• where experts go to learn about FDA
  • New Administration, “Old” Rules: FDA and HHS Jointly Withdraw 11th Hour Trump Administration Proposal for Sweeping 510(k) Exemption

    In a return to regular order, on April 16, HHS and FDA jointly withdrew a January 15, 2021 proposal issued by HHS under the prior administration recommending wide-spread 510(k) exemptions (the “Notice”).  See 86 Fed. Reg. 20167, 20174 (Apr. 16, 2021) (available here and here).  The Notice, specifically, proposed exempting 83 Class II devices, ranging from thermometers to digital therapeutics and ventilators, and immediately exempted seven types of Class I gloves.  Because the glove exemption was immediate upon issuance of the January Notice, HHS and FDA are issuing a notice and request for comment to reinstate the 510(k) requirements for these devices.

    The only thing this group of Class I and II devices had in common was that they were all subject to an FDA enforcement discretion policy issued during the COVID-19 public health emergency.  See.  86 Fed. Reg. 4088 (Jan. 15, 2021).  In brief, the January Notice determined that because these devices were granted regulatory flexibility during the public health emergency that they should be permanently exempt from the 510(k) notification requirements (even if that’s not what the enforcement policy said).  In support of this proposal, the Notice looked only to FDA’s publicly available device adverse event database, FDA’s Manufacturer and User Facility Device Experience (MAUDE), to identify any safety risks.  Anyone in industry who has ever tried to argue to FDA that a device that is commercially available outside the U.S. should be cleared because there have been no or minimal adverse events knows how willing FDA is to accept lack of adverse events as a sign of safety (for those who haven’t tried this argument, it’s not a winning one).

    When this author read the January Notice, it seemed like an ill-thought-out proposal.  But, it was actually a gift in waiting having led to what can only be described as two scathing withdrawal notices issued last week, in which HHS and FDA found that “the proposed exemptions . . . were published without adequate scientific support, . . . contained errors and ambiguities, and . . . [were] otherwise flawed.”   The Federal Register notice announcing the withdrawal also noted that the enforcement policies that the previous administration proposed expanding and making permanent, “were issued in response to a highly unusual set of facts and circumstances; the most sweeping [public health emergency] to occur in over a century.”

    It should not come as a surprise to anyone that at a time when FDA, particularly CDRH, is experiencing an unprecedented workload, it needed to prioritize resources and ensure that it was not a bottle neck to getting devices to people that needed them in a way that minimized risk to the public.  It acted by issuing enforcement discretion policies.  These policies were never meant to be permanent – each stating that, “This policy is intended to remain in effect only for the duration of the public health emergency related to COVID-19.”  Indeed, the glove withdrawal notice goes into detail about the evidence that FDA considers when evaluating a 510(k) exemption for a Class I device noting that if the Agency believed that the gloves met the criteria for exemption it could have issued it, but “instead it chose an enforcement policy, which reflected FDA’s careful balancing of the public health considerations in response to the [public health emergency].”

    The withdrawal notices also stated that HHS and FDA had received “dozens” of inquiries, both formal and informal, about the proposal highlighting confusion around ambiguities and errors in the proposal.  Interestingly, public comments in response to the January Notice were mixed with some supporting the proposal for specific device types (e.g., digital pathology devices) and others opposing the proposed exemption.  The comments in opposition highlighted risks to public health, the methodology for identifying those devices for exemption, and the industry confusion that could be caused if the proposal were to be finalized.  The government appeared to agree on the methodology point, stating that “adverse event data is not adequate on its own for assessing safety, let alone whether to determine a device to be exempt from 510(k).”

    Many in industry found the January Notice odd given that it came from HHS, rather than FDA.  Indeed, in the withdrawal notices, HHS and FDA noted that they “did not find any evidence that HHS consulted with, otherwise involved, or even notified FDA before issuing” the proposed exemptions.  The withdrawal made quite clear how HHS and FDA should work together stating, “Section 1003(d) of the FD&C Act (21 U.S.C. 393(d)) provides that the Secretary ‘shall be responsible for executing’ the FD&C Act ‘through the [FDA] Commissioner.’  Here, the January 15, 2021, Notice is clearly an action ‘executing’ the FD&C Act.”

    Because the January Notice merely proposed an exemption for the 83 Class II devices, HHS and FDA were able to withdraw it immediately.  Thus, there is no change to the regulatory status of those devices.  As discussed above, HHS and FDA are currently seeking comment on the reinstatement of the 510(k) requirements for these devices.  The notice indicates that HHS and FDA, “believe that only a limited subset of regulated entities may have placed legitimate reliance on the January 15, 2021 Notice” and the government is “concerned about the public health risks posed by the exemption.”  Glove manufacturers affected by the exemption should beware of the likely reinstatement of the 510(k) requirements.  The comment period closes May 17, 2021.

    Categories: Medical Devices

    FDA Updates the Regulatory Definitions of Certain Software Types for Consistency with 21st Century Cures Act Exclusions

    The 21st Century Cures Act (“Cures Act”), which was enacted in 2016 (see our blog post here), excluded from the statutory definition of “device” five categories of software:

    1. Software for administrative support of a health care facility;
    2. Software for maintaining or encouraging a healthy lifestyle and is unrelated to the diagnosis, cure, mitigation, prevention, or treatment of a disease or condition (so-called “general wellness” software);
    3. Electronic medical record software;
    4. Certain types of medical device data system (MDDS) software, which is software intended to transfer, store, convert formats, or display device data; and
    5. Certain types of clinical decision-support software.

    To date, FDA had not updated its classification regulations, the FDA regulations defining categories of devices and outlining the applicable regulatory controls, to carve out the categories of software devices excluded from the device definition by the Cures Act.  This lag was, at times, a source of confusion when attempting to determine whether a new software functionality was subject to regulation as a device and required 510(k) clearance.

    On April 19, FDA published a final rule amending eight classification regulations to exclude software functions that no longer fall within the device definition:

    Classification Regulation

    (21 C.F.R.)

    Device TypeModification
    862.2100Calculator/Data Processing Module for Clinical UseRemove non-device software functions to maintain and retrieve laboratory data
    862.1350Continuous Glucose Monitor (CGM) Secondary DisplayRemove software functions regarding receipt and display of data, and amend the title of the regulation to “Continuous Glucose Monitor (CGM) Secondary Alarm System”
    866.4750Automated Indirect Immunofluorescence Microscope and Software-Assisted SystemReplace “software” with “device” in the device category name, because both hardware and software functions that use fluorescent signal acquisition and processing software, data storage, and transferring mechanisms, or assay specific algorithms to interpret or analyze results, are devices
    880.6310Medical Device Data SystemRemove non-device software functions intended for transferring, storing, converting formats, or displaying clinical laboratory test or other device data and results
    884.2730Home Uterine Activity MonitorRemove non-device software functions intended for transmitting, receiving, and displaying data
    892.2010Medical Image Storage DeviceRemove non-device software functions intended for storing and retrieving, so that a medical image storage device is a hardware device that provides electronic storage and retrieval functions for medical images
    892.2020Medical Image Communications DeviceInclude software functions intended for medical image processing and manipulation
    892.2050Picture Archiving and Communications SystemRemove non-device software functions intended for storing and displaying medical images, clarify that the regulation includes software and hardware functions intended for medical image management and processing, and revise the title of the classification regulation to “Medical Image Management and Processing System”

    By removing the non-regulated software functionalities, the classification regulations can more easily be used to identify regulated software functionalities.

    The modifications to the Picture Archiving and Communications System (PACS) classification regulation, in particular, are a welcome change.  This category of devices was defined very broadly in the previous classification regulation, and many types of radiological imaging software fell within the PACS definition.  By narrowing down the PACS definition to remove functionalities for storage and display of images, it will be much easier to evaluate the regulatory status of a new radiological imaging software.

    Categories: Uncategorized

    REMINDER: Controlled Substances Act Issues: Legal Perspectives and Analytical Trends Webinar

    Hyman, Phelps & McNamara, P.C. and Analysis Group are partnering to host a two-hour timely, informative and free program to discuss current important legal perspectives and analytical trends concerning the Controlled Substances Act and the Drug Enforcement Administration.  The webinar is scheduled to take place on Tuesday, April 27, 2021, from 2:00 p.m. – 4:00 p.m. (ET).

    AGENDA:

    State of the Agency: Recent Drug Enforcement Administration Regulatory Changes (2:00 – 2:40 p.m.)

    John A. Gilbert, Jr. and Crystal Pike

    The Pharmacist’s Corresponding Responsibility: Legal and Regulatory Requirements and Recent Enforcement Activity (2:40 – 3:20 p.m.)

    Karla L. Palmer and Nicholas Van Niel

    “Suspicious Order” Monitoring: The SUPPORT Act, Proposed SOM Rule, the “ORUSC,” and Distribution Trends (3:20 – 4:00 p.m.)

    Larry K. Houck and Kenneth Weinstein

    To RSVP for this program, please email Amy Vasvary at avasvary@hpm.com

    Big Win for HP&M Client: Court of Appeals Tells FDA to Regulate Barium Sulfate As a Device

    We have blogged recently about several FDA setbacks in court (here, for example).  Add one more to that tally.  Genus Medical Technologies secured an important victory in the D.C. Circuit Court of Appeals on Friday.

    In Genus Medical Technologies v. FDA, the Court of Appeals ruled that FDA cannot regulate a medical product – in this case, the radiographic contrast agent barium sulfate – as a drug when the product meets the definition of a device.  The decision has wide-ranging implications for FDA’s assertion of discretion in classifying and regulating medical products.  The Court decision limiting FDA’s discretion provides regulatory certainty for device manufacturers, as the claimed discretion, if recognized by the Court, would have meant that any medical device potentially could be classified and regulated as a drug.  And, of course, requiring medical devices to be regulated as such precludes the imposition of significant additional costs.  As most readers of our blog are aware, the regulatory costs to manufacturers of medical products are much lower if FDA regulates a product as a medical device rather than a drug requiring FDA marketing approval.

    Devices are defined by statute as excluding products that achieve their primary intended purposes through chemical action in or on the body, or through metabolic action (what Genus referred to in its submissions to the Court as the “mode-of-action clause”).  Two judges on the D.C. Circuit rejected FDA’s claim that it could regulate, at its discretion, any medical device as a drug.  A third judge, who filed a concurring decision, argued that, although FDA might, in some instances, be able to classify and regulate as a drug a product meeting the definition of a device, FDA had not adequately justified its decision in this case.

    Our client, Genus Medical Technologies, manufactures and distributes barium sulfate for use in radiographic procedures.  After an FDA inspection in 2016, Genus was told that it could not distribute barium sulfate because it was an unapproved drug.  In response, Genus argued that barium sulfate meets the definition of a device because it does not achieve its primary intended purposes through either chemical or metabolic action.  (The product is effective because of its physical characteristics: barium sulfate absorbs X-rays, coating the digestive system with light to provide a contrast to surrounding tissues.)  FDA replied that the product appeared to meet the definition of a device, but said it nonetheless had discretion to regulate it as a drug.  Pointing to an overlap in the statutory definitions of “drug” and “device” (which pertains only to a product’s “intended use”), FDA took the position that it could choose whether to regulate a device as a drug at its will.  FDA chose to do so for contrast agents because FDA wanted to regulate all contrast agents—no matter their mode of action—the same.  Because some other contrast agents achieve their primary intended purposes through chemical action, and because FDA claimed discretion to regulate all devices as drugs, FDA decided to regulate all contrast agents as drugs.

    Genus responded by filing a Request for Designation with FDA’s Office of Combination Products, which backed up FDA’s earlier claim of wide discretion.  Genus challenged the designation of barium sulfate as a drug in U.S. District Court, which sided with Genus in December 2019.  FDA appealed that decision, and the D.C. Circuit upheld it on Friday.

    Two of the judges agreed with Genus that the federal statutory scheme directed FDA to treat products as devices if they meet the statutory definition of a device, and while the statutory definition of the purposes of both types of medical products might be overlapping, the statute lays out a clear distinction in the device definition’s mode-of-action clause.  Notwithstanding the overlap in the statutory definition of “drug” and “device,” the judges relied on the long-accepted adage that specific statutory language supersedes general statutory provisions.  The judges also said that changes to the language of the governing Federal Food, Drug, and Cosmetic Act over the last couple of decades did not abrogate the clear statutory definitions.

    A third judge wrote an opinion agreeing that the FDA decision on barium sulfate needed to be reversed and remanded to FDA.  But her opinion noted a statutory change in 1990, in the Safe Medical Devices Act, removing a clause excluding devices from the definition of drugs.  As a result, she said, FDA does have the discretion to classify and regulate some devices as drugs, but only if they do not meet an additional portion of the device statute describing devices as including an “an instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article, including any component, part, or accessory.”  While FDA did say in numerous communications to Genus, in its initial brief in District Court, and in its oral argument in the D.C. Circuit that barium sulfate appeared to meet the definition of a device (including the language cited by Judge Pillard), Judge Pillard would have remanded the decision to FDA to consider whether barium sulfate meets that portion of the definition.

    The majority decision drafted by Judge Henderson and joined by Judge Katsas left open the possibility that FDA could, on remand, decide that the product does, in fact, achieve its primary intended purposes through chemical or metabolic action.  However, the government attorney at oral argument about this case stated that he believed that FDA would probably classify barium sulfate as a medical device if the case is remanded, which is the result that the majority opinion would require.

    As we noted in our blog post on the District Court decision in 2019, Friday’s decision is a big win for industry (as well as for our client).  This decision limits FDA’s typically broad discretion and precludes the Agency from imposing significant regulatory hurdles and costs based on policy positions rather than the congressionally imposed risk-based regulatory scheme.  In other words, FDA cannot regulate a device as a drug on a whim.

    Of course, we can’t represent that we will always or usually win when we challenge FDA in court, or that the government may not decide to further challenge Friday’s ruling.  But we are happy for our client to be able to celebrate.

    Hyman, Phelps & McNamara, P.C. Seeks a 2nd to 4th Year Associate

    Hyman, Phelps & McNamara, P.C. seeks a 2nd to 4th year associate to join our team and work on a wide variety of FDA-related matters.  The ideal candidate must have a demonstrated interest in FDA law, possess strong research and writing skills, and fit into the collegial culture of a boutique law firm.  A science background and previous private practice experience are preferred, but not required.

    Please send your resume to Anne K. Walsh (awalsh@hpm.com).  Candidates must be members of the DC Bar or eligible to waive in.  Compensation is competitive and commensurate with experience.  HPM is an equal opportunity employer.

    Categories: Uncategorized

    Ask and Ye Shall Receive, But Don’t Ask FDA for a Virtual Inspection

    Ask and ye shall receive, if yer requests are vocal and repeated, and ye are patient, and willing to accept less than ye ask for.

    For more than a year we have been asking FDA to initiate virtual or remote inspections of drug manufacturing facilities.  FDA has conducted only a handful of on-site inspections – and no virtual inspections – of drug manufacturing facilities since the COVID epidemic shut down foreign travel 13 months ago.  FDA’s failure to perform inspections of foreign drug manufacturing facilities made it impossible for many companies to close out Warning Letters, climb off the Import Alert list, or secure approvals of drug applications delayed because FDA insisted on an on-site inspection (see blogposts with catchy titles like “FDA Fiddles with Remote Inspections While Pharma Burns” and “Conducting Virtual Inspections: EMA and MHRA Do It, CMOs Do It, Why Won’t FDA Do It?”).  Regulatory agencies other than FDA have been performing virtual inspections for much of the past year.

    Finally, on April 14, FDA issued a guidance addressing (in large part), these concerns.  It spells out the procedures to be followed for what FDA labels “Remote Interactive Evaluations,” with an explanation that these “interactions” will not meet the statutory definition of an “inspection.”  The Guidance also sets forth when FDA will ask for companies to cooperate in these “interactions,” and when FDA won’t.  But, overall, the “interactions” will look and feel a lot like a virtual inspection.  FDA says it “will use its own IT platforms and equipment to host virtual interactions during remote interactive evaluations (e.g., videoconferences, livestreaming video of the facility and operations in the facility).”  It says that it expects the regulated entity to cooperate in the use of “livestream and/or pre-recorded video to examine facilities, operations, and data and other information.”  And FDA will host prior brief virtual meetings to discuss logistics and responsibilities during “livestreaming walkthroughs of the facility.”

    While FDA states that these “evaluations” are not inspections, there are a lot of features that are very similar to inspections.  “After the remote interactive evaluation concludes,” the agency states, “FDA will provide a copy of the final remote interactive evaluation report to the facility.”  This report is explicitly not a Form 483, which is delivered with observations about significant deviations at the conclusion of about half of the inspections of drug-manufacturing facilities.  But it will have many of the same features, especially since, “As with an inspection, FDA encourages facilities to respond during the discussion and/or provide responses in writing to the observations within 15 U.S. business days,” the same deadline set for responding to a Form 483.  Also, if the interactive evaluation is a supplement to an inspection, FDA “usually will combine any observations from the remote interactive evaluation(s) into a single written list of observations issued at the close of the inspection, which would be issued on a Form FDA 483.”

    A puzzling footnote (footnote 11) says that FDA will not supply equipment for the virtual noninspection, nor can it accept equipment to conduct the virtual noninspection.  We suppose that the point is that the facility must provide owned or rented equipment to permit the virtual tour, but cannot give it to the Agency, or it might look like a bribe.

    And don’t you dare ask for an “Interactive Evaluation” in lieu of an inspection.  “We will not accept requests from applicants or facilities for FDA to perform a remote interactive evaluation,” FDA says.  “Such decisions depend on many factors and information not always known to applicants or facilities, and it would be too burdensome on all parties to establish a request-based program.”

    We wonder whether a prohibition on asking for an “Interactive Evaluation” would survive constitutional challenges based on First Amendment Free Speech rights, or the constitutional right to petition the government to redress grievances.  When a company responds to an Informational Letter that states their drug approval will be delayed because FDA insists on a pre-approval, or pre-license, inspection, what would be wrong with the company suggesting that a “Remote Interactive Evaluation” might be appropriate?  Where is the government’s compelling interest in prohibiting such a request?

    Oh well.  To paraphrase the immortal words of Mick Jagger, “you can’t always get what you want, but if you try sometime you find, you get what you need” – after 13 months of reasoning, arguing, pleading and, finally, kvetching.

    Categories: cGMP Compliance

    OHT-7’s Q1 2021 Report Card on EUA Reviews

    During the February 3rd meeting of the IVD Town Hall that OHT-7 has been hosting since early on the pandemic Office Director Timothy Stenzel proudly proclaimed:

    We have also really have ramped up our decisions. So we are currently over the last week averaging about nine decisions. That’s N-I-N-E, nine a day.

    While we were initially encouraged by this update from Dr. Stenzel, we reserved judgment till we could look at more data.  We waited two months since the town hall in February to do a look back at Q1 2021 and the state of the play for IVD EUAs.

    At the onset of our review we were puzzled. We are being told that the Agency was making up to 45 decisions a week, but why have we not been seeing more EUAs on the market? The answer, in part, is in the rest of Dr. Stenzel’s description from that same town hall as to what counts as a decision.

    And some of these are of course new original authorizations…Many of them though are also supplements and amendments to existing EUAs…Also we consider a decision in our accounting when they issue and close out a pre-EUA feedback. And then of course there are negative decisions and those we don’t publicize typically… So not all of our decisions are publicly seen easily or at all…[W]e are working harder and faster than ever with more people whereas in the beginning of the pandemic…when we had an application making maybe one decision today. We’re now making nine decisions a day.

    The monologue above raises a few key points that we will address individually.

    1. Not all decisions are authorizations.

    How many of the decisions are Authorizations? Let’s take a closer look at the data from 2021:

    Table 1 – Positive Decisions on OHT-7 EUAs during Q1-2021

    2021SerologyMolecularAntigenTotal
    January 628236
    February325230
    March 1029948

    What we can glean from the data is that the first quarter of 2021 was once again dominated by RT-PCR reviews.  If the pace of nine decisions per day held true through the first quarter of the year, one would expect nearly 200 decisions per month.  As can be seen in the table above, OHT-7 never exceeded 50 positive decisions in a month.  The data in this table includes both new EUA authorizations and re-issued authorizations via the approval of supplements.  This means that the overwhelming majority of decisions that the office has made in the first quarter of 2021 was to close-out PEUAs or render negative decisions on pending EUAs.

    2.  Not all authorization are new products

    Let’s remove the decisions for supplements to existing EUAs and look at brand new authorizations.  Many of these decisions listed above fall away and we are left with the following:

    Table 2 – New EUAs Authorized by OHT-7 during Q1-2021

    2021SerologyMolecularAntigenTotal
    January 54110
    February110112
    March 410620

    When distilling down OHT-7’s track record in Q1 2021 to the new authorizations, we see that the pace of  authorizations has slowed to a crawl.  Over the first three months of the year OHT-7, on average, authorized a new EUA every 1.5 business days.  This does not bode well for companies that are in the process of submitting new EUA as less than half of all positives decisions are to bring a new device to market.

    3.  Is OHT-7 working faster than the beginning of the pandemic?

    Let’s compare new EUA authorizations from the most recent quarter to the first three months of the pandemic:

    Table 2 – New EUAs Authorized by OHT-7 during the First Three Months of the Emergency

    2020SerologyMolecularAntigen*Total
    February1203
    March 420024
    April 925034

    The declaration of a public health emergency was not made until January 31, 2021.  The first EUAs were starting to trickle in during the beginning of February so it is expected that the first month of the pandemic shows slow progress. Additionally, the number of review staff dedicated to reviewing EUAs was only a fraction of the current review staff for COVID-19 response team as the scope and scale of the pandemic was not yet understood. Similar to Q1 2020, new PCR authorizations were dominant and higher than in Q1 2021. The number of serology EUAs authorized is still higher in the first three months of the pandemic than Q1 2021 even when taking into account FDA’s policy in March 2020 to allow serology tests on the market without prior FDA review.  The only category where 2021 outperforms the first three months of the pandemic in new authorizations is with antigen tests. The first antigen EUA was not authorized till May 8, 2020.  In light of the above, at the beginning of the pandemic OHT-7, on average, authorized a new EUA every business day.

    During the first few months of the pandemic OHT-7 tried to walk and chew gum at the same time by reviewing EUAs and completing their normal review work as required by MDUFA.  This was the strategy employed when the emergency was declared for the Zika virus back in August 2016.  Similar to the Zika emergency, at the outset of the COVID pandemic review staff were not pulled from other divisions and the additional review work brought on by the EUAs was handled through the approval of overtime for existing staff.  However, once the significantly greater scope of the COVID pandemic became clear, the number of review staff dedicated to reviewing EUAs increased dramatically.

    When taking into account the significantly higher EUA staffing levels in Q1 2021 than 2020, a full year of review experience with the EUA process, and a full workload to maximize output the pace of new device authorizations is far below the 2020 numbers.  With the data on hand we cannot confirm Dr. Stenzel’s claim that OHT-7 is working faster than ever on EUAs is true.

    FDA needs to increase transparency within their review process by publishing key metrics:

    • We recommend that FDA publish the average time with standard deviation from EUA submission to reviewer assignment stratified by technology (Serology, Molecular, Antigen) and Indication
    • We recommend that FDA publish the average time with standard deviation for the authorization of a new EUA stratified by technology (Serology, Molecular, Antigen)
    • We recommend that FDA publish the average time with standard deviation for the authorization of an EUA supplement stratified by technology (Serology, Molecular, Antigen)
    • We recommend that FDA publish the average time with standard deviation to receive PEUA feedback stratified by technology (Serology, Molecular, Antigen)
    • We recommend that FDA not include negative decisions in their metrics
    • We recommend that FDA publish the number of pending EUAs and PEUAs
    • We recommend that FDA publish the current number of review staff dedicated to IVD EUA reviews

    HP&M’s Sara Koblitz to Present on Integrating FDA Regulatory Law into an IP Law Practice

    Hyman, Phelps & McNamara, P.C. is pleased to announce that Sara W. Koblitz will be discussing the fundamentals of FDA law as it relates to Intellectual Property law in a remote program hosted by the DC Bar.  The program, titled “FDA Law for IP Lawyers: Tips for Effectively Integrating FDA Regulatory Law into an IP Law Practice,” will explore the intersection of patent and FDA law and provide practical tips for integrating FDA regulatory law and IP law practices for FDA-regulated products.

    The remote program is scheduled for April 19, 2021 from 12 to 2 pm and will discuss various topics, including (but not limited to):

    • Listing patents in FDA’s Orange Book and related exclusivity questions for product life cycle management;
    • Patent exchanges in biosimilar litigation;
    • Patent term extension applications;
    • FDA’s product name reviews for proprietary names protected by trademarks; and
    • Use of patent information in FDA regulatory filings.

    The speakers will engage in a live question and answer session with participants, so they can answer your questions about these issues directly.

    Please register for the program here.  The price ranges from $15 to $50, and D.C. Bar membership is not required to attend.

    Categories: Hatch-Waxman

    AMPed up—again– over Medicaid Rebate False Claims Act allegations

    Earlier this month, the Department of Justice announced another settlement in a Medicaid Rebate False Claims Act (FCA) case.  In this case, United States ex rel. Streck v. Bristol-Myers Squibb Co., Civil Action No. 2:13-CV-7547 (E.D. Pa)  Bristol Myers Squibb (BMS) agreed to pay $75 million:  $41 million to the United States and $34 million to states.  The relator in this case has been litigating Medicaid Rebate FCA cases for over a decade, settling some claims along the way.

    The relator has filed three separate actions, two in the Eastern District of Pennsylvania (Streck I and II) and one in the Northern District of Illinois (Streck III).  In all of the cases, the relator makes the same core allegations.  As we explained back in 2012,  the complaints allege that so-called “Discount Defendants” improperly treated bona fide service fees as discounts, and that so-called “Service Fee” Defendants, improperly offset price appreciation credits against service fees instead of factoring them into the AMP calculation.  According to the relator, the result of both alleged schemes was to unlawfully reduce the companies’ AMP’s and correspondingly reduce the rebates paid by the manufacturers to the states and thereby increase the federal government’s payment for drugs, resulting in both traditional and reverse FCA claims.

    The outcomes in these cases have varied based on the time periods at issue and the classification of the defendants.  In 2018 the Third Circuit affirmed the dismissal of pre-2012 claims against a group of Service Fee Defendants (Streck I), putting an end to that case.  In the BMS case, another judge in the Eastern District of Pennsylvania, followed the same analytical framework as Streck I, but denied a motion to dismiss, and a motion for summary judgment (Streck II).  In the the Northern District of Illinois, Streck III also survived a motion to dismiss.  With the BMS settlement, only Streck III continues to be litigated.

    As noted in these cases and in our prior posts, the law and regulatory guidance on AMPs has changed since these cases were filed.  AMP reporting remains a complex area and one that prosecutors and whistleblowers will continue to investigate and litigate.

    Categories: Enforcement |  Health Care

    Controlled Substances Act Issues: Legal Perspectives and Analytical Trends Webinar

    Hyman, Phelps & McNamara, P.C. and Analysis Group are partnering to host a two-hour timely, informative and free program to discuss current important legal perspectives and analytical trends concerning the Controlled Substances Act and the Drug Enforcement Administration.  The webinar is scheduled to take place on Tuesday, April 27, 2021, from 2:00 p.m. – 4:00 p.m. (ET).

    AGENDA:

    State of the Agency: Recent Drug Enforcement Administration Regulatory Changes (2:00 – 2:40 p.m.)

    John A. Gilbert, Jr. and Crystal Pike

    The Pharmacist’s Corresponding Responsibility: Legal and Regulatory Requirements and Recent Enforcement Activity (2:40 – 3:20 p.m.)

    Karla L. Palmer and Nicholas Van Niel

    “Suspicious Order” Monitoring: The SUPPORT Act, Proposed SOM Rule, the “ORUSC,” and Distribution Trends (3:20 – 4:00 p.m.)

    Larry K. Houck and Kenneth Weinstein

    To RSVP for this program, please email Amy Vasvary at avasvary@hpm.com

    Shhh! It’s a Secret! FDA is Not Providing Key Details in the EUA Templates

    We have previously posted about the heartache and anxiety that is the EUA process (here).  Companies are waiting months for feedback from FDA and are frequently given comically short timelines for response.

    Another layer in this onion of poor management is the growing gap between the requirements and expectations that FDA has released publicly to gain authorization and the actual study requirements to support an EUA.

    CDRH, helpfully, has created a series of detailed EUA templates for the interactive review process.  Throughout 2020, FDA periodically issued new or revised EUA templates as the pandemic progressed.

    Has this been a perfect system? No.  There are still many cases where changes to FDA requirements were applied before new templates were issued and companies with EUAs under review took these changes in the teeth, delaying their authorization while new data was collected.

    Sadly, the pace of versioning existing templates has either slowed or stopped for IVD products.  What we are left with now are hard and fast requirements that are barriers to an EUA authorization, that are not disclosed for public consumption.  This gap can leave companies blindsided when their reviewer emails them requesting new data.  In these communications FDA will claim that these requirements have been in place for months, but they are nowhere to be found in any publicly available EUA template or announcement.

    Of particular importance:  there are several surprise requirements are all linked to a single issue for PCR and Antigen tests.  This requirement is to ensure that the clinical agreement study is populated with a sufficient number ‘low positive’ samples.

    This single concern touches upon many design considerations for a clinical agreement study.

    Here are key points to consider:

    1. What does it mean for a sample to be ‘low positive’ in the clinical agreement study?

    FDA does not have a definitions section in the templates, but the agency does provide some insight as to what ‘low positive’ means in the Molecular Diagnostic Template for Commercial Manufacturers (updated July 28, 2020) when describing the details of a clinical agreement study to support Point-of-Care (Page 34).

    You should conduct testing with samples prepared in clinical matrix with SARS-CoV-2 viral load near the LoD of your assay. The testing should be performed by inexperienced users at the clinical sites. The test samples should consist of 10 low positives (<2x LoD) and 10 negatives (matrix) per site.

    In reading the above, a reasonable person might assume that when FDA is discussing LoD in this context they are referring to the LoD of the candidate device, as directly stated in the first sentence meaning that the description of ‘low positive’ is <2x LoD of the candidate device.  We have found, however, that a study designed in this fashion would not be considered adequate to support an EUA.  If you are attempting to validate a PCR device for CLIA Labs or Point-of-Care, the above statement is all FDA provides in your template.

    To try and get more context for ‘low positive’ one would have to search the templates that were drafted for other indications or device technologies.  For instance, FDA has a slightly different description of low positive in the Template for Manufacturers of Molecular and Antigen Diagnostic COVID-19 Tests for Non-Laboratory Use (July 29, 2020). Low positive is only referred to in this template when describing the Flex Studies, but it largely consistent with the one found in the manufacturers template:  “Flex studies should be conducted by testing a negative sample and a low positive sample (at 1.5x – 2x LoD) for each condition being evaluated.”

    FDA, again, has a somewhat different description of low positive in the Molecular Diagnostic Template for Laboratories (updated July 28, 2020) when describing the clinical data required for respiratory panels that implies the description of ‘low positive’ is based on the LoD of the candidate device:

    The pre-selection of archived positive samples should represent a range of viral load or Ct values including low positive samples near the assay cut-off.

    Finally, FDA has a fourth description of low positive that can be found in the Antigen Template for Test Developers (October 26, 2020)

    [L]ow positives (i.e., RT-PCR Ct counts >30)

    While it may not seem appropriate to scour an EUA template for an antigen test to gain insight into FDA’s thinking for a PCR test, you will see later in this post that this type of exercise can be informative.

    If you are attempting to validate a PCR assay you may be confused as to which of these descriptions of low positive is most appropriate for your test.  The answer, none of them.

    Rather, FDA is providing the true or current requirements for low positives during conversations with individual sponsors.  Recently, in the context of PCR assays, FDA has been defining ‘low positives’ as specimens having Ct results obtained with the comparator that are ≤3Ct of the mean Ct for the LoD of the comparator. This description is different than the all of the versions found in the EUA templates.  This is an important difference, because it could mean that your study does not have the correct distribution of sample titers if you did not know about this informally imposed requirement.

    2.  Ct values for all positive specimens in the Clinical Agreement study are required

    In the Molecular Diagnostic Template for Commercial Manufacturers (updated July 28, 2020) FDA outline the expectations for the positive samples on page 15:

    The use of samples previously tested positive by another EUA RT-PCR assay may be acceptable without additional comparator testing. You should indicate the source of the samples, provide results for each tested sample, indicate specimen type, and initial test date.

    If you follow the recommendations provided in the template you will likely, at minimum, get follow-up questions, but very possibly a request for new data.  In order to fulfill FDA’s request regarding low positives, you are required to report the Ct values for all positive samples in your study.

    While this seems minor, many companies did not ensure that the Ct value was recorded for the positive sample they were purchasing. Most companies purchasing samples confirmed the PCR assay used was EUA authorized. This remediation may not be an issue for a large company as they would likely has direct access to a lab with a comparator device, but smaller companies were relying on the ability use these samples without the need to test them on any other device beyond their own.  In many cases this has forced smaller companies or universities to purchase additional samples and re-run the experiment.

    FDA officials have indicated in conversations that reporting of Ct values for clinical agreement is a long-standing request for EUAs, but we have not been able to independently confirm this assertion.

    When purchasing samples for a retrospective clinical agreement study you should be able to report the following for samples tests with a high-sensitivity PCR assay: source of the samples, results for each tested sample with Ct values, specimen type, and initial test date

    3.  Make sure that your PCR comparator is a high-sensitivity test

    The three main diagnostic technologies for the pandemic are:  PCR, Antigen, and Antibody tests.  In each of the templates for these devices you will find a version of the following statement:

    Positive percent agreement should be calculated in comparison to an EUA RT-PCR test. We recommend using only a high sensitivity EUA RT-PCR assay which uses a chemical lysis step followed by solid phase extraction of nucleic acid (e.g., silica bead extraction). If available, FDA recommends selecting a comparator assay that has established high sensitivity with an internationally recognized standard or FDA SARS-CoV-2 Reference Panel.

    For nearly a year now, we at HPM have been trying to find out what ‘high sensitivity’ meant in this context.  In conversations with FDA, we have been told to propose an assay as the comparator and FDA would then comment.

    We recently were finally provided with an answer to this ‘high sensitivity’ question.  To be considered a ‘high sensitivity’ test, we now understand that the assay must have an LoD that is at or lower than 18,000 NDU/mL according to FDA’s Reference Panel.  Setting the threshold to 18,000 NDU/mL effective eliminates at least 17 PCR assays from being used as a comparator for other tests.  We expect the true number to be higher as the list containing reference panel results has not been updated since October 2020.  We were not provided with an explanation as to why 18,000 NDU/mL was an appropriate cutoff, but we will take whatever clarity we can get from the review staff.

    This unpublicized requirement disproportionally impacts smaller companies. A larger company has access to more resources and can more easily shoulder the burden of retesting samples or purchasing new ones that were tested with an appropriate comparator, but it can be fatal for smaller companies without these resources.

    If you did not pick a test that is high-sensitivity as FDA defines it, it is not your fault, as FDA has not previously provided guidance as to which of the authorized tests can be used as a comparator. The adverse consequences of selecting the wrong assay are real.  Companies run the risk of their data being considered unsuitable to support an EUA.

    4.  What does it mean to have a sufficient number of low positive samples

    In communications with FDA, the agency has insisted that the clinical agreement study consist of not only a range of viral loads and Ct values as stated in the template but, at minimum, 20% low positive specimens.

    The requirement for at minimum 20% low positive samples is not found in the following templates:

    In FDA’s templates for PCR assays one can find only the following recommendation when FDA describes the Clinical Evaluation study:

    Specimens representing a wide range of viral load including low positive samples should be tested.

    We refer to this request for 20% ‘low positives’ as a requirement since FDA has flagged studies as insufficient and requested additional data if a retrospective clinical study does not have at least 20% low positives samples.

    One can find only a single reference to a specific amount of low positives in the Antigen Template for Test Developers (October 26, 2020):

    Retrospective specimens should be reflective of the natural distribution of SARS-CoV-2 viral loads, and approximately 10-20% of the clinical specimens should be low positives (i.e., RT-PCR Ct counts >30), as has been observed in other sequentially enrolled clinical studies.

    As you can see from the excerpt above, the only specific guidance can is found in a template for a different assay technology where the requested amount of low positives is as little as 10%.  If you do follow this guidance and present a study with 10-20% low positives, your study will likely be deemed inadequate.

    5.  Risks of picking a too‑sensitive comparator assay

    The gut reaction in response to the above may to be over-correct and pick the absolute highest sensitivity device possible.  As stated in section 1 above, low positive is defined by the comparator assay. If you pick a comparator that is more sensitive than your test, you will not only increase the likelihood of discordance, but you will also narrow the window of what it means for a sample to be ‘low positive’. You then run the risk of not meeting the minimum requirement to have 20% of the samples in that range.  It is recommended that you choose a comparator with a similar LoD to your assay that is also still considered ‘high-sensitivity’ per FDA’s Reference Panel.

    Based on the foregoing, we have the following recommendations to FDA to improve the EUA process:

    1. Issue a statement defining ‘high-sensitivity’ and ‘low positives’ as this lapse is causing unnecessary delay in bringing new products to market and is creating needless inefficiency.
    2. Issue updated templates with study design requirements that are consistent with FDA’s expectations for EUA authorization. Some of the templates have not been versioned in 9-11 months.
    3. Commit to updating the EUA templates on a regular basis for the duration of the emergency to prevent this problem from recurring.
    4. Commit to allowing pending EUAs to resolve issues via new testing as a post‑authorization requirement rather than applying unpublicized requirements retroactively.
    5. Update the SARS-CoV-2 Reference Panel Comparative Data Table, as it is 6 months out of date and data from new assays or updated data from existing assays are almost certainly sitting in the shadows.

    We strongly urge all developers of PCR assays that are about to submit an EUA or those that have an EUA pending to review the details of your clinical agreement study to make sure that your data will not get flagged by the reviewer.  We are finding that gap analyses are more important than ever to reduce review delays for EUA products.

    Ninth Circuit Allows Fraud-on-the-FDA Claim in FCA Whistleblower Suit Against Medtronic, But Affirms Dismissal of Off-Label Promotion Claim

    On April 2, 2021, the Ninth Circuit issued a decision in a False Claims Act (FCA) case against Medtronic.  The Dan Abrams Co. LLC v. Medtronic Inc., No. 19-56377, 2021 U.S. App. LEXIS 9637  (9th Cir. Apr. 2, 2021).  Relator appealed the U.S. District Court for the Central District of California’s dismissal of its FCA lawsuit alleging submission of false claims to Medicare due to: (1) alleged unlawful promotion of spinal surgery implants for off-label and contraindicated uses, and (2) alleged fraud-on-the-FDA in obtaining 510(k) clearance for the subject devices.

    Regarding off-label and contraindicated use, Relator alleged that Medtronic marketed the devices without FDA clearance or approval for use in the cervical spine.  Such use was both off-label and specifically contraindicated in the device labeling.  The Ninth Circuit affirmed the district court’s dismissal of these claims, finding that the off-label and contraindicated use was not material to the government’s decision to provide Medicare reimbursement for Medtronic’s device.  Specifically, the Court noted that “the federal government acknowledges that doctors may use medical devices for off-label and even contraindicated uses if they believe that such use is medically necessary and reasonable.”  This appellate-level decision provides welcome precedent to support a lack of materiality argument in other FCA cases involving devices reimbursed for off-label uses.

    Relator’s fraud-on-the-FDA claim was based on an allegation that Medtronic defrauded FDA into granting the subject devices 510(k) clearance by “falsely represent[ing] in its clearance application that they were intended for use in the thoracolumbar spine (the part of the spine below the neck) when in fact they could not be used there and could only be used in the cervical (neck-area) of the spine.”

    The Court acknowledged that the Supreme Court held in Buckman Co. v. Plaintiffs’ Legal Comm. that the Federal Food, Drug, and Cosmetic Act bars a private party from asserting state law claims that a device manufacturer defrauded FDA during the 510(k) clearance process concerning a device’s intended use.  531 U.S. 341, 348 (2001).  The Court further acknowledged that the First Circuit has extended the Supreme Court’s holding in Buckman to the FCA context (see our blog post on this First Circuit decision here).  However, unlike the First Circuit, because the Ninth Circuit previously allowed fraud-on-the-FDA claims in the FCA context, the Court here reversed the district court’s dismissal of Relator’s claim, allowing the fraud-on-the-FDA theory to go forward.

    Categories: Medical Devices

    BARDA’s Mask Innovation Challenge – “I don’t pop in peach”

    On March 31st, 2021 BARDA launched a competition to design tomorrow’s mask. The Mask Innovation Challenge, at its core, is about finding new mask designs that can be mass produced at a low cost and provide general protections against respiratory pathogens. One of the lessons learned from this pandemic is that barriers exist within the population when it comes to widespread adoption and consistent use of face masks.  This challenge identifies the specific problems that the contestants should consider in their device designs:

    • Currently available retail masks are often untested, with unknown protective capability
    • Physical discomfort with prolonged use, particularly in hot and humid environments
    • Perceived or actual breathing difficulties
    • Irritant contact dermatitis with extended wear
    • Inability to effectively communicate with others using facial expressions
    • Speech intelligibility and difficulty with glasses wearing,
    • Lack of understanding of the features of a mask

    Potential contestants should read the rules of the challenge carefully as there are delineations between the two potential tracks for applications.

    1. Barrier Face Coverings: Designs in this track focus on improving upon already existing designs for cloth facemasks.
    2. Other Designs/Technologies: Designs in this track incorporate new technologies that have not yet been included in current mask designs.

    This competition has two phases. Phase 1 could have up to ten (10) winners walking away with $10,000 each and Phase 2 will see five (5) winners splitting a prize pool of $400,000.  If you do not get selected for Phase 1 do not fret as you may still be available for Phase 2. There is no expectation of a prototype or finished product for Phase 1. These submissions are not very long with an approximate 1500 word count limit across the nine discreet sections of the proposal.

    If I can make one humble request, please make your masks available in an array of colors.  The only attribute that I share with fictional Telenovela star, Rogelio de la Vega, is that I don’t pop in peach.

    The deadline to submit is 5pm (Eastern Time) on April 21st, 2021.

    Categories: COVID19 |  Medical Devices

    Bills, Bills, Bills: Congress Advances Bills to Address Drug Competition

    There’s no question that drug pricing is one of the most important issues in health care right now, and while such pricing considerations are outside FDA’s statutory mandate, it has not stopped FDA from trying to address pricing issues through enhancing drug competition (see, for example, our discussions of the Drug Competition Action Plan and the Biosimilar Competition Action Plan).  To that end, FDA has attempted to limit exclusivity awards in an effort to facilitate generic access, by, for example, requiring proof of clinical superiority for Orphan Drug Exclusivity (Depomed) or by limiting the definition of active ingredient to active moiety (Vascepa).  But courts have not necessarily agreed with FDA’s interpretation of its governing statute (the FDCA).  In some of these instances—Depomed serving as a prime example—Congress has not hesitated to step in.

    Most recently, the Senate passed legislation amending the definition of “active ingredient” with respect to New Chemical Entity (“NCE”) exclusivity, presumably in an attempt to address the Vascepa litigation.   In a case that we followed closely in 2015, Amarin challenged FDA’s determination that its Vascepa Capsules (icosapent ethyl) was not entitled to New Chemical Entity exclusivity based on FDA’s theory that Vascepa’s “active ingredient” is a component of a mixture that makes up the “active ingredient” of Lovaza, a previously approved drug.  FDA opined that when a mixture is well-characterized and components of that mixture have been identified as both the active ingredient and the active moiety in another product, a component of that mixture is not eligible for NCE exclusivity because it contains a previously approved active ingredient or moiety.  The key legal issue in that case was framed as “whether the prior approval of a drug product, the active ingredient of which is a complex mixture of constituents, constitutes approval of each constituent as an active ingredient so as to preclude NCE exclusivity for a new drug product in which one of those constituents alone is the active ingredient.”  Central to this dispute was the definition of “active ingredient” as compared to “active moiety” in the context of mixtures.  While the statute offers NCE exclusivity for a new “active ingredient,” FDA regulations offer it for a new “active moiety.”  And while the distinction is often inconsequential, it becomes relevant for poorly characterized or well characterized mixtures.  As we explained back in 2015, Judge Moss was not too convinced by FDA’s conflation of active moiety and active ingredient, noting that it contradicts the plain language of the statute and is inconsistent with other provisions (and application of those provisions) of the statute.

    Presumably with this decision in mind, Congress is granting FDA permission to conflate those definitions in a recent bill passed by the Senate in mid-March 2021.  S.415, entitled “An Act to amend the [FDCA] with respect to the scope of new chemical exclusivity” strikes the term “active ingredient” throughout the drug provisions set forth in section 505 of the FDCA and inserts “active moiety.”  Under this new definition, an active moiety approved in a mixture of an active ingredient can now block a component of that active moiety used alone as an active ingredient from obtaining NCE exclusivity.  This bill gives FDA the discretion it relied upon in the Vascepa litigation to make narrower NCE exclusivity decisions and therefore further restrict awards of such exclusivity and bolsters any denials by further review of an Advisory Committee.  Though, practically, the bill will have little effect, active ingredients composed of “mixtures” can no longer rely on Judge Moss’s decision.  Further, this new definition of “active ingredient” refers all new active moieties to an Advisory Committee for review unless FDA provides a reason not to do so.  Theoretically, this will ensure that all NCE determinations—well characterized active ingredient or otherwise—are consistent.

    In a different but related bill, Congress attempts to address biological product pricing through further education about biosimilars.  In S.164, “Advancing Education on Biosimilars Act,” Congress provides authority for FDA to maintain and operate a website providing educational materials regarding biosimilars and interchangeable biosimilars.  The bill also requires FDA to publish the action package and summary review of each approved biologic and biosimilar.  It’s not clear how this bill would change the status quo.  Firstly, under the bill, the provision of educations resources is optional, as the bill uses the term “may” rather than “shall.”  Secondly, FDA already engages in this type of education on its website and as part of its Biosimilars Competition Action Plan.   And FDA already publishes the summary basis of approvals for (at least some) biologics and biosimilars, which you can access through the Purple Book, in its drug database.  Perhaps this a response to the rampant misinformation about the quality of biosimilars, but, again, it’s not entirely clear how this will help.

    Both S.415 and S.164 have cleared the Senate and are up for review in the House of Representatives.

    New Prescription Drug Price Transparency Law in Virginia

    On March 24, 2021, Virginia became the latest state to enact a prescription drug price transparency law.  Similar to other state drug price transparency laws (see, for example, our coverage here and here), HB 2007 sets forth reporting requirements applicable to health carriers, pharmacy benefit managers (PBMs), wholesale distributors, and manufacturers.

    Under the new law, health carriers are required to submit annual reports with information about the carrier’s spending on prescription drugs, including identifying the 25 most frequently prescribed outpatient prescription drugs, the 25 outpatient prescription drugs covered at the greatest cost, and the 25 outpatient drugs that experienced the greatest year-over-year increase in cost.  PBMs are required to submit an annual report with information about the manufacturer rebates received by the PBM, the rebates distributed to health benefit plans, and the rebates passed on to enrollees of health benefit plans.

    Manufacturers are required to submit annual reports for each (i) brand-name drug and biologic with a wholesale acquisition cost (WAC) of $100 or more for a 30-day supply or a single course of treatment and an increase of 15% or more in the WAC over the preceding calendar year; (ii) biosimilar with an initial WAC that is not at least 15% less than the WAC of the referenced brand biologic at the time the biosimilar is launched; and (iii) generic drug with a price increase that results in a WAC increase that is equal to 200% or more during the preceding 12-month period, when the WAC of that generic drug is equal to or greater than $100 for a 30-day supply.  A price increase for a generic drug is defined as the difference between the WAC of the generic drug following an increase and the average WAC of the generic drug during the previous 12 months.  For each reportable drug, manufacturers must provide the following:

    • Name of prescription drug;
    • Identify whether brand name or generic;
    • Effective date of the change in WAC;
    • Aggregate, company-level research and development costs for the most recent year for which final audit data is available;
    • Name of each new prescription drug approved by the FDA within the previous 3 calendar years;
    • Name of each prescription drug that, within the previous 3 calendar years, became subject to generic competition and for which there is a therapeutically equivalent generic version; and
    • A statement regarding the factor(s) that cause the WAC increase.

    Upon a determination that the data received from the health carriers, PBMs, and manufacturers is insufficient, the law allows the Virginia Department of Health to request reports from wholesale distributors with information on WACs, rebates, discounts, price concessions, and other fees related to the 25 costliest drugs.

    The law states that the Virginia Department of Health shall engage a nonprofit data services organization to collect, compile, and make information submitted by the health carriers, PBMs, wholesale distributors, and manufacturers available on a public website.  The data and information will be made available in aggregate in a form and manner that does not disclose proprietary or confidential information of the reporting entities.  The law provides that information submitted pursuant to the new prescription drug price transparency requirements is excluded from disclosure under the Virginia Freedom of Information Act, and also specifies that a manufacturer’s reporting obligations shall be fully satisfied if the manufacturer reports the information and data that would be included in reports to the Securities and Exchange Commission or any other public disclosure.

    The law specifies that regulations must be promulgated within 280 days of enactment – which would be December 29, 2021.  The Virginia prescription drug price transparency law will become effective on January 1, 2022, so the first annual reports will be due by April 1, 2022.  Entities that do not comply with the new reporting requirements may be subject to a civil penalty of up to $2,500 per day from the date that any such reporting was due.