference” within 10 days of the request. He said this pilot offers only about 15 minutes of teleconference time with the application’s reviewers, an amount of time he suggested is inadequate.

The Medical Imaging & Technology Alliance said the draft invoked the question of medical necessity when the agency has to consider what sort of least burdensome enforcement action is needed to deal with violative devices. MITA’s executive director, Patrick Hope, countered that medical necessity is a standard for payers to determine, and that the association is “concerned about the potential for scope creep” should the medical necessity question play a role in the agency’s decisions.

FDA’s Intended Use Rule Back in Play

A number of regulatory and enforcement items have been up for grabs at the FDA over the past year, but few carry the weight of the agency’s review of the intended use rule. The FDA announced recently that it is suspending the implementation date for the rule, and is separating the tobacco-related portions of the rule from those governing drugs and devices. It’s a welcome step and one that is long overdue, but it is not clear yet where the agency will land on this matter.

Dexcom Warning Letter Pulled

To recap, this problem dates back to at least 2011, when Par Pharmaceutical Inc. sued the agency over the latter’s attempts to suppress Par’s on-label discussion of the company’s appetite stimulant, Megace ES, in a setting in which the drug was likely to be used off-label. Par agreed to pay a $45 million fine two years later, and the five-year corporate integrity agreement is finally set to expire later this year.

Glucose monitor maker Dexcom subsequently received an FDA warning letter alleging the device maker was aware that its devices had been sold for uses that fell outside the labeled indication, but the agency has since deleted that document from the warning letter database. The agency took an explicit approach to the issue in a Federal Register announcement in September 2015, a peculiar attempt to devise a rule that would cover tobacco products along with drugs, devices and biologics. The FDA said its intent was to clarify some of the related issues, but the 10-page draft included the curious observation that a lack of clarity might lead consumers to use tobacco products “in place of FDA-approved medical products.”

The final rule appeared in early 2017 and retained the plus-tobacco features of the proposed rule, but the document grew to 25 pages and included a more or less lengthy discussion of the Central Hudson test and other issues that came up in comments to the docket. However, the agency then delayed implementation of the final rule to March 21, 2017, and then to March 19, 2018, and FDA commissioner Scott Gottlieb said in the agency’s Jan. 12 statement that the final rule will be suspended yet again “until further notice.”

A Procession of Concessions Fails

The 2015 proposed rule rattled observers by stating that the agency’s determination of a product’s intended use “is not bound by” explicit claims made by the manufacturer, but can instead be inferred by “objective evidence,” including the circumstances “surrounding the distribution of the product or the context in which it is sold.” The FDA tried to assuage industry’s concerns by vowing that it would not act on distribution of a product “based solely on a firm’s knowledge” of off-label use, but this concession did little to mollify industry.

The agency took a somewhat different approach in the final rule, stating that “a totality of the evidence” would be employed to determine an intent to knowingly distribute a drug or device for off-label uses. However, the Advanced Medical Technology Association argued that an approach based on the totality of the evidence is “more outcome determinative than prescriptive,” and thus manufacturers would have little choice but to “curb important product-related communications.”

The intended use rule does not entirely capture the regulated speech problem, but it is a significant hazard, particularly since whistleblowers and the Department of Justice can readily avail themselves of fodder for prosecution. It is pertinent to note that the Par Pharma case involved multiple relators, who had netted more than $4 million when all was said and done.

States Moving Ahead

There are several questions looming for the FDA, but whether the agency is in a position to stand pat is not one of those questions. The State of Arizona passed a law last year that takes up the off-label communication issue, and there are indications that other states may soon follow suit. Gottlieb has already noted that the FDA must come to grips with recent jurisprudence on the off-label issue, and the agency can scarcely afford to be swamped by a pixelated map of state policymaking where commercial speech is concerned.

The easy answer to all this is that Gottlieb will scuttle the totality-of-evidence standard, but little beyond that is especially obvious. The FDA said it will take comment through Feb. 5 on this latest iteration of the intended use scrum, so there is still time to weigh in. Given that the docket for this issue already features nearly 2,000 comments, it’s clear that significant change is in the works.