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  • Welcoming Citrus Wines into the Fruit Wines Family: TTB Begins Modernizing Beverage Alcohol Labeling and Advertising

    In some news that is not about Emergency Use Authorizations, how to make a DIY face mask, or even about COVID-19, the Alcohol and Tobacco Tax and Trade Bureau (TTB) published a final rule amending its regulations governing the labeling and advertising of wine, distilled spirits, and malt beverages on April 2, 2020.  And yes, the new regulations eliminate the distinction between fruit wines and citrus wines and allow citrus wines to now be called “fruit wines.”

    By way of quick background, the TTB is the primary federal agency that regulates alcohol, but it is part of a complex system of both federal and state regulation.  At the federal level, the TTB is joined by the FDA, USDA, FTC, and CBP in regulating beverage alcohol.  At the state level, each of the 50 states has the ability to regulate the distribution and sale of alcohol within their states, courtesy of the 21st Amendment to the Constitution.

    The TTB first proposed modernizing the regulations in late 2018 and issued a proposed rule for comment (Notice No. 176: Modernization of the Labeling and Advertising Regulations for Wine, Distilled Spirits, and Malt Beverages, Nov. 26, 2018).  The final rule released on April 2, 2020 addresses the 1000+ comments TTB received.  The final rule does not address all the proposed changes.  Instead, it focuses on liberalizing and clarifying the regulations, and at the same time making the transition to the new regulations easier for manufacturers because the new regulations:

    • do not require any current labels or advertisements to be changed
    • were generally widely supported by commenters and stakeholders
    • can be implemented relatively quickly, and
    • will either give more flexibility to industry members or help industry members understand existing requirements

    Specifically, the rule implements, among other things, the following proposed changes:

    • an expanded alcohol content tolerance for distilled spirits to plus or minus 0.3 percentage points from between 0.15 and 0.25 depending on the product
    • brand label placement flexibility for distilled spirits
    • removing the current prohibition of age statements for most types of distilled spirits
    • allowing vintage dates for wine imported in bulk, and
    • removing the prohibition against the term “strong” for malt beverages

    In addition, the rule identifies which proposals TTB did not adopt, including:

    • the proposal to define an “oak barrel” for purposes of aging distilled spirits
    • the proposal to require that statements of composition for distilled spirits specialty products list components in intermediate products
    • the proposal to require that distilled spirits statements of composition (indicating the category of spirit) list distilled spirits and wines in order of predominance, and
    • the proposal to adopt new policies on the use of cross-commodity terms (for example, imposing restrictions on the use of various types of distilled spirits terms, including homophones of distilled spirits classes, on wine or malt beverage labels)

    In the category of an attempted clarification that did not work as drafted, TTB did not finalize its proposal to incorporate into the regulations the jurisdictional interaction between FDA determinations that a product is adulterated and TTB’s position that such products are mislabeled.  Commenters appeared to misunderstand this proposal and believed that TTB was proposing to take on a new role of interpreting FDA requirements.  This was not the case, and the TTB’s longstanding position that its review of labels and formulas does not relieve industry members from complying with FDA regulations regarding food additives, ingredient safety, and suitable container materials.  So, even if TTB approves a label, the company must still ensure that all ingredients in the product comply with FDA regulations. See our prior post here for more information.

    As indicated in the title of the post, we haven’t seen the last of the modernization, as TTB does plan to address the remaining issues in the 2018 proposal at a later date.

    New FDA Policy Significantly Limits Serological Testing

    During the COVID-19 pandemic, there is widespread agreement that one of the most important steps the government can take is to enable widespread testing of patients.  Many experts have cited the lack of access to a sufficient number of tests as a fundamental flaw in the response to the unfolding pandemic.  Yet, FDA has announced a new policy that will exacerbate this problem.

    In recent weeks, the FDA has taken multiple steps to facilitate access to COVID-19 testing.  For example, the agency has issued Emergency Use Authorizations (EUAs) to over 30 molecular tests.  On March 16, FDA issued a policy that also allowed laboratories to begin offering laboratory-developed tests (LDTs) for 15 days prior to submission of an EUA and during the pendency of FDA’s review of the EUA.  (As readers of the blog know, we have long been critical of FDA’s limitations on LDTs, but the topic of LDTs and COVID-19 is for another day.)

    In that same document, FDA also allowed companies to begin offering point of care serological tests without prior FDA review, provided that the test is validated, the test report includes certain required disclaimers, and the company has submitted a notification to FDA.  The combined effect of these and other steps has been to increase access to COVID-19 tests.

    The point of care serological test policy, in particular, allowed companies to proceed to market quickly with easy-to-use IgG and IgM antibody tests, which provide information about exposure to COVID-19.  However, FDA has started instructing companies that their review of the notification is required prior to commencing distribution, and that review is taking one to two weeks.  This will likely lead to a delay in the availability of additional point of care serological tests.

    In addition, FDA recently issued a statement that significantly curbs the ability of serological tests to play a meaningful role in addressing the COVID-19 pandemic.

    Given their ease of use, serological tests generally do not need to be used in labs.  Instead, they can be used at the point of care, including doctors’ offices, urgent care centers, and drive-through testing centers, providing rapid information about COVID-19 status to the health care provider and patient.  Allowing tests at the point of care greatly facilitates patient access, as compared to having samples sent to a laboratory and then awaiting test results.

    While FDA’s policy on March 16 addressed the FDA status of serological tests, it was silent about the status of these tests under the Clinical Laboratory Improvement Amendments (CLIA).  CLIA is a separate law that governs laboratory testing.  Among other elements, CLIA requires that tests be performed in appropriately certified laboratories, unless the test is categorized as “waived.”  High-complexity tests can only be performed in those laboratories that are certified as high-complexity, which is a small minority of labs in the U.S.

    FDA announced its new policy on serological tests as a response to a Frequently Asked Question (FAQ) on its website (see FAQ webpage here).  In the FAQ response, FDA states:

    While FDA has indicated that [tests offered prior to or without an EUA] may be appropriate for use in clinical laboratories and by healthcare workers at the point of care, the policies in the Policy for Diagnostic Tests for Coronavirus Disease-2019 do not provide a CLIA categorization and do not override any CLIA requirements.  Therefore, in accordance with CLIA, tests offered under these policies are considered high complexity by default until or unless they are authorized and deemed to be appropriate, through an EUA authorization or general FDA review processes, to be performed as moderate or waived complexity tests.

    This language may be opaque, but the impact is not: serological tests offered by manufacturers under the policy discussed above can only be performed in high-complexity laboratories.  In other words, these tests – which are designed to be used at the point of care – can only be run in facilities that hold high-complexity CLIA certifications.  Serological test samples could be collected at the point of care, but they would need to be transported to a high-complexity certified laboratory for testing, which defeats the purpose of a simple, rapid test.  The result is reduced access to most serological tests.

    In a separate FAQ, FDA clarified that tests that have been authorized for point of care use via an EUA will be considered CLIA-waived and could be used in settings like doctors’ offices or drive-through testing sites (so long as these settings have CLIA certification to perform waived tests).  As of today, there are only three EUAs in which FDA has authorized point of care use (the Xpert Xpress SARS-CoV-2 Test, Accula SARS-CoV-2 Test, and ID NOW COVID-19 Test).

    Bizarrely and inconsistently, yesterday the Department of Health and Human Services touted a new policy that ostensibly expanded testing by pharmacists.  The statement says, “In an effort to expand testing capabilities, we are authorizing licensed pharmacists to order and administer COVID-19 tests to their patients.  The accessibility and distribution of retail and independent community-based pharmacies make pharmacists the first point of contact with a healthcare professional for many Americans.  This will further expand testing for Americans, particularly our healthcare workers and first responders who are working around the clock to provide care, compassion and safety to others.”

    The tests that pharmacists are most likely to offer, though, are point of care serological tests without EUAs, which means they are high-complexity tests under CLIA.  Unless local pharmacies and chain pharmacies are part of high-complexity CLIA-certified labs, under FDA’s FAQ, they will not be able “to order and administer COVID-19 tests to their patients.”  In other words, what HHS gave with one hand, FDA took away with the other.

    We appreciate that FDA cannot simply ignore CLIA.  However, given that FDA and other parts of the government have waived multiple requirements during this National Emergency, it is striking that FDA’s current policy – and by extension HHS’ – is to block serological testing for COVID-19 in the locations where it is most needed and would be most helpful.

    Ultimately, responsibility for this disjointed, uncoordinated policy rests with HHS, since FDA, CLIA, and the new policy on pharmacies all are under HHS’ purview.  In the past couple weeks, HHS has issued enforcement discretion policies for a number of issues in response to the COVID-19 pandemic, including the Federal Anti-Kickback Statute, telehealth, community-based testing sites, and HIPAA.  To avoid roadblocks to serological testing access, HHS should issue a similar enforcement discretion policy related to test complexity limitations under CLIA.

    Court’s Construction of the Term “Original New Drug Application” Formerly in Medicaid Rebate Statute Offers Rebate Relief for Some Drugs Approved Under Literature-Based NDAs

    From the enactment of the Medicaid Drug Rebate Statute in 1990 until last year, a term appearing in the statute – “original new drug application” – caused  controversy and uncertainty.  The term was not defined in the statute and the legislative history shone no light on it.  Yet it had enormous fiscal implications for drug companies under the Medicaid Drug Rebate Program (MDRP).  Until April 2019, innovator drugs, which are subject to a substantially higher per-unit rebate than non-innovator drugs, were defined as drugs approved under an “original new drug application.”  This begged the question, what is an original NDA over and above an NDA?  The term obviously did not include an ANDA, but what about NDAs that are not original in that they rely on previously approved applications or data that are not original to the applicant, such as a section 505(b)(2) application or a literature based application?  In February 2016, CMS issued a final regulation construing an “original NDA” as simply an approved NDA,  “unless CMS determines that a narrow exception applies.”  42 CFR 447.502.  In subregulatory guidance, CMS advised that narrow exceptions would only be granted for drugs that were approved under FDA’s paper NDA policy prior to 1984 or under literature‑based 505(b)(2) applications, and that had no patent protection or statutory exclusivity.  For drugs on the market as of April 1, 2016, the regulation established a deadline of April 1, 2017 for requesting a narrow exception.  Manufacturers could also submit requests for up to one year after the launch of a new drug or after an acquisition of a drug.  Effective April 1, 2019, a statutory amendment codified CMS’s interpretation by deleting the word “original” and codifying the narrow exception process.

    Why then are we posting an article about a term that no longer exists in the U.S. Code?  The reason is that a recent decision of the D.C. District Court construed the former term in a manner that may offer rebate relief to companies marketing drugs approved under FDA’s pre-Hatch Waxman paper NDA policy, and those approved under literature based applications submitted under FDC Act section 505(b)(2).  The case, STI Pharma v. Azar, No. 18-cv-1231 RDM, 2020 U.S. Dist. LEXIS 49618 (D.D.C. Mar. 23, 2020), concerned STI’s Sulfatrim, an antibiotic suspension with pediatric indications.  The drug was originally approved in January 1983 as a paper NDA.  Its approval was based on its chemical equivalence and bioequivalence to Bactrim Suspension, which had been approved a decade earlier.  STI purchased Sulfatrim from an intervening owner in 2011 and began marketing it two years later.  Because the drug was approved under an NDA, STI categorized the drug as an innovator multiple source drug, which subjected it to higher rebates than noninnovator multiple source drugs.

    After CMS published its 2016 Final Rule adopting the narrow exception approach, STI timely requested a narrow exception to classify Sulfatrim as a noninnovator multiple source drug despite its approval under an NDA, and CMS granted the request effective from April 1, 2016, when the CMS “narrow exception” rule took effect.  However, STI requested CMS’s permission to treat Sulfatrim as a noninnovator multiple source drug status retroactively to the fourth quarter of 2013, when STI first began marketing Sulfatrim.  CMS denied STI’s request, explaining that “[a] drug category change pursuant to a narrow exception request approval does not apply to reporting periods prior to the effective date of the Final Rule because the narrow exception did not exist before that date.”  STI Pharma, 2020 U.S. Dist. LEXIS at *19.

    STI challenged CMS’s reading of the statute, arguing that Sulfatrim was a “noninnovator multiple source drug” because FDA approved the drug based on its equivalence to the previously approved Bactrim Suspension.  In other words, Sulfatrim and Bactrim Suspension are equivalent drugs, and the “original” NDA was granted for Bactrim Suspension — not Sulfatrim. CMS agreed that this is a permissible reading of the MDRP statute, and, indeed, that is the interpretation CMS itself adopted in the 2016 Final Rule.

    Contrary to both parties’ briefs, the Court did not believe that it had to weigh in on the reasonableness of CMS’s interpretation of the MDRP statute.  Rather, according to the Court, “the case can and must be decided at Chevron step one.”  Id. at *23.  Under Chevron Step One, the Court used the same analysis it would have applied “in the absence of an administrative interpretation of the statute” to determine whether Congress has unambiguously expressed an intention on the precise question at issue.  Id. at *24.

    According to the Court, the ordinary meaning of “original NDA” and “innovator drug” cannot include duplicate drugs, like Sulfatrim, that were approved under the pre-1984 paper NDA process.  Sulfatrim could not be the “original NDA” because “Sulfatrim was not the source, beginning, or the product or model from which copies are made. Rather, Bactrim was.”  Id. at *29.  Sulfatrim’s approval documents repeatedly refer to Sulfatrim as a “generic version of the Bactrim product,” and a “duplicate NDA for [Bactrim].” The Court also noted that “innovate,” the verb form of the term “innovator,” in its ordinary meaning, is “to introduce as or as if new.”  Id. at *34. Courts have used innovator interchangeably with pioneer, novel, non-generic drugs.  The Court agreed with STI that this “common understanding of the word ‘innovator’ shows ‘that Congress did not intend to classify duplicate generic drugs as innovator multiple source drugs.’”  Id. at *35 (emphasis in original).

    The Court concluded that the traditional tools of statutory interpretation “reveal[ed] a ‘single right answer’ to the meaning of the statute.”  Id. at *40.  Accordingly, the Court held that “CMS’s decision declining to reclassify Sulfatrim as a noninnovator multiple source drug for the period from 2013 through 2016 must be set aside as not in accordance with law.”  Id.

    This case has obvious relevance to companies that, like STI, were granted a narrow exception by CMS but told that it would not be applied retroactively before April 1, 2016.  Such companies now have grounds for requesting a retroactive reclassification for periods prior to that date.  However, the case also has relevance to companies that market drugs that might have been candidates for a narrow exception, but the company for one reason or another failed to meet CMS’ April 1, 2017 regulatory deadline for requesting one.  Under the court’s reasoning, such a drug – for example a duplicate drug approved under FDA’s paper NDA policy – was not an innovator drug according to the plain meaning of the statue until the 2019 amendment.

    GAO Analysis Says FDA is Meeting PDUFA Commitments

    It’s no secret that FDA’s review and approval metrics are closely watched.  In fact, these metrics are integral to evaluating whether FDA has met the commitment to industry it made during Prescription Drug User Fee Act (“PDUFA”) negotiations.  As explained in our summary of the 2017 reauthorization of PDUFA, for fiscal years 2018-2022, FDA has committed to reviewing 90 percent of new molecular entity (“NME”) NDAs in 10 months and 90 percent of new priority NDAs in 6 months of the filing date (60 days after actual submission); for non-NMEs, the review goals are 10 months and 6 months after submission, respectively.  At the direction of Congress, the GAO just released a new report evaluating exactly how FDA is doing in meeting these goals.

    The bottom line: Application review times largely reflect agency goals.  The GAO reached this conclusion based on its analysis of 637 NDAs and BLAs submitted to the Center for Drug Evaluation and Research throughout fiscal years 2014 and 2018.  Oddly, the GAO Report does not explain much about its conclusion that “review times largely reflect agency goals,” mentioning only in a footnote that “FDA completed its initial review of 97 percent of NDAs within the time frames established under its PDUFA goals—a greater percentage than the 90 percent goal stated in its PDUFA V and VI commitment letters.”  There are, however, some exceptions – though fewer than one might think.  The GAO identified only 5 NDAs for which the review time was exceptionally long in comparison to the PDUFA goal date.  GAO excluded these NDAs from its some of its analyses based on FDA’s explanation that “these reviews were substantially delayed because of complicated manufacturing site issues, complicated legal and regulatory issues, or emerging public health issues requiring last minute advisory committee meetings” – conditions that GAO “deemed sufficiently unusual to exclude these five NDAs from further statistical analyses of review times.”

    Much of the GAO Report’s focus is on the differences between applications that may impact goal dates.  The Report explains that goal dates are directly related to four key features of NDAs: whether the NDA receives priority review designation; whether the NDA involves an NME; whether the applicant submitted a major amendment; and whether the NDA qualifies for one of FDA’s expedited programs (such as Accelerated approval, Breakthrough designation, or Fast track designation, all of which are available for NDAs for drugs intended to treat serious or life-threatening conditions).  Thirty-two percent of the 637 NDAs included in the GAO review had a priority review designation; 36 percent involved a new molecular entity; 12 percent involved a major amendment; and 18 percent qualified for one expedited program while 9 percent qualified for two or three.   These key features, the Report explains, directly affect the timing of review because they dictate the PDUFA goal date.

    The GAO Report also explains that the features that affect goal dates impact some review divisions more than others.  As such, the Report examines the distribution of NDAs with these key features across review divisions and analyzes the differences in time taken to complete initial reviews between divisions.  The analysis found that each division differed in the average number of days to complete an initial review of an NDA, but these differences reflected the differences in the key features of the NDAs (i.e. priority review, expedited programs, major amendments, and NME status) submitted to each division.  Unsurprisingly given the goal date commitments, NDAs with key features that resulted in shorter goal dates had shorter review times.  Controlling for these differences in goal dates, the GAO Report found that most of the divisions’ average review times were similar to (within 2 weeks of) each other.  However, the Hematology and Oncology divisions reviewed about 2 or 3 weeks faster than other divisions.

    The Report includes a breakdown of the applications submitted to each division with details about the number of applications with each key feature.  FDA’s Oncology and Hematology divisions reviewed the greatest number of NDAs—while still reviewing faster than other divisions—closely followed by the Antiviral Division, the Anti-infective Division, the Metabolism and Endocrinology Division, and the Anesthesia, Analgesia, and Addiction Division.  The distribution of NDAs with key features varied significantly across divisions, which led to differences in the review time for each division as well.  For example, fifty-six percent of the Anti-Infective Division’s NDAs had priority designation, mandating a faster review time, while thirty-seven percent of the Gastroenterology and Inborn Errors Division’s NDA were priority.  With this difference in priority workload, the median time taken to complete an initial review of an NDA by the Anti-infective division was about two months faster than the Gastroenterology and Inborn Errors division.

    Finally, in response to a request from Congress, the Report also details actions FDA has recently taken to evaluate and facilitate the use of different sources of evidence to support NDAs.  As a result of the 2016 Cures Act, FDA started implementing initiatives, including the Real-World Evidence Program, Patient-Focused Drug Development, Complex Innovative Trial Designs, Drug Development Tool Qualification Programs, and Model-Informed Drug Development.  Because the amount and nature of the evidence needed can be an important determinant of when and whether new therapies become available to the public, these programs can impact review times.  While implementation is still in progress for all of the initiatives—meaning only minimal data was available for GAO review—the GAO did note that there has been an increase in discussions with the Agency relating to these new initiatives.

    The GAO Report included four appendices of interesting data.  For those of you that have the time while social distancing, it could make for some noteworthy quarantine reading.

    OTC Monograph Reform Becomes Law; HP&M Issues Summary and Analysis

    Amidst the onslaught of regulatory and legislative announcements and changes occurring daily during this unprecedented time, a long-awaited (in some quarters) legislative change quietly and finally became law.   On March 27, 2020, President Trump signed into law the CARES Act which includes an array of COVID-related provisions.  CARES Act, Pub. L. 116-136 (2020).  Buried in its many hundreds of pages are the OTC monograph reform provisions of the CARES Act which appear in Subtitle F.  Congress did not name the law.  Part I provisions address the reform of the review process and are added to the Food, Drug, and Cosmetic Act (FDC Act) in new section 505G.  Subtitle F Part II covers the new OTC monograph user fee provisions adding sections 744L and 744M to the FDC Act.

    Highlights of the amendment are a change from the much-maligned archaic rulemaking framework to an administrative order process, the abandonment of the concept of the unresolved regulatory status of drugs marketed under a tentative final monograph, or TFM, in favor of making a wholesale determination of active ingredients in categories I, II, and III, a mechanism for the issuance of an interim final order to address imminent safety issues, and  provisions allowing innovation with a possibility of 18 months of marketing exclusivity.  Finally, the legislation includes a user fee provision that allows for certain fees for OTC monograph drug manufacturing facilities and certain requests for changes to the monograph.

    As has been the case with other user fee laws, industry and FDA agreed upon a Goals Letter that, among other things, describes how this vast overhaul will be implemented over the course of the first several years and timeline goals for many FDA actions.

    Hyman, Phelps & McNamara, PC has prepared a summary memorandum that details these and other aspects of the OTC Monograph Reform and User Fees.  It’s a whole new OTC monograph world out there!

    State COVID-19 Response: Medical Marijuana and Telemedicine

    State regulators across the healthcare professions continue to issue a number of guidances and waivers as part of the larger COVID-19 response.  We have previously blogged on a number of waivers issued by state pharmacy regulators in connection with COVID-19 response related to pharmacy staffing and facility licensure and inventory and distribution of controlled substances.  Today, we are blogging on an entirely different set of state COVID-19 guidance and waivers related to telemedicine and medical marijuana.  The regulatory landscape in light of the ongoing COVID-19 pandemic is constantly evolving and this is merely an overview of a few recent actions.


    On March 31, Minnesota Governor Tim Walz signed an Executive Order Ensuring Continuing Operations of the Medical Cannabis Program during the COVID-19 Peacetime Emergency.  The Executive Order allows the Commissioner of Health to permit a healthcare practitioner to certify a patient’s qualifying medical condition after a visit through videoconference, telephone, or other remote means, and temporarily waives the requirement that the certification be made only after an in-person visit.  The certifying healthcare practitioner must still meet the applicable professional standards of care when certifying a patient’s qualifying medical condition.  This Executive Order remains in place for the duration of the state of emergency.

    District of Columbia

    On March 25, DC Health issued a letter stating that medical marijuana recommenders will temporarily be permitted to utilize telehealth to make medical marijuana recommendations, subject to certain requirements.  In order to provide telehealth recommendations for medical marijuana, the provider must be licensed and in good standing as a medical doctor, osteopath, advanced practice registered nurse, dentist, naturopath, or physician assistant in DC, and have a bona fide relationship with the “qualifying patient.”  A qualifying patient is a resident of the District who has a qualifying medical condition or is undergoing a qualifying medical treatment.

    The provider must have completed a full assessment of the qualifying patient’s medical/dental history and current condition no more than 90 days before making the recommendation.  The medical marijuana recommendation must be based on the practitioner’s assessment of the patient’s medical/dental history, current medical/dental condition, and a review of other approved medications and treatments that might provide relief to the patient.  Providers who are owners, employees, or otherwise hold an interest in a dispensary, cultivation center, or testing lab cannot perform a telemedicine recommendation for medical marijuana under this policy.

    The policy announced in this letter is intended to allow patients and providers to responsibly practice social distancing and ensure adequate availability of healthcare providers for COVID-19 response.  Providers must still comply with all other DC medical marijuana regulations.


    On March 20, the Massachusetts Cannabis Control Commission issued a bulletin on Telehealth Consultations for New Patients During COVID-19.  Under this Bulletin, the Commission will consider waivers from providers who wish to certify new patients via telehealth for the Medical Use of Marijuana Program in Massachusetts.  The certification is a document stating that in the healthcare professional’s professional opinion, the potential benefits of the medical use of marijuana would likely outweigh the health risks for the qualifying patient.  Typically, Massachusetts law requires that the potential patient be physically present for the clinical visit, prior to issuing a certification.  If a waiver to conduct a clinical visit via telehealth is granted, providers must first ensure that the same standard of care can be met.  The policy set forth in the bulletin remains in effect for the duration of the state of emergency.


    The State Medical Board of Ohio voted on March 18 to allow providers to use telemedicine in place of in-person visits, without risk of enforcement from the Medical Board.  Providers are permitted to use telemedicine in lieu of the in-person visits that are typically required by Ohio law for certain services, including medical marijuana recommendations and renewals, prescribing controlled substances, and prescribing to patients not previously seen by the provider.  Providers must document the use of telemedicine and meet the applicable standard of care.  The Medical Board policy is set to expire once the Executive Order declaring a state of emergency expires and the Medical Board will provide advance notice before resuming enforcement of the in-person visit requirements.


    In addition to the measures outlined above, many state regulators have specifically identified medical marijuana businesses as “essential businesses” that will remain open during the state of emergency.  For example, the Maryland Medical Cannabis Commission stated that medical cannabis licensees (growers, processors, dispensaries and independent testing labs) are state-licensed healthcare providers and are designated as essential businesses that may remain open.   However, medical cannabis licensees are still required to follow social distancing practices and clean and disinfect frequently touched surfaces.  New Hampshire’s Therapeutic Cannabis Program has similarly categorized Alternative Treatment Centers as essential businesses.

    Categories: Cannabis |  COVID19

    FSIS Admits Its Policy for Product of USA Labeling is Misleading; Will Undertake Rulemaking

    As readers of this blog may recall, the Food Safety Inspection Service of the USDA (FSIS) received two Petitions regarding the Product of USA Labeling for Meat Products. (See here and here for our blog posts).

    In 2018, the Organization for Competitive Markets and the American Grassfed Association requested that FSIS revise its policy on “Product of USA” claims so that only U.S. domestic meat and meat products under FSIS jurisdiction can be labeled “Product of U.S.A.”  More than a year later, the U.S. Cattlemen Association (USCA) submitted its own Petition, requesting that FSIS limit the Product of USA claims to products made from beef from cattle born, raised, and harvested in the United States.

    On March 27, 2020, FSIS posted responses to both Petitions, here and here.

    FSIS received more than 2500 comments to the 2018 Petition and more than 100 comments to USCA’s Petition. FSIS concluded that its current labeling policy permitting meat and poultry products that are derived from animals that may have been born, raised, and slaughtered in another country but processed in the United States to be labeled as “Product of USA,” may be causing confusion in the marketplace.  Nevertheless, FSIS denied the Petitions’ requests to amend the policy. Instead, FSIS decided that, considering the significant public interest, it needs an “open and transparent process,” and the more appropriate way to accomplish that would be through rulemaking.

    The USCA requested that FSIS limit the Product of USA claim to beef from animals born, raised, and slaughtered in the USA.  However, based on concerns expressed that such policy change could potentially affect the integrated livestock supply chains between the United States and Canada, as well as the integrated cattle supply chain between the United States and Mexico, FSIS concluded that the better approach would be to allow the claim on products from animals that were slaughtered and processed in the United States without regard to where the source animals were born (and grown).  FSIS intends to propose a rule consistent with that conclusion.

    FSIS did not provide a timeline for the rulemaking.

    Industry – 3, FDA – 0: Will the Agency Finally Throw in the Towel?

    In a March 13, 2020 opinion, the United States Court of Appeals for the District of Columbia Circuit handed Eagle Pharmaceuticals, Inc. (Eagle) a significant win in FDA’s appeal from a District Court order requiring FDA to grant Orphan Drug Exclusivity to Eagle’s Bendeka (bendamustine) drug product.  The legal issue at the heart of this case has been the subject of posts several times before (here, here, here, and here), but bears repeating.

    FDA’s Orphan Drug Regulations

    FDA’s orphan drug regulations define a “clinically superior” drug as “a drug . . . shown to provide a significant therapeutic advantage over and above that provided by an approved orphan drug (that is otherwise the same drug)” in one of three ways:

    (1) greater effectiveness as assessed by effect on a clinically meaningful endpoint in adequate and well controlled trials;

    (2) greater safety in a substantial portion of the target population; or

    (3) demonstration that the drug makes a major contribution to patient care.

    21 C.F.R. § 316.3(b)(3).  FDA has explained in its response granting in part and denying in part a citizen petition (Docket No. FDA-2011-P-0213) that the standard for obtaining designation as a clinically superior drug is different from the standard for obtaining exclusivity:

    Though the sponsor of a subsequent orphan drug must set forth a plausible hypothesis of clinical superiority over the previously approved drug at the designation stage, such a sponsor faces a higher standard at the time of approval. At approval, the sponsor of a drug which was designated on the basis of a plausible hypothesis of clinical superiority must demonstrate that its drug is clinically superior to the previously approved drug.

    This heightened standard for demonstrating clinical superiority to obtain orphan drug exclusivity is the subject of the dispute in the Eagle case.

    Depomed Files First Challenge to FDA’s Clinical Superiority Standard

    Notably, Eagle was not the first company to question FDA’s clinical superiority standard.  In September of 2012, Depomed filed a lawsuit against FDA (see our previous post here) seeking Orphan Drug Exclusivity for its drug, Gralise (gabapentin).  Depomed prevailed and, instead of appealing the district court decision, FDA published in the December 23, 2014 Federal Register a “clarification of policy” notice in which the Agency addressed the effects of the Depomed court decision (see our previous post here).  In that notice, FDA set forth its position that the Depomed decision was limited to the specific drug at issue in that case.  FDA reiterated its intent continue applying its clinical superiority regulatory standard in evaluating orphan drug exclusivity.

    Eagle Files Second Challenge to FDA’s Clinical Superiority Standard

    Unsurprisingly, after the publication of this notice by FDA, the same issue arose with respect to another drug, Eagle’s Bendeka (bendamustine HCL).  After the parties filed their respective cross motions, two other drug manufacturers with pending applications for generic versions of Bendeka, Apotex, Inc. and Fresenius Kabi USA, LLC intervened as defendants.  As in Depomed, the district court ruled in favor of the company, granting Eagle’s motion for summary judgment and denying FDA’s cross-motion.  Applying Chevron step one, the district court concluded that the Orphan Drug Act “unambiguously require[d] the FDA to afford Bendeka the benefit of orphan-drug exclusivity.”  Eagle Pharms., Inc. v. Azar, 16-790, 16 (D.D.C. 2018).  As a result, no Chevron deference was due FDA’s interpretation.  FDA and the Intervenors appealed.

    FDA Appeals District Court Ruling in Favor of Eagle

    Judge Henderson, Judge Rao and Judge Williams considered the appeal.  Judge Henderson and Rao ruled in favor of Eagle, with Judge Williams dissenting.  The opinion, written by Judge Henderson, closely tracked the arguments and legal conclusions set forth in Depomed:

    The district court in Depomed said it well when it described this provision as “employ[ing] the familiar and readily diagrammable formula, ‘if x and y, then z’”—if designation and approval, then exclusivity.  66 F. Supp. 3d at 230.  Under the plain language of this provision, the FDA is barred from approving another application for “such drug” for the same disease for seven years once it approves an orphan drug for marketing.

    Eagle Pharms., Inc. v. Azar, 18-5207, 15 (D.C. Cir. 2020).

    As the court explained, by withdrawing its appeal following Depomed, FDA opted “instead to nonacquiesce to the decision in future cases.”  Id. at 9.  The majority went on to analyze the text, structure or purpose, and legislative history of the exclusivity provision, finding nothing to support the benefit is limited to only the drug manufacturer.  First, with respect to the text, the majority presumed the legislature says in a statute what it means.  Repeating the often-cited analogy describing the orphan drug exclusivity questions as one of, if x and y, then z; the majority concluded the statutory text leaves no room for FDA to place additional requirements on exclusivity.

    Next, in analyzing the structure and purpose of the Orphan Drug Act, the majority explained FDA’s argument as saying a literal interpretation of the Federal Food, Drug, and Cosmetic Act (FDCA) § 360cc(a)’s text would lead to such absurd results that we should consider evidence beyond it.  The majority responded that, as judges, it is not their “role . . . to ‘correct’ the text so that it better serves the statute’s purpose, for it is the function of the political branches not only to define the goals but also to choose the means for reaching them.”  Id. at 19.

    The majority also addressed the repeated argument regarding self-evergreening, or serial exclusivity, where either the same manufacturer or several manufacturers obtain multiple periods of sequential exclusivity for the same drug to treat the same disease.  In response to this assertion, the majority concluded that such a problem does not result purely from a literal reading of the statute, but from the way FDA has decided to regulate designation and the scope of exclusivity.  As a result, to the extent serial exclusivity is a problem, it is within FDA’s power to manage.

    Lastly, the majority asserted that statutory interpretation does not require a review of the legislative history when the statutory text is clear, which is the case with FDCA § 360cc(a).

    The majority briefly addressed the arguments from the Intervenor Appellants, which are two companies with generic versions of Eagle’s drug currently being excluded from the market.  The intervenors argued that the district court’s decision should have been controlled by the 2017 amendment to FDCA § 360cc(a), which requires a showing of clinical superiority to obtain exclusivity.  The majority noted this argument was raised for the first time on appeal, and is therefore, waived.  In a footnote, however, the majority described this argument as “dubious at best.”  The majority asserted that the district court order requires that FDA give Eagle what Eagle was entitled to at the time its application for Bendeka was approved—prior to the enactment of the 2017 amendments.

    Judge Williams’ Dissent responded that the text, structure, and purpose of FDCA § 360cc(a) show that Congress intended the exclusivity period afforded by that provision to be limited to the first manufacturer to secure designation and approval of its orphan drug.  FDA’s additional clinical superiority requirement, therefore, merely flows from the statute.  Indeed, Judge Williams characterized the majority’s interpretation as running counter to the best reading of the congressional language and upsetting the basic economic bargain Congress carefully constructed.

    In explaining FDA’s regulations implementing the orphan drug exclusivity statute, the dissent asserted that such regulations incentivize firms to continue innovating for the benefit of patients even after a particular active moiety has been approved for use in an orphan drug.  He then proceeded to question the majority’s interpretation of the “if x and y, then z” analogy.

    My view is that Congress meant to imply that this if-then statement—if designation and approval, then exclusivity—would cease to apply to that “same drug” at “the expiration of seven years.” This is a natural reading of an if-then statement, no different from myriad other everyday uses. “If you paint my house, I will pay you $1,000” would in the usual context imply an offer for a single painting and a single reward of $1,000—not as many house paintings and as many thousands of dollars as an industrious painter might want to exchange.

    Eagle Pharms., Inc. v. Azar, 18-5207, 52 (D.C. Cir. 2020).  According to Judge Williams, the drafters of FDCA § 360cc(a) failed to expressly close the infinite loop.  He then criticized the majority for basing their analysis on how the statute might look if the drafters had.  Judge William asserted that, because congress could have drafted the statute in a number of ways to close this loop, there was clear ambiguity.  Judge Williams described the majority’s analysis as reducing the role of judges “to nothing more than executing Congress’s script like a computer . . . unguided by contextual common sense.”  Instead, Judge Williams asserted that judges must “calculate[e] the probably meaning of the congressional language based on the information before [them].”  Id.  at 55-56.

    Parting Thoughts

    It is unclear why FDA insists on holding so tightly to an interpretation that continues to be refuted by the judiciary.  This is especially questionable given that the language of the statute was amended in 2017, after FDA’s decisions on Depomed’s Gralise (gabapentin) and Eagle’s Bendeka.  The 2017 amendment added a clinical superiority requirement to FDA’s determination of orphan drug exclusivity.  Yet the Agency continues to seek validation of its prior actions, to no avail.

    It remains to be seen whether FDA will file a writ of certiorari in the Supreme Court.  Notably, the result in Eagle has implications for a third case challenging the clinical superiority standard, United Therapeutics v. FDA, which has been stayed pending this ruling (and in which litigation Hyman, Phelps & McNamara, P.C. represents United Therapeutics).  Days after the decision in Eagle, the judge in United Therapeutics requested the parties file a joint status report indicating whether there is any objection to granting summary judgment in plaintiff’s favor based on the recent holding in Eagle.  On March 26, 2020, the parties in United Therapeutics filed a Joint Notice to the court, requesting “the Court continue to stay further proceedings until the time for rehearing in Eagle has expired, or until the D.C. Circuit has disposed of any petition for rehearing, whichever is later.”  Joint Status Report, United Therapeutics Corp. v. United States Department of Health and Human Services et al., 1:17-cv-01577 (D.D.C. Mar. 26, 2020).  The parties agreed to update the court by April 30, 2020 with their views on summary judgment, if no petition for rehearing has been filed in Eagle.  Id.  We will keep our readers apprised of any updates as they happen.

    Update: State Controlled Substance Pharmacy Law Waivers and COVID-19 Response

    We previously blogged on a number of pharmacy law waivers issued by state pharmacy regulators in response to COVID-19.  Waivers are being updated and added to state pharmacy websites daily to address the constantly changing public health and regulatory landscape.  This blog post addresses a few recent waivers related to the controlled substances distribution and inventory requirements and a waiver related to non-resident facility licensing similar to those covered in the last post.

    Controlled Substances: Distribution


    On March 30, Michigan Governor Gretchen Whitmer issued Executive Order 2020-30 (COVID-19), which provides temporary relief from certain restrictions and requirements pertaining to the provision of medical services in connection with COVID-19 response.  The Executive Order authorizes any drug manufacturer or wholesale distributor licensed in good standing in another state to temporarily distribute controlled substances in Michigan to a hospital, manufacturer, or wholesale distributor.  However, to be considered licensed in good standing, the manufacturer/wholesale distributor must not have any pending disciplinary action or a suspended or revoked license in any other state.  The “licensed in good standing” requirement is not limited to the facility’s home state license.  The Executive Order will remain in effect until the end of the declared emergency.


    On March 31, the State of Ohio Board of Pharmacy also issued a guidance on the temporary off-site storage of dangerous drugs by a terminal distributor of dangerous drugs (TDDD).   Ohio regulations define “dangerous drug” as any drug or drug product whose commercial package bears a label containing the symbol “Rx only”, the legend “Caution: Federal Law Prohibits Dispensing Without Prescription” or “Caution: Federal Law Restricts This Drug To Use By Or On The Order Of A Licensed Veterinarian,” or any similar restrictive statement and, thus, includes both drugs that are controlled substances and non-controlled substances.  OAC Ann. 4729-9-01(A).

    Under the new guidance, Ohio facilities licensed as a TDDD may maintain possession, custody, or control of dangerous drugs for the treatment of COVID-19 patients at a satellite location other than or in addition to its actual licensed location, subject to certain requirements.  The TDDD using an off-site satellite location is responsible for implementing policies and procedures to ensure that drugs stored at the off-site location are kept under supervision and control of licensed healthcare personnel.  For non-controlled substances, this may be a “licensed, registered, or certified healthcare provider.”  However, supervision of controlled substances is limited to prescribers, pharmacists, physician assistants, and nurses (including APRN, RN, LPN).  If supervision is not provided, the drugs must be physically secured in a manner to prevent unauthorized access.  TDDDs must also take reasonable efforts to ensure the drugs are properly stored, and must maintain all required records (e.g., receipt, dispensation, disposal).

    Off-site storage does not need to be approved by the Board, but the TDDD must submit a COVID-19 Satellite Registration Form prior to engaging in off-site storage.

    Controlled Substances: Inventory


    On March 31, the State of Ohio Board of Pharmacy announced a temporary extension of the annual controlled substance inventory requirement.  The Board extends the inventory date to August 1, 2020 for any annual controlled substance inventory that is required between March 2, 2020 and June 30, 2020.  However, the inventory must incorporate the additional months included as part of the extension period.


    The California State Board of Pharmacy had previously issued a similar waiver related to controlled substance inventories.  California is allowing pharmacies to complete inventory reconciliation reports at least once every six months, rather than every three months, if determined to be necessary by the pharmacist-in-charge to ensure continuity of direct patient care activities that would otherwise be impacted.


    Massachusetts requires that pharmacies maintain a perpetual inventory of schedule II controlled substances that must be reconciled at least once every ten days.  247 CMR 9.01(14).  However, as of April 1, the Massachusetts Board of Pharmacy has stated that it “does not intend to take any enforcement action against pharmacies that perform and reconcile perpetual inventory counts as least every 30 days” for the duration of the declared emergency.

    Facility Licensing

    South Carolina

    The South Carolina Board of Pharmacy issued an Order Regarding Temporary Non-Resident Permits that directs Board staff to issue 90-day temporary permits to non-resident facilities that are permitted in good standing in with states.  The order applies to out-of-state pharmacies, manufacturers, wholesale distributors, 3PLs, and FDCA Section 503B outsourcing facilities.  Typically, applicants must personally appear before the Non-Resident Application Review Committee, but this Order allows for a remote interview of the applicant by Board staff.  Temporary permits are to be issued within 24 hours of receipt of a completed application.

    We intend to regularly update our blog readers with other Board of Pharmacy COVID-19 related changes, so please check back often.

    FDA Works Around the Clock, Provides More Detailed Guidance on the Conduct of Clinical Trials Amidst the COVID-19 Pandemic

    In the White House coronavirus updates, President Trump has commended FDA for working “around the clock” to expedite the review of new medical products to help with the testing and treatment of COVID-19.  This is not puffery, as we at HP&M have experienced lightning fast feedback from FDA staff on Emergency Use Authorizations and expanded access and research protocols (for more information on EUAs in response to COVID-19, see recent posts here and here).

    At the same time as conducting this important review work, FDA must also manage the challenges that the COVID-19 pandemic presents to the conduct of clinical trials for every other disease and condition.  Just 8 business days after releasing the original guidance on this, FDA provided an update by adding a Q&A section as an appendix.  In these 10 responses to commonly asked questions, FDA builds on the core set of considerations and recommended actions that the Agency provided in the body of the original guidance.  In this post, we summarize this new Appendix.  We recommend first reading our summary the original guidance, which remains unchanged (available here).

    The new Q&A portion covers a number of topics important to many sponsors.  It first lays out decision-making considerations for two of the largest decisions sponsors must make as a result of this pandemic: (1) whether to continue the study and (2) whether continue administering the investigational product.  Other Q&A’s address managing protocol deviations and amendments, helping navigate a number of contingency measures (e.g., initiating virtual visits, switching to home delivery or infusion of the investigational product, alternative monitoring), and documenting informed consent from a patient in isolation.

    Deciding Whether to Suspend or Continue an Ongoing Study (or Initiate a New One)

    Every clinical trial depends upon an assessment of the participants’ safety and welfare.  In the updated guidance,  FDA discusses specific factors for  sponsors to consider when deciding how or whether to proceed with a trial during the COVID-19 pandemic:

    • Limitations on the protocol that pose new safety risks on participants, feasibility of risk mitigation
    • Availability of clinical investigators to provide oversight and assess/manage safety issues
    • Sufficiency of clinical trial support staff; adequacy of equipment and materials
    • Ability to conduct assessments (in-person at site or alternative site or virtually)
    • Availability of clinical trial supplies and continued operation of vendors, especially related to the investigational product (and whether product stability will accommodate revised schedules)
    • Availability of, and support for, IT systems and other technology needed, feasibility of contingency to minimize potential disruptions
    • Continued operations of IRB/IEC and DMC staff, if applicable
    • Feasibility given Federal and State public health measures/controls

    FDA recommends involvement of the study’s safety monitoring committee, if established, to aid in supporting these assessments given their responsibility to assure the safety of participants.

    FDA notes that the decision to start a trial presents different risks and benefits than continuing one, stating that (other than trials of products intended for COVID-19-related uses) sponsors of new studies need to be able to assure patient safety and trial integrity.  Furthermore, sponsors of new studies should consider whether the trial could interfere with public health measure (e.g., social distancing) implemented by Federal and State authorities to control the virus.

    Deciding Whether to Continue Administering the Investigational Product (to All or Some Participants)

    In the decision to continue administering or using the product, assuming availability of the product and ability to administer and assure safe use, FDA recommends that sponsors consider the following:

    • Participant benefit from treatment
    • Availability of reasonable alternative treatments
    • Seriousness of the disease being treated
    • Risks involved in switching to an alternative treatment if necessary

    A decision to discontinue administer need not be universal to all study participants.  Where discontinuation would present substantial risk to certain participants, including because the investigator perceives them as benefitting clinically, then the sponsor can consider amending the protocol to include only those patients with apparent benefit and discontinue the others.  Before doing so, the guidance states that sponsors should discuss this with the relevant review division.

    FDA acknowledges there are situations where discontinuation of product may be necessary, including due to lack of product supply or inability to administer or ensure safe use.  In any case where administration is discontinued, it is important to provide appropriate management after.

    Capturing Protocol Deviations

    As discussed in the main body of the guidance (and discussed in our previous post), sponsors should be documenting the specific deviations and reasons that result from the impacts of the COVID-19 pandemic.  While typically deviations are captured individually, when large numbers of deviations are systematically experienced (e.g., all visits are being conducted remotely rather than at the site), these can be documented collectively with a listing of all study visits that experienced that deviation.

    As noted in the main body of the guidance, it is important to capture specific information for individual participants that explains the basis for missing protocol-specified information, including the relationship to COVID-19 (e.g., missed study visits or discontinuations due to COVID-19-related closure of a clinical study site).  This information should be captured in the case report form, or similar systematic process.  Processes should be developed to capture site-level status, site- or vendor-level protocol deviations, and process deviations.  COVID-19-related deviations should be summarized in the clinical study report.

    Managing Protocol Amendments

    FDA reminds sponsors of the regulatory threshold for when a particular decision necessitates a protocol amendment (21 CFR 312.30(b)), which is:

    • For a change that significantly affects the safety of subjects
    • For Phase 2 and 3 studies only, a change that significantly affects the scope of the investigation or the scientific quality of the study

    To help interpret this regulation, FDA notes that protocol amendments are not required for when pausing enrollment to decrease potential exposure to COVID-19.  In addition, a protocol amendment is not required for every individual modification unless required to prevent imminent safety risk to patients; instead, several protocol modifications can be consolidated. However, any modifications to protocol-specified procedures that occur prior to an amendment implementing that modification must be documented as a protocol deviation

    For studies under an IDE, FDA recognizes that given the unique and evolving circumstances surrounding the impact of COVID-19, it may be challenging to submit 5-day Notices when implementing changes that are exempt from prior FDA approval (21 CFR 812.35(a)(3)).  The guidance allows sponsors to instead consolidate implemented changes as long as the IDE is updated as soon as possible.

    The guidance also recommends clearly identifying cover letters to accompany COVID-19-related protocol amendments under INDs and IDEs by adding to the subject line: PROTOCOL AMENDMENT – COVID-19.

    Evaluating Contingency Measures: Virtual Visits & Home Delivery/Infusion & Off-Site Monitoring

    All protocols should be evaluated periodically to consider whether modifications to the protocol could help ensure the safety of participants.  The guidance provides greater granularity into FDA’s current thinking about contingency measures specific to avoiding the risk of exposure to COVID-19.

    1. Virtual Visits. Conducting telephone or video contact visits for safety monitoring rather than on-site visits can be immediately implemented with subsequent review by the IRB and notification to FDA. These reflect protocol deviations (until the amendment is approved), so need to be documented as previously described. Since this change would likely result in some protocol-required procedures not being conducted (e.g., vital signs, blood samples for safety laboratory values), the sponsor must assess the potential impact on patient safety, considering how to mitigate risks or even the need to discontinue the investigational product.
    1. Home Delivery. For products that are self-administered at home, home delivery, if it does not raise any new safety risks, may be implemented to protect patients from coming to clinical trial sites. Applicable FDA regulations for maintaining required storage conditions and product accountability remain. If the protocol indicates pharmacy dispensing, then a protocol amendment is required to change to direct-to-patient shipments.
    1. Home Infusion. For products infused at the clinical trial site, alternative sites for administration (e.g., home nursing or alternative sites by trained by non-study personnel) should be considered and discussed with the appropriate FDA review division, particularly where altered storage or handling conditions could adversely affect product stability (e.g., cell and gene therapies). Applicable FDA regulations for maintaining required storage conditions and product accountability remain. If suitable alternative arrangements cannot be made, sponsors should define circumstances when discontinuing product treatment, while continuing study participation even if with delayed assessments.
    1. Off-Site Monitoring. Recognizing that monitors may not be able to access trial sites for on-site visits in a timely manner during the pandemic, sponsors should work to find alternative approaches (e.g., enhanced central monitoring; telephone contact with sites to review study procedures, participant status, and study progress; or remote monitoring of individual participants). Sponsors should carefully document situations where monitors were unable to access, or had to delay, monitoring of a site.  Sponsors should also document whether protocol deviations or other GCP non-compliance issues were delayed in being identified due to this.  FDA recognizes the unique situations will occur at sites due to COVID-19 control measures and states it will consider these when evaluating inspection observations.

    Obtaining Informed Consent from a Patient is in Isolation from COVID-19 Infection

    While FDA regulations generally require that informed consent of a participant be document by use of a written form approved by the IRB and signed and dated by the subject (or their legally authorized representative) at the time of consent, the guidance identifies alternative ways to satisfy the documentation requirement if the patient is in COVID-19 isolation.  First, if technology is available, electronic methods should be considered.  When not possible to obtain it electronically, the guidance details a procedure where an unsigned consent form is provided to patients and, by direct communication or telephone/videoconference, verbal confirmation of consent is obtained and that the form in their possession is signed and dated.  Documentation procedures are provided as well.

    FDA Relaxes Postmarketing Reporting Requirements During a Pandemic

    As noted in our blog post last week, FDA has issued several guidance documents authorizing the emergency use of medical devices and drugs to address the COVID-19 outbreak.  These EUAs provide a streamlined approach for selling otherwise unapproved products intended to alleviate the national emergency.  Today’s blog post describes a separate, but related, FDA initiative to alleviate companies’ postmarketing reporting obligations for their routine, non-COVID19 related products during a pandemic.  FDA recognizes that a pandemic can result in a shortage of staff (due to illness or stay-at-home orders), and seeks to prioritize both FDA and industry’s limited resources to manage the pandemic.  This guidance provides regulated entities some relief on continuing business operations without fear of running afoul of FDA enforcement.

    The Office of Counterterrorism and Emerging Threats, CDER, CBER, CDRH, and CFSAN all joined in issuing the guidance for industry titled, “Postmarketing Adverse Event Reporting for Medical Products and Dietary Supplements During a Pandemic.”   These offices anticipate that “during a pandemic, industry and FDA workforces may be reduced because of high employee absenteeism,” at the same time that adverse events related to the pathogen causing the pandemic likely would increase.  FDA states that it will exercise enforcement discretion (i.e., does not intend to object) if a company does not submit certain required adverse event reports within the time required by statute and regulation.  FDA expects that any delayed reports will be submitted within 6 months after the pandemic ends and operations resume to pre-pandemic levels.

    In the guidance, FDA emphasizes that companies should already have in place a Continuity of Operations Plan (COOP) to address all firm operations in the event of a pandemic.  (Companies who may not have developed such a procedure pre-COVID-19, should prioritize this in advance of their next FDA inspection.)  The COOP should address what happens if there is pandemic-related high employee absenteeism and require the company to maintain documentation of the declaration of the pandemic and the factors preventing the company from meeting its normal regulatory requirements (e.g., high absenteeism, increase in adverse event reports).

    Specific to adverse event reporting, FDA sets forth its general premise that “normal adverse event reporting processes should be maintained to the maximum extent possible” during a pandemic.  But the guidance details in Table 1 exactly which adverse event reports FDA will continue to require and those it will permit to be stored until the pandemic concludes.  With some exceptions, FDA will only require timely reporting of events that are related to products that are indicated for the treatment or prevention of the pathogen causing the pandemic.   FDA still requires reporting for deaths associated with drugs, biologics, blood and blood components, source plasma, and medical devices, and also requires timely reporting of adverse reactions associated with HCT/Ps or that would result in a 5-day MDR (i.e., those that necessitate remedial action to prevent unreasonable risk of substantial harm to public health).  FDA also reserves the right to communicate special concerns about certain products that must be reported even during a pandemic.

    FDA recognizes there may be a gap between when the pandemic is resolved and a pre-pandemic state is restored.  But once both events happen, FDA expects companies to follow their COOP and generally plan to submit stored reports to FDA within 6 months on a prioritized basis (e.g., the reports with shorter time periods should be reported before the periodic, routine reports).

    This guidance is practical in its approach and provides helpful assistance to those companies who simply cannot handle its regulatory obligations remotely.   It also relieves pressure from companies who may otherwise be trying to develop solutions to directly address the pandemic, and are seeking to divert its limited resources internally.  To take advantage of this guidance, in the short term, a company should be documenting any inability to meet its obligations to submit postmarket reports; in the long term, a company should develop a robust COOP to make seamless its decisionmaking should (heaven forfend) another pandemic occur.

    Categories: COVID19

    Amid Concerns of Shortage, FDA Issues Emergency Use Authorization for Ventilators, Accessories and Other Respiratory Devices

    You’ve seen the news about insufficient supply and availability of ventilators to treat patients with Coronavirus Disease 2019 (COVID-19).  You’ve also likely seen news of ideas to mitigate this shortage.  On March 24, 2020 FDA issued an Emergency Use Authorizations (EUA) for ventilators, anesthesia gas machines modified for use as ventilators, and positive pressure breathing devices modified for use as ventilators (collectively referred to as “ventilators”), ventilator tubing connectors, and ventilator accessories (EUA) and a companion policy, Enforcement Policy for Ventilators and Accessories and Other Respiratory Devices During the Coronavirus Disease 2019 (COVID-19) Public Health Emergency (Policy) to allow emergency use of ventilators in healthcare settings.  Eligible devices include “ventilators, ventilator tubing connectors and ventilator accessories that are not currently marketed in the U.S., or that are currently marketed in the U.S., but a modification is made to the device that would trigger the requirement that a manufacture submit a new premarket notification (510(k)) to FDA.”  Policy at 3.

    Instead of an EUA for a specific device, FDA has issued a general EUA that provides criteria for specific devices to be added.  Eligible devices will be added to Appendix B of the EUA after FDA determines they meet the criteria for safety, performance and labeling set forth in Appendix A of the EUA.  With the EUA, FDA will waive requirements for current good manufacturing practices (cGMP) and registration and listing.

    For devices that are currently cleared in the US and will be modified for emergency use, the Policy states that the Agency does not intend to object to introduction of these modifications without submission of a premarket notification (510(k)).  Three types of modifications are discussed.

    1. Modifications to the indications for use, claims or functionality, such as the use of powered emergency ventilators and anesthesia gas machines for mechanical ventilation of patients, use of ventilators outside of their cleared environment of use, use of sleep apnea devices and oxygen concentrators when medically necessary and clinically appropriate.
    2. Modifications to hardware, software and materials changes to allow use of alternative components, addition of filtration, modification of ventilator parameters and remote monitoring. FDA will also not object to implementation of technology currently authorized under an Investigational Device Exemption that provides physiological closed loop (automate) algorithms for oxygen titration.
    3. Use of breathing circuit components beyond their indicated shelf-life and duration of use.

    The Policy also provides recommendations for current ventilator manufacturers whose products are not currently marketed in the US.  For these eligible devices, manufacturers should engage with FDA by sending device information including product labeling, current market authorizations, conformance with standards, use of a quality management system and whether the device’s power supply is compatible with US voltage, frequency and plug type.  “Where appropriate under the circumstances, FDA will notify the manufacturer that it does not intend to object to the distribution and use of the device while the manufacturer is preparing, and FDA is reviewing the EUA request.” Policy at 13.

    For manufacturers who have not previously been engaged in medical device manufacturing but with capabilities to increase supply of these devices, FDA states that they intend to work collaboratively through the EUA process.  The Policy notes that this applies to US manufacturers in other manufacturing sectors.

    To be added to Appendix B of the EUA, devices must be validated to ensure safety and performance and accompanied by EUA labeling.  The criteria for safety, performance and labeling requirements are specified in Appendix A of the EUA.  The Policy as well as Appendix A of the Ventilator EUA require safety and performance standards be complied with, as applicable.  These standards cover basic safety and essential performance, electromagnetic compatibility, use in the home, software lifecycles, wireless coexistence, biocompatibility, and device specific performance.  Instead of submission of test reports, the EUA request should include declarations of conformity to these standards.  The EUA also should include:  device specifications, instructions, reprocessing and shelf-life information, facility requirements (e.g., gas connection type).  For continuous ventilator splitters (adapters for multiplexing), safety and performance considerations for creating and testing these components are provided, including material properties, gas pathway biocompatibility, leak, disconnect alarm and compliance with standards for ventilator circuitry.

    Finally, the EUA provides labeling considerations for both ventilators and ventilator splitters.  For ventilators, labeling will include specifications, alarms, reprocessing and other applicable instructions, a statement that FDA has authorized emergency use of the device and FDA’s fact sheets,  Fact Sheet for Healthcare Providers and Fact Sheet for Patients.  Additional recommendations are provided for the safe use of ventilator splitters.

    There are currently no devices listed in Appendix B of the EUA.  Even with the waivers provided by the EUA, there could be significant delays to bring additional ventilators to the market if all of the required testing has not been previously conducted.  It is not clear if FDA will add devices to Appendix B that have some basis of safety and performance data, while allowing some tests to be run concurrently with distribution and use of the devices to meet emergency demand.  The Policy is clear that the Agency understands the need and intends to collaborate with manufacturers.  Engaging them early, by contacting CDRH-COVID19-Ventilators@fda.hhs.gov, is recommended to all ventilator manufacturers working to help in this public health emergency.

    Categories: COVID19 |  Medical Devices

    State Regulators Issue Pharmacy Law Waivers in COVID-19 Response

    As part of a larger COVID-19 outbreak response effort, many state pharmacy regulators have issued waivers or temporary suspensions of certain pharmacy laws. The California State Board of Pharmacy, State of Ohio Board of Pharmacy, Pennsylvania Department of State, and Texas State Board of Pharmacy have all issued COVID-19-related waivers or suspensions affecting both pharmacy staffing and licensing.  These waivers meet the dual objectives of enhancing pharmacy response to the ongoing COVID-19 pandemic, while also allowing pharmacy staff to responsibly practice social distancing.  This is merely a sample of an ever changing landscape and we will provide updated information regarding these waivers when possible.



    As of March 20, California will allow the ratio of pharmacists to intern pharmacists to increase to allow for one additional pharmacy intern, so long as certain conditions are met.  California currently allows for a pharmacist to supervise no more than two intern pharmacists at any one time.  Cal. Bus. & Prof. Code § 4114(b).  The pharmacy must document the need for the modification due to the COVID-19 public health emergency.  The intern pharmacist must have an anticipated graduation date in 2020, or have graduated from a recognized school of pharmacy, or be certified by the Foreign Pharmacy Graduate Equivalency Committee.  Similarly, California is also permitting an adjustment of the ratio of pharmacy technicians to pharmacists to allow for one additional technician for each supervising pharmacist.  California law currently allows for a pharmacist to technician ratio of 2:1, with some limited exceptions.  Cal. Bus. & Prof. Code § 4115(f).  A waiver granted by the Board is limited to 30 days.  All documentation and justification related to the staffing ratio waivers must be maintained for one year following the end of the declared emergency.

    As of March 18, California is expanding the activities permissible as “remote processing.”  Pharmacists performing remote processing may also receive, interpret, evaluate, clarify, and approve medication orders and prescriptions, including medication orders and prescriptions for controlled substances classified as Schedule II, III, IV or V.  The pharmacist remote processing waiver does not extend to final product verification and dispensing.  The waiver also allows pharmacists to supervise processing done by interns and technicians remotely using technology.  Pharmacists who are supervising remotely must be readily available to answer questions and must verify the work performed by the intern or technician.

    Facility Licensure

    As of March 21, California will allow a licensed pharmacy to receive prescription drugs and devices from an unlicensed pharmacy, wholesaler, or third-party logistics provider located in another state to alleviate a temporary shortage that could lead to a denial of healthcare, under certain conditions.  The unlicensed entity must be appropriately licensed in its home state and the California pharmacy must maintain documentation of the license verification.  The California pharmacy must also maintain documentation of the temporary shortage of the drug or device received from the unlicensed entity and the drug or device must have been produced by an FDA-registered manufacturer.  Under the Board’s policy, a waiver granted by the Board is limited to 30 days.  All documentation related to the waiver must be maintained and readily retrievable for three years following the end of the declared emergency.



    As of March 13, Ohio has authorized remote order entry for all licensed/registered pharmacist, pharmacy interns, and pharmacy technicians.  Remote processing includes data entry functions, but does not include dispensing.  For pharmacists, remote processing includes activities such as receiving and interpreting medication orders and performing prospective drug utilization review.  For technicians and interns, remote processing includes activities such as order entry and insurance processing.  This guidance is in effect until rescinded by the Board.

    Facility Licensing

    In an effort to ensure drug supply chain continuity, Ohio is expediting licensure for “drug distributors” which under Ohio regulations includes wholesale distributors (including brokers and wholesalers), manufacturers, outsourcing facilities, third-party logistics providers, and repackagers.  In order to expedite licensure, the Board is temporarily waiving the requirement for the submission of ownership/officer and responsible person criminal records checks prior to the initial issuance of a drug distributor license received on or after March 2, 2020. Instead, the drug distributor will have 120 days from the date the application is submitted to submit fingerprints for criminal records checks to the Ohio Bureau of Criminal Investigation.  The expedited licensure guidance shall remain in effect until June 14, 2020 or when Ohio’s emergency orders are lifted, whichever is earlier.

    As of March 24, Ohio is also allowing the sale and shipment of certain prescription drugs that are in shortage by out-of-state facilities that are not licensed in Ohio.  This guidance applies to drugs on the FDA’s drug shortage list and drugs on the American Society of Health-System Pharmacists drug shortage list.  Controlled substances and prescription drugs containing gabapentin are excluded from the policy.  In order for an Ohio terminal distributor of dangerous drugs (TDDD) to receive drugs to alleviate a shortage, the unlicensed location must be properly licensed in good standing in its home state and the Ohio TDDD must maintain the licensure verification.  The TDDD must also main documentation of the shortage for any drug received under this guidance and the drug must be produced by an FDA-registered drug manufacturer.  The TDDD must comply with all recordkeeping requirements and all documentation and records must be maintained and readily retrievable for three years following the end of the declared public health emergency.  The unlicensed facility must submit an Out-of-State Shipment Notification Form to the Board of Pharmacy prior to shipping any drugs to the Ohio TDDD.  This guidance shall remain in effect until June 14, 2020 or when Ohio’s emergency orders are lifted, whichever is earlier.



    As of March 22, Pennsylvania is allowing pharmacists to supervise pharmacy interns and technicians responsible for data entry via “technological means.”  The pharmacy must have documented policies and procedures to protect against patient harm and the pharmacist must be readily available to answer questions and be fully responsible for the practice and accuracy of the intern or technician. This suspension does not allow for pharmacy technicians and interns to fill prescriptions from a remote location; a pharmacist is still required to be on-site to fill prescriptions.

    Facility Licensure

    As of March 22, Pennsylvania is temporarily suspending the requirement for a non-resident pharmacy registration for the duration of the COVID-19 emergency.  An out-of-state pharmacy that does not hold a Pennsylvania non-resident pharmacy registration may ship into the state so long as the pharmacy has access to common patient files, has a business relationship with a Pennsylvania pharmacy and is licensed in good standing in the home state.  The requirement for nonresident pharmacy registration is temporarily suspended for the duration of the COVID-19 emergency.



    On March 20th, Texas temporarily suspended the requirement of in-person contact for patient consultation and will allow for telephonic consultation.  The suspension of the in-person consultation requirement remains in effect until terminated by the Office of the Governor or until the March 13, 2020 disaster declaration is lifted or expires.

    Facility Licensure

    Texas has also temporarily suspended the inspection requirement to renew Class A-S (community pharmacy engaged in sterile compounding), Class B (nuclear pharmacies), Class C-S (hospital, ambulatory surgery center, or institutional pharmacy engaged sterile compounding), and Class E-S (non-resident pharmacy engaged in sterile compounding) pharmacies.  This will allow pharmacies with these license types that have not been inspected by the Board within the last renewal period to still renew their pharmacy licenses.  The waiver does not apply to other classes of pharmacy licenses (e.g., Class D clinic pharmacies, Class F freestanding emergency medical care center pharmacies).  The suspension of the inspection requirement remains in effect until terminated by the Office of the Governor or until the March 13, 2020 disaster declaration is lifted or expires.

    Categories: COVID19

    What Device Manufacturers Need to Know at This Time about FDA’s Exercise of Emergency Authority in Response to COVID 19

    FDA is exercising significant emergency authorities during the COVID‑19 pandemic.  Not all of industry is affected, but those who are manufacturing or distributing (or using) devices being used to fight the pandemic can benefit by understanding FDA’s emergency‑related policies and practices.  These are evolving every day, but we have gained enough experience, and there is now enough FDA guidance, that it seemed worthwhile to try to sketch out a roadmap, even if somewhat rudimentary.

    Although the EUA authority applies to drugs, devices, and biological products, our focus in this blog post is confined to devices.  We will cover these topics:

    • How to obtain an emergency use authorization (EUA) for devices under section 564 of the Federal Food, Drug, and Cosmetic Act (FDC Act).
    • Practical information about how to import EUA devices and devices marketed under enforcement discretion.
    • Postmarket compliance for EUA devices.
    • PREP Act immunity for EUA devices.


    Under the FDC Act, it is unlawful to introduce into interstate commerce a medical device that lacks 510(k) clearance or premarket application (PMA) approval when required.  An EUA is effectively a substitute clearance or approval issued by FDA in a time of emergency pursuant to Section 564 of the FDC Act.  An EUA authorizes emergency use of a device that (1) is not approved or cleared for commercial distribution or (2) is approved or cleared, but not for the emergency intended use.

    FDA may only issue EUAs within the scope of an applicable HHS emergency declaration.  The Secretary of HHS, Alex Azar, has issued three EUA device-related emergency declarations to date for the COVID-19 pandemic.  The first two emergency declarations issued relate to in vitro diagnostic (IVD) devices (see Federal Register notice here) and personal protective respiratory devices (see Federal Register notice here).  Following publication of these emergency declarations, FDA issued over fifteen EUAs for IVDs, and two EUAs for facial respirators (see list of COVID-19 EUAs here).

    This week, HHS issued a third device-related emergency declaration, which is broadly applicable to “emergency use of medical devices, including alternative products used as medical devices” and has a retroactive effective date of March 24 (see Federal Register notice here).  FDA has already issued one EUA for a ventilator (see EUA here) pursuant to the authority granted by this broad emergency declaration.   Other EUAs seem likely to follow.

    Preparation of a Request for EUA

    Under Section 564 of the FDC Act, an EUA request must satisfy the following criteria:

    1. There is an applicable HHS declaration related to a serious or life‑threatening disease or condition;
    2. Based on the totality of scientific evidence, it is reasonable to believe that the device may be effective in diagnosing, preventing, or treating the disease or condition;
    3. The known and potential benefits of the device outweigh the known and potential risks of the device; and
    4. There are no adequate, approved, and available alternatives to the device.

    FDA issued an EUA guidance document in 2017 expanding on FDA’s expectations for these four criteria.  The guidance clarifies that the fourth criterion, regarding no available alternatives, does not mean that only one EUA can be issued for a device type or category.  Rather, a device manufacturer can establish that there are no available alternatives if there are “insufficient supplies of the approved alternative to fully meet the emergency need.”

    The 2017 guidance does not specify any particular format for EUAs, but for the COVID-19 pandemic, FDA has requested use of FDA-created EUA templates.  FDA has posted to its website two EUA templates for IVD EUAs, one for laboratories to perform high-complexity testing under the Clinical Laboratory Amendments (CLIA) (see template here) and one for commercial test kit manufacturers (see template here).  FDA has stated that templates for non-diagnostic devices can be requested via email at CDRH-NonDiagnosticEUA-Templates@fda.hhs.gov, but has not yet posted any non‑diagnostic EUA templates to its website.  We are aware of one that is being used by an FDA review team but it has not been publicly released to our knowledge.

    In our experience with the EUA process so far during the current emergency, the review divisions we have worked with have requested initial submission of the request as a “Pre‑EUA.”  The Pre-EUA submission has the same content and data as an EUA submission, but submitting as a Pre-EUA apparently allows FDA to work interactively with the device manufacturer to gather the necessary data and information to compile a complete EUA request that is ready for approval.

    FDA’s Current Policies for IVD EUAs

    The COVID-19 pandemic has led to a pressing need throughout the country for appropriate screening and diagnostic tests.  As a result, FDA established policies related to COVID-19 tests early in the Agency’s response to the pandemic.  Perhaps because the IVD policies were created early, they have evolved over time to adapt to the test market.

    On February 29, FDA issued a guidance document describing a policy that would allow laboratories certified under CLIA to perform high-complexity testing to develop, validate, and use diagnostic tests for the SARS-CoV-2 virus, prior to submission of a request for EUA.  The grace period was approximately 15 business days.  This policy allows laboratories to proceed to market quickly with validated laboratory-developed test while simultaneously seeking an EUA.

    Under this policy, once a laboratory has a validated test, it must notify FDA via email (at CDRH-EUA-Templates@fda.hhs.gov) that it has a validated assay and will begin clinical testing.  During the 15-day grace period, lab reports must include a statement that the test has been validated, but FDA’s independent review of the validation is pending.  While awaiting FDA’s determination on the request for EUA, the laboratory must obtain confirmation of the first five positive and first five negative clinical specimens using an EUA-authorized assay.  If FDA ultimately refuses to issue the EUA, the laboratory must terminate testing patient specimens and issue corrected test reports that indicate the prior test result may not be valid.

    On March 16, FDA issued an updated version of this guidance document (Policy for Diagnostic Tests for Coronavirus Disease-2019 during the Public Health Emergency), which retained the February 29th policy regarding high-complexity laboratories without modification, and added three additional policies addressing various testing scenarios that arose as states and commercial laboratories attempted to respond to the call for additional tests.

    The updated guidance included a policy that permitted state authorization of laboratory tests developed by high-complexity laboratories in lieu of an EUA.  Prior to publication of this guidance, on March 12, FDA issued enforcement discretion for laboratory tests authorized by the Wadsworth Center of the New York State Department of Health.  On March 13, the President issued a Memorandum on Expanding State-Approved Diagnostic Tests, which explicitly gave FDA authority to offer the same enforcement discretion policy to any other state that requests it.  FDA is requesting that states choosing to exercise this option notify FDA.  Additionally, FDA has asked laboratories with tests authorized by a state, rather than through the EUA process, submit a notification to FDA via email at CDRH-EUA-Templates@fda.hhs.gov.

    Originally, the grace period applied to laboratory-developed tests in high-complexity CLIA certified laboratories.  This updated guidance extended the policy to commercial test kit manufacturers and distributors, who now may begin distribution of a test kit prior to submission of a request for EUA for a period of 15 business days, so long as the test has been validated, the manufacturer sends an email notification to FDA, and the test report includes the disclaimer that the validation has not been reviewed by FDA.  Unlike the policy for high-complexity laboratories, FDA recommends that commercial test manufacturers post to their website the instructions for use and a summary of assay performance.

    The fourth policy in the March 16 updated guidance relates serology tests.  Serology tests that identify antibodies (e.g., IgM, IgG) to SARS-CoV-2 from clinical specimens do not require an EUA.  To qualify for this enforcement discretion policy, a test must be appropriately validated, the test manufacturer or laboratory must send a notification to FDA via email, and the test reports must have the following disclaimers:

    • The test has not been reviewed by the FDA.
    • Negative results do not rule out SARS-CoV-2 infection, particularly in those who have been in contact with the virus. Follow-up testing with a molecular diagnostic should be considered to rule out infection in these individuals.
    • Results from antibody testing should not be used as the sole basis to diagnose or exclude SARS-CoV-2 infection or to inform infection status.
    • Positive results may be due to past or present infection with non-SARS-CoV-2 coronavirus strains, such as coronavirus HKU1, NL63, OC43, or 229E.

    There has been some confusion among laboratories and test kit manufacturers as to whether the policies in the March 16 guidance apply to home testing and/or home collection.  FDA’s guidance states that none of the four policies applies to home testing.  FDA’s Frequently Asked Questions webpage on diagnostic testing for SARS-CoV-2 clarifies that the policies also do not apply to home collection tests that are performed in a laboratory.  So, all home tests or tests using home specimen collection require an EUA, and laboratories and manufacturers cannot begin distribution prior to approval.

    FDA is hosting a weekly virtual town hall series to provide policy updates and answer questions regarding COVID-19 diagnostic tests.  These webinars may prove to be a useful channel for policy updates on FDA review and regulation of COVID-19 IVDs in the coming weeks.

    The first virtual town hall was held on March 25 (see slides here), during which Elizabeth Hillebrenner, Associate Director for Scientific and Regulatory Programs in the Office of the Center Director, and Timothy Stenzel, Director of the Office of In Vitro Diagnostics, summarized the policies in the March 16th guidance and answered questions from industry.  Many questions related to CLIA requirements, which FDA stated should be directed to CMS rather than FDA.  Though, FDA did clarify that the March 16th policies would not alter the relevant CLIA requirements for a test.  For example, if a test is moderate or high complexity, it can only be used in a doctor’s office if the doctor has the appropriate CLIA certification.


    During the past week, FDA has provided increased clarity on importing devices subject to EUAs, devices subject to enforcement discretion, and alternative products to be used as medical devices.  Imports have been a source of consternation for industry as, even under the best of circumstances and with clear guidance, products do not always enter the U.S. at an efficient pace.

    As background, FDA has broad authority over imports of products subject to its jurisdiction.  FDA may refuse admission of a product if the product “appears from the examination of . . . [a] sample or otherwise” to violate the law.  FDC Act § 801(a).   This standard is flexible, and permits FDA to refuse product entry into the U.S. based on subjective criteria.  Historically, this created inconsistency among different FDA Import Offices and even inconsistent approaches among reviewers within the same office.

    Since mid-2016, we have seen many consistency issues addressed by the onboarding of the Automated Commercial Environment (ACE) for FDA-regulated products.  As we previously blogged, ACE provides importers with a “single window”  to submit information to government agencies, reducing redundant submissions to different agencies that may have jurisdiction over the products proposed for import.  The ACE system relies heavily on the use of appropriate codes to identify manufacturers, products and product uses.  The FDA Supplemental Guidance, last updated in April 2018, provides the appropriate codes for use with FDA-regulated products.

    One of the biggest issues for importers during the COVID-19 public health emergency has been the lack of appropriate codes in the FDA Supplemental Guidance to address devices that may be subject to EUAs, those subject to enforcement discretion, or alternative products intended to be used as medical devices.  Although FDA published final guidance in 2017 on Emergency Use Authorizations of Medical Products and Related Authorities making clear that products subject to EUA could be legally imported, no mechanism was provided in that guidance on how to appropriately code these imports – with the guidance merely stating that, “[t]he letter of authorization should serve as appropriate documentation or certification that the product may be legally imported or exported.”  While the FDA Supplemental Guidance includes a “compassionate use/emergency use” code for medical devices, it was unclear whether importers could apply the code to commercial shipments of EUA products or whether the code applies to more discrete utilizations of a device for more traditional compassionate use purposes.

    On March 24, FDA issued a statement that it had taken action to increase COVID-19 response supplies by providing instructions to the import community on importing personal protective equipment and other devices.

    These instructions provide specific codes for importers to utilize when importing 3 categories of products:

    • Non-FDA-regulated general purpose protective equipment – importers should utilize, if available, Harmonized Tariff Schedule codes (HTS codes) that do not flag the entry for FDA review.  If an HTS code has a flag, importers should do a ‘disclaim’ for FDA;
    • Products authorized under EUA – importers should use Intended Use Code 940.000: Compassionate Use/Emergency Use as well as the applicable FDA product code;
    • Products regulated by FDA as a device, not authorized by an EUA, but where an enforcement discretion policy has been published in guidance – importers should use Intended Use Code 081.006: Enforcement discretion per final guidance as well as the applicable FDA product code.

    While these import instructions are helpful, gaps remain.  FDA has historically required importers to identify products’ intended uses at the time of import.  It is unclear whether importers may use HTS codes that avoid FDA review for general purpose products that do not meet medical device requirements but are intended for use as medical devices.  FDA has provided published guidance on certain face masks (and importers can now use intended use code 081.006 for these products).  As of March 25, there was not guidance for other types of personal protective equipment such as surgical gowns, although we are aware that FDA has provided email guidance to members of industry stating its willingness to exercise enforcement discretion in certain circumstances.

    In a March 26 email response from the newly established COVID19FDAIMPORTINQUIRIES@fda.hhs.gov, we received confirmation that there is no mechanism to import personal protective equipment for a medical use (Gloves, Gowns, Surgical Apparel, etc.,) that is not in compliance with traditional medical device requirements, even if FDA has provided email guidance that it would exercise enforcement discretion in certain circumstances.  FDA confirmed that for these products, “There are no exemptions from registration, listing, and/or clearance/approval requirements at this time.”

    To its credit, FDA appears to recognize many of these issues and is taking steps to partner with industry. We are aware that FDA has proactively reached out to importers to facilitate information exchanges that may help expedite U.S. entry of these much‑needed products.


    To date, FDA has not issued general guidance to address postmarket compliance of EUA devices and the issue of enforcement has not arisen in any meaningful way in the current pandemic.  That could change later, so it is at least worth knowing what the statute authorizes FDA to do.

    Under Section 564 of the FDC Act, FDA has authority to set “conditions of authorization” for an EUA.  For on any device with an EUA, the letter of authorization will set forth specific conditions of approval.  This authority is somewhat different for products not previously regulated versus those already regulated but being put to a new emergency use.

    For products previously unapproved under the FDC Act:  An EUA may specify appropriate conditions to ensure that healthcare professionals administering the product (and patients receiving it) know that it is being used under FDA’s emergency use authority and the significant known benefits and risks and alternatives.  Patients specifically may be told of an option to refuse or accept it and the consequences.

    In addition to these informational requirements, FDA may set appropriate conditions for monitoring and reporting adverse events associated with the emergency use.  FDA also may subject manufacturers to appropriate conditions concerning recordkeeping and reporting, as well as inspection of the records, with respect to the emergency use.

    Finally, FDA has broad authority over distribution (including who may distribute and/or receive product), who may administer and to whom it may be administered, and requirements for collection and analysis of information about the safety and effectiveness of the product.

    For unapproved new uses:  For a manufacturer of a device subject to an EUA for a new emergency use, FDA is required to apply the informational requirements above, to the extent practical, and FDA is authorized to apply adverse event reporting and recordkeeping and reporting.

    Interestingly, if an EUA requires a change in labeling, the manufacturer may choose not to comply.  In this situation, FDA may not authorize a distributor or other person to obscure or alter the original labeling.  FDA may authorize a distributor to add supplemental labeling not subject to the misbranding requirements (502 of the FDC Act).

    All devices:  FDA has broad authority to waive or limit compliance with good manufacturing practice (for devices, the Quality System Regulation), including any adulteration requirements (section 501 of the FDC Act).

    Finally, FDA may establish conditions on advertisements and other promotional descriptive printed matter for the emergency use.  This authority includes the right to invoke the restricted device authority over advertising in Section 502(r) of the FDC Act.


    The Public Readiness and Emergency Preparedness Act (PREP Act) is a broad and complex public health emergency statute.  Of interest here, it has a provision that authorizes the Secretary of HHS to issue a declaration (i.e., a PREP Act declaration) that triggers broad statutory immunity from liability under federal and state law.  This immunity applies to claims of loss caused or resulting from administration or use of countermeasures to diseases, threats and conditions determined by the Secretary to constitute a present or credible risk of a future public health emergency.  The immunity is applicable to entities and individuals involved in the development, manufacture, testing, distribution, administration, and use of such countermeasures.  The exception for “willful misconduct” is exceedingly narrow.

    As mentioned, the immunity from liability is triggered by a PREP Act declaration.  A PREP Act declaration has been issued for COVID‑19.  Although the immunity provisions in the PREP Act are too complex for this already quite long blog post, it is at least worth knowing that a device receiving EUA approval for fighting COVID‑19 also receives immunity under the PREP Act.  Specifically, the statute defines a “covered countermeasure,” to include “a . . . device . . . authorized for emergency use in accordance with section 564.”

    Categories: COVID19 |  Medical Devices

    Open for Business: DEA’s Proposed Rule Would Make the Agency an Active Buyer and Seller of Marijuana

    In 2009, Levon Helm, formerly of The Band, wrote and recorded “Growin’ Trade,” a song about a weary, disillusioned American farmer reluctantly staves off bankruptcy by growing illegal cannabis.  Helm nor anyone else could have known that in the ensuing years, a majority of states would decriminalize cannabis, a number of whom would authorize cannabis for medicinal and recreational purposes.  It would have been beyond anyone’s wildest imagination that the Drug Enforcement Administration (“DEA”) on March 23, 2020, would issue a Notice of Proposed Rulemaking (“NPR”) that while issuing additional registrations to manufacture marijuana for research, also involves the agency inserting  itself in the manufacturer-to-researcher equation by buying, taking possession and directing marijuana to researchers.  Controls to Enhance the Cultivation of Marihuana for Research in the United States, 85 Fed. Reg. 16,292 (March 23, 2020).

    In summary, DEA finally appears ready to start evaluating applications and issuing DEA registrations to manufacture marijuana for research.  However, to meet the requirements under the international treaties, DEA is proposing to control the distribution of marijuana by purchasing the crops from the manufacturers and then acting as the distribution point to the researchers.  This raises a number of regulatory issues and concerns over how DEA will prioritize the sale and distribution.

    For over 50 years, DEA has granted only one manufacturer registration for marijuana, restricting all marijuana production for research to the University of Mississippi, under contract with the National Institute on Drug Abuse (“NIDA”).  DEA issued a policy statement in August 2016 recognizing the increased interest in the research of certain cannabinoids, including cannabidiol, concluding, based on discussions with NIDA and the Food and Drug Administration (“FDA”), “that the best way to satisfy the current researcher demand for a variety of strains of marijuana and cannabinoid extracts is to increase the number of federally-authorized marijuana growers.”  Applications to Become Registered Under the Controlled Substances Act to Manufacture Marijuana to Supply Researchers in the United States, 81 Fed. Reg. 53,846, 53,847 (Aug. 12, 2016).  [See DEA Policy Expands the Number of Marijuana Cultivators for Research, Aug. 17, 2016].

    DEA’s proposed rule that would increase the number of marijuana growers for research purposes resulting in a larger, more diverse variety of marijuana for research.  The proposed regulations would allow DEA to evaluate the 37 pending manufacturer applications, establish a program to register additional marijuana growers, and for the agency purchase, take possession and direct marijuana to registered researchers.  DEA, Press Release, DEA Proposes Process to Expand Marijuana Research in the United States (March 20, 2020).  While registering additional growers of marijuana for research is long overdue, that DEA would assume such an active, direct role in the supply chain raises a number of questions as noted below.

    We reported last August that DEA was not ready to evaluate the registration applications it had received since announcing in 2016 that it would accept applications and issue registrations to manufacturer marijuana for research.  [See Ease on Down the Road: DEA Still Not Ready to Evaluate Marijuana Manufacturer Registrations, Aug. 29, 2019].  To meet increased demand for research with marijuana, marijuana extracts and marijuana derivatives, DEA has increased the annual production quota for marijuana by 575 percent since 2017, from 472 kilograms to 3,200 kilograms in 2020.  DEA, Press Release, DEA Proposes Process to Expand Marijuana Research in the United States (March 20, 2020).

    DEA anticipates approving applications for registration of three types of bulk marijuana manufacturers:  manufacturers who grow marijuana for their own research or drug development; manufacturers who supply marijuana to other DEA registrants; and manufacturers who supply marijuana to support NIDA’s drug supply program.  Id. at 16,295-96.

    The NPR explains that because marijuana is a schedule I controlled substance, registration applications to manufacture it are governed by 21 U.S.C. § 823(a).  Controls to Enhance the Cultivation of Marijuana, at 16,293.  For DEA to issue a registration under 21 U.S.C. § 823(a), DEA must determine that the registration is consistent with the public interest based on enumerated criteria and with U.S. obligations under the Single Convention on Narcotic Drugs, 1961 (“Single Convention”).  Id.  Article 28 of the Single Convention requires signatory countries that permit cultivation of the cannabis plant for the production of cannabis or cannabis resin to comply with Article 23 controls, and excludes the cultivation of cannabis for industrial or horticultural purposes.  Id. at 16,294.  Article 23 requires signatory countries that allow the cultivation of cannabis for lawful purposes, such as manufacturing for research, to:

    1. Designate areas and plots of land where they will permit cannabis plant cultivation for producing cannabis or cannabis resin;
    2. Ensure only licensed cultivators engage in cultivation;
    3. Specify through licensing the extent of the land on which cultivation is permitted;
    4. Require cultivators to deliver all their cannabis to the responsible agency, ensuring the agency purchases and takes physical possession of the crops as soon as possible, but not later than four months after the end of the harvest; and
    5. “Have the exclusive right of importing, exporting, wholesale trading, and maintaining stocks of cannabis and cannabis resin,” except the exclusive right need not extend to medicinal cannabis, cannabis preparation, or the stocks of cannabis and cannabis resin held by manufacturers of such medicinal cannabis and cannabis preparations.

    DEA already performs the first three functions under the Controlled Substances Act (“CSA”), so to comply with the CSA and issue registrations consistent with the Single Convention, the agency is proposing revising its regulations “to directly perform” the fourth and fifth functions as well.  Id.

    So, to comply with the Single Convention, the regulations, if finalized, would require:

    1. Registered manufacturers to deliver the entirety of their cannabis crops to DEA, and DEA to purchase and take physical possession as soon as possible, but no later than four months after harvest.
    2. DEA may accept delivery and maintain possession of the crops at the registered location of the registered manufacturer consistent with the CSA security controls required for schedule I substances.  DEA would designate a secure storage mechanism at the manufacturer’s registered location to maintain possession by controlling access to the cannabis.  If no suitable location exists at the manufacturer’s registered location, DEA would designate a location for the grower to deliver the crops within four months of harvest.
    3. DEA would have the exclusive right to import, export, wholesale trade and maintain cannabis stocks other those held by registered manufacturers and distributors or medicinal cannabis or cannabis preparations.  DEA may authorize registrants to perform such activities.  DEA would require prior written notice of each proposed cannabis import, export or distribution specifying the quantity, and the name, address and DEA registration of the recipient manufacturer or researcher before authorizing the transaction.  Registered manufacturers could not import, export or distribute cannabis without the express written authorization of DEA.
    4. A registered manufacturer must notify DEA in writing of its proposed harvest date at least fifteen days prior to commencement of the harvest.  (A delay of DEA taking possession “would not only increase the risk of diversion, but would also adversely impact the quality of the crop.).  Id. at 16,294-95.

    DEA intends to purchase marijuana with funds from the Diversion Control Fee Account and add a variable administrative cost per kilogram to the sales price to end users.  Id. at 16,297.  The merits of this proposition alone could be the subject of its own blog post.

    If the proposed rule is finalized as is, DEA would become an active player in these enterprises, constituting a huge leap from the role of an enforcer of federal law regulating marijuana to being responsible for purchasing, possessing and directing marijuana in the research supply chain.  How is this going to work?  Can DEA be both a participant and regulator of the same activities?  Will DEA’s participation be hampered by investigative, administrative and budgetary constraints?  All stakeholders would be best served for DEA to delegate as many of these proposed new responsibilities to registered entities who are better equipped to engage in these activities.

    In addition to compliance with the Single Convention, DEA may grant a registration to manufacture marijuana only where the agency determines the registration is consistent with the public interest based on criteria in 21 U.S.C. § 823(a), including limiting the number of registered bulk manufacturers to that which can produce an adequate and uninterrupted supply of marijuana under adequately competitive conditions in order to maintaining effective controls against diversion.  Id. at 16,296.  To fulfil this requirement, a bona fide supply agreement between a grower and registered schedule I researcher would provide evidence that an application is necessary to produce an adequate and uninterrupted supply of marijuana under adequate competitive conditions.  Id.  The proposed regulation defines a “bona fide supply agreement” as “a letter of intent, purchase order or contract between an applicant and a researcher or manufacturer.”  Id. at 16,305.  Applicants seeking to grow marijuana for their own research can meet this requirement by holding a DEA registration to conduct research with marijuana.  Id. at 16,296.  Applicants should be prepared to produce bona fide supply agreements to DEA as part of the preregistration process.

    DEA will also determine which applicants to register as consistent with the public interest by  emphasizing the “applicant’s ability to consistently produce and supply marihuana of a high quality and defined chemical composition” and “[w]hether the applicant has demonstrated prior compliance with the CSA and DEA regulations.”  Id. at 16,297.  DEA stated in its 2016 policy statement that “[i]n this context, illegal activity includes any activity in violation of the CSA (regardless of whether such activity is permissible under State law) as well as activity in violation of State or local law.”  Applications to Become Registered, at 53,847. DEA explained at the time that while past illegal conduct involving controlled substances would not automatically disqualify an applicant, “it may weigh heavily against granting” a registration.  Id.  Given all things being equal, it will be interesting to see whether DEA penalizes those applicants who ignored this warning and conducted state-authorized cannabis activities in violation of the CSA by favoring those who did not by granting the latter a registration.

    Having received 37 applications since August 2016, how will DEA determine which of those registrations to grant and how to handle additional applications it receives?  “With limited exception,” DEA will first evaluate the applications it has received before the final rule becomes effective, and will not consider applications received after the rule becomes effective until it grants registrations or denies registrations of the earlier applicants.  Id. at 16,297. Because DEA is required to issue a show cause before denying any application for registration, and provide the applicant with a right to an administrative hearing, we expect that a number of applicants will challenge these denials and lead to more litigation.

    Neither Levon Helm nor anyone else could not have envisioned in 2009 that DEA would seek to purchase, take possession and direct marijuana in 2020.  Not even for legitimate research.

    Electronic comments on the proposed rule must be submitted, and written comments postmarked, on or before May 22, 2020.