The National Marine Fisheries Service (NMFS) has issued a final rule updating the requirements for voluntarily labeling tuna as dolphin-safe. Under the updated rule, tuna products intended for labeling as dolphin-safe must be accompanied by a certification from the captain of the vessel that harvested the tuna and a certified and qualified observer that no purse seine net was intentionally deployed on or used to encircle dolphins during the fishing trip in which the tuna were caught and that no dolphins were killed or seriously injured in the sets in which the tuna were caught. NMFS will announce determinations that an observer is qualified and authorized in future Federal Register notices.
The purpose of the rule amendments is to bring the dolphin-safe labeling requirements into compliance with U.S. international trade obligations, in response to a ruling by the World Trade Organization (WTO) Appellate Body that the current requirements violate the WTO Agreement on Technical Barriers to Trade.
The effective date of the final rule is July 13, 2013. Through January, 1, 2014, NMFS will conduct education and outreach programs for industry on the provisions of the rule.
On June 17, 2013, the Supreme Court issued its decision in FTC v. Actavis, Inc. et al. Justice Breyer delivered the majority decision, and was joined by Justices Kennedy, Ginsburg, Sotomayor, and Kagan. Chief Justice Roberts dissented, together with Justices Scalia and Thomas. Justice Alito was recused from the decision.
This decision increases the likelihood of future antitrust challenges to settlements in which the generic defendant: (1) receives a payment as part of a settlement, and (2) does not come onto the market immediately. Moreover, the decision probably makes more likely that we will see in the future more trials-of-a-patent-case-within-an-antitrust-case, because assessing (as the Rule of Reason calls for) whether the procompetitive aspects of an agreement outweigh the anticompetitive aspects of the agreement, would seem to require an assessment of the strength of the patent case
The Supreme Court reversed the decision of the Eleventh Circuit, which had affirmed the dismissal of a complaint brought by the FTC alleging that a reverse payment settlement between brand and generic pharmaceutical companies violated the antitrust laws. The Eleventh Circuit had held that a reverse settlement does not violate antitrust law “absent sham litigation or fraud in obtaining the patent” so long as the settlement’s “anticompetitive effects fall within the scope of the exclusionary potential of the patent.” FTC v. Watson, 677 F.3d 1298 (11 Cir. 2012). The Supreme Court disagreed, stating that reverse payment settlements “can sometimes violate the antitrust laws,” holding that the Eleventh Circuit should have allowed the FTC to proceed with its lawsuit, and remanding the case for further proceedings consistent with its opinion. Majority Opinion at 2, 21.
The Alcohol and Tobacco Tax and Trade Bureau (TTB) issued a ruling recently that will allow the alcohol industry to voluntarily use Serving Facts statements on alcohol labels. The new TTB ruling modifies a 2004 TTB ruling that only permitted the use of a statement of average analysis. The ruling explains that a Serving Facts statement is essentially a more expansive statement of average analysis, except “with the addition of a title, a serving size that reflects how the product is typically consumed, information about the number of servings per container, a specified format, and the option of providing information about alcohol content.”
The TTB released a proposed rule in 2007 to require certain mandatory label information, including alcohol content, and calorie and nutrient information, but has yet to promulgate final regulations. Given the delay in the final regulation and the seeming narrowness of the 2004 ruling, the TTB decided that it was appropriate to issue a ruling expressly providing a labeling option for “[t]ruthful, verifiable numerical statements of alcohol content [to] be included in Serving Facts statements as an option.”
As part of the ruling, alcohol content may be declared as part of the optional Serving Facts statement as percentage of alcohol by volume. Alternatively, alcohol content may be declared as the number of U.S. fluid ounces of pure ethyl alcohol per serving, so long as that statement is accompanied by percentage of alcohol by volume. The TTB provided five examples of optional Serving Facts statements that demonstrate possible approaches based on the new guidance.
The ruling continues the trend of allowing the alcohol industry some leeway in devising labels by permitting truthful and non-misleading speech. The trend can be traced to the 1995 Supreme Court decision in Rubin v. Coors Brewing Co., which held that the Bureau of Alcohol, Tobacco and Firearms violated the First Amendment by prohibiting the disclosure of the alcohol content of beer on labels or in advertising.
We will continue to monitor developments in alcohol labeling issues and post updates here.
The Alcohol and Tobacco Tax and Trade Bureau (TTB) released today its final rule that amends TTB standard of identity regulations for distilled spirits to expressly list Pisco as a type of brandy. Under the Federal Alcohol Administration Act, TTB prescribes requirements for the packaging, marking, branding, labeling, and quality of alcoholic beverages. Pursuant to this authority, TTB has established standards of identity for twelve different classes of distilled spirits. 27 C.F.R. § 5.22. Within each class, TTB prescribes additional standards of identity for various sub-categories or “types” of spirits.
In order to clarify the status of Pisco and conform existing regulations to international agreements limiting the geographical origin of Pisco, the final rule adds Pisco as a type of brandy under TTB regulations. While the TTB has consistently considered Pisco to be a brandy, the new rule makes that classification explicit and newly restricts the geographical origin of Pisco to products manufactured in Peru or Chile. As such, the final rule simultaneously revokes any Certificate of Label Approval (COLA) granted for products labeled as Pisco that are not from Peru or Chile.
The final rule is available here.
The use of mobile apps for health purposes has created new questions for users, developers, and regulators regarding the balance between convenience, expanded health care, and public safety. The line between apps that are useful tools for accessing health information and those that are considered medical devices can be unclear but is very important for developers and marketers of these products.
On April 24, 2013, associate Kristi L. Wolff will present a Thompson Interactive webinar, “There’s an App for That: Regulating Mobile Medical Devices” regarding these issues. Ms. Wolff will discuss the regulatory status surrounding health-related and medical device mobile applications, or MMAs. The presentation will cover topics including FDA’s position regarding MMAs as explained in the draft guidance, the recent Congressional hearings on the issue, FTC’s enforcement and recent statements regarding health-related mobile applications, and design considerations key to application development, such as privacy. Participants will also have the chance to ask questions during the live Q&A portion of the webinar.
To register, please click here.
The U.S. Department of Agriculture (“USDA”) issued a Final Rule on April 1, 2013, which adds eight new product categories, and one new subcategory, to the USDA’s BioPreferred federal procurement program. The BioPreferred Program is intended to promote federal procurement of “biobased products” (i.e., commercial or industrial products (other than food or feed) that are composed in whole, or in significant part, of biological products, renewable agricultural materials, or forestry materials). A product will be considered a “biobased product” for procurement preference if the product fits within a designated product category and contains at least the minimum biobased content established for the designated category.
The eight new product categories are:
- Aircraft and boat cleaners (minimum biobased content of at least 48% for aircraft cleaners; and 38% for boat cleaners)
- Automotive care products (minimum biobased content of at least 75%)
- Engine crankcase oil (minimum biobased content of at least 27%)
- Gasoline fuel additives (minimum biobased content of at least 92%)
- Metal cleaners and corrosion removers (minimum biobased content of at least 71% for corrosion removers; 75% for stainless steel cleaners; and 56% for other metal cleaners)
- Microbial cleaning products (minimum biobased content of at least 45% for drain maintenance products; 44% for wastewater maintenance products; and 50% for general cleaners)
- Paint removers (minimum biobased content of at least 41%)
- Water turbine bearing oils (minimum biobased content of at least 46%)
In addition, USDA has added an additional subcategory (Countertops) to an existing product category (Composite panels). Under the regulations, countertops must have a minimum biobased content of at least 89%) to qualify under the Program.
Procuring agencies must give procurement preferences to qualifying products under each of the above categories, and agency procurement specifications must require the use of biobased products in each of the above categories, by no later than April 1, 2014.
On April 10, 2013, the U.S. Food and Drug Administration (“FDA”) announced a proposal that could increase the cost of doing business for the food and cosmetic industry. In its budget request for fiscal year 2014, the FDA has proposed two new user fee programs for food companies to help pay for implementation of the food safety measures mandated by the Food Safety Modernization Act (“FSMA”). In addition, a user fee program has also been proposed for cosmetic manufacturers to support FDA cosmetic safety and other FDA cosmetic responsibilities. The FDA would need to obtain Congressional authorization for the new user fee programs in the form of new legislation before they could be implemented.
The new user fees would consist of a food facility registration and inspection fee, as well as a food importer fee. The facility registration and inspection fee is separate from the re-inspection fee that is already in place. Small food importers would be exempt from the importer fee and there would be a maximum charge for large importers. In addition, the cosmetics user fee would consist of a registration fee for both domestic and foreign manufacturers.
According to the FDA, the food importer fee would generate an estimated $166 million for the agency in 2014, while the facility fee would generate an estimated $59 million. Revenues from these fees would account for 20 percent of FDA’s total food program budget and also fund 85 percent of the $295 million the agency said it needs to support FSMA next year. The FDA indicated that most of the revenue from these two fees will support the activities to improve the food import process and increase the effectiveness of facility inspections. The cosmetics user fee is projected to generate $19 million for the agency in 2014.
Additional fees have also been proposed by FDA in its 2014 budget. For example, the agency has proposed additional fees on plastic and machinery substances that come into contact with food, international couriers, and follow-up inspections of medical establishments.
The new fees are likely to face strong opposition by the food and cosmetic industry and obtaining approval by Congress will also be a challenge.
The Food and Drug Administration (FDA) published a draft guidance for industry titled “Purchasing Reef Fish Species Associated With the Hazard of Ciguatera Fish Poisoning “ (CFP). Through the draft guidance, the FDA is adding Pterois volitans and Pterois miles, two species of lionfish, to the list of fish that may carry hazardous levels of ciguatoxins.
CFP is associated with consumption of toxin-contaminated subtropical and tropical reef fish. In addition to the species of lion fish mentioned in the draft guidance, reef fish associated with CFP include: barracuda (Sphyraenidae), amberjack (Seriola), grouper (Family: Serranidae), snapper (Family: Lutjanidae), po’ou (Chelinus spp.), jack (Family: Carangidae), travelly (Caranx spp.), wrasse (Family: Labridae), surgeon fish (Family: Acanthuridae), moray eel (Family: Muraenidae), roi (Cephalopholis spp.), and parrot fish (Family: Scaridae).
Under the Fish and Fishery Products Hazards and Controls Guidance, the FDA recommends that primary seafood processors who purchase fish directly from fishermen obtain information about harvest locations to determine the potential for ciguatoxic fish based on knowledge of the regions where ciguatera occurs. In the draft guidance, the FDA recommends that primary seafood processors avoid purchasing fish species associated with causing CFP from established or emerging areas linked with CFP.
Comments on the draft guidance are due May 26, 2013.
The House Subcommittee on Oversight and Investigations concluded a three-day series of hearings regarding medical device mobile applications (“MMAs”) on Thursday morning. Our posts regarding the first two hearings are here and here. The focus of day three was to hear testimony from key FDA and DHHS officials who have responsibilities relating to MMAs and other health information technologies (“HIT”).
The subcommittee heard testimony from just two witnesses, Ms. Christy Foreman, Director, Office of Device Evaluation, Center for Devices and Radiological Health (CDRH) at the Food and Drug Administration (“FDA”), and Dr. Farzad Mostashari, National Coordinator, Health Information Technology, U.S. Department of Health and Human Services.
The witnesses addressed questions raised in the two previous days’ hearings regarding FDA’s role in regulating HIT and MMAs. Some of the key points were as follows:
• Ms. Foreman testified that FDA has prioritized the MMA guidance and intends to issue final guidance by the end of this fiscal year. She reminded the Subcommittee that FDA’s CDRH has been regulating medical device software for decades and MMAs for more than 10 years. She indicated that FDA reviewed its first premarket notification for an MMA in 1997.
• Ms. Foreman also stated that FDA does not intend to regulate smart phones or tablets themselves as medical devices simply because they are used to operate MMAs. Rather, she said that the finalized guidance would set forth a risk-based approach whereby she anticipates that those MMAs (not the actual smartphone or tablet) that perform the same function as a medical device that is currently marketed would have to go through the premarket approval process. She anticipates that this will affect MMAs that fall into the Class II category most directly because Class I devices do not require premarket approvals and she is not aware of any MMAs to date that would be considered Class III devices.
• Ms. Foreman also responded to questioning concerning whether FDA’s current premarket approval process is slowing the pace of MMA innovation. She stated that the current average review time for 510(k) notifications for MMAs is 67 days, far less than the 90 days the agency is allowed by law. She also noted that keeping pace with technology is a constant challenge for FDA and one that the agency is prepared to meet with regard to MMAs.
• Dr. Mostashari spoke more broadly about DHHS programs to expand the use of HIT and electronic health records (“EHR”) technologies in the healthcare setting. He stated that the overwhelming evidence is that healthcare efficiency, quality, and safety is improved by access to better data, which HIT and EHR provide. He acknowledged certain obstacles to the current status of EHR implementation but cited recent statistics that indicate that even at current levels of implementation, these systems are providing benefits to patients and providers.
Ms. Foreman’s comments in particular should have provided some level of comfort relative to the agency’s intentions and a timeframe by which they can expect final guidance. Ms. Foreman explained that because she is not a tax expert and FDA is not a taxing authority, she was not able to answer definitively whether or not MMAs would be subject to the 2.3% excise tax. Many subcommittee members indicated throughout the three days of hearings that they believe that the retail exemption to the excise tax would apply at least to those MMAs marketed to consumers.
For further discussion on this important topic, please join us for a webinar on April 24 at 1:00 Eastern. Go to @ThompsonWebinar for more information.
The Health Subcommittee of the House of Representatives Energy and Commerce Committee held a second day of hearings regarding medical device mobile applications (“MMAs”) on Wednesday. Our post regarding the first day of hearings can be found here. The focus of day two was “Health Information Technologies: How Innovation Benefits Patients.”
The subcommittee heard from five witnesses. Unlike the first day of hearings, which focused mainly on MMAs, day two discussion involved broader questions of health information technology (“HIT”) such as the rate of adoption of electronic health records (“EHR”) and other types of software used in medical facilities. The witnesses’ main points were as follows:
• The widespread adoption of EHR and other HIT platforms is encouraging and has already provided benefits in terms of communications between healthcare facilities, providers, and patients; improved patient safety; and reduced medical error rates. Broader adoption of MMAs are just a part of this expansion of healthcare.
• Despite this widespread expansion, the panelists acknowledged that the current HIT systems are not perfect and that meaningful federal leadership is needed. The witnesses called on FDA to finalize the draft guidance to MMA developers issued in July 2011. They also advocated for a nimble, risk-based system of regulation that accounts for stakeholder input and provides clarity for all HIT, not just MMAs. The witnesses expressed concern that FDA is already failing to keep up with regulations relative to MMAs and HIT more broadly.
The subcommittee on Oversight and Investigations held day 3 of hearings on Thursday. Stay tuned for our post on the final hearing on this topic!