FDA Releases 2018 Roadmap: Focus On Digital Health Continues

Last week, FDA released a document outlining its policy priorities for the coming year. “Healthy Innovation, Safer Families: FDA’s 2018 Strategic Roadmap” addresses continued focus on digital health, among other priorities, as one way that the agency seeks to further its public health mission and foster innovation that benefits consumers and patients.  Consistent with this focus, the agency also announced a public workshop on January 30-31, 2018, to discuss the status of its Software Pre-Cert Program, which we wrote about here.

These announcements follow a consistent drumbeat of digital health focus from FDA during 2017, including release of two draft and one final guidance documents that are intended to implement the objectives of the 21st Century Cures Act.  These include the following:

  • The Clinical and Patient Decision Support Software (CDS) Draft Guidance. As explained by FDA, this guidance “is intended to make clear what types of CDS would no longer be defined as a medical device, and thus would not be regulated by the agency. For example, generally, CDS that allows for the provider to independently review the basis for the recommendations are excluded from the FDA’s regulation… However, the FDA will continue to enforce oversight of software programs that are intended to process or analyze medical images, signals from in vitro diagnostic devices or patterns acquired from a processor like an electrocardiogram that use analytical functionalities to make treatment recommendations, as these remain medical devices under the Cures Act.” The comment period is open until Tuesday, February 6, 2018.
  • The Changes to Existing Medical Software Policies Resulting from Section 3060 of the 21st Century Cures Act Draft Guidance.  This draft guidance updates the agency’s thinking relative to exercise of jurisdiction or enforcement discretion over low risk mobile and digital health products, as previously addressed in FDA’s Mobile Medical Application and General Wellness guidance. The deadline for public comments is Tuesday, February 6, 2018.
  • The Software As A Medical Device (SaMD): Clinical Evaluation Final Guidance. This finalizes draft guidance issued in 2016 and attempts to further global regulatory harmonization efforts by establishing common principles for regulators to use in evaluating the safety, effectiveness and performance of SaMD.

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AG Sessions Ends Obama-Era Policies Governing Federal Marijuana Enforcement; Sudden Wave of Enforcement Unlikely

Timed almost to the day that California legalized recreational marijuana, Attorney General Jeff Sessions announced on Thursday, January 4, that the Department of Justice has rescinded the Obama-era guidance (the Cole Memo) issued to federal prosecutors relative to marijuana enforcement. The announcement characterizes the move as an effort to restore prosecutorial discretion, noting that the U.S. Attorneys’ Manual requires prosecutors to weigh all relevant considerations in determining which cases to bring, including the seriousness of the crime, the deterrent effect of the prosecution, and the cumulative impact of particular crimes on the community. Notably, the announcement also appears to characterize marijuana as a contributor to “the growing drug crisis.”

This development is not a surprise. Attorney General Sessions has made a number of statements that reflect a view that marijuana is properly classified as a Schedule I narcotic under the Controlled Substances Act, putting it in the same category as heroin. Nevertheless, given that eight states (Alaska, Washington, Oregon, California, Colorado, Nevada, Maine, and Massachusetts) and the District of Columbia have legalized recreational marijuana and 29 states allow medical marijuana, it opens questions as to federal enforcement priorities and risks for companies operating or considering doing business with the cannabis industry.

While recreational marijuana may seem like the obvious target for future enforcement, Sessions has not limited his stated concerns about marijuana to recreational use. In a May 2017 letter to House and Senate leaders, Sessions specifically renewed the DOJ’s objection to any limitation on its ability to enforce the Controlled Substances Act. Consistent with the language used in the January 4 announcement, Sessions characterizes state-regulated medical marijuana as a contributing factor in the “historic drug epidemic and potentially long term uptick in violent crime.”

It is also not clear from his public statements, such as this one from his confirmation hearing, whether Attorney General Sessions has specific opinions as to CBD, a non-psychoactive derivative that can be produced either from cannabis or industrial hemp. CBD has been legalized in many states but its legal status at the federal level depends on whether the product is derived from cannabis (Schedule I narcotic) or industrial hemp, a legal substance.  However, as we have written about here, it is likely that the Food and Drug Administration remains the agency most interested in CBD product classification and claims.

Wave of Enforcement Unlikely

It also seems likely that, even though the Cole Memo no longer stands as official agency guidance, its principles will continue to guide prosecutors’ decision-making, rendering a sudden wave of law enforcement activity unlikely. Whether to take action will be up to individual U.S. Attorney’s Offices, and, in exercising their prosecutorial discretion, those Offices will look primarily to the seriousness of the crime.  In assessing seriousness, in turn, prosecutors will most likely look back to the newly-rescinded Cole Memo, which sets forth the top priorities for law enforcement.  So even though the Cole Memo now lacks any formal effect, it likely will remain the best guide for U.S. Attorney’s Offices in terms of prioritizing marijuana cases.  What that means is that those in violation of state law, or engaged in distribution to minors, or engaged in other criminal activity, will be the most likely to attract law enforcement attention, just as they were prior to the Attorney General’s announcement.  State compliant medical marijuana businesses, and the ancillary business who provide products or services to them, will remain the least likely.

Notwithstanding that the risk to ancillary businesses providing services to state compliant marijuana businesses remains low, financial institutions are likely to have heightened concerns, and those previously on the fence about whether bank marijuana-related businesses will probably take a wait-and-see approach for a while. However, those that continue to engage in the due diligence steps set forth in 2014 by the Financial Crimes Enforcement Network (FinCEN) are unlikely to find themselves the target of law enforcement activity. After all, there is increasing recognition that the scrutiny and record-keeping that financial institutions bring to marijuana-related businesses is beneficial to law enforcement.  Without them, the industry is forced to rely on large movements of cash, which poses a security risk to the businesses, raises the risk of money laundering and other illicit activity, and makes that activity more difficult to detect and prevent.

Elected officials from several states, particularly those with legalized recreational marijuana, have already expressed opposition to the DOJ’s announcement.   We will continue to follow this issue closely and provide updates here.

Litigation Is Not The Solution To The Opioid Epidemic

The causes of the opioid epidemic are myriad and unique, and undermine the legal claims faced by manufacturers. Opioids are not tobacco, and pharmaceutical companies — who produce and distribute medicine that for many provide vital relief from chronic, agonizing pain — are not cigarette companies. Read our Law360 article discussing how the opioid crisis is a public health problem and it is irresponsible to fit the pharmaceutical industry into the mold of Big Tobacco.  Our bottom line is that litigation is not a proper solution. 


Preparing for the Opioid Litigation Epidemic

One of the newer symptoms of this so-called “Opioid Epidemic,” is a rash of litigation targeting pharmaceutical manufacturers and distributors. Currently, there are actions underway in Texas, West Virginia, Alabama, Ohio, Mississippi, South Carolina, Kentucky, Washington, Illinois, California, New York and more new suits are being filed.

In each of these claims, specific acts and specific harms attributable to actual elements of causation must be determined. This is difficult to do when the quality of the ostensible harm, the full diasporic spectrum of the “epidemic,” is so variable. Furthermore, there are a plethora of intervening actors between pharmaceutical companies and the community, any of whose independent behavior could supersede and break the causal chain required to hold opioid manufacturers liable. For example, studies conducted by the University of Arkansas looking at the transition from acute to periodic opioid use seem to suggest that the most effective way of reducing the risk of abuse might be through doctors limiting initial prescriptions, leaving shorter periods of time between refills, and so preventing unnecessary accumulation of medication. Continue reading our client advisory here.

H.R. 3985 Calls For Public-Private Working Group to Study Medical Device Security

The “Internet of Medical Things Resiliency Partnership Act of 2017” was introduced in the House of Representative earlier this month.  Co-sponsored by Rep. David Trott (R-MI) and Rep. Susan Brooks (R-IN), the bill would require establishment of “a working group of public and private entities to develop recommendations for voluntary frameworks and guidelines to increase the security and resilience of networked medical devices sold in the United States that store, receive, access, or transmit information to an external recipient or system for which unauthorized access, modification, misuse, or denial of use may result in patient harm.”

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FDA and EPA Issue Joint Guidance On Jurisdiction Over Mosquito-Related Products

Last week, FDA and the EPA issued guidance for industry regarding each agency’s respective jurisdiction over mosquito-related products.  With the emergence of the Zika virus and the urgency in countering the spread of mosquito-borne diseases taking on new prominence, the agencies acknowledged that “novel mosquito control technologies have gained greater attention as an element of [vector control]; however, there has been some confusion with respect to FDA’s and EPA’s respective jurisdiction over mosquito-related products.”   Key points of the guidance include the following:

  • Mosquitoes fall within the statutory definitions of “drug” per the FD&C Act and “pest” per the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA).
  •   In 1975, Congress amended FIFRA’s definition of “pesticide” in FIFRA to exclude any article that is a “new animal drug,” within the FD&C Act.  Since then, EPA has required registration, as pesticides, articles that control the mosquito population by killing them or interfering with their reproduction.
  • Given this history, with the new guidance, FDA is clarifying that the phrase “articles (other than food) intended to affect the structure or any function of the body of man or other animals” in the FD&C’s drug definition does not include articles intended to function as pesticides by preventing, destroying, repelling, or mitigating mosquitoes for population control purposes.
  • Examples of New Animal Drugs regulated by FDA include products intended to reduce the virus/pathogen load within a mosquito or products intended to prevent mosquito-borne disease in humans or animals.
  • Examples of Pesticide Products regulated by EPA include products intended to reduce the population of mosquitoes (for example, by killing them or interfering with their reproduction).

This guidance potentially applies to a wide variety of products, including those produced through biotechnology.  One point that is not addressed in the guidance but that is of interest to industry is that the Federal Trade Commission also has jurisdiction over the advertising of insect repellent products.  Last year the agency issued warning letters to companies making Zika-related claims.

As mosquito-borne disease spreads, mosquito-related products will proliferate.  Companies will need to determine at the outset which agency or agencies have jurisdiction to ensure compliance.

Digital Health Update: Tech and Health Care Giants Selected for FDA’s Pre-Cert Program

In his keynote address at the AdvaMed annual conference in late September, FDA Commissioner Scott Gottlieb returned to the themes of promoting innovation by partnering with industry.  Consistent with that, and furthering the agency’s emphasis on digital health innovation, he announced the companies that will be participating in FDA’s Pre-Cert program, a program that the agency describes as “intended to inform a tailored approach toward digital health technology by looking at the software developer or digital health technology developer, rather than primarily at the product.”

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“Challenges Remain” for FDA’s Inspections of Food Facilities, According to Inspector General Report

While FDA is on track to meet the initial inspection timeframes specified under the Food Safety Modernization Act (FSMA), questions remain about the effectiveness of those inspections and the capacity for FDA to meet future required timeframes.  The report comes this week from the U.S. Department of Health and Human Services Office of Inspector General, which used FDA’s inspection data and information about FDA’s advisory and enforcement actions to provide its analysis and recommendations.

Notable findings include:

  • Specified FSMA timeframes.  For the initial cycle, FSMA requires FDA to inspect all high-risk facilities within five years and all non-high risk facilities with seven years.  While FDA is on track to meet these deadlines, FSMA thereafter requires a quicker timeframe – three years for high-risk facilities and five years for non-high risk facilities.  The report found that the shorter timeframe poses a challenge for non-high risk facilities in particular.
  • Inaccurate information.   The report found that more than one quarter of high-risk and non-high-risk facilities that FDA counted toward meeting inspection mandates were attempted inspections but were never actually completed due to the facility being out of business or not in operation.  FDA inspections are generally unannounced.
  • Correcting significant inspection violations.  According to the report, FDA uncovered significant inspection violations in 1-2% of inspected facilities or 1,245 facilities.  FDA most commonly relied on advisory actions such as warning letters, untitled non-public letters, or regulatory meetings to address these issues, as shown in the pie chart to the right.  The report noted that advisory actions do not necessarily ensure that the identified issues are corrected and commented that FDA declined to regularly use the new administrative tools authorized under FSMA, such as administratively detaining unsafe food, mandating recalls of certain foods, and suspending facility registrations and prohibiting the facility from distributing food.
  • Timeliness of follow-up.   The report further noted that FDA may not always timely follow-up with facilities even when a significant inspection issue was identified.  According to the data, about half the time, FDA either did not follow-up within one year (31%) or did not follow up at all (17%).

FDA responded to the report by noting that it concurred with the Inspector General’s recommendations and would implement certain corrective actions to address the identified issues.

Potential Drawback Opportunity for Distilled Spirits

“Drawback” is U.S. Customs program that allows importers to get their duty payments refunded by Customs if they export the same or a similar product.  There are lots of permutations and it’s quite a bit of “paperwork” to qualify, but the upside is significant.

Under the recently enacted Trade Facilitation and Trade Enforcement Act (TFTEA), drawback is being simplified and will be effective Feb 24, 2018.  The importing community is still waiting for certain Customs regulations on this, including whether distilled spirits will be eligible for “substitution” drawback.  Customs has historically denied substitution drawback to distilled spirits.Customs will be issuing a notice of proposed rulemaking in September on substation drawback. It remains to be seen whether distilled spirits are included.  There will be a time for public comments after the notice is issued.If Customs omits distilled spirits, we anticipate the industry will lobby Congress to extend drawback via legislation.

The drawback revised regulations will provide various opportunities for the distilled spirits industry, including submitting comments and government relations efforts.  In the meantime, we are waiting on the Federal Register Notice in September.

WTO and FAO Issue Publication on Trade and Food Standards

The World Trade Organization (WTO) and the UN Food and Agriculture Organization (FAO) recently issued a joint publication, Trade and Food Standards, which discusses the development of international standards and the need for additional regulations and involvement by all countries.

Currently, the global food trade is valued at $1.7 trillion.  The FAO has 188 member countries and guidelines covering almost 200 food products and more than 300 food additives.  The U.S. alone imports food from 150 countries and food products often traverse a complex supply chain to reach the U.S.

The WTO and FAO emphasized that now is the time for additional international standards due to the rise in e-commerce, new production technology, and new international trade agreements. Furthermore, the agencies have organized a partnership to advise developing countries on controlling their supply chains and inspection and certification systems.