On November 1, 2018, the Office of the Inspector General (“OIG”) for the U.S. Department of Health and Human Services (“HHS”) published an audit report finding that the U.S. Food and Drug Administration’s (“FDA”) policies and procedures were “deficient for addressing medical device cybersecurity compromises.” (A copy of OIG’s complete report is available here and Report in Brief is available here.) Specifically, the OIG found that FDA’s policies and procedures were “insufficient for handling postmarket medical device cybersecurity events” and that FDA had not adequately tested its ability to respond to emergencies resulting from cybersecurity events in medical devices. Although the OIG report “did not identify evidence that FDA mismanaged or responded untimely to a reported medical device cybersecurity event,” it noted that “existing policies and procedures did not include effective practices for responding to these events.”

Citing cybersecurity of medical devices as a top management challenge for HHS, OIG conducted an audit to evaluate FDA’s plans and processes for timely communicating and addressing cybersecurity compromises in the medical device postmarket phase. Based on OIG’s audit of certain FDA internal policies, procedures, and website, as well as interviews with FDA staff, OIG recommended that FDA take the following actions: (i) continually assess the cybersecurity risks to medical devices and update its plans and strategies; (ii) establish written procedures and practices for securely sharing sensitive information about cybersecurity events with key stakeholders; (iii) enter into a formal agreement with federal agency partners; and (iv) establish and maintain procedures for handling recalls of medical devices vulnerable to cybersecurity threats. Although the OIG acknowledged that FDA has recently implemented some of its initial recommendations, it emphasized that its findings and recommendations with regard to FDA’s cybersecurity policies and procedures remain valid.

On the same date OIG published its report, FDA’s Suzanne B. Schwartz, M.D., M.B.A., published a post on FDA Voices asserting that the OIG report is an incomplete and inaccurate picture of FDA’s oversight of medical device cybersecurity. The post addresses FDA’s ongoing efforts to improve medical device cybersecurity over the past five years, including entering into a memorandum of agreement between FDA and the Department of Homeland Security (“DHS”) and publishing a new premarket cybersecurity guidance update in October 2018, which we wrote about in a previous blog here. FDA’s post also highlights FDA’s other partnerships with industry that aim to increase awareness of cybersecurity vulnerabilities and related concerns.

FDA reiterated that its regulatory approach to cybersecurity threats “is not static,” and reconfirmed its commitment to “work with the medical device industry and other stakeholders to proactively address emerging cybersecurity threats to medical devices in a way that puts patient safety first.” FDA has announced that it will hold a public Workshop on January 29-30, 2019 to discuss the newly released draft guidance on cybersecurity in premarket submissions. Instructions for registration are available on FDA’s website here.

In response to the OIG’s report, FDA will likely continue to develop new cybersecurity policies, initiatives, and guidance. Stakeholders in the medical device industry should monitor these developments and be prepared to address any such changes in policy or regulation. Meanwhile, regulated industry should consider reviewing FDA’s current cybersecurity guidance documents and assess whether its internal controls, quality systems, policies, or procedures adequately address potential cybersecurity risks or threats or could be improved.

EBG will continue to monitor all developments in FDA’s regulation of and policies related to medical device cybersecurity.

On November 2, 2018 CMS announced the finalization of the 2019 OPPS and ASC payment rules which were initially proposed in July of 2018.[1] [2] While the final document will not be officially published until November 21st, an Inspection Copy is available for the public to review on the Federal Register website. These new payment rules in many ways expand the range of services that CMS will reimburse when performed at Ambulatory Surgical Centers (ASCs), most notably, by including certain cardiac catheterization procedures on the approved list, and by lowering the threshold that determines allowable device intensive procedures.

Increase in Covered Cardiac Catheterization Procedures:

The Final Rule will add 17 procedures relating to cardiac catheterization to the list of ASC Covered Surgical Procedures.  The final list includes five procedures that were not included in the July 2018 proposed rule, due in part to commenters requesting that additional procedures be added to the list, and CMS adopting their request, at least in part.[3] [4] [5] The expanded list reflects the growing trend of cardiac procedures being transitioned from an inpatient to an outpatient setting. This shift will have a continuing business impact on inpatient providers and may also lead to state-level regulatory changes. States that currently prohibit cardiac catheterization procedures at outpatient facilities may decide to adopt changes to allow certain procedures that have been deemed acceptable by CMS to be performed at facilities without on-site inpatient services, including ASCs.[6] Furthermore, these additions could be a springboard for CMS to later add more complicated procedures to the list of ASC covered services.

Decrease in Device Offset Percentage:

CMS has also taken steps to make device-intensive procedures more accessible in the ASC setting. Procedures categorized as “device-intensive” are paid at the higher OPPS rate, even if performed in an ASC.  However, a procedure only qualifies as “device-intensive” if the portion of the procedure’s cost related to the device falls within a predetermine percentage. The Final Rule decreases the device offset percentage threshold from 40 percent to 30 percent, meaning that procedures utilizing lower-cost devices will now be eligible for reimbursement as “device-intensive.”  As a result, ASCs will have the financial capacity to perform more procedures that involve lower cost medical devices.[7] CMS directly states its purpose behind this move saying “We believe allowing these additional procedures to qualify for device-intensive status will help ensure these procedures receive more appropriate payment in the ASC setting, which will help encourage the provision of these services in the ASC setting.”[8] The implementation of the new payment rules will undoubtedly lead to an increase in the amount of device-intensive procedures performed in the ASC setting as ASCs expand their scope of services to include more device-intensive procedures and patients choose to have these procedures performed in an outpatient setting. This change may also indicate future moves by CMS to encourage complex, device intensive procedures, such as joint replacements, in the ASC setting.

Government Shift to Outpatient Providers

These rule changes reflect Medicare’s continued shift towards encouraging services to be provided in the less costly outpatient setting. Anticipating a continued incline in the amount of individuals eligible for federal programs based on the expectation that 10,000 baby boomers will retire per day for over the next decade, CMS is likely to continue making changes to its payment rules to encourage the provision of care in lower cost settings.[9] These changes provide opportunities for ASCs and physicians to expand their business, but also threaten more “bread and butter” revenue streams on which hospitals have historically relied. Thus, hospitals, ASCs and physicians should consider addressing these changes in their long-term strategic plans, including possible joint ventures for outpatient services, in general, or specific service lines, such as cardiac catheterizations.

____

[1] CMS Inspection Copy

[2] 83 Fed. Reg. 37046.

[3] CMS Inspection Copy (at page 746)

[4] 83 Fed. Reg. 37046, 37160.

[5] CMS Inspection Copy (at page 743-44)

[6] N.J.A.C. 8:33E-1.3.

[7] 83 Fed. Reg. 37046, 37108.

[8] Id.

[9] http://www.pewresearch.org/fact-tank/2010/12/29/baby-boomers-retire/

On October 15, 2018, the Centers for Medicare and Medicaid Services (CMS) unveiled its proposed rule requiring direct-to-consumer television advertisements for prescription drug and biological products to contain the list price (defined as the Wholesale Acquisition Cost) if the product is reimbursable by Medicare or Medicaid. Medical devices are not included in the proposed rule, although CMS seeks comment on how advertised drugs should be treated if used in combination with a non-advertised device. If finalized, the requirement will be sweeping and only purports to exclude products costing under $35 per month for a 30-day supply or a typical course of treatment.

CMS prescribes specific language for manufacturers to use at the end of an advertisement:

The list price for a [30-day supply of ] [typical course of treatment with] [name of prescription drug or biological product] is [insert list price]. If you have health insurance that covers drugs, your cost may be different.

The list price is determined “on the first day of the quarter during which the advertisement is being aired or otherwise broadcast.” This pricing statement must be legible, “placed appropriately against a contrasting background for sufficient duration,” and must be in an easily read font and size. Manufacturers are permitted under the proposed rule, “[t]o the extent permissible under current laws,” to include a competitor’s current product list price, so long as the disclosure is done in a “truthful, non-misleading way.”

CMS proposes that drug and biological products in violation of the proposed rule would be publically listed on its website. Although CMS acknowledged that it was proposing no other HHS-specific enforcement mechanisms, CMS anticipates an influx in private actions under the Lanham Act as the primary enforcement mechanism if the proposed rule is finalized.

Health and Human Services Secretary Alex Azar emphasized the proposed rule’s intent to mitigate consumer out-of-pocket costs and reduce unnecessary Medicare and Medicaid expenditures. Interested stakeholders can submit comments online to the regulations.gov docket or by mail until December 17, 2018.

The FDA issued a new Draft Guidance today to ensure medical devices – an increasing potential target for hackers – are better protected from unauthorized digital access.

According to the FDA’s draft guidance issued today, “Cybersecurity incidents have rendered medical devices and hospital networks inoperable, disrupting the delivery of patient care across healthcare facilities in the US and globally. Such cyberattacks and exploits can delay diagnoses and/or treatment and may lead to patient harm.”

Under the proposed draft guidance manufacturers will be required to better protect their devices in a more uniform manner as prescribed by the FDA. The new pre-market submission proposals are designed to help guide the industry in designing these digital safety mechanisms from the beginning of product design and development.

The New Guidance covers Premarket Notification (510(k)) submissions (including Traditional, Special, and Abbreviated); De Novo requests; Premarket Approval Applications (PMAs); Product Development Protocols (PDPs) that contain software (including firmware) or programmable logic; as well as software that is a medical device.

While manufacturers are required under Quality System Regulations to establish and maintain procedures for validating the devices design including software validation and risk analysis, FDA is recommending validation include design controls to ensure medical device cybersecurity and maintain medical device safety and effectiveness. Including these design controls may make it easier for FDA to “find your device meets its applicable statutory standard for premarket review.”

The recommendations in the newly released Draft Guidance describe using a more risk-based approach to the design and development of appropriate cybersecurity protections. The FDA wants manufacturers to design programs to follow their devices throughout the device lifecycle, monitor new and potential threats, and issue cybersecurity updates to thwart new attempts at unauthorized digital access of the devices.

Because devices that connect to the internet or wirelessly to other devices pose a new and larger threat to cybersecurity, the FDA is requiring a Cybersecurity Bill of Materials be included in the manufacturers filing to identify key components and accessories that could render the device vulnerable to “hacking”. The FDA is creating a new Tier 1 level of standards for these devices to ensure greater security than Tier 2 devices (those that are not wirelessly or internet connected).

Design controls should include appropriate authorization such as ID’s, passwords, time limited sessions with auto logout, layered authorization (i.e. patient, healthcare professional, technician) should now be used in the design of these devices. Authentication and authorization of critical safety commands will be considered in new submissions. In addition, proper labeling to warn patients and providers of the cyber security risks involved in these devices is essential.

For an updated list of FDA recognized consensus standards the Agency recommends that you refer to the FDA Recognized Consensus Standards Database.

 

 

 

The Florida State Legislature has decided to eliminate its state licensure requirement for clinical laboratories.  Effective July 1, 2018, Florida’s recent legislation (SB 622) repeals the entirety of Chapter 483, Part I of the Florida statutes, and in doing so removes the state licensure requirement for clinical laboratories operating in-state and out-of-state.  Section 97 of SB 622, approved by the Governor on March 19, 2018, repeals the entirety of Chapter 483, Part I of the Florida statutes, and therefore, in tow, eliminates section 59A-7.024(1) and as well as all other corresponding regulations.

Currently, all clinical laboratories providing services within the state of Florida must maintain a state license unless you were either: (1) a clinical laboratory operated by the U.S. government; (2) a clinical laboratory that only performed waived tests; or (3) a clinical laboratory that was operated and maintained exclusively for research and teaching purposes that did not provide services to patients.  Furthermore, an out-of-state laboratory testing specimens derived from the state of Florida is also required to obtain Florida state licensure if: (1) the out-of-state laboratory maintains an office, specimen collection station or other facility within the state of Florida (Fla. Adm. Code 59A-7.024); or (2) receives a specimen for examination from a clinical laboratory located within the state of Florida (Fla. Stat. § 483.091).

Beginning July 1, 2018, clinical laboratories and stakeholders will be able to provide their laboratory services in Florida or to Florida healthcare providers as long as they meet federal CLIA certification requirements.  Florida’s Agency for Health Care Administration (AHCA) expects to roll-out notifications regarding the change in state licensure requirements to currently licensed clinical laboratories in approximately two weeks and will post notice on its website.

On January 16, 2018, the Department of Health and Human Services Office of Inspector General (OIG) published its most recent update to the agency’s “Work Plan.”  Of note to Durable Medical Equipment (DME) manufacturers, suppliers and prescribers, OIG signaled increased interest in the investigation of three specific off-the-shelf orthotic devices identified by the HCPCS codes:

  • L0648—back bracing
  • L0650—back bracing
  • L1833—knee bracing

According to OIG, the government paid out $349 million for these braces in 2016, representing a 97% increase from just 2014.  OIG expressed concern that many of the braces were being prescribed without adequate documentation of medical necessity in patient records and also fulfillment in cases where actual physical examination of the patient had occurred over a year prior to the device being provided.

DME manufacturers, suppliers and prescribers of back and knee bracing should be advised that OIG has, and will, start taking a much closer look at any Medicare/Medicaid reimbursements for these devices and one can expect increased scrutiny in this area.

For additional information about this issue, contact the author of this post, Clay Lee, or the Epstein Becker Green attorney who regularly assists you.

The Federal Trade Commission (“FTC”) and the Antitrust Division of the Department of Justice (“Antitrust Division”) released their respective year-end reviews highlighted by aggressive enforcement in the health care industry. The FTC, in particular, indicated that 47% of its enforcement actions during calendar year 2016 took place in the health care industry (including pharmaceuticals and medical devices). Of note were successful challenges to hospital mergers in Pennsylvania (Penn State Hershey Medical Center and Pinnacle Health System), and Illinois (Advocate Health Care Network and North Shore University Health System). In both actions, the FTC was able to convince the court that the merger would likely substantially lessen competition for the provision of general acute-care hospital services in relevant areas in violation of section 7 of the Clayton Act. See FTC v. Penn State Hershey Med. Center, 838 F. 3d 327 (3d Cir. 2016); and FTC v. Advocate Health Care Network et al No. 1:15-cv-11473, 2017 U. S. Dist. LEXIS 37707 (N.D. Ill.Mar. 16, 2017)

The Antitrust Division, in similar fashion, touted its actions to block the mergers of Aetna and Humana, and Anthem and Cigna. Complaints against both mergers were filed simultaneously in July of 2016, and tried before different judges in the Federal District Court for the District of Columbia. After extensive trials, Judge Bates blocked the Aetna/Humana deal, and Judge Amy Berman Jackson blocked the Anthem/Cigna transaction. United States v. Aetna Inc., No. 1:16-cv-1494, 2017 U.S. Dist. LEXIS 8490 (D.D.C. Jan 23, 2017) and United States v. Anthem Inc., No. 1:16-cv-01493, 2017 U.S. Dist. LEXIS 23614 (D.D.C. Feb8, 2017).

In addition to their enforcement activities, the agencies promoted jointly issued policy guidelines, including their “Antitrust Guidance for Human Resources Professionals.” Although not specific to any industry, this guidance has particular relevance to the health care industry. Among other things, this guidance makes clear that naked wage-fixing (such as the wave of wage fixing claims relating to nurses) and no-poaching agreements (that would include agreements not to hire competing physicians) are not only per se illegal, but also subject to criminal prosecution.

While a marginal enforcement shift may be in store as a result of the change in administration, most signs point to a continued focus on the health care industry. Maureen K. Ohlhausen, appointed by President Trump as acting Chair of the FTC, reiterated in a speech recently delivered at the spring meeting of the American Bar Association’s antitrust section, that “[i]t’s extremely important we continue our enforcement in the health care space.” Likewise the Acting Director of the FTC’s Bureau of Competition – Abbott (Tad) Lipsky, appointed by Chairman Ohlhausen, applauded the FTC’s success in challenging the Advocate/Northshore Hospital merger noting, in a related FTC press release, that the “merger would likely have reduced the quality, and increased the cost, of health care for residents of the North Shore area of Chicago.”

Makan Delrahim, President Trump’s selection (awaiting confirmation) to head the Antitrust Division, recently lobbied on behalf of Anthem and its efforts to acquire Cigna, and has openly stated with respect to certain announced mergers, that size alone does not create an antitrust problem. Nevertheless, given the political climate and overall impact the health care industry has on the U.S. economy, the Antitrust Division’s efforts to open markets in the health care sector, particularly to generics and new medical technologies by challenging pay for delay deals and scrutinizing unnecessarily restrictive agreements among medical device manufacturers is likely to continue.

A wild card affecting future antitrust enforcement is increasing possibility of passage of the Standard Merger and Acquisitions Review Through Equal Rights Act of 2017 (H.R. 659 a/k/a the “SMARTER ACT”). This bill, recently approved by the House Judiciary Committee, would eliminate the FTC’s administrative adjudication process as it relates to merger enforcement, forcing the FTC to bring all such actions in court. In addition, it would align current preliminary injunction standards such that both the FTC and DOJ would face the same thresholds required of the Clayton Act rather than the more lenient standard under the FTC Act. A similar bill passed the House in 2016, but was not taken up by the Senate.

Our colleagues Joshua A. Stein and Frank C. Morris, Jr., at Epstein Becker Green have a post on the Health Employment And Labor blog that will be of interest to many of our readers: “The U.S. Access-Board Releases Long-Awaited Final Accessible Medical Diagnostic Equipment Standards.”

Following is an excerpt:

As part of a flurry of activity in the final days of the Obama Administration, the U.S. the Architectural and Transportation Barriers Compliance Board (the “Access Board”) has finally announced the release of its Accessibility Standards for Medical Diagnostic Equipment (the “MDE Standards”).  Published in the Federal Register on Monday, January 9, 2017, the MDE Standards are a set of design criteria intended to provide individuals with disabilities access to medical diagnostic equipment such as examination tables and chairs (including those used for dental or optical exams), weight scales, radiological equipment, mammography equipment and other equipment used by health professionals for diagnostic purposes. …

Read the full post here.

Early January has seen the release by FDA of a flurry of information on drug and device manufacturer communications, largely reaffirming FDA’s long-held approach to restricting manufacturer communications regarding off-label uses of approved drugs and medical devices. The most significant positive development arising from these documents is the Agency’s concession on proactive pre-approval communications with payors about investigational drugs and devices, allowing certain information to be provided to payors prior to a product’s approval. FDA’s guidance documents issued this week also clarify some grey areas surrounding the circumstances under which manufacturers may communicate about information that is consistent with or related to an approved indication, but is not included in approved product labeling.

While these pronouncements provide drug and device manufacturers with some additional leeway in their communications regarding investigational products and certain information about the approved uses of their products that is not included in the approved labeling, they do not address long-standing questions regarding the circumstances under which manufacturers may communicate about unapproved uses of their products in light of recent First Amendment case law. Instead, these last words of the Agency under the outgoing administration signal that, at least under the direction of current administration, FDA is not inclined to significantly expand manufacturers’ ability to communicate regarding unapproved uses of their products without the risk of enforcement. The eventual impact of the new administration on FDA’s approach to off-label communications remains a significant unknown.

In draft guidance on Drug and Device Manufacturer Communications with Payors, Formulary Committees and Similar Entities – Questions and Answers released on January 18, FDA signifies its acceptance of the position long held by industry and payors alike that payors need access to information regarding investigational drugs and devices to help them plan and budget for coverage of these products once they are approved. In the draft guidance, FDA states that it will not object to manufacturers providing payors with “unbiased, factual, accurate and non-misleading” information regarding investigational drugs and medical devices, provided that those communications include a clear statement of the investigational status of the product and that its safety and effectiveness have not been established, along with information regarding the stage of product development of the product.

Information that may be provided by manufacturers in accordance with FDA’s recommendations in the draft guidance includes information about the product such as its drug class or design, the indication sought and the patient population under investigation, a factual presentation of the results of clinical and pre-clinical studies without any conclusions regarding the product’s safety and effectiveness, the anticipated timeline for FDA approval, product pricing information, and anticipated marketing strategies and product-related programs and services, such as patient assistance programs. FDA also recommends that manufacturers update payors with any significant new information about the investigational product that differs from information previously communicated to them.

As suggested by its title, the primary focus of the draft guidance is on the communication of health care economic information (“HCEI”) regarding prescription drugs to payors, interpreting the changes to FDAMA Section 114 included in the 21st Century Cures Act that was signed into law in December. Notably, unlike FDA’s recommendations regarding pre-approval product communications with payors, this portion of the draft guidance does not apply to HCEI regarding medical devices. The draft guidance also makes it clear that the expanded HCEI communications permitted by FDAMA 114, as amended, are limited to payors, and similar flexibility in the levels of evidence required to support HCEI communications to payors do not apply to communications with health care providers or consumers. Additionally, consistent with the statute, the draft guidance limits the HCEI that may be provided to information that “relates to” an approved indication, confirming that FDA does not currently intend to permit the proactive dissemination to payors of HCEI related to off-label use.

In a series of questions and answers, FDA provides recommendations regarding the types of HCEI that may be provided, the scope of the payor audience to which this information may be provided, the types of competent and reliable scientific evidence that may be relied upon, the information that must be disclosed along with HCEI provided to payors, and perhaps mostly usefully, examples of the circumstances under which FDA will determine HCEI to relate, and not to relate, to an approved indication. FDA describes the categories of information that will be deemed to relate to an approved indication, even if they do not appear within, or vary in some respects from, the approved labeling; provided that the information is not inconsistent with the approved labeling. These include, among others, information on duration of treatment, burden of illness, length of hospital stay, information including actual patient use of an approved drug that varies from the approved dosing regimen, and information derived from clinical data demonstrating an effect on a validated surrogate endpoint or a comparison of safety and effectiveness with another drug or intervention.

FDA’s approach to “related” information in the draft guidance is similar to that taken in another draft guidance it released on January 17 on Medical Product Communications that are Consistent with the FDA-Required Labeling – Questions and Answers. In the Medical Product Communications draft guidance, FDA provides recommendations for manufacturers of drugs and medical devices on communications, including communications with health care providers, consumers and payors and in promotional materials, regarding information that is not included within the FDA-approved package labeling, but is consistent with that labeling.

In determining whether information provided by manufacturers is consistent with the product’s approved labeling, FDA will consider three factors. First, FDA will compare the information to the conditions of use in the approved labeling. To comply with the recommendations in the guidance, the information must relate to an indication, patient population, and dosing and administration instructions within the scope of those set forth in approved label, and it must not be inconsistent with any use limitation or directions for handling or using the product in the approved labeling. Second, the suggestions regarding the use of the product in the HCEI information must not increase the potential for patient harm relative to information in the approved labeling or otherwise adversely impact the risk-benefit profile of the product. Finally, the directions for use in the approved labeling must allow the product to be used safely and effectively under the conditions of use suggested in the HCEI information distributed by the manufacturer. If all three of these factors are met, FDA will not view that information, alone, as evidence that the manufacturer intends to promote the drug or device for a new intended use.

To assist manufacturers in applying these factors, the guidance includes examples of the types of communications that are, and are not, consistent with a product’s approved labeling. In describing the types of evidence required to support the disclosure of information that is not included in, but is consistent with, the approved labeling, FDA states that the data must be scientifically and statistically sound to support the representations made by the manufacturer to avoid being false or misleading, but because the safety and effectiveness of the product for the approved indication has already been established, the evidence need not meet the applicable approval or clearance standard for the product. For drug products, this means that two adequate and well-controlled clinical trials will not be required. The evidence must, however, be accurately characterized and any material limitations on the evidence must be clearly and prominently disclosed in language appropriate for the intended audience.

FDA also has, within a ten day period, released two other pieces of information relating to drug and device manufacturers’ communications regarding their products. On January 9, FDA issued a Final Rule on Clarification of When Products Made or Derived From Tobacco Are Regulated as Drugs, Devices, or Combination Products; Amendments to Regulations Regarding “Intended Uses”, clarifying the Agency’s position that a determination of a regulated product’s intended use may be determined based upon the totality of the evidence of the manufacturer’s objective intended use of the product, including the manufacturer’s knowledge of the product’s actual use for an off-label indication in practice.[1]  FDA states in the preamble to the Final Rule, however, that it will not bring an enforcement action based solely on a manufacturer’s knowledge that an approved or cleared product is being prescribed or used for an unapproved use.

The Proposed Rule released in September 2015 deleted from the drug and device intended use regulations at 21 CFR §§ 201.128 and 801.4 a reference to a manufacturer’s knowledge of off-label uses, specifically the statement that “[Intended use] may be shown by the circumstances that the article is, with the knowledge of such persons or their representatives, offered and used for a purpose for which it is neither labeled nor advertised.” Many commenters on the Proposed Rule had interpreted that deletion as excluding a manufacturer’s knowledge of off-label use from the evidence that may be relied upon to establish a manufacturer’s intent to promote a drug or device for an off-label use. The preamble to the Final Rule expresses FDA’s disagreement, and clarifies that FDA proposed deleting that language merely to avoid a potential misinterpretation that a manufacturer’s knowledge of an unapproved use of an approved or cleared medical product, without more, automatically triggers a requirement for that manufacturer to provide additional labeling for the unapproved use. FDA asserts that its intent was not to change the scope of information that could be relied upon as evidence of a manufacturer’s intended use of the product.  The amended language set forth in the Final Rule provides that “”intended use may be shown, for example, by circumstances in which the article is, with the knowledge of such person or their representatives, offered and used for a purpose for which it is neither labeled nor advertised.”

In the preamble to the Final Rule, in response to comments that existing First Amendment jurisprudence restricts FDA from bringing enforcement actions based on truthful and non-misleading speech regarding a product’s off-label use, FDA states that it is separately examining its rules and policies relating to firm communications regarding unapproved uses of approved and cleared medical products, and while those broader policy considerations are being addressed separately from the Final Rule, “[n]evertheless, it is important to note here that we do not agree with the assertion that the current case law allows FDA to consider speech as evidence of intended use only when it is false or misleading.” FDA cites recent Second Circuit precedent[2] to support its view that the Second Circuit’s 2014 Caronia decision does not foreclose the government’s ability to prove misbranding using promotional speech as evidence that a drug is intended for an off-label use. FDA goes on to describe the significant public health considerations that the Agency believes support its approach to limiting manufacturer communications regarding off-label uses of their approved or cleared products.

FDA makes similar assertions in a document posted to the docket for the November public hearing on Manufacturer Communications Regarding Unapproved Uses of Approved or Cleared Medical Products entitled, “Memorandum: Public Health Interests and First Amendment Considerations Regarding Unapproved Uses of Approved or Cleared Medical Products.” In a notice published in the Federal Register on January 19, 2017, FDA announces that it has reopened the comment period that was opened in connection with the public hearing on off-label communications that took place November 9 and 10, 2016 to allow interested parties an opportunity for additional comment based on the content of the memorandum and the two draft guidances discussed above. In this memorandum, FDA describes in detail the public policy considerations guiding its assessment of its restrictions on off-label communications, and the legal authority it believes supports its restriction of these communications and their use as evidence of intended use to support misbranding actions. FDA also describes its views on several alternative approaches to addressing the public health interests at issue.  FDA seeks additional comments on its views expressed in the memorandum and potential alternative approaches to regulating manufacturer communications regarding off-label indications of their approved products.  The docket will remain open until April 19, 2017.

[1] In addition to its provisions specific to determinations of when a tobacco product will be regulated as a drug or device, the Final Rule also amended intended use regulations at 21 CFR §§ 201.128 and 801.4.

[2] United States ex rel. Polansky v. Pfizer, Inc., 822 F.3d 613 n.2 (2d Cir.2016).

On August 31, 2016, FDA issued a notification of public hearing and request for comments on manufacturer communications regarding unapproved uses of approved or cleared medical products. The hearing will be held on November 9-10, 2016, and individuals wishing to present information at the hearing must register by October 19, 2016. The deadline for written comments is January 9, 2017.

In the notice, FDA posed a series of questions on which it is seeking input from a broad group of stakeholders, including manufacturers, health care providers, patient advocates, payors, academics and public interest groups. The topics on which FDA is seeking feedback are broad, but generally include:

  • The impact of off-label communications on public health,
  • The impact of changes in the health care system on the development of high-quality data on new uses of cleared or approved products,
  • Preserving incentives for manufacturers to seek approval for new uses, standards for truthful and non-misleading information,
  • Factors FDA should consider in monitoring and bringing enforcement actions based on off-label communications by manufacturers,
  • The extent to which data on which off-label communications are based should be publicly available, and
  • The changes FDA should consider to existing regulations governing manufacturers’ communications regarding their products.

This announcement comes in the wake of increased pressure from lawmakers, public interest groups, and regulated industry for FDA to issue guidance or propose regulatory changes to address recent litigation clarifying commercial speech protections for pharmaceutical and medical devices manufacturers under the First Amendment. On May 26, 2016, the House Committee on Energy and Commerce sent a letter to HHS Secretary Sylvia Burwell expressing concern that FDA had failed to clarify its current thinking on permissible manufacturer communications about uses of cleared and approved drugs and devices beyond the scope of their approved labeling. In the letter, the committee noted that FDA had neither issued guidance, including guidance on the permissible scope of “scientific exchange” that has been on FDA’s Guidance Agenda since 2014, nor conducted the public hearing it announced in May 2015 in connection with negotiations on the proposed 21st Century Cures bill.  The committee expressed concern that HHS was preventing FDA from issuing guidance or proposing new regulations to address a string of recent court victories for companies and individuals prosecuted for off-label communications about drug and medical devices.

In light of the current state of First Amendment commercial speech protections, which makes it clear that manufacturers’ truthful and non-misleading speech regarding their products is not unlawful even if that speech includes uses of their products that have not been approved or cleared by FDA, other stakeholders have actively encouraged FDA to issue guidance or modify its regulations to conform its regulatory oversight and enforcement activities to this reality. While stakeholder groups have been actively engaged on these issues for several years, recent examples include the February 2016 white paper issued by the Duke-Margolis Center for Health Policy outlining policy options for off-label communications, and the joint release by BIO and PhRMA of the Principles on Responsible Sharing of Truthful and Non-Misleading Information about Medicines with Health Care Professionals and Payers on July 27, 2016.

Despite pressure from interested stakeholders, FDA has yet to propose changes to its regulations or issue long-awaited guidance on a number of topics related to manufacturers’ communications regarding off-label uses of their cleared or approved products. While FDA’s 2016 Guidance Agenda, updated most recently on August 6, 2016, continues to promise guidance on manufacturer communications regarding unapproved, unlicensed, or uncleared uses of approved, licensed, or cleared human drugs, biologics, animal drugs and medical devices and the inclusion of health care economic information in promotional labeling and advertising for prescription drugs, among others, the post-election timeline for the public hearing and FDA’s ongoing collection of feedback announced in the August 31st notice may suggest that FDA is going back to the drawing board. In particular, the focus in the notice’s background discussion and in FDA’s questions on the public health impact of off-label communications may suggest that FDA is re-evaluating its position in response to the HHS concerns about broader dissemination of off-label by manufacturers that were highlighted in the Energy and Commerce committee letter.  While FDA’s notice and request for comments is a step in the right direction, it likely signals a further delay in the issuance of guidance that is needed to bring greater clarity to the currently unsettled regulatory framework for FDA’s oversight of manufacturers’ off-label communications, and a punting of these important decisions to the next administration.