The pharmaceutical industry is facing new limits on payments to prescribers in New Jersey. Earlier this month the state’s Division of Consumer Affairs finalized sweeping new rules prohibiting some types of payments and capping others. New Jersey now joins the ranks of other states, like California and Massachusetts, with specific payment prohibitions between manufacturers and prescribers. The new rules place the burden of compliance on prescribers licensed in New Jersey, but manufacturers should be fluent in these requirements. We expect engagement and collaboration with New Jersey prescribers to be impacted, as these rules are clearly designed to be a disincentive to financial arrangements between manufacturers and prescribers. How deeply this impacts ongoing and new collaborations with prescribers is yet to be seen, as manufacturers do rely on prescribers for contributions to product design, product feasibility in clinical workflow, and patient expectations. Below is a summary of the key aspects of the new rules, along with tables to assist in identifying how certain payments are affected. Continue Reading A Guide to New Jersey’s New Limits on Pharmaceutical Industry Payments to Prescribers
Bethany Hills is a Member in the firm’s New York office. Her practice focuses on leveraging deep FDA regulatory experience and exceptional knowledge of the health care delivery system to assist international and domestic health technology companies enter and navigate the US health care market. Bethany represents a large variety of health care provider businesses in a range of regulatory, reimbursement, and US and international compliance matters. Through extensive representation, her understanding of compliance issues and of the US health care reimbursement system far surpasses that of most FDA lawyers.
As we enter a new era in which executive agencies are headed by President Trump, we are also faced with many other transformative changes that will affect FDA-regulated entities in a significant and lasting way. This post will outline some of our thoughts related to what could face FDA and its various stakeholders as we go forward into the great unknown.
First, since being signed into law by former President Obama on December 13th, we’ve been writing and speaking about the myriad provisions of the 21st Century Cures Act. This wide-ranging law has many mandates for agency actions and new guidance documents, which FDA will be working on beginning this year, but far beyond 2017 as well. Drug, biologic, and medical device stakeholders are also awaiting the outcome of the upcoming reauthorization of all the major User Fee Acts that are “must-pass” legislation before the end of the current fiscal year (FY17 ends on September 30th), in order to ensure FDA’s continuing operations. Many other policy changes that are expected to result from the switch from a Democratic-led to a Republican-led Executive Branch, the latter also being supported by a GOP-controlled Congress, will likely have major impacts on medical product developers. Continue Reading FDA’s Enforcement Priorities Likely to Change in 2017 and Other “Unknowable Knowns”
Over the past year, clear trends have emerged in FDA’s enforcement activities. Enforcement arising from alleged violations of the Federal Food, Drug, and Cosmetic Act (FFDCA) can take many forms, including FDA advisory actions such as warning letters, adverse inspectional observations that can lead to specific administrative actions like product recalls or import detentions, and the pursuit of product seizures using express judicial tools, criminal convictions, or civil settlements in cooperation with DOJ. Structurally, individual compliance offices within the FDA centers and regional offices can initiate enforcement activity against regulated industries, while the FDA Office of Criminal Investigations (OCI) has primary responsibility for criminal investigations conducted by the FDA and works closely with DOJ in setting enforcement priorities for new cases. Continue Reading Health Care Enforcement Review and 2017 Outlook: FDA’s Wide-Ranging Activities
As we noted in our December 9th post, the 21st Century Cures Act (the “Cures Act”) requires FDA to develop a framework and guidance for evaluating real world evidence (“RWE”) in the context of drug regulation to support approvals of new indications for previously approved drugs, and to support or fulfill post-approval study requirements. This directive to apply RWE in the drug sphere is particularly interesting because FDA has issued a draft policy on the use of RWE in the context of medical devices, but has generally remained silent about applying RWE to pharmaceutical and biologic regulatory considerations. In this post, we briefly review the Cures Act’s RWE provision, as well as FDA’s recent public remarks about the use of RWE, and we provide some predictions on how FDA will implement the RWE evaluation program.
On Wednesday, the U.S. Senate overwhelmingly passed the 21st Century Cures Act (the “Act”) by a vote of 94 to 5. Spearheaded by Michigan Representative Frank Upton, the bill now heads to President Obama who has promised to sign it. The Act is ambitious, and will impact a wide swath of the U.S. health care system. The Act provides, among other things:
- $4.8 billion over 10 years to support NIH research on precision medicine, neuroscience, cancer and regenerative medicine.
- $1 billion in state grants to increase opioid abuse prevention and treatment services, including prescription drug monitoring programs, training programs and treatment programs.
- Substantial changes to FDA regulations to accelerate the pace of bringing pharmaceuticals and medical devices to market.
- New obligations on the part of both FDA and industry stakeholders to implement the research initiatives and regulatory changes mentioned above.
- Other health care initiatives addressing health information technology, vaccines, national security and health care delivery.
At 996 pages, the Act cannot be summarized in one post. Instead, we plan to analyze the various aspects of the Act in multiple posts over the coming weeks. The remainder of this post will highlight provisions that support one of the Act’s primary objectives: the acceleration of drugs and devices to market. Continue Reading Senate Passes 21st Century Cures Act, but Can It Cure an Ailing FDA?
Based on recent FDA statements, it looks as though the FDA would like to integrate hospital medical device reporting obligations into the National Evaluation System for health Technology (NEST) framework. The NEST system is a new model for “real world” evidence generation as the FDA looks to better identify problematic devices, accurately and transparently characterize and release data on device performance in clinical practice, and efficiently generate data to support premarket clearance or approval of new devices and new uses of currently marketed devices
Currently the FDA has a number of post marketing surveillance tools available to assist these goals. First, medical device reporting obligations require user facilities to report a wide range of defects and adverse events associated with medical devices. FDA does not tend to enforce this requirement in light of a 1997 law requiring the FDA to find a less burdensome post market surveillance approach. Second, the FDA can, although it does so infrequently, require post approval studies as part of the device approval process. Recently the FDA inspected 17 hospitals and found significant noncompliance with FDA medical device reporting regulations. This is clearly a wakeup call that the current system is not working as it should.
If you are following the development of NEST like we are, you know that the FDA, led by CDRH Director Jeffrey E. Shuren, is slowly implementing a massive data collection and analysis system to merge data from many stakeholders into a system the FDA can utilize for pre market and post market decisions. FDA desires to obtain and utilize real world data about devices and their performances as part of the scientific evidence the FDA reviews, both pre and post market.
Now that a coordinating center for NEST has been established, the Medical Device Innovation Consortium (MDIC), we know that the policy goal of moving away from reliance on MDR reporting by end users towards the use of device registries is beginning to be implemented. We hope that the upcoming December 5th Public Workshop: The Role of Hospitals in Modernizing Evidence Generation for Device Evaluation: Harnessing the Digital Revolution for Surveillance allows for further discussion of the many issues we have seen that may impact any transition from the current MDR system to the planned NEST approach. For example, complicated software licensing agreements and data transfer restrictions often make EHR data transfers to a device registry difficult and unreliable. This could lead to biased information in the registries that ultimately could impact how the FDA views the safety and effectiveness of the device.
We strongly encourage hospitals and device manufactures to participate in the December 5th public meeting. It is important that the FDA consider all aspects of these issues before implementing long term policies that affect post market device surveillance.
This week, a high-profile FDA hearing sought to receive broad stakeholder input on four draft guidance documents from 2014 and early 2015 that further explain the agency’s views on some of the criteria for the regulation level of Human Cell and Tissue Products (HCT/P) as well as on the scope of the “same surgical procedure” exception under 21 CFR § 1271.15. More than 150 people attended in-person, including our own Joanne Hawana, with another 500 webinar attendees. Continue Reading FDA Concludes Two-Day Public Hearing on Human Cell and Tissue Product (HCT/P) Regulatory Paradigm
Last month, we reported on a Massachusetts federal court jury’s decision to acquit the former CEO of Warner Chilcott in one of the first prosecutions of a health care executive following the Department of Justice’s (“DOJ”) Yates Memo. Last week, another Massachusetts federal court jury acquitted two more former health care executives of felony charges following another closely watched post-Yates-Memo prosecution. This time, the jury found William Facteau, the former CEO of Acclarent, and Patrick Fabian, Acclarent’s former Vice President of Sales, not guilty of 14 counts of felony fraud related to Acclarent’s off-label promotion of a medical device (although the jury did find them guilty of related misdemeanor charges). Continue Reading Another Jury Acquits in One of the First Few Prosecutions of Health Care Executives Following DOJ’s Yates Memo
In our Israel Connect Summer 2016 edition we summarized the FDA’s post-market surveillance data programs, including the NEST program designed to consolidate and analyze real-world device data once a device is legally commercialized. In late June I had an opportunity to sit down with a medical device industry veteran, and one with a uniquely international perspective, and we discussed in detail the practical impact of the planned NEST program.
Bethany Hills (“BH”): Oded Kraft (“OK”), you’ve been involved in the medical device industry, both with established industry giants and also with small, nimble start-ups, for nearly two decades. What do you think about the FDA NEST program?
OK: It’s great to see the FDA taking the NEST path. Companies, even if informally, make use of data resulting from on-going use of the products when monitoring complaints, assessing competition, reviewing third party publications, and addressing issues found in-house. This is especially true for companies marketing in the EU.
BH: So since companies are already seeking out and utilizing this data, the FDA NEST program only has a positive impact?
OK: I do wonder whether the reliance on Post-marketing surveillance data would really reduce the burden of collecting data prior to launching like has been promoted as a benefit of NEST. After all, it is the FDA’s stated role to ensure the safety and effectiveness of the cleared/approved products before commercialization. And in addition, there is the question of whether the agency would force companies to recall products from the market should the post-market surveillance data reveal issues. I am not advocating that we should leave unsafe products in the market, however, reducing pre-market burden by collection of post market data, without looking at the entire clearance/approval approach would leave the companies with no choice but to keep on running the same pre market studies, regardless of the promises within the NEST program. What company will want to take the financial and brand risk of a recall post-launch if those issues can be addressed in the clearance or approval process?
BH: Interesting. The potential for FDA to swing the pendulum to post-market enforcement is important. Certainly our clients are always pushing for a quicker path to market and the NEST program seems to be promising that.
OK: But companies today, especially startups and smaller growth stag companies, plan a limited availability period when launching to limit financial and brand risk exposure. Yes, NEST could become another tool for companies’ managements and boards to manage the go to market timing vs. post market risk. Yet, another side of this decision is the strategic path of the company itself. It is not unusual for startups to acquire an FDA approval/clearance in order to gain the interest of a corporate partner for an M&A or investment opportunity. The startups would typically want to accelerate the FDA process, meaning the NEST post market surveillance options to reduce pre-market data requirements would be very attractive. But risk averting corporate partners or investors may prefer to either resolve the risk ahead of time, devalue the company if the risk is not sufficiently resolved, or establish milestones for post-market surveillance that could be burdensome or delay corporate growth. Not a pleasant decision, but nevertheless, an important tools in the hands of startups.
BH: I agree with the concerns corporate partners and investors might have about the uncertain nature created by a shift to heavier reliance on post-market data and enforcement. We’ve talked about the main post-market risk area–off-label use and promotion–as another risk area that could be impacted by as policy shift where FDA highly values post-market data.
OK: Yes, there could be an additional upside here. If a device company could rely on the NEST data to expand intended use and indications post launch, then the NEST approach would bring real value. It would also bring the official labeled use (cleared or approved through the pre-market process) to par with real life experience and use. In a world revolving around consumer technologies launching a new product every other day, and leveraging social media to share best known methods, it’s time for the healthcare industry, FDA included, to join the club.
BH: Thanks Oded! We certainly have a lot to follow with the evolving NEST program and the practical impact on our device clients.
Oded Kraft Biography: Oded is the VP of Product Development at Kornit Digtal, leading a team of over 100 professionals developing digital printing solutions for the textile market. Previously, Oded served in an executive business role with Roche Diabetes Care, Germany, leading the 10 year product portfolio and strategic roadmap (business worth of over $600M), and VP Products at Medingo, a medical devices company, acquired by Roche GmBH in
2010 for $180M. Throughout this time, Oded has been working with several startups in various capacities, integrating technology with business goals. Prior to joining Medingo, Oded worked at GE Healthcare Nuclear Medicine division as a Global Segment Leader, and before that, in various R&D positions with GE Healthcare, the IDF, and 5 years with a DoD company in the US. Oded holds an MBA and a BSc in Electrical Engineering from Technion-Israel Institute of Technology. Oded is not affiliated with Mintz Levin and all opinions expressed are his own.
On July 11, 1969, the United States accomplished the almost unthinkable –two men walking on the moon. Conjuring images of that moon landing, President Obama moved forward the “Cancer Moonshot” program at his January 2016 State of Union Address. Vice President Joe Biden—who recently lost his 46 year old son to brain cancer— was named as the program’s “Mission Control.” To combat such a complex and variable disease—for which the cure is unknown and where treatments vary significantly—in the aggressive way envisioned by the Cancer Moonshot program requires a restructuring of the FDA. The current FDA administrative structure does not organize around a particular disease, but rather product categories (i.e. drug, device, food).
Establishing a cross-sectional Oncology Center of Excellence (OCE) would theoretically increase the retention and recruitment of professional FDA personnel with disease- specific expertise, streamline drug and device review processes, and enhance outreach activities to patient groups. Rather than have individual FDA centers review oncology products and treatments in an uncoordinated way, the centralized OCE, would seek to coordinate and improve the process across the FDA.
Significant steps must be taken to realize the benefits of the OCE. The temporary director, Dr. Richard Pazdur, recently proposed the first steps to complete the task. He recommended cross-center monthly meetings to discuss central oncology issues and advances. Initially, Pazdur seeks to build a system for cross- disciplinary review staff, provide external outreach to diverse stakeholders, and ensure current administrative efficiency for review of significant cancer products.
Congress is also taking an interest in reorganizing the FDA. H.R. 5414, the FDA Cross-Center Collaboration Act of 2016, would establish Intercenter Institutes within the FDA to focus on specific diseases and coordinate activities between the agency’s drug, device, and biologic centers. Specifically, these Institutes would be tasked with coordinating activities, applicable to their specific disease areas, with the Center for Drug Evaluation and Research, Center for Biologics Evaluation and Research, and Center for Devices and Radiological Health. In order to establish such Institutes, HHS would have to provide for a public comment period on the proposed Institute. A bipartisan Senate bill, S. 2700, also included language on Intercenter Institutes when it advanced out of committee in March.
Although Cancer Moonshot efforts within FDA are, pardon the pun, just taking off, we can already anticipate a number of challenges to creating the OCE and hurdles that may arise for product approvals within OCE. First, the FDA is in the midst of a massive administrative reorganization called Program Alignment, underway since 2014 that created the Office of Regulatory Affairs—a product based and vertically integrated inspection program—and the Offices of Manufacture and Pharmaceutical Quality. However, this reorganization is focused mainly on post- market compliance; thus it does not provide much framework for the lofty Cancer Moonshot goals focused on new treatments and cures. Second, an October 2015 independent report titled “Combination Product Review Intercenter Consult Process Study” identified key issues with the fully implemented office of Combination Products that could be very instructive to the FDA in developing the OCE or other Intercenter Institutes:
- Different Application Types and Timelines
- Separate Review and Tracking System in each Center
- Unclear communication channels between Centers
- Lacked Resources
While we don’t expect much to happen with the implementation of these initiatives in these final months of the Presidential election year, we are carefully monitoring all reorganization programs within the FDA so we can better identify opportunities and anticipate roadblocks for clients.