Attorney East Hampton

By McKenzie E. Cato —

On December 10, 2021, FDA issued a discussion paper titled 3D Printing Medical Devices at the Point of Care seeking feedback on FDA regulatory oversight of various 3D-printing scenarios, in order to inform future policy development.

This discussion paper is not the first time that FDA has grappled with the tricky regulatory questions presented by 3D printing.  In October 2014, FDA held a public workshop titled “Additive Manufacturing of Medical Devices: An Interactive Discussion on the Technical Considerations of 3D Printing.”  In May 2016, FDA released a draft guidance document titled “Technical Considerations for Additive Manufactured Devices” (see our blog post on the draft guidance here), which was finalized in 2018 (see our blog post on the final guidance here).  This guidance document is still in effect today.

The recent discussion paper is not a guidance document and FDA says it is not intended to convey any current policy.  Rather, it is meant to present various scenarios related to use of 3D‑printed devices at the point of care, along with a series of discussion questions seeking input from industry and other stakeholders.

The discussion paper starts with an acknowledgment of the benefits of 3D printing at the point of care.  Specifically, that it allows for fast production of “patient-matched devices” (i.e., devices that are fitted specifically to a patient’s anatomy), and anatomical models for surgical planning.  3D printing has also allowed for production of medical devices such as face shields, face mask holders, nasopharyngeal swabs, and ventilator parts during device shortages caused by the COVID-19 pandemic.

However, the discussion paper summarizes, there are a number of regulatory challenges associated with 3D printing, including (1) ensuring devices are safe and effective; (2) ensuring appropriate controls are in place for design and manufacturing so that product specifications are met; (3) clarifying which entities are responsible for compliance with regulatory requirements; and (4) ensuring that point-of-care facilities have the necessary training and expertise to produce 3D-printed devices.

The discussion paper provides an overview of FDA’s current approach to regulation of 3D-printed devices.  In brief, such devices can be commercially distributed to the general public for non-medical purposes without FDA regulation (e.g., use in education, construction, art, and jewelry).  Additionally, general purpose manufacturing equipment, including 3D printers and mills, are not subject to FDA regulation if not specifically intended to produce medical devices.  FDA does regulate 3D printing equipment and activities when intended to produce regulated medical devices (i.e., products intended for medical purposes).  The regulatory requirements for the devices that are 3D-printed generally govern the responsibilities of the entities that are manufacturing and distributing the 3D printing equipment for that use at the point of care.

The proposed regulatory approach in the discussion paper incorporates several high-level concepts:

• The extent of FDA oversight should correspond with the risks of the printed device and the 3D printing of the device at the point of care;
• The device specifications should not change based on the location of manufacture (i.e., a traditional manufacturing site vs. the point of care);
• The capabilities available at a point-of-care healthcare facility can help mitigate production risks;
• Entities involved in 3D printing of devices should understand their regulatory responsibilities under the Federal Food, Drug, and Cosmetic Act; and
• FDA intends to leverage existing regulatory controls for the regulation of 3D printing at the point of care, including existing standards and processes.

The discussion paper outlines three illustrative scenarios, to facilitate discussion and feedback from stakeholders.

The first scenario is a healthcare facility using a medical device 3D-printing production system.  FDA is seeking feedback on the challenges that a manufacturer of a 3D-printing system may face in being responsible for FDA regulatory requirements for devices that are 3D-printed by independent healthcare facilities, including with respect to adverse event reporting.  FDA also asks questions about the challenges related to any post-production manufacturing steps that may be undertaken by a healthcare facility after the device is printed.

The second scenario is a traditional manufacturer that is co-located at or near the healthcare facility site, where the 3D printing is conducted by the manufacturer to supply devices to the healthcare facility.  In this scenario, FDA is interested in the possibility of frequent design changes that may occur in response to clinical feedback (e.g., requests for different sizes or geometries after a printed device is examined by a healthcare provider).  FDA also asks whether there are any specific considerations in this co-location scenario that differ from traditional non-3D printed manufacturing processes for devices.

The third scenario is a healthcare facility that has assumed all traditional manufacturer responsibilities, including complying with all FDA regulatory requirements that apply to traditional device manufacturers.  The discussion paper notes that healthcare facilities already have internal quality systems in place that could be adapted to compliance with device regulatory requirements (e.g., complaint handling and adverse event reporting processes) and staff trained in the maintenance of equipment.  FDA is seeking feedback on which parts of FDA’s regulatory framework would be the easiest for healthcare facility’s to implement, and which would present the greatest challenges.

Separate from these three scenarios, the discussion paper seeks feedback on considerations for “very low risk” devices.  FDA has not yet defined “very low risk,” but the discussion paper states that it is considering developing a list of characteristics that would help identify very low risk devices.  The discussion paper includes a question for stakeholders on a proposed list of considerations in identifying these devices (e.g., intended use, device class, whether the device requires sterilization).  For these devices, FDA is considering exercising “regulatory flexibility” when these devices are 3D-printed at a healthcare facility, which we assume refers to some level of enforcement discretion with regard to compliance with manufacturing regulatory requirements.

The discussion paper states that FDA will use the feedback submitted to the public docket it has opened (Docket No. FDA-2021-N-1272) to inform future policy development.  Comments may be submitted until February 7, 2022.

By Sara W. Koblitz —

Since the August 2021 decision in GSK v. Teva, the generic industry has been waiting with bated breath to see whether the section viii carve-out (and thus skinny-labeled generic drugs) will survive.  With the District Court of Delaware’s January 4 decision in a similar case (brought by GSK’s lawyers), Amarin v. Hikma, the generic industry can have some hope.  Relying heavily on the Federal Circuit’s contention that the decision in GSK v. Teva was a “narrow, case-specific review,” Judge Andrews dismissed Amarin’s suit against Hikma in which Amarin alleged that Hikma’s skinny-labeled generic icosapent ethyl induced infringement of Amarin’s method-of-use patents.  The Court, however, would not dismiss similar allegations as applied to health insurer.

In the wake of GSK v. Teva, in which the Federal Circuit reversed the District Court of Delaware’s decision to overturn a jury verdict finding that Teva induced infringement of GSK’s method-of-use patents covering carvedilol, several Reference Listed Drug (“RLD”) sponsors sued generic manufacturers marketing skinny-labeled versions of their products under the same induced infringement theory that prevailed in GSK v. Teva.  (The Federal Circuit twice reversed the District Court decision at issue in GSK v. Teva, but Amarin v. Hikma was filed in November 2020 after the Court’s first decision issued in October 2020.)  One of those RLD sponsors, Amarin, sued generic sponsor Hikma for induced infringement of method-of-use three patents listed in the Orange Book for Amarin’s Vascepa (icosapent ethyl) after FDA approved Hikma’s product with the patented use carved out, alleging that Hikma’s approved label “is ‘not skinny-enough.’”  Amarin also sued Health Net, an insurer that provides coverage for both Vascepa and Hikma’s generic.

The procedural background of Amarin v. Hikma (unlike that of GSK v. Teva) is simple:  Amarin received FDA approval for Vascepa as adjunct to diet to reduce triglyceride levels in adult patients with severe hypertriglyceridemia in 2012 (referred to as the “SH indication”) and as an adjunct to statin therapy in patients with elevated triglyceride levels and established or risk factors for cardiovascular disease in 2019 (the “CV indication”).  Amarin listed Vascepa in the Orange Book with multiple patents, including several method-of-use patents covering only the CV indication.  In accordance with the statutory “section viii” provision, FDA approved Hikma’s generic product referencing Vascepa in May 2020 omitting information pertaining to the patented CV indication.

Five months later, Amarin sued Hikma for induced infringement arguing, essentially, that Hikma’s labeling does not adequately carve out Amarin’s protected method of use concerning the CV indication and thus induced infringement of Amarin’s patents.  Specifically, Amarin alleged that Hikma’s label “teaches CV risk reduction” due to “a notice regarding side effects for patients with CV disease” and an absence of a statement that the generic “should not be used for the CV indication….”  Hikma countered that the notice of side effects for patients with CV disease is a warning, not an instruction to use the product in CV patients, and that Hikma has no duty to provide a statement discouraging an infringing use.  The Court agreed with Hikma, finding that a warning “is hardly instruction or encouragement.”  The Court also explained that the Federal Circuit has already rejected Amarin’s argument that generic labels must contain a clear statement discouraging use of the patented indication.  Further, the Court noted, Amarin did not sufficiently plead that Hikma, “took affirmative steps to induce” infringement in its labeling.

Amarin also argued that Hikma’s non-label claims—public statements, including press releases and its website—induced infringement by stating that Hikma’s product is the “generic equivalent to Vascepa” and that Vascepa “is indicated, in part” for the SH indication while citing to sales numbers for Vascepa in all indications.  Amarin also took issue with the statement on Hikma’s website that its generic icosapent ethyl is “AB rated” in the “Therapeutic Category: Hypertriglyceridemia.”  Ultimately, the Court explained that the question here is whether these statements are sufficient to support inducement “without a label or other public statements instructing as to infringing use.”  The Court said that they are not, as these statements “might be relevant to intent but they do not support actual inducement.”  “Intent alone is not enough; Amarin must plead an inducing act.”

The Court took pains to distinguish Hikma’s labeling and promotion from Teva’s in GSK v. Teva.  There, the Court explained, Teva’s promotion of carvedilol for as a cardiovascular agent that is a generic of GSK’s Coreg for the “treatment of heart failure,” as well as its direction to the partially carved-out labeling—as opposed to Hikma’s more general “AB rated” language—differentiated GSK v. Teva from this case.  The Court again made sure to emphasize language from GSK v. Teva explaining that “it is still the law that ‘generics could not be held liable for merely marketing and selling under a “skinny” label omitting all patented indications, or for merely noting (without mentioning any infringing uses) that FDA had rated a product as therapeutically equivalent to a brand-name drug.”

Taking induced infringement for skinny labeling in a different direction, Amarin also sued health insurer Health Net.  Amarin alleged that Health Net’s formulary placement induces infringement of Amarin’s method-of-use patents covering Vascepa.  Specifically, Health Net lists Hikma’s generic in a lower tier than Amarin’s Vascepa, making the product available for a lower co-pay when the generic is dispensed.  Given state automatic substitution laws, Amarin alleges that Health Net’s placement of Hikma’s generic on the formulary “leads to substitution on ‘all VESCEPA (sic) prescriptions, not just the prescriptions directed to the’ SH indication.”

The Court denied Health Net’s Motion Dismiss, finding that Amarin pled enough facts to allege that Health Net knew of Amarin’s CV patents, made affirmative acts to induce infringement by placement on the formulary, and had specific intent to induce based on the listing of the patented indication on the insurer’s generic icosapent ethyl capsules prior authorization form.  Thus, the court concludes, “Health Net’s placement of generic icosapent ethyl on a preferred tier encourages the substitution of the generic for the branded drug, including for the patented indication.”  The issue, explained the Court, is the incentives the formulary puts in place to prescribe the generic regardless of the indication.  Whether Health Net induced infringement is a “factual question” that cannot be resolved on a motion to dismiss.

As we have learned from GSK v. Teva, Amarin’s case against Hikma could still end very differently if it is appealed to the Federal Circuit.  In GSK v. Teva, the District of Delaware was certain that Teva’s promotion did not induce infringement of GSK’s patent, going as far as to overturn a jury verdict, but the Federal Circuit reversed.  Amarin could appeal this dismissal, and the Federal Circuit could do the same here and reinstate the case.  So, while generic sponsors may have a brief reprieve from concerns that the skinny-label is altogether dead, the Federal Circuit could kill it once again.  Thus, until the Federal Circuit addresses this case, it’s difficult to read too much into the decision here.  Of course, if the Federal Circuit doesn’t hear this case, the Court’s fact-specific inquiry suggests that the implications of GSK v. Teva are less far-reaching than initially believed.

The case against Health Net introduces another wrinkle to the skinny-label debate though.  That insurers may have some liability for induced infringement merely by listing a skinny-labeled generic on a formulary could dissuade health insurers from covering skinny-labeled generics.  This would either force patients to brand-name products or to pay out of pocket for generics; in either scenario, it would increase prices for patients.  But thus far Amarin’s allegations have only survived a Motion to Dismiss; it’s entirely possible that this theory of induced infringement is rejected by the Court sometime in the future.

We still have a way to go until there’s certainty with respect to the future of the skinny label.  GSK v. Teva is still awaiting a decision from the Federal Circuit on Teva’s request for rehearing from the full panel, Amarin may appeal the Hikma decision, and the claims against Health Net must still be litigated.  So while we’re hesitant to say that the skinny-label has been resuscitated, we’re not ruling out the possibility of resurrection.

Hyman, Phelps & McNamara, P.C. is the largest dedicated FDA law firm, and we need attorneys to help our clients bring pharmaceutical drugs and medical devices to market.  Our ideal candidates have experience working at FDA (CDER, CDRH, CBER, or OCC), or have at least two years working in private practice with a sophisticated FDA practice group.  Our firm culture is collaborative, the work environment is flexible, and the subject matter is intellectually stimulating.   If you want to join our team, please send your resume to Anne Walsh, awalsh@hpm.com.

By Michael S. Heesters & Jeffrey N. Wasserstein —

“EKRA” refers to the Eliminating Kickbacks in Recovery Act, which was part of the Substance Use – Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act of 2018.  EKRA is codified at 18 U.S.C. § 220 and was described on HP&M’s blog here.  Until recently, no federal court had had occasion to interpret EKRA.  That changed on October 18, 2021 when the Federal District Court for the District of Hawaii handed down a decision that construed key terms in the statute.

I.   The Eliminating Kickbacks in Recovery Act (“EKRA”)

In general, EKRA prohibits, knowingly and willfully, soliciting, receiving, paying or offering kickbacks in exchange for referring to, inducing a referral to, or using the services of a recovery home, clinical treatment facility, or laboratory.

EKRA defines “recovery home” as “a shared living environment that is, or purports to be, free from alcohol and illicit drug use and centered on peer support and connection to services that promote sustained recovery from substance use disorders.”  18 U.S.C. § 220(e)(5).  “Clinical treatment facility” is defined as “a medical setting, other than a hospital, that provides detoxification, risk reduction, outpatient treatment and care, residential treatment, or rehabilitation for substance use, pursuant to licensure or certification under State law.”  18 U.S.C. § 220(e)(2).  “Laboratory” is defined broadly as “a facility for the biological, microbiological, serological, chemical, immuno-hematological, hematological, biophysical, cytological, pathological, or other examination of materials derived from the human body for the purpose of providing information for the diagnosis, prevention, or treatment of any disease or impairment of, or the assessment of the health of, human beings.”  42 U.S.C. § 263a.  Note that while EKRA was passed as part of a bill to combat the opioid crisis, its definition of “laboratory” applies to lab activities far beyond those involving opioid or other drug testing.

EKRA is also broadly written because it applies to all “health care benefit” programs.  A “health care benefit program” is defined as “any public or private plan or contract, affecting commerce, under which any medical benefit, item, or service is provided to any individual, and includes any individual or entity who is providing a medical benefit, item, or service for which payment may be made under the plan or contract.”  18 U.S.C. § 24(b) (emphasis added).  Note that EKRA’s reach is broader than the Anti-Kickback Statute, which applies only to “federal healthcare programs” — e.g., Medicare, Medicaid, Tricare, etc.

EKRA also contains several exemptions.  18 U.S.C. § 220(b).  In particular, the employee exemption, relevant to the S&G Labs Haw., Ltd. Liab. Co. v. Graves case described below, states that it is not unlawful to pay an employee/independent contractor (as part of a bona fide employment relationship) to the extent that the employee’s payment does not vary by the following:

(A) the number of individuals referred to a particular recovery home, clinical treatment facility, or laboratory;

(B) the number of tests or procedures performed; or

(C) the amount billed to or received from, in part or in whole, the health care benefit program from the individuals referred to a particular recovery home, clinical treatment facility, or laboratory.

18 U.S.C. § 220(b)(2).

EKRA violations constitute a criminal offense with a maximum sentence of up to 10 years imprisonment and/or a $200,000 fine for each violation of the statute.

II.   S&G Labs Haw., Ltd. Liab. Co. v. Graves, No. 19-00310 LEK-WRP, 2021 U.S. Dist. LEXIS 200365 (D. Haw. Oct. 18, 2021)

A.   Background Facts

S&G Labs Hawaii, LLC (“S&G Labs”) is a Hawaiian laboratory company that performs various lab testing services including toxicology (for both legal and illicit substances) and COVID testing.  These lab tests are performed for physicians, substance abuse treatment centers and other types of organizations.

The litigation between S&G Labs and Graves involved multiple claims and counterclaims, many of which are not related to EKRA.  This summary will focus on the EKRA issue and facts pertinent to that issue.

S&G Labs’ pay structure was important to the Court’s decision regarding the EKRA issue.  S&G Labs alleged during the litigation that they are paid on a “per test” basis by third party insurers, government agencies under the Medicare and Medicaid programs, and direct “self-pay” by some individuals.  S&G Labs has no contractual relationships with the entities that referred clients to S&G Labs.  Specifically, S&G Labs has no contracts with any physicians, substance abuse counseling centers, or other organizations in need of having individuals tested.   S&G Labs receives no compensation from physicians, substance abuse treatment centers, or other similar types of organizations who refer individuals for testing.  Those “clients” are free to cease using the services of S&G Labs and direct their patients to other medical lab testing companies at any time.  S&G Labs Haw., Ltd. Liab. Co. v. Graves, 2021 U.S. Dist. LEXIS 29248, at *2-3 (D. Haw. Feb. 17, 2021).

Graves was an employee of S&G Labs whose job was to oversee client accounts.  His job was governed by an employment contract that contained both salary provisions and restrictive covenants.  Graves was compensated by receiving a $50,000 salary.  Graves also received 35% of the monthly net profits generated by his client accounts and a portion of the 35% monthly net profits generated by the accounts handled by the S&G Labs’ employees who Graves managed.  Id. at *4.  Graves’s employment contract also prohibited the following:  engaging with any business competitor, making disparaging remarks about S&G Labs, soliciting current employees to resign from S&G Labs and soliciting particular clients while an employee and for two years post-employment.  Id. at *4-6.

B.   EKRA Issue

The EKRA issue in this case centered on how Graves was compensated.  S&G Labs received legal advice in 2018/2019 that, under EKRA, employee compensation could not vary based on the number of lab tests performed or revenue received by S&G Labs.  S&G Labs, therefore, concluded that they could not pay Graves 35% of the monthly net profits generated by his client accounts and a portion of the 35% monthly net profits generated by the accounts handled by the S&G employees who Graves managed.

S&G Labs and Graves, however, could not reach agreement on a new compensation model.  Ultimately, Graves alleged that S&G Labs breached his employment contract.  S&G Labs argued that Graves’s employment contract became illegal and, thus, unenforceable.  The issue for the Court was, therefore, what effect did EKRA’s enactment have on Graves’s employment contract?  The district court was required to engage in statutory interpretation to answer this question.

C.   District Court’s Holding

The Court first held that S&G Labs is a “laboratory” as defined by EKRA.  S&G Labs Haw., Ltd. Liab. Co. v. Graves, 2021 U.S. Dist. LEXIS 200365, at *29 (D. Haw. Oct. 18, 2021).

The Court next interpreted the statutory terms “remuneration” and “individual” as those terms are used in EKRA.

(a) Offense.–Except as provided in subsection (b), whoever, with respect to services covered by a health care benefit program, in or affecting interstate or foreign commerce, knowingly and willfully–

…

(2) pays or offers any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind–

(A) to induce a referral of an individual to a recovery home, clinical treatment facility, or laboratory; or

(B) in exchange for an individual using the services of that recovery home, clinical treatment facility, or laboratory.

18 US.C. § 220(a) (emphasis added).

EKRA does not define these terms, so the Court looked to the Anti-Kickback Statute.  Applying the definitions in the Anti-Kickback Statute, the Court defined “individual” as “an individual, a trust or estate, a partnership, or a corporation (citing, 42 U.S.C. § 1301(a)(3)) and concluded that “for purposes of the anti-kickback statute, an “individual” is not an artificial entity.”  Id. at *31-32.

The Court relied on Section 1301(c) to define “remuneration” as including payments from an employer to an employee.  Specifically, Section 1301(c) states:

Whenever under this chapter or any Act of Congress, or under the law of any State, an employer is required or permitted to deduct any amount from the remuneration of an employee and to pay the amount deducted to the United States, a State, or any political subdivision thereof, then for the purposes of this chapter the amount so deducted shall be considered to have been paid to the employee at the time of such deduction.

42 U.S.C. § 1301(c) (emphasis added).

The Court interpreted EKRA in the same manner as the Anti-Kickback Statute because, as the Court explained, an act should “be interpreted as a symmetrical and coherent regulatory scheme, one in which the operative words have a consistent meaning throughout.”  S&G Labs Haw., Ltd. Liab. Co. v. Graves, 2021 U.S. Dist. LEXIS 200365, at *30 (D. Haw. Oct. 18, 2021), citing Gustafson v. Alloyd Co., 513 U.S. 561, 569 (1995).

Applying the definitions of “individual” and “remuneration” the Court concluded that EKRA applied to Graves and his employment contract.  And, importantly, Graves’s salary structure constituted remuneration under EKRA.  However, because Graves was not paid for use of S&G Labs services, “[t]he critical issue is whether Graves’s remuneration was to induce a referral of an individual to S&G.”  Id. at *32, citing 18 U.S.C. § 220(a)(2)(A).

The Court noted that Graves’s salary structure undoubtedly induced him to generate business for S&G Labs.  However, Graves’s clients were physicians/physician offices — not individual patients in need of lab services.  Moreover, S&G Labs is not directly compensated by their clients (e.g., physicians and substance abuse counseling centers).  S&G Labs is primarily compensated by patient’s insurance providers.  EKRA, however, prohibits kickback payments in exchange for inducing “individual” referrals and in exchange for “individuals” using a laboratory’s services.  18 U.S.C. § 220(a)(2).  The Court, therefore, concluded that Graves’s employment contract using commission-based incentives did not violate EKRA because his clients were not “individuals” as that term is used in EKRA.  The Court further noted that the EKRA’s exceptions were inapplicable because “Graves’s commission-based compensation from S&G [Labs] was a payment made by an employer to an employee, and it was determined based upon the number of tests that S&G performed.  Thus, the exception in § 220(b)(2) would not apply to Graves’s compensation under his Employment Agreement.”  S&G Labs Haw., Ltd. Liab. Co. v. Graves, 2021 U.S. Dist. LEXIS 200365, at *34-35 (D. Haw. Oct. 18, 2021).

III.   Conclusion

EKRA is a broadly written statute that applies to all lab services billed to any public or private health insurance.  EKRA also applies to lab activities beyond those involving drug testing.  All labs must be aware of EKRA to avoid paying illegal kickbacks to generate business.

In this specific case, there was no evidence cited, and the Court did not analyze, whether or not Graves may have aided and abetted or been involved in a conspiracy with his clients.  In future cases, there will likely be a different result where a lab employee conspires with a client to refer “individuals” back to the employee’s lab in exchange for a kickback.  Moreover, other courts may decide that remuneration based on the volume of referrals induced by an employee is unlawful pursuant to EKRA, despite the fact that the employee does not personally refer or use the lab services him/herself.

The S&G Labs case is one of the first cases that has interpreted EKRA, and it is unlikely to be the last.  This case may be appealed and there will certainly be more cases in the future to interpret the statute.  EKRA is also a new law and the U.S. Department of Justice has not, as of yet, prosecuted many cases under EKRA.  Therefore, the scope of the statute has not yet been extensively judicially tested.  Much like the Anti-Kickback Statute, we anticipate that EKRA will be tested more often over the next several years.

Hyman, Phelps & McNamara, P.C. (HP&M) is pleased to announce that Sara W. Koblitz has become the firm’s newest Director.  Sara’s practice covers the intersection of FDA regulatory issues and Intellectual Property, including the Hatch-Waxman Amendments, the Biologics Price Competition and Innovation Act, and the Orphan Drug Act, biosimilars, and the Orange Book.  She assists pharmaceutical drug companies of all sizes on product lifecycle management, as well as regulatory strategies related to obtaining FDA approval, exclusivity, and patent listing.  Sara also has been heavily involved in FDA-related litigation and interpretation of the Federal Food, Drug, and Cosmetic Act.

Sara joined the firm from a well-recognized intellectual property firm in 2017.  Her full bio can be found here.

Hyman, Phelps & McNamara, P.C. (HP&M) is pleased to announce Adrienne R. Lenz has become its first Principal Medical Device Regulation Expert.  Adrienne joined HPM in September 2017.  In her time with HPM, she has made significant contributions to the firm and its clients.

Prior to joining HP&M, Adrienne worked as an independent regulatory consultant and consultant with Emergo.  She has also held positions in regulatory affairs, quality assurance, and test engineering at GE Healthcare and Smiths Medical.

As a Principal Medical Device Regulation Expert, Adrienne will continue to provide consulting to medical device and combination product manufacturers. Adrienne assists clients with a wide range of pre and postmarket regulatory topics including developing regulatory strategy, preparing regulatory submissions, drafting regulatory policies and procedures, and addressing enforcement matters.

In the premarket area, Adrienne prepares IDEs, 510(k)s, de novos, and PMAs. She also prepares pre-submissions, and assists clients in preparing for and represents clients at pre-submission meetings with FDA. In the postmarket area, she advises clients on complaint handling, MDRs, field actions, and QSR compliance.  Adrienne’s full bio can be found here.

By Faraz Siddiqui —

Happy New Year!

On January 1, 2022, the recently revised version of the PhRMA Code on Interactions with Health Care Professionals went into effect. We summarized the major revisions to the Code in a blog post when it was released in August 2021. Many of the updates relate to drug manufacturer practices with regard to speaker events, including meals, choice of venue, and attendance.

Although the PhRMA Code is a voluntary code of conduct, drug manufacturers should consider updating their marketing policies and practices to align with the new Code. The updated Code incorporates the latest guidance from the Office of Inspector General at the U.S. Department of Health and Human Services (OIG). This includes a November 2020 Special Fraud Alert wherein OIG explained its enforcement focus regarding speaker programs. (We blogged about the Alert here).

Another reason drug manufacturers may want to update their marketing policies are the numerous state requirements tied to the Code. Several states, including Connecticut, California, District of Columbia, Massachusetts, and Nevada, have adopted or incorporated the Code in their statutes or regulations. In some cases, a revised PhRMA Code adds obligations for manufacturers to update their practices. For example, California’s drug marketing law requires pharmaceutical companies to adopt an internal marketing compliance policy that aligns with the PhRMA Code. See Cali. Health & Safety Code § 119402(b). If the Code is revised, the California law gives companies six months to update internal policies to conform to the new version. Other jurisdictions like D.C. require sales representatives to comply with the Code “as it may be amended or republished from time to time.” See D.C. Municipal Regulation § 8305.11.

Given these state requirements, following the PhRMA Code is not only an approach to mitigate litigation risk – it is an explicit requirement for manufacturers that interact with health care practitioners in a state that has adopted or incorporated the Code.

By Jeffrey N. Gibbs & Gail H. Javitt —

As we approach our third year of COVID, one of the major questions from March 2020 eerily echoes today: where are all the COVID tests?  The situation now, of course, is very different and much more favorable than two years ago.  Unlike March 2020, numerous tests by multiple manufacturers have been reviewed by FDA and are being distributed.  There is also a wide variety of tests, including PCR assays, antigen tests, and antibody tests, and at least 16 over-the-counter assays (4 of which were authorized in the past month).  And yet, there is still a dramatic shortfall in the number of tests available.  There are innumerable accounts of desperate scavenger hunts for a COVID assay (link), and a photograph taken by one of us (Jeff) at the local library depicts an all too common scene.

There are multiple explanations for the current inadequate number of tests (link), including government policies on test procurement, manufacturers’ decisions to curtail production when demand fell this summer, the extraordinarily rapid spread of the omicron variant, and surges in demand brought on by the holidays.  But while the advent of omicron unquestionably precipitated the immediate critical shortage, limitations on the availability of COVID tests in the United States was a vulnerability long before the emergence of this variant (link).  As we chronicle in an article that appears in the current edition of the Food and Drug Law Journal, FDA’s policies for reviewing COVID assays, have been a contributing factor.

Over the past two years, FDA has played a central role as gatekeeper for COVID tests.  This role is one that has sporadically received attention (link) but which has not undergone a detailed analysis.  To help fill that void, our article takes an in-depth look at FDA’s policies since the emergence of the pandemic in the United States.  This article (link), which is made available with the permission of the Food and Drug Law Institute, examines multiple facets of FDA’s regulation of COVID assays.

The onset of COVID brought unprecedented challenges to FDA.  There is no question that the agency has devoted herculean efforts and resources to reviewing and authorizing COVID assays.  As of the latest count, FDA has granted more than 420 Emergency Use Authorizations (EUAs) for COVID In Vitro Diagnostics (IVDs) (25 of which were laboratory developed tests).  And that total understates the agency’s efforts to address the critical need for testing, which have included holding 75 Town Hall meetings and issuing eight EUA submission templates.

At the same time, as our article discusses, the agency has taken steps that have unnecessarily impeded the introduction of assays.  For example, the agency has abruptly changed its policies, leaving numerous tests in regulatory limbo and unavailable for use.  The agency’s prioritization scheme has been opaque and confusing, and its implementation has kept COVID tests off the market and hampered decision-making by IVD companies.  The strict data requirements for tests intended to be used with asymptomatic patients led to a lack of tests available for that use.  Ultimately, FDA took the unprecedented step of affirmatively encouraging the off-label use of tests authorized for symptomatic patients to be used off-label for asymptomatic patients.  As we learned first-hand through our counseling of scores of companies, and as has been reported in the media (link), the unpredictability of FDA policies had a chilling effect on product development and submissions.

FDA’s approach to laboratory developed tests (LDTs) has been perhaps one of the most remarkable examples of the impact of agency regulation on test development and availability).  As we’ve blogged about on many occasions (see, e.g., link, link, link, link), FDA’s LDT policy has been fraught for decades, and the consequences of unresolved jurisdictional issues were made manifest during the pandemic.

As we describe in the article, at the outset of the pandemic FDA blocked labs from offering COVID LDTs without an EUA, choosing instead to rely solely on the CDC’s assay.  When that assay turned out to be flawed (link), there were no alternate laboratory tests available because labs had been discouraged from developing them.  Only after weeks of the country flying blind in the face of the viral onslaught did FDA permit labs to offer testing while they prepared EUA requests for submission.  In August 2020, the Department of Health and Human Services intervened, directing FDA to stop requiring EUAs for LDTs in the absence of rulemaking.  This policy was reversed in November 2021, and laboratories were given 60 days to submit EUA requests (the deadline is January 14th) (link).  Given the inadequate testing capacity and the surging demand in the United States, it is inexplicable that FDA would take any steps that could increase burdens on test developers and potentially reduce test availability without an extraordinary reason – which FDA did not offer.

Our article closes with a strong recommendation that FDA take a close look at what has gone well with its review of COVID IVDs – and a lot has – and where improvements are needed.  Mistakes cannot be glossed over.  Under FDA’s quality system requirements, device manufacturers must review all available sources of information to identify quality problems, institute meaningful corrective and preventative actions when appropriate, and then verify effectiveness.  We should expect no less from FDA itself when it comes to self-evaluation of the impact of its testing policies on pandemic preparedness.

In the past few decades, multiple new and deadly etiologic agents have arisen.  SARS-CoV-19 will not be the last one.  The next time, the United States – and FDA – need to be much better prepared to facilitate widespread testing.

* In recognition of the wide and eclectic musical tastes of our HPM Blog followers, this blog post title alludes to the music of both Pete Seeger and Taylor Swift.

The authors acknowledge and thank Charlie Snow for his assistance in preparing this blog post.

By Adrienne R. Lenz, Principal Medical Device Regulation Expert —

On December 23, 2021, CDRH released as a draft guidance, Assessing the Credibility of Computational Modeling and Simulation in Medical Device Submissions (Draft Guidance).  Computational modeling and simulation (CM&S) can sometimes be useful to demonstrate the safety and effectiveness of medical devices or incorporated into devices.  FDA indicates that they receive regulatory submissions with such computational modeling, but the submissions “often lack a clear rationale for why models can be considered credible for the context of use.” Draft Guidance at 4.

The Draft Guidance describes a nine-step framework for evaluating the credibility of CM&S information submitted in pre-market applications.  A computational model is “the numerical implementation of the mathematical model performed by means of a computer.” Draft Guidance at 8.  The National Institute of Biomedical Imaging and Bioengineering describes computational modeling as “the use of computers to simulate and study complex systems using mathematics, physics and computer science.” NIH, Computational Modeling (May 2020).  Weather forecasting is an example of computational modeling and simulation for which most of us are familiar.  Similar techniques can be used to model complex biological systems. The Draft Guidance applies to physics-based or mechanistic CM&S and not statistical or data-driven CM&S, such as those incorporating artificial intelligence or machine learning.

The Draft Guidance describes four types of CM&S that can potentially be used to support a regulatory submission, by either being used to provide evidence to support a device’s safety and effectiveness or by being incorporated within the device, itself:

• In Silico Device Testing, which are computational models that simulate medical device performance. Draft Guidance at 5.
• CM&S used within medical device software, which is use of computational modeling within medical device software to perform device functions. at 6.
• In Silico Clinical Trials, where “device performance is evaluated using a ‘virtual cohort’ of simulated patients with realistic anatomical and physiological variability representing the indicated patient population.”
• CM&S-based qualified tools, which are tools for developing or evaluating a medical device that can be submitted to CDRH under the Medical Device Development Tools (MDDT) Program.

In the Draft Guidance, credibility is defined as “trust in the predictive capability of a computational model.” Id. at 4.  The guidance assesses credibility using key concepts from FDA-recognized standard ASME V&V 40 Assessing Credibility of Computational Modeling through Verification and Validation: Application to Medical Devices.  However, where the ASME standard assumes the ability to perform traditional validation activities, the Draft Guidance provides a more general framework that additionally incorporates non-traditional validation evidence.

A nine-step framework is presented for assessing credibility for purposes of a regulatory submission of the four types of computational modeling described above.  The first steps are to (1) describe the question of interest, (2) describe context of use and (3) model risk.  Next, (4) credibility evidence, either previously generated or planned, is identified and categorized, followed by (5) defining credibility factors and setting prospective credibility goals.  Prospective adequacy assessment is then performed (6) to answer the question, “will the credibility evidence be sufficient to support using the model for the context of use given the risk assessment?” Id. at 10.  Credibility evidence is then generated (7) by executing the proposed studies and/or analyzing previously generated data.  A post-study adequacy assessment (8) is conducted to determine if credibility goals were met, followed by preparation of a credibility report (9).

Key concepts from the framework are then presented in detail within the Draft Guidance, including points of consideration for each type of CM&S, where applicable.  The question of interest should describe the question that is being addressed using the model and along with other sources of information.  When considering the context of use, it should be the specific role and scope of the computational model used to address the question of interest.  The Draft Guidance recommends that a model’s risk, defined as “the possibility that the computational model and the simulation results may lead to an incorrect decision that would lead to an adverse outcome” is assessed according to the ISO 14971 and ASME V&V 40 standards.  Id. at 9.

Credibility evidence is evidence that could support the credibility of a computational model.  Id. at 8. There are three types of credibility evidence (code verification, calculation verification, validation) and ten distinct categories within these three types of credibility evidence that are discussed in the Draft Guidance.

Code verification provides evidence demonstrating that a computational model implemented in software is an accurate implementation of the underlying mathematical model.  Calculation verification determines the solution accuracy of a calculation.  Both calculation verification and validation of the model may be provided through a number of types of evidence, including: general non-context-of-use evidence, evidence generated using bench-top conductions to support the current context of use, evidence generated using in vivo conditions to support the current context of use, evidence generated using bench-top conductions to support a different context of use, and evidence generated using in vivo conditions to support a different context of use.  Validation can additionally be provided by population-based evidence, emergent model behavior, model plausibility and model calibration evidence.  Model calibration evidence is an assessment of the fit of simulation results against the data used to develop the model; while it can support the validation of the model, it alone cannot be used to validate the model.

Although a pre-submission is optional, the Draft Guidance suggests it may be useful to receive Agency feedback on the model risk assessment and prospective adequacy assessment.  A Credibility Assessment Plan is suggested for inclusion in pre-submissions.  For regulatory submissions, the Draft Guidance recommends inclusion of a Credibility Assessment Report.  The structure for both a Credibility Assessment Plan and Credibility Assessment Report are provided in Appendix 2 of the Draft Guidance. Id. at 34-36.

For regulatory and legal professionals, the Draft Guidance provides information that will help ensure regulatory submissions provide appropriate documentation to support the credibility of computational modeling and simulation information provided to support the safety and effectiveness of medical devices.  As FDA indicates, it is especially important to consider these issues within the clinical context (conditions of use).  A model that is credible in one context may not be credible in another.  We are interested to hear from engineers as to whether this guidance will also prove helpful in developing and validating CM&S.

By Alan M. Kirschenbaum —

We reported in August that CMS proposed to rescind the Most Favored Nation (MFN) drug pricing interim final rule issued in the latter days of the Trump regime.  Today, CMS finalized that proposal, effectively putting an end to the concept of international reference pricing as a means to limit drug prices.  The bipartisan idea of international reference pricing generated considerable controversy during its short lifetime.  The November 2020 rule was promptly challenged in four lawsuits, one of which resulted in a nationwide preliminary injunction against its implementation.  Though regulatory implementation was stymied, international reference pricing was carried over by Democrats into the drug pricing provisions of H.R. 5376, the Build Back Better Act, which passed the House on November 19.  However, the approach has been rejected in the version of the Build Back Better Act that is slowly taking shape in the Senate.  (See section 129001 of the most recent Finance Committee text.)  Rather than using foreign prices as benchmarks, that legislation would use a specified percentage of the non-federal average manufacturer price (NFAMP) reported by manufacturers to the Department of Veterans Affairs, in order to set a ceiling on Medicare Part B and D drug payment for selected high cost brand drugs.  With today’s action by CMS, the idea of international reference pricing for drugs has reached its demise in both the Congress and the Administration.