Recent federal and state legislative efforts signal an increased focus on a significant and largely underappreciated public health threat – antimicrobial resistance (i.e., when a microorganism (such as a bacteria or virus) is able to resist the effects of medications such as antibiotics and antivirals, causing such medications to be ineffective). The results of a 2014 study underscore the magnitude of the threat of so-called “superbugs,” estimating that the number of deaths worldwide attributable to antimicrobial resistance will reach 10 million by 2050.  By comparison, the same study projected 8.2 million deaths from cancer, and 1.2 million deaths from traffic accidents by 2050.  Legislative efforts to address antimicrobial resistance span from encouraging development of new pathways to market for antimicrobial drugs to expanding data collection and monitoring efforts to better understand the scope of the problem.  The combination of new data and less-restrictive pathways to market simultaneously provide pharmaceutical companies with a faster entry into the market for antimicrobial drugs and a better understanding by local health departments and hospitals of the need for new drugs to combat resistant strains of microorganisms.

Federal Initiatives

On the federal side, the 21st Century Cures Act (the “Act”), signed into law by President Obama on December 13, 2016, includes several measures related to antimicrobial resistance.  For example, the Act creates a new approval pathway for “limited population drugs,” which are antibacterial or antifungal drugs “intended to treat a serious or life-threatening infection in a limited population of patients with unmet needs.” While the Act allows FDA to approve limited population drugs with less data than typically would be required, the approval is restricted to “the intended limited population,” and the manufacturer must meet additional labeling requirements to inform physicians of the drug’s limited approved use.  In addition, manufacturers of drugs approved through this pathway are required to submit any promotional materials to FDA at least 30 days before they plan to use them.

While adding specific labeling requirements for new drugs approved for limited populations, the Act also changes labeling requirements for susceptibility test interpretive criteria. Susceptibility test interpretive criteria includes the myriad of testing options used to determine whether a patient is infected with a specific microorganism or class of microorganism that can effectively be treated by a drug.  The Act requires pharmaceutical manufacturers to replace the currently existing susceptibility test interpretive criteria from the drug’s packaged insert or labeling with a reference to a FDA website to be built where such criteria for all drugs will be held.  Manufacturers have one year from the day the website is established to move its susceptibility test interpretive criteria to the so-called “Interpretive Criteria Website.”

The Act also increases monitoring and reporting of antimicrobial drug use and antimicrobial resistance at federal healthcare facilities, like VA hospitals and facilities run through the Indian Health Service or the Department of Defense. Further, it requires annual federal data reporting on aggregate national and regional trends related to antimicrobial resistance. A broad base of reliable data on antimicrobial resistance and the associated morbidity and mortality does not currently exist. However, along with the federal government, certain states are also making efforts to improve data collection in this space.

State Initiatives

Many states receive funding from the Centers for Disease Control (CDC) to collect data about patients with extremely resistant strains of microoganisms, like carbapenem-resistant Enterobacteriacea, or “CRE” – a bacteria that kills an estimated 600 Americans each year. The Illinois Department of Health, for example, developed a registry in 2014 that tracks positive lab tests for extremely drug-resistant organisms, including CRE.  Illinois began tracking this information following a deadly outbreak of CRE in 2013.  Health care facilities participating in the registry receive alerts when an infected patient is transferred in and must report CRE-positive culture results of patients within seven calendar days.  The most recent annual report shows a 7% increase in overall cases; however, a recent article posits that the increase may be somewhat attributable to better reporting efforts by hospitals gaining experience identifying CRE.  Similar programs exist in many states, but these programs typically do not track the outcomes of CRE cases.

A recently proposed bill in California (California Senate Bill 43) would require hospitals to include information within death certificates that identifies whether “any antimicrobial-resistant infection…was a factor in the death.”  Specifically, the bill would require the “attending physician [who] is legally obligated to file a certificate of death” to determine whether, in the physician’s professional judgment, an antimicrobial-resistant infection was a factor in the patient’s death.  State law already mandates tracking of over 80 communicable diseases, like HIV and Hepatitis (A-E), but only tracks antibiotic-resistant infections of VRE and MRSA if they are contracted while a patient is already in the hospital.

Given the magnitude of the potential threat, it is reassuring that legislative initiatives are showing an increased focus on antimicrobial resistance. New pathways to market for antimicrobial drugs and increased public awareness of the rising threat of “superbugs” should lead to additional innovation by drug manufacturers.  The limited population pathway may also cause some manufacturers to reassess their pipelines and strategies to market drugs toward limited populations.  For manufacturers facing expensive and burdensome FDA requirements to market new antimicrobials to a general population, the limited population pathway may provide a cheaper and faster entry into the market.  Early entry into the market can then fund additional efforts expand the label beyond a limited population.

Entities that provide goods and services to the federal government, including health care providers and life sciences companies, should take note of the new civil monetary penalty amounts applicable to False Claims Act (“FCA”) violations. After much anticipation, the U.S. Department of Justice (“DOJ”) issued an interim final rule on June 30, 2016 confirming speculation that the penalty amounts will increase twofold.

The new minimum per-claim penalty amount will increase from $5,500 to $10,781, and the maximum per-claim penalty amount will increase from $11,000 to $21,563. The DOJ penalty increase mirrors the penalty spike announced by the U.S. Railroad Retirement Board (“Railroad Board”) in May of this year and discussed in our previous blog post.

The new penalty amounts will take effect August 1, 2016 and will apply to all violations that occurred after November 2, 2015.  This November date was the date that Congress passed the Bipartisan Budget Act of 2015 (the “Act”), which is the legislation that requires federal agencies that handle FCA cases to update their penalty amounts to adjust for inflation.

After this first adjustment, the Act allows DOJ and other federal agencies to make additional annual adjustments to penalty amounts based on the Consumer Price Index for Urban Consumers (CPI-U). Guidance on these annual adjustments is slated to be issued by the Office of Management and Budget this December.

If you would like to comment on this interim final rule, you must act quickly as the deadline for comments is August 29, 2016.

This post was written with assistance from Olivia Seraphim, a 2016 Summer Associate at Epstein Becker Green.