Attorney East Hampton

By Michael S. Heesters —

On March 24, 2021, the U.S. Department of Health and Human Services Office of Inspector General (“OIG”) issued its first advisory opinion of the year.  Advisory Opinion 21-01 addresses whether the provision of a specific drug at no cost by a pharmaceutical manufacturer to a physician or healthcare facility violates the Federal health care program antikickback statute (“AKS”) or the civil monetary penalty (“CMP”) provision prohibiting certain inducements to beneficiaries.  OIG concluded that it would not impose administrative sanctions or civil monetary penalties in connection with the program proposed by the pharmaceutical manufacturer.  OIG’s conclusion was, however, highly dependent on specific facts surrounding the drug at issue.

Background

The drug is intended to be administered one time only per patient and is potentially curative with that one dose.  The FDA subjected the drug to a Risk Evaluation and Mitigation Strategy (REMS) to ensure its safe use.  The Elements To Ensure Safe Use (“ETASU”) under this REMS include that it may only be administered at a certified healthcare facility and prescribed only by a physician trained to meet the requirements of the drug’s REMS.  The pharmaceutical manufacturer is responsible for certifying the health care facilities where the drug can be administered.

Typically, the drug is administered only once.  In order to receive the drug free of charge, a patient must have an on-label prescription, be uninsured or have insurance that does not cover the drug, and have a household income not exceeding a limit of $75,000 for a single person plus $25,000 for each additional person.  While patients with any government or commercial insurance are eligible for the free drug program, the manufacturer represented that Medicare beneficiaries have not, and likely will not, qualify for the program.  However, beneficiaries of other Federal health care programs, including Medicaid and TRICARE, may qualify for the program.  The prescriber and/or certified healthcare facility are prohibited from billing any Federal health care program for the cost of the drug.  However, administration and other ancillary costs can be billed.

OIG’s Decision

Based on these facts, OIG concluded that the free drug program implicates the AKS because provision of the drug at no cost constitutes remuneration and may induce prescribers and hospitals to prescribe the drug and patients to select the drug for treatment.  Prescribers and hospitals would be incentivized to do so because they could bill for administration and other services involved with injecting the drug into the patient.  Patients would be incentivized to select the drug because it would be free and, therefore, may cost less than other alternatives.  Despite these incentives, OIG determined that the risk of fraud and abuse was low, for several reasons.

First, OIG stated that the risk of seeding (i.e., inducements for future use of a federally reimbursable drug) is minimal because, unlike most drugs, this drug is administered only once and is individually made for each patient.  OIG also noted that, although providers can bill for administration fees, the risk that the program will cause the drug to be overused is negligible because, besides being used only once, it must be administered on label, and it is not indicated for first line therapy.  Therefore, in order to receive this drug cost-free, a patient would have to fail at least two other therapies.  This reduces the likelihood that this free drug program will induce prescribers to use this drug versus other, cheaper options.

OIG next determined that the free drug program did not implicate the CMP, which prohibits inducements to beneficiaries that the offeror knows, or should know, is likely to influence the beneficiary to select a specific provider, practitioner, or supplier.  OIG repeated its long-held policy that a drug manufacturer is not a “provider, practitioner, or supplier,” so an inducement to use a manufacturer’s drug does not violate the CMP, even if it does violate the AKS.  However, a pharmaceutical manufacturer can violate the statute if it offers remuneration to a beneficiary that the manufacturer knows (or should know) will influence the beneficiary to use a particular provider (such as a hospital), practitioner (such as a physician), or supplier (such as a pharmacy).  The OIG found no violation under these specific facts because the free drug program places no limits on which prescriber or healthcare facility a patient may use, other than those imposed by FDA’s REMS requirements.

Future Implications

This OIG advisory opinion is one of several approving of free drug programs in specific factual circumstances.  For example, Advisory Opinion 15-11 approved of a manufacturer’s program to provide a one- to two-month supply of a drug cost-free where a new patient was experiencing reimbursement delays (see our blog post here).  Another series of advisory opinions approved of free drug provided to Medicare Part D enrollees in financial need outside of the Part D program, in accordance with OIG guidelines.  However, caution must be exercised in extrapolating these opinions to other free drug programs, because the opinions are highly fact specific.  Nevertheless, certain questions are consistently considered by the OIG in these opinions:  whether the free drug could induce use of the same or other drugs that are federally reimbursable, whether it could have an adverse effect on patient care, and whether it could influence the use of particular providers or suppliers.  The new opinion is unique in that the drug is intended to only be administered once and is individually made for each patient.   However, as more biologics come to market, along with other forms of personalized medicine, certain aspects of this opinion can be useful in providing a roadmap to pharmaceutical manufacturers regarding the design of a program to provide important drugs to patients that otherwise could not afford them.

By Riëtte van Laack —

For more than five years now, FDA has pursued action regarding cannabidiol (CBD) products.  FDA has taken the position that CBD is not a lawful food or dietary ingredient.   But despite the agency’s strong statement about CBD, FDA has acted, primarily through Warning Letters (WLs), only when the claims for CBD are egregious.   Last week, it shifted focus to CBD as ingredient in over-the-counter (OTC) drug products.

On March 22, FDA announced that it had issued warning letters, here and here, to two companies for selling OTC drugs for pain relief containing CBD.  FDA asserts that CBD not only is an impermissible active ingredient in such products, it also is an impermissible inactive ingredient because it has known pharmacological effects with demonstrated risks in humans with demonstrated risks.  In other words, according to these WLs there is no place for CBD in OTC drug products.

Citing numerous examples of marketing claims, FDA asserts that, although CBD is listed as an inactive ingredient in the OTC topical analgesics, the labeling and marketing claims for the Companies’ CBD-containing topical pain-relieving products represent CBD as an active ingredient.  Since CBD was not an active ingredient in any applicable final OTC drug monograph or tentative final monograph, the CBD-containing drug products are unapproved drugs and do not meet the requirements of FDC Act § 505G.

Somewhat surprisingly, FDA also asserts that even if the products were properly labeled and the claims did not imply that CBD is an active ingredient, the products would still be unapproved drugs because CBD does not qualify as an inactive ingredient.  Specifically, FDA asserts that CBD is not a valid inactive ingredient because it does “not conform with the general requirement in 21 CFR 330.1(e) that inactive ingredients must be safe and suitable;” CBD has no known functional role as an inactive ingredient in a finished drug product and is not safe.  It is not suitable because “a suitable inactive ingredient generally provides a beneficial formulation function, such as a tablet binder or preservative, or improves product delivery (e.g., enhances absorption or controls release of the drug substance),” and FDA does not know of such a beneficial function for CBD in a finished drug product.  In support, FDA cites guidances regarding excipients in FDA approved drugs, which arguably do not apply to OTC drugs marketed under FDC Act 505G.  Even though, as the Agency acknowledged in the WLs, FDA does not know whether the levels in the products at issue have pharmacological activity, it concludes that the mere fact that CBD has pharmacological activity in an approved oral drug  causes the ingredient to be unsafe as inactive in the topical OTC drugs.

It is not clear what inspired FDA to take this action and it remains to be seen if these two letters are just the beginning.  We will be monitoring FDA activity regarding CBD.

By Richard A. Lewis, Senior Regulatory Device & Biologics Expert —

On March 17, 2021, FDA granted BioFire Diagnostics’ De Novo, making it the first COVID assay originally authorized on a temporary basis for this public health emergency to be given permanent access to the US market. While FDA has only released the signed letter affirming their permanent marketing status, we can infer a few key points:

1. This De Novo was product of collaboration between FDA and industry over the course of months.

In the letter granting the De Novo it is important to note the date that the De Novo was “Received” by FDA May 19, 2020. This is significant as it means that it is very likely that the candidate device changed from the initial submission to the De Novo being granted. The BioFire® COVID-19 Test was initially authorized by FDA on March 23, 2020 which is well in advance of the DEN200031 being received by FDA.

The BioFire Respiratory Panel 2.1 was submitted for FDA review under EUA202392 meaning that this EUA was originally submitted for FDA review sometime between mid-July and mid-September.  As this device was going to ‘set the bar’ for future clearances FDA likely allowed BioFire to add data and indications to the device from the original submission in March through at least October 2, 2020 when the BioFire Respiratory Panel 2.1 was originally authorized as an EUA assay.  It is reasonable to assume that if BioFire did not have enough data till mid/late summer to submit an EUA for the BioFire Respiratory Panel 2.1, they did not have enough data for a complete submission back in May 2020.

While this is not typically allowed under normal circumstances it can be viewed as an action to everyone’s benefit as is explained below.

2.  A more comprehensive De Novo submission allows for more EUA devices to declare this test as a predicate. The new regulation (21 CFR 866.3981) is as follows:

Device to detect and identify nucleic acid targets in respiratory specimens from microbial agents that cause the SARS-CoV-2 respiratory infection and other microbial agents when in a multi-target test.  A device to detect and identify nucleic acid targets in respiratory specimens from microbial agents that cause the SARS-CoV-2 respiratory infection and other microbial agents when in a multi-target test is an in vitro diagnostic device intended for the detection and identification of SARS-CoV-2 and other microbial agents when in a multi-target test in human clinical respiratory specimens from patients suspected of respiratory infection who are at risk for exposure or who may have been exposed to these agents. The device is intended to aid in the diagnosis of respiratory infection in conjunction with other clinical, epidemiologic, and laboratory data or other risk factors.

As shown by the bolded language, this regulation means that not only can the multitudes of single analyte RT-PCR tests claim this device as a predicate, but also the multiplexed assays will be able to use this De Novo as a predicate and proceed down a less burdensome 510(k) pathway.  Furthermore, the regulation is worded to encompass the expected mutation of the virus by defining the measurand as simply “nucleic acid targets” from “microbial agents that cause the SARS-CoV-2 respiratory infection.”

Throughout the pandemic FDA has been very particular about the specific respiratory specimens a device has validated for use.  FDA had previous stratified the clinical matrices between the “upper” and “lower” respiratory tracts requiring, in most cases, a representative sample from each.  While the BioFire assay is only indicated for nasopharyngeal swabs, the regulation is crafted broadly to encompass samples from all portions of the respiratory tracts.

It appears that this new regulation is only applicable to assays where the measurand is a nucleic acid.  This means that both antigen and antibody tests will likely need their own regulations created via the granting of De Novos for their respective technologies.

3.  The controversial ‘FDA Reference Panel’ will likely survive the pandemic and fight on to plague industry for years to come. Item 5 of the Special Controls list states the following:

When applicable, performance results of the analytical study testing the FDA recommended reference panel described in paragraph (b)(4)(vi) of this section must be included in the device’s labeling under 21 CFR 809.10(b).

The reference panel was FDA’s attempt in the early stages of the pandemic to gain an understanding of assay performance across IVD manufacturers via a single standardized panel.  The panel was met with controversy as some test manufacturers were obtaining inconsistent or otherwise confounding results when using the test samples.  It appeared to many that the issue was not the tests but the panel.  Apparently, there are tests with perfectly good performance that, for some reason or other, are not optimized for the panel.

This use of this panel began showing up in “Conditions of Authorization” for PCR EUAs making the testing compulsory when directed by FDA if a manufacturer wished to stay on the market.  In another surprise move, FDA used the performance on their reference panel to rank assays by sensitivity on a public facing website.  This website has not been maintained in recent months and is only current as of December 7, 2020.

A manufacturer’s performance with this panel could yield both regulatory and business advantages.  If an assay performed well, it afforded the manufacturer the opportunity to pursue an asymptomatic claim for the assay before completing the required clinical study. The device would be considered a ‘more sensitive’ test that would potentially drive new business as a comparator for other assays.  Links to the website containing the data from FDA’s reference panel can be found in many of the issued EUA templates:

From FDA’s “Molecular Diagnostic Template for Commercial Manufacturers” regarding “adding population screening of individuals without symptoms or other reasons to suspect COVID-19 to an authorized test”:

If your assay is highly sensitive as determined by testing with the FDA SARS-CoV-2 Reference Panel or a recognized international standard, a post-authorization study may be appropriate.

From FDA’s “Antigen Template for Test Developers” regarding “POC Clinical Evaluation”:

The comparator method should be one of the more sensitive RT-PCR assays authorized by FDA. We encourage you to review the results from the FDA SARS-CoV-2 Reference Panel available here.

Many manufacturers will likely hope that when FDA states “when applicable” in the special controls with respect to the reference panel that FDA means sometime after the eventual heat death of the universe.

4.  This submission set the bar for all the other manufacturers wishing to stay on the market post-pandemic.

A key parameter of substantial equivalence is the performance in the clinical agreement study. While OHT-7 typically posts the decision summary for public consumption it has yet to do so for this De Novo (we expect it to be posted in the coming days).  While the performance in the decision summary will be the true bar for substantial equivalence, we can look to the labeling for the EUA authorized device to get a preview of what to expect. On page 24 of the labeling, you can find the overall Sensitivity of this device for SARS-CoV-2 is 98% with a Specificity of 100%.  We do not know what this performance means for assays that had acceptable clinical agreement as an EUA authorized test (Sensitivity ≥95% and Specificity ≥98%) but do not meet this new bar for performance. As more COVID assay manufacturers scramble to convert their temporary marketing authorization afforded by the EUA pathway into a permanent clearance, these initial devices will be compared to BioFire’s to determine substantial equivalence.  If FDA clears a device with a lower sensitivity and specificity than BioFire’s this new device can then be used a predicate for others thereby lowering the bar for substantial equivalence for the rest of industry.

This incremental lowering of acceptable performance standards is a permanent fixture in FDA’s thinking when it comes to clearing device via the 510(k) pathway. Typically, OHT-7 is more intractable than Captain Picard when facing the Borg when comes to clearing a test with lower clinical performance than the declared predicate. We do not yet know how FDA will apply the substantial equivalence paradigm in the future but granting a De Novo to a device with very high clinical agreement could be used as a gating mechanism to weed out devices that were adequate for the pandemic, but not suitable as a permanent fixture in the US market.

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

Over the past several years, FDA has faced criticism stemming from high-profile device issues related to materials, including the Essure permanently implanted birth control device and metal-on-metal hip implants. Given this, it is not surprising that device biocompatibility has received greater focus in FDA premarket reviews for medical devices.  FDA  initially issued Use of International Standard ISO 10993-1, “Biological evaluation of medical devices – Part 1: Evaluation and testing within a risk management process” (Guidance) in 2016 to provide guidance to sponsors of premarket applications on evaluation of biological risk and biocompatibility testing for devices that are in direct or indirect contact with the human body.  However, many device sponsors have continued to face challenges demonstrating device biocompatibility, with many sponsors receiving additional information requests related to the biocompatibility data necessary to support a marketing application.  The Guidance describes a risk-based approach where justification may be provided to support the overall testing strategy and interpretation of results.  Many additional information requests that we have seen relate to disagreements between FDA and the sponsor with respect to justifications provided by the sponsor on what tests are applicable to the device, how the device tested is representative of the device intended for commercialization, the impact of differences between device tested and the device intended for commercialization, test methods, especially for extraction, and interpretation of results.

On March 19, 2021, FDA announced the launch of an online Biocompatibility Assessment Resource Center to provide more clarity for sponsors navigating biocompatibility requirements.  The new resource is intended to explain terms and concepts for use in conjunction with the Guidance.  The site is divided into four steps:  1) Biocompatibility Basics, 2) Evaluation Endpoints, 3) Test Articles, and 4) Test reports.

Biocompatibility Basics provides a very high-level description of the basis for biocompatibility and a glossary of biocompatibility terms.  In some ways, it is a repackaging of the Guidance.  The Basics page describes devices for which biocompatibility information is needed, what FDA assesses or evaluates, how FDA assesses or evaluates biocompatibility and biocompatibility factors of interest to FDA.  In the glossary, there is quite a bit of overlap in terms defined compared to the Guidance, with some new terms added, most of which come from the ISO 10993 series of biocompatibility standards.

Evaluation Endpoints provides the same information as Attachment A of the Guidance in an easy-to-use format.  One statement of note is that FDA indicates that device categorization information can be obtained informally via e-mail or as part of the pre-submission process.  Information on Test Articles includes the same information as Attachment F of the guidance, providing example text to use when relying on biocompatibility data from a test article that is not the final, finished device, e.g., when using an identical material to that used in another cleared device.  Information on Test Reports includes the same information as Attachment E of the Guidance.

While these resources may prove helpful to those new to biocompatibility, for those familiar with the Guidance, there is not likely much value other than the convenient format and it is not likely to help resolve the biocompatibility challenges faced by sponsors during premarket review.  It is nice to see informal e-mail mentioned as a way to get questions answered, but use of the Guidance and the pre-submission process will continue to be the best way to determine testing necessary to support a device’s biocompatibility before conducting studies.

By Richard A. Lewis, Senior Regulatory Device & Biologics Expert —

On August 25th, 2020 Hyman, Phelps & McNamara, P.C. released a blog post covering experiences and lessons learned from our interactions with FDA and what was at the time the new and unfamiliar EUA pathway (FDA, Testing, and COVID-19: A “Mid-Mortem”). In the six months since that post, we have seen new products hit the market for non-laboratory use, new technologies, and what I assume is attributable in some small part to my offerings to Jupiter, Son of Saturn, an effective vaccine.

Since the early days of the pandemic, FDA has made it possible for manufacturers to market and distribute certain diagnostic tests to high-complexity CLIA Labs prior to EUA authorization provided that the validation testing is complete at the time of marketing and an EUA is filed with 15 business days. The “Policy for Coronavirus Disease-2019 Tests During the Public Health Emergency (Revised) Immediately in Effect Guidance for Clinical Laboratories, Commercial Manufacturers, and Food and Drug Administration Staff” Issued on May 11, 2020 (the “FDA Testing Policy”).

FDA does not intend to object to a commercial manufacturer’s development and distribution of SARS-CoV-2 test kits for specimen testing for a reasonable period of time, where the test has been validated and while the manufacturer is preparing its EUA request, where the manufacturer gives notification of validation to FDA as described below, and where the manufacturer provides instructions for use of the test and posts data about the test’s performance characteristics on the manufacturer’s website.

On the surface, this statement sounds fantastic.  FDA appeared to understand that the pandemic is an all-hands-on-deck situation and is trying to find a middle ground to get tests on the market while manufacturers play catch-up compiling their EUA submission. But, in the words of the many great home shopping spokespeople, “But Wait! There’s More!”  The FDA Testing Policy states:

FDA believes that 15 business days is a reasonable period of time to prepare an EUA submission for a test that has already been validated. Soon after receiving the EUA request, FDA will perform a preliminary review to identify if there are any problems with the performance data. If a problem is identified, FDA intends to work with the manufacturer to address the problem (e.g., through labeling or bench testing). If the problem is significant and cannot be addressed in a timely manner, and the manufacturer has already distributed the device, FDA would expect the manufacturer to suspend distribution and conduct a recall of the test.

Per this policy, FDA is affording companies at least 3 weeks to compile completed data into a functional EUA submission and submit while also committing to a triage review with a tiered approach to deficiencies.  Hundreds of companies took advantage of this program and notified FDA of their intent to distribute test kits in accordance with FDA’s policy. This seemed too good to be true, and it most certainly was.

Many companies viewed the notification pathway as a way to stand out from the crowd by proactively signaling to FDA that their submission was complete and that their EUA should garner additional attention from the Agency. For many companies the notification pathway was only about visibility on FDA’s radar. In our experience, many manufacturers never availed themselves of the opportunity to distribute as nearly all potential customers were seeking out tests that had successfully obtained EUA authorization.

Weeks in the EUA queue turned into months with little to no action being taken by FDA for many EUAs on the notification list.  When companies finally received the reviewer introduction email, many were lifted from the morass of uncertainty and despair and filled with new hope for the future.  This life-reaffirming high would be snuffed out quickly by the all too common subsequent “Inadequate Validation” email.

This email would inform companies that they had not provided complete information to demonstrate that the studies performed are adequate to validate the test and support the claimed performance characteristics of the device.  The email would go on to list the deficiencies in the familiar fashion of a hold letter for a 510(K), De Novo, or PMA.  As you’ll recall, the FDA Testing Policy stated that, “If a problem is identified, FDA intends to work with the manufacturer to address the problem (e.g., through labeling or bench testing).” Most in industry expected that this meant FDA would allow time to address concerns via new labeling,  bench testing, or simply the submission of additional data.  The veritable chasm between industry’s expectations as to how this process would play out and the reality espoused by FDA can be found in the close of the “Inadequate Validation” letter, which typically, allowed a sponsor a mere 24 or 48 hours to respond:

[I]f the information you provide does not demonstrate that your device is adequately validated for its intended use and performing consistently, we may take steps as described in the guidance referenced above, including removing the test from the website listing of notifications, and may determine that the criteria for emergency use authorization have not been met. If such steps are taken and we make that determination, we would expect you to suspend distribution of your test, and we may request that you take additional actions to protect the public health as appropriate.

One can imagine the feeling of despair when after months of waiting for a reviewer to be assigned to your EUA submission FDA returns with questions but only provides you with 24 or 48 hours to respond with the rationale that the timeline was in the “interest of public health.” Once on the notification list FDA has no way of checking to see if devices were actually introduced into the market, therefore, FDA approaches each review as if they have allowed the company to exist in the marketplace unchecked for months.  It seems that FDA is content with the idea that by limiting response windows to one or two days they are fulfilling their mandate to promote and protect public health.  Many companies are at a loss, however, as they are not prepared for this over-correction by FDA and simply cannot operate within such arbitrary timelines with draconian enforcement.

We have to ask the question, “Is FDA intending for these companies to fail?” By now FDA should be well aware of industry’s plight.  Companies are waiting months only to scramble for 48-hours straight to try and deliver FDA the moon.  It behooves the Agency to publicly issue new instructions clarifying their expectations for companies on the notification list.

In comparison, for a company that has submitted an EUA without being added to the notification list, FDA may not even specify a deadline to respond to the review team’s questions.  Furthermore, we have not observed an acceleration in the review timeline for companies on the notification list. It appears that you have everything to lose by being added to the notification list with nothing to gain.

Prof. Hubert J. Farnsworth said it best “I’m sciencing as fast as I can.”  Only so much can be done in the span of 48 hours and many times FDA requests additional data or analysis. Bottom line: Companies should think twice before choosing to add their tests to the notification list.

By Jeffrey K. Shapiro —

The FDA is legally established as a law enforcement agency.  But its structure and activities have also generated its own “branding” as a trusted independent validator of medical devices.

This public trust gives FDA tremendous power.  If a device has not undergone FDA’s premarket review (even if lawfully exempt), it often causes consternation among potential customers.  Likewise, if FDA issues negative public statements about the safety of marketed devices or the compliance status of a company, there can be a significant and lasting market impact.

The use of this power is not new for FDA.  Historically, FDA has made public a variety warning letters about violations available to the public (and it continues to do so).  It also publicizes adverse event reports and  recalls, market withdrawals and safety notices. In Class I recalls, the agency may issue its own press release.  FDA issues device safety communications.  FDA makes public some information on inspection results.

During the pandemic, however, CDRH has qualitatively increased its use of public lists and other information to leverage the FDA brand to protect the public health.

A few examples:

CDRH allows commercial manufacturers to distribute diagnostic test kits to perform assays to detect SARS-CoV-while the manufacturer is preparing its EUA request, provided that the manufacturer provides instructions for use of the test and posts data about the test’s performance characteristics on the manufacturer’s website.  CDRH is relying upon this “[t]ransparency to mitigate potential adverse impacts from a poorly designed test by facilitating better informed decisions by potential purchasers and users.”  The manufacturers and their tests are listed here, and the list expressly notes whether a test is “unauthorized” or “authorized.”

This approach has not been an unalloyed benefit to manufacturers.  Some customers are unwilling to purchase products based upon notification and insist on waiting for an EUA to issue.  That reflects the power of FDA’s brand.  But other customers are perfectly happy to do so.  For instance, some sophisticated clinical laboratories may feel that they have an adequate ability to validate the tests and do not need to rely on FDA’s validation.

As another example, CDRH maintains a list of tests that affirmatively should no longer be used or distributed here.

As a third example, CDRH issued enforcement discretion guidance allowing thermographic cameras to be commercially distributed for detecting fever during the pandemic.  Upon finding that some firms are marketing the cameras in violations of the guidelines, FDA has issued warning letters.  That much is not unusual (except for the demand for a response within 48 hours).  But FDA also has redeployed these technical and legalistic warning letters into a plain English warning against using the products:

FDA is advising consumers not to purchase or use certain products that have not been approved, cleared, or authorized by FDA and are being misleadingly represented as safe and/or effective for the mitigation, prevention, treatment, diagnosis, or cure of COVID-19. Your firm will be added to a published list on FDA’s website of firms and websites that have received warning letters from FDA concerning the sale or distribution of COVID-19 related products in violation of the Act. This list can be found at https://www.fda.gov/consumers/health-fraud-scams/fraudulent-coronavirus-disease-2019-covid-19-products. Once you have taken actions to address the sale of unapproved, uncleared, and unauthorized products . . . and any appropriate corrective actions have been confirmed by the FDA, the published list will be updated to indicate that your firm has taken such corrective actions.

Other examples:

SARS-CoV-2 Reference Panel Comparative Data | FDA (list of molecular tests and their performance against a reference panel).

EUA Authorized Serology Test Performance | FDA (list of serology tests and their expected performance).

Independent Evaluations of COVID-19 Serological Tests (Frederick National Laboratory for Cancer Research results of serology test performance – authorized and not authorized).

As a final example, in response to a great deal of (often deliberate) misinformation circulating in the public domain about the meaning of “FDA registered” and “FDA certified,” CDRH has published an explainer.

FDA took these steps in the crush of responding to the pandemic.  But they point to a broader potential after the pandemic.  We have gotten to the point where there has been wide and deep integration of internet-based research into business and consumer decision‑making.  It is now easy to quickly find FDA’s lists and other information they may put out.  For this reason, although the pandemic may have acted as a catalyst, FDA’s more aggressive use of publicity is likely to expand in the years to come.

Congress should keep an eye on how FDA evolves its use of publicity in order to ensure that this power is used responsibly.  Still, Congress will no doubt appreciate that this approach permits FDA to achieve a public health impact more quickly and at lower cost than might otherwise be the case.

Finally, the song title quoted in the title of this post is from Gilbert & Sullivan’s The Mikado.  The pertinent lyrics:

“I’ve got a little list.

I’ve got a little list.

Of society offenders

Who might well be underground

Who never would be missed – who never would be missed!”

By Richard A. Lewis, Senior Regulatory Device & Biologics Expert —

On March 16th, 2021 CDRH announced a major policy change for the EUA program in an effort to expedite screening testing for the pandemic. Screening is the testing of asymptomatic individuals who do not have known or suspected exposure to COVID-19 in order to make individual decisions based on the test results.  This new supplemental template provides recommendations for device manufacturers with the goal:

to streamline the authorization of screening tests with serial testing. The recommendations apply to test developers who seek an EUA from the FDA for certain screening tests prior to conducting certain performance evaluations with asymptomatic individuals.

This is a major departure from previous policy as testing prior to authorization was only permissible in very limited cases for devices used only in High Complexity CLIA labs. It is important to note that this new pathway is only available to manufacturers of molecular and antigen tests.  Serology tests are not mentioned in this announcement.

Serial testing as defined by FDA is the “testing the same individual multiple times within a few days.”  The thinking behind this strategy is the testing of a single patient across multiple days would increase the chances of detecting infection even when using devices with lower sensitivity.  FDA’s expectations for a device’s Sensitivity/Specificity increase when you traverse across the continuum of indications.  We provide an example for antigen tests below (Table 1).

Table 1 – Performance Expectations by Indication in FDA’s EUA Templates (Antigen)

	CLIA Lab	Point-of-Care	Rx-Only Home-Use (Symptoms Confirmed)	Rx-Only Home-Use (Suspected Exposure)	OTC Home-Use (Asymptomatic or No Suspected Exposure)
PPA	>80%	>80%	80-90%	>90%	≥90%
NPA	>80%	>80%	≥99%	≥99%	≥99%
PPA = Positive Percent Agreement; NPA = Negative Percent Agreement

The key section of this announcement is where FDA identifies what indications may be eligible for this new program:

For example, in certain circumstances, a [point-of-care] test or an at-home test could be authorized for over-the-counter (OTC) use without the need for validating its use in asymptomatic individuals prior to authorization.

This statement has the potential to be both very powerful and very frustrating for industry.  In Table 2 below there is a breakdown of the data expectations for Point-of-Care, Prescription Home Use, and OTC Home Use with an asymptomatic claim.  What you can see from the information, in the various EUA templates laid-out in this fashion, is that ‘Prescription Home Use’ and ‘OTC Home Use’ are very similar in their requirements.  It is, therefore, reasonable to expect FDA to blur the line between ‘Prescription Home Use’ and ‘OTC Home Use’ when considering asymptomatic testing.  It was very surprising, however, to read that this new policy may also apply to devices validated for Point-of-Care.  The differences in data requirements between ‘Point-of-Care’ and ‘OTC Home Use’ are substantial.  Devices authorized for Point-of-Care are not validated to the same degree with respect to Robustness (Flex Studies), Human Factors (Human Usability), the data required to substantiate performance for Point-of-Care (POC) may have been largely retrospective testing.  This difference is due, in part, to the intended users – tests intended for POC are typically used by healthcare providers whereas home tests are used by lay people.

The inclusion of Point-of-Care in this new policy implies that a manufacturer can take their authorized test, supplement the EUA with the additional information describing serial testing and obtain an OTC Home-Use indication. As of March 16, there are twenty (20) molecular EUAs and one (1) Antigen EUA with an attribute of ‘screening’ according to FDA’s website.  Of these tests, eight (8) are Direct-to-Consumer (DTC) and two (2) are Over-the-Counter (OTC). To date, there are no Point-of-Care EUAs with a screening attribute.

Table 2 – Tests Recommended by FDA Stratified by Indication

Data	Point of Care (POC)	Prescription Home Use	OTC Home Use (asymptomatic)
Limit of Detection	X	X	X
Cross Reactivity	X	X	X
Interference	X	X	X
Microbial Interference	X	X	X
High Dose Hook Effect	X	X	X
Biotin Interference	X	X	X
Specimen Stability	X	X	X
Test Kit Stability	X	X	X
Control Materials (high-volume sites only)	X
SARS-CoV-2 Variant Analysis1	X	X	X
Point-of Care Clinical Agreement (Combination Prospective/Retrospective)	X
Flex Studies for Point-of-Care Delay in Reading Time Specimen Volume Variability Buffer Volume Variability Temperature and Humidity Disturbance During Analysis	X
Expanded Flex Studies for Home Use 40°C and 95% RH Delay in sample testing Delay in operational steps Delay in reading results Sample volume variability* Buffer volume variability* Mixing/swab expression variability* Disturbance during analysis Placement on non-level surface Impact of different light sources* Hand-held, positioning at 90° angle		X	X
Human Usability2		X	X
All Comers Testing (Prospective)		X	X
Self-Testing or Testing of Minors (Prospective)		X	X
Discrepant Analysis		X	X
Asymptomatic Testing			X
1FDA has announced plans to update the EUA Temple, but has yet to do so for Antigen tests
2 FDA expects 30 Participants for Rx Only and 100 Participants for OTC
*If Applicable

Supplemental Template for Developers of Molecular and Antigen Diagnostic COVID-19 Tests for Screening with Serial Testing (Example Template)

The administrative section at the top of this new template echoes the announcement indicating that this policy applies to Point-of-Care indications:

This template is intended to provide supplemental recommendations for developers of molecular and antigen tests seeking claims for screening with serial testing without studying asymptomatic individuals prior to authorization, including for point-of-care (POC) and at-home tests.

While the intention of the policy is to increase testing availability FDA does not want manufacturers to misconstrue this as a paradigm shift with an opportunity to resurrect denied EUAs from the grave.

These recommendations will generally not be applicable to developers with tests for which data has already demonstrated poor performance (e.g., less than 80% PPA) for testing asymptomatic individuals.

FDA later goes on to seemingly contradict themselves on the next page of the template by stating:

As discussed in the Antigen Template for Test Developers, strategies for serial testing with less sensitive tests (i.e., PPA <80%) may be able to be support authorization

FDA gives the following example as a modification to the intended use:

…individuals without symptoms or other epidemiological reasons to suspect COVID-19 infection, when tested twice over two (or three) days with at least 24 hours (and no more than 36 hours) between tests.

As written, this implies that there is no expected modification to the intended use setting or user as a result of this policy change.

The template does indicate that FDA intends to push as much of the clinical validation as possible to a post-marketing commitment in order to expedite the authorization of new tests.  While this recommended study size is small, 20 asymptomatic positives individuals, it has been increasingly more difficult to find asymptomatic positives naturally within the population, and that challenge is likely to continue to grow.  It is not clear from this template how long FDA will give these companies to compete these post-authorization studies.

The template closes with a final recommendation for labeling:

Proposed labeling should clearly identify the population in which the test’s performance has been validated, and clearly identify any populations included in the intended use for which the test’s performance has not yet been established and will be established during the above referenced post-authorization study.

This final section further confuses what is expected of manufacturers as it implies that the post-authorization study is the only data requirement to expand the EUA claim to a new patient population.

This announcement from FDA generates a rollercoaster of emotion starting with cautious optimism, to elation, and finishing with confusion. This policy raises major administrative questions that need to be answered in full if this new program is to have a chance at success.

Can a manufacturer take an existing Point-of-Care or Rx-Only EUA and convert it to an OTC Authorization, if they commit to conducting an additional clinical study post-authorization?

It is our review of the policy that, as written, it appears that the answer is yes. However, the policy never mentions the non-clinical tests that FDA typically requires for Home-Use tests and whether those will also need to be performed, either pre- or post-market, to support the expanded indication Point-of-Care authorized tests.  Without additional clarifications on the part of FDA, manufacturers will be left scratching their heads and unsure as to what FDA expects in EUAs moving forward.

The next “FDA Virtual Townhall” is Wednesday March 24^th at 12:15 pm (ET).  See you there.

By Richard A. Lewis, Senior Regulatory Device & Biologics Expert —

On Friday, March 12th FDA posted a letter to healthcare providers about performance concerns regarding the Roche Molecular Systems, Inc. cobas SARS-CoV-2 & Influenza Test for use on cobas Liat System.  This public letter appears to be the culmination of a dialogue between Roche and FDA.  Roche’s root cause analysis investigation has identified two potential causes for the false positives:

• Roche identified that the assay tubes may sporadically leak, causing an obstructed optical path in the Liat analyzer, producing abnormal PCR growth curves. This could lead to invalid or erroneous positive results, particularly for the Flu B test. If a tube leak occurs, later testing runs may have an increased likelihood of false positive Flu B results.

• Roche determined that abnormal PCR cycling in the reaction tubes may also produce abnormal PCR growth curves, leading to erroneous results. The issue is sporadic and may be caused by multiple factors happening at the same time, such as hardware positioning, volume movement, and curve interpretation. This issue may cause false positive results for multiple analytes (Influenza A, Influenza B and/or SARS-CoV-2) in a single testing run.

In response, FDA recommended three actions by users:

1. Monitor for unexpected clusters of positive Flu B results, as this may indicate the cobas Liat System has experienced a tube leak.
2. Repeat tests when two or three analytes are positive. Different results on the repeat test may indicate abnormal PCR cycling.
3. Stop using the cobas Liat System and contact Roche if you suspect either of these two issues has occurred.

This letter is not the first FDA has posted for Clinical Laboratory and Point-of-Care staff.  It is actually the fourth one since October 2020 and the eighth such notice flagging in‑vitro diagnostic performance issues or concerns during the pandemic.

These notices have hit each of the three major classes of in-vitro diagnostic products used for the nation’s pandemic response, PCR, Serology, and Antigen Tests.  Here are three relatively recent examples:

PCR

• Genetic Variants of SARS-CoV-2 May Lead to False Negative Results with Molecular Tests for Detection of SARS-CoV-2 – Letter to Clinical Laboratory Staff and Health Care Providers (Posted 01/08/2021)

Antigen

• Potential for False Positive Results with Antigen Tests for Rapid Detection of SARS-CoV-2 – Letter to Clinical Laboratory Staff and Health Care Providers (Posted 11/03/2020)

Serology

• Important Information on the Use of Serological (Antibody) Tests for COVID-19 – Letter to Health Care Providers (Posted 04/17/2020)

The full list of FDA’s “Letters to Health Care Providers” can be found here.

As we proceed through this pandemic, it is becoming more critical that manufacturers be as vigilant as ever with post-market surveillance to flag performance issues early in order to be able to investigate and identify potential root causes.  Prompt investigation and correction is always preferable to pulling a test that works out of the marketplace.  It is in no one’s best interest to lose testing capacity and we hope that FDA is affording companies of all sizes the same opportunity that Roche has been given to investigate and correct rather than be forced to pull an assay from distribution.

By Richard A. Lewis, Senior Regulatory Device & Biologics Expert —

On February 17th, 2021 the Biden Administration announced an expansion of the Federal strategy to test the population for SARS-CoV-2 with a three pronged approach:

1. Expand COVID-19 testing for schools and underserved populations ($650 Million);
2. Ramp up the domestic manufacturing of testing supplies and raw materials ($815 Million); and
3. Increase genomic sequencing of the virus to better prepare for the threat of variants ($200 Million).

Each of these goals requires significant and targeted investment at all levels of the diagnostics supply chain from testing locations to finished device manufacturers to the suppliers of raw materials.

The administration has set aside a total of $1.665 billion dollars across all three initiatives. The $650 million dollar investment into new testing is intended to translate into 25 million new tests delivered monthly to regional hubs across the US that are under the auspices of DoD and HHS.  It is not clear from the administration’s announcement what the total number of tests that are expected to be realized by this investment, but the news is still overwhelmingly positive for manufacturers still working their way through the EUA process. This initiative puts an emphasis on targeted testing of the population that will occur outside the traditional laboratory setting. This is consistent with a shift in FDA’s focus for diagnostic tests from CLIA Lab runs assays to non-laboratory sites such as Point-of-Care and Home Use. HPM recently released a blog post on FDA’s changing priorities (“Beware EUA Deprioritization”)

The lion’s share of the monies ($815 million) is slated for domestic manufacturing of testing materials.  Specifically, filtered pipette tips, nitrocellulose, and injection molded reagent container closures. This additional investment is heartening news as many manufacturers have experienced delays in device development over the last 12 months that are directly traceable to the ability to source samples, reagents, controls, and basic testing supplies.  The infusion of federal money toward domestic manufacturing may favor EUAs that bolster the domestic supply chain.

The final pool of monies ($200 million) is slated to address an ever-increasing concern for the pandemic which is the mutation of the SARS-CoV-2 virus and the rise in new mutant strains that may impede our march toward herd immunity and a return to normalcy. This increased funding for virus sequencing may aid in the rapid identification of new variants and allow for the development of multi-valent vaccines or boosters to maintain the efficacy of the vaccination program.  This money will likely not impact the EUA work that the Center for Devices and Radiological Health is doing in the review of new diagnostic EUAs.

This announcement comes amidst a series of public notices and statements from FDA regarding their concern with genetic mutations of the virus impeding the performance of diagnostic tests. On February 4th 2021, FDA provided a “Coronavirus (COVID-19) Update” where the agency stated:

For diagnostics, we have been monitoring for new mutations, identifying and working with developers of tests whose performance may be adversely impacted by them, and communicating with the public when helpful information becomes available. At this time, we believe the risk that the currently known mutations will impact overall testing accuracy of molecular tests is low. Moving forward, we are considering expanding the role of in silico monitoring by sponsors prior to and following authorization to assess for mutations that impact the performance of the test, test designs to minimize the impact of new mutations and ways to label authorized products to be transparent about what we know the test can detect.

This update was followed-up later in the month on February 22nd, 2021 with a new policy “Policy for Evaluating Impact of Viral Mutations on COVID-19 Tests.”  With issuance of this policy statement, FDA is putting industry on notice that due to the rise of mutations, post-authorization monitoring of assay performance will be a key consideration for an EUA. In this policy FDA states:

During FDA’s review of an EUA request for a COVID-19 test, FDA intends to consider the performance of the test across all known variants, as well as the developer’s plans for post authorization monitoring.

For industry, the only way to keep up with new mutations is to run an analysis through a sequence database, like the one maintained by the National Center for Biotechnology Information (NCBI). It is expected that this increased funding will improve the quality of databases that are used to monitor the pandemic and that industry uses to evaluate inclusivity of their tests.

In this policy update, FDA also gives granular feedback to industry on FDA’s expectations for developers of molecular diagnostic tests. However, the feedback for developers of Serology and Antigen tests is high level with more feedback from the Agency being promised in future updates to the EUA templates.  In light of FDA’s policy, companies with pending EUAs or those who are in the process of preparing their submissions to FDA should be proactive and develop plans for the evaluation of mutations as FDA has applied new thinking and requirements retroactively to EUA reviews.

By Sara W. Koblitz —

Perhaps when you’re carving out a patented method of use?  Well, at least that’s what GSK is arguing.  As the now-infamous GSK v. Teva case makes its way through the Federal Circuit once again to address what many have called the death-knell to skinny-labeling (also called a “section viii statement” or a “carve-out”), Teva is poising for a fight to save the practice.  Framing the issue in the Petition for Rehearing briefing, Teva, like much of the generic industry, argues (with support from former Rep. Waxman) that the Federal Circuit decision upends the statutorily-enacted Hatch-Waxman carve-out.  GSK, on the other hand, characterizes the issue as a fact-specific inquiry into whether Teva’s generic carvedilol adequately carved out enough of a patented method-of-use included in GSK’s Reference Listed Drug (“RLD”) Coreg’s labeling.  The Federal Circuit reheard arguments on this case in February 2021.  And, as we wait for a new opinion that could have huge implications for generic drugs, we bring this (belated) update.

To jog your memory: In October 2020, the Federal Circuit issued a big blow to the generic drug industry when it reinstated a jury verdict awarding GSK $235 million in damages from Teva resulting from the generic company’s alleged “induced infringement” of a GSK patent through skinny-labeling.  As we explained back in October, the Hatch-Waxman Amendments permit generic drug companies to “carve-out” a patent-protected method-of-use included in the labeling of the RLD so long as such a carve-out does not compromise the safety or effectiveness of the product for the conditions of use remaining in the labeling.  The resulting “skinny-labeled” generic can still be listed in the Orange Book with an “A” therapeutic equivalence code because such ratings look only to the drug product itself rather than the approved indications.  As a result, a skinny-labeled “A”-rated generic drug can be, and indeed automatically will be, substituted for the brand drug regardless of the reason the product is prescribed.  Effectively, GSK argues, even though the statute provides for such a carve-out, even though FDA’s Orange Book states that the generic is therapeutically equivalent to GSK’s product, and even though the pharmacy is legally required to substitute an AB-rated generic for brands in most states (absent doctor’s orders otherwise), the mere truthful promotion of Teva’s skinny-labeled version of GSK’s Coreg (carvedilol) as AB-rated constitutes induce infringement.  And, for all intents and purposes, both the jury and the Federal Circuit agreed, making sweeping statements indicating to industry that even the carved-out label may be enough to induce infringement (“[p]recedent has recognized that the content of the product label is evidence of inducement to infringe”).

Understandably, the Federal Circuit decision led to a panic in the generic industry.  Skinny-labeling has been around for decades—countless generic drugs have marketed their skinny-labeled drugs as therapeutically equivalent to their Reference Listed Drug.  Now, even though some of those patents have expired and carved-out language added into the generic labeling, there’s no telling how many cases for induced infringement may be in the wings.  Given this uncertainty in the industry, many have expressed concern about whether generic drug sponsors will proceed with patent carve-outs and whether any resulting hesitancy will result in increased drug prices.

It is no surprise then that Teva promptly petitioned the Federal Circuit for a rehearing en banc.  Framing the issue as “whether induced infringement can be used to nullify a provision of the Hatch-Waxman Amendments,” Teva argued (as many in the press have) that if describing a skinny-labeled product as the generic equivalent of the RLD “can be inducement, as the majority held, every skinny-labeled generic is at risk, and the carve-out statute is a dead letter.”  GSK, on the other hand, opens its Response to Teva’s Petition with a strong statement: “This case does not implicate the fate of section viii carve-outs.”  Instead, GSK explains, that the case is much narrower than Teva portends as it “merely reaffirmed that section viii is not a get-out-of-jail-free card for generics who do not fully carve out the patented use from their labels.”  GSK explains that Teva did not thoroughly carve out all of GSK’s patented use, and it’s the label’s claims that induced infringement, not the AB-rating promotion.  GSK concedes that the Federal Circuit opinion never actually noted that the “partial label instructed the patented method,” but argues that “that finding is implicit in, and necessary to, its decision.”   

On February 9, 2021, the Federal Circuit vacated the October 2, 2020 judgment and withdrew the controversial opinion.  The Federal Circuit granted a panel rehearing (rather than en banc), which occurred on February 23, 2021.  But rather than address the overarching issue of induced infringement by way of skinny labeling, the Court limited the appeal—or at least the rehearing—to evidence to support the jury verdict of induced infringement.  In other words, the Court declined to address whether skinny-labeling itself is induced infringement and theoretically will look only to the specific promotion used to allegedly induce infringement.  This limitation could provide for a much narrower decision than the October 2, 2020 decision, but the Court did leave room for itself to make a broader decision, stating that “[w]e find all other issues to be sufficiently briefed.”

While FDA did not submit an Amicus Brief, Henry Waxman—the namesake of the legendary Hatch-Waxman Amendments that created the skinny-label practice—did.  Others joined Rep. Waxman in submitting Amicus Briefs, including Apotex, Novartis, Mylan, a consortium of professors, Knowledge Economy International, the Association for Accessible Medicines, and the R Street Institute in support of Teva.  These briefs focused on the policy aspects—health, economic, and patent policy.  No Amicus Briefs were filed in support of GSK or the Federal Circuit’s decision.

The Federal Circuit reheard the case on February 23, 2021.  From all accounts, the panel listened to the narrowed questions about the facts at issue here (i.e., whether Teva’s skinny-labeled carvedilol carved out enough language) rather than the overarching concerns about the death of the carve-out.  This makes sense given the parties and the venue: a patent case should be specific to the patents-at-issue, not a validation of a statutory provision.  However, we can’t help but think about the arguments that might arise if this case were strictly about statutory interpretation.  How would the Court reconcile the implicated conflict between the patent statutory scheme (induced infringement) and the Hatch-Waxman Act (carve-outs)?  Obviously, patent and FDA cases overlap often: innovation is critical to the drug industry and patents are critical to innovation, thus ANDA litigation, 30-month stays, etc.  But, effectively, this case would force the Courts to determine whether to protect innovation or whether to protect accessibility—the very balance that Congress sought to achieve in adopting the Hatch-Waxman Amendments.  Given the limited oral argument, it’s unlikely that the Federal Circuit will go that far in this case, as it will probably issue a very narrow decision that allows the skinny-label to live another day, but the Federal Circuit did leave room to address the entire issue.  But all we can do now is wait to see if the Federal Circuit believes that Teva’s carvedilol labeling was skinny enough or whether the Federal Circuit’s initial decision applies more broadly.