FDA Flips It and Reverses It: FDA Withdraws HHS Withdrawal of UDI Guidance

By Sara W. Koblitz

While typically, FDA is responsible for setting forth its own agenda and enforcing compliance with its own regulations, the Trump Administration’s HHS, on its way out the door in late 2020, took the unusual steps of withdrawing an important FDA Compliance Policy Guide, “Marketed Unapproved Drugs – Compliance Policy Guide Sec. 440.100, Marketed New Drugs Without Approved NDAs or ANDAs,” which set forth FDA’s approach to prioritizing enforcement actions and exercising enforcement discretion with respect to marketed unapproved drug products.   As explained in CPG 440.100 and on FDA’s website, FDA adopted the “Unapproved Drug Initiative” (“UDI”) in 2006—later revised in 2011—to remove unapproved drugs from the market using a risk-based approach both to ensure the safety and efficacy of all drug products on the market and the integrity of the drug approval process.  Yet HHS, without input from FDA, “terminated” the UDI, citing increased drug pricing and shortages supposedly arising from the UDI.  HHS further withdrew all FDA materials relating to the UDI to “prevent actors from using Food and Drug Administration (FDA) rules to enjoy artificial monopolies over older drugs.”  While FDA was silent on the withdrawal for about 6 months, FDA finally withdrew HHS’s withdrawal of CPG 440.100 and the UDI on May 27, 2021.

In a somewhat scathing Federal Register Notice, FDA—noting that FDA “did not find any evidence that HHS consulted with, otherwise involved, or even notified FDA before issuing the HHS Notice”—explained that it was withdrawing HHS’s UDI Termination because “the HHS Notice contained multiple legal and factual inaccuracies.”  Specifically, FDA raised concerns with HHS’s misrepresentation of the term “new drug.”  A key term integral to the application of the drug approval requirements to a given product, FDA has always interpreted the term “drug” in the definition of a “new drug” to refer to the “entire drug product” rather than only the active ingredient, and courts consistently have upheld that interpretation.  The November 2020 HHS Notice, however, suggested that FDA previously had defined “new drugs” to mean active ingredient, and, therefore, the Notice reasoned that any active ingredient marketed prior to 1938 should not constitute a “new drug,” could be considered “grandfathered,” and may not require approval prior to marketing.  In this Federal Register Notice, FDA explained that it has never taken that position, as doing so “could result in significant harm to public health by suggesting that unsafe or ineffective drugs could circumvent the drug approval process.” FDA also criticized the implication in the HHS Notice that the CPG changed FDA’s interpretation of “new drug,” “grandfathered,” or “GRASE” status (formally known as drugs that are “Generally Recognized as Safe and Effective”) without required notice and comment.  FDA explained that the CPG changed no interpretations or definitions but merely reflected FDA’s decades-long interpretations and advised the public of FDA’s enforcement priorities.

Further, FDA assiduously defended the success of the UDI program.  Rejecting HHS’s position that the UDI program resulted in the “unintended” and “adverse” consequences of increased drug pricing and shortages, FDA explained that “the HHS Notice is supported by flawed facts,” as the single study relied upon was an observational study of only 26 products without adjustments for inflation, potentially resulting in an overestimation of real price changes.   Contrary to HHS’s assertions, FDA emphasized that the program and related compliance actions have resulted in approval of safe and effective versions of previously unapproved drugs.  FDA also cited carbinoxamine-containing products and quinine as examples of unapproved new drugs that, due to significant adverse events, were ultimately removed from the market as a result of this program.  And FDA refuted the HHS Notice’s association between the UDI and a Daraprim price increase for Daraprim: Daraprim was an approved drug without generic competition, and it was the absence of generic competition—not FDA enforcement under the UDI—that led to the increase in price.

Finally, FDA’s rebuke of the HHS Notice suggested that HHS did not have the statutory authority to withdraw the CPG as only the FDA Commissioner is “responsible for executing” the FDC Act.   FDA concluded its withdrawal notice by stating that “[t]he HHS Notice did not, and legally could not, provide a new pathway for the legal marketing of unapproved new drugs” as “[n]either HHS nor FDA has the authority to exempt a product or class of products that are new drugs under the FD&C Act from the new drug approval requirements of the FD&C Act.”

This is not the first time this year that FDA and HHS have given industry whiplash.  HHS withdrew FDA’s December 29, 2020 Federal Register Notice announcing OTC monograph fees only eight days after publication.  There, HHS threw FDA under the bus, issuing a statement that the imposition of user fees on hand sanitizer manufacturers “was not cleared by HHS leadership, who only learned of it through media reports” and that the HHS Secretary “would never have authorized such an action.”  Similarly, HHS and FDA withdrew HHS-proposed exemptions for 83 medical devices published in the Federal Register by the Trump Administration just days before leaving office.  There, HHS and FDA explained that “the proposed exemptions and bases for them are flawed.”  Once again, the Federal Register Notice explained that FDA “did not find evidence that HHS consulted with or otherwise involved FDA in its proposed exemption or the issuance of the January 15, 2021, Notice” and explained that only FDA ‘‘shall be responsible for executing’’ the FD&C Act.   The Agencies further explained that “it is particularly important that FDA have at least some level of involvement in this type of an action given the expertise needed . . . to assure the safety and effectiveness of a device,” and it’s clear from FDA’s withdrawal of the UDI withdrawal that the same premise applies to drugs.

As we explained back in late 2020 (after calling the HHS’s reasoning “malarkey”), the rescission of the UDI could mark “a return to the Wild West of marketed unapproved drugs instead of companies deciding to seek FDA approval.”  Thankfully, FDA has stepped in to reverse HHS’s thinly-veiled attempt to circumvent statutory drug approval requirements at the expense of safety and efficacy in an effort to control prices.