CFDA Issues Groundbreaking Proposals for Medical Device Regulatory Reform

Last month, the China Food and Drug Administration (CFDA) published drafts of four proposed policies in the form of circulars (or notices) for public comment. These proposed policies include significant reforms in the areas of the new drug and device approval process (“Circular 52”), clinical trial regulation (“Circular 53”), life-cycle management and post-marketing surveillance (“Circular 54”), and regulatory data protection and patent linkage (“Circular 55”). Continue Reading

Health Care Task Force Pre-Releases Report on Cybersecurity Days Before Ransomware Attack

Last week, the Health Care Industry Cybersecurity (HCIC) Task Force (the “Task Force”) published a pre-release copy of its report on improving cybersecurity in the health care industry.  The Task Force was established by Congress under the Cybersecurity Act of 2015.  The Task Force is charged with addressing challenges in the health care industry “when securing and protecting itself against cybersecurity incidents, whether intentional or unintentional.”

The Task Force released its report mere days before the first worldwide ransomware attack, commonly referred to as “WannaCry,” which occurred on May 12.  The malware is thought to have infected more than 300,000 computers in 150 jurisdictions to date.  In the aftermath of the attack, the U.S. Department of Health and Human Services (HHS) sent a series of emails to the health care sector, including a statement that government officials had “received anecdotal notices of medical device ransomware infection.”  HHS warned that the health care sector should particularly focus on devices that connect to the Internet, run on Windows XP, or have not been recently patched.  As in-house counsels understand, the ransomware attack raises a host of legal issues.  For example, a recent Covington alert addresses insurance coverage for ransom attacks.

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Federal Circuit Holds Patentee Cannot Use Retroactive Statutory Disclaimer to Avoid Patent Marking Statute, But Leaves Open a Key Question About the Statute’s Application

Last week, in its opinion in Rembrandt Wireless Technologies, LP v. Samsung Electronics Co., Ltd., the Federal Circuit resolved one question about patent marking under 35 U.S.C. § 287 but left another open—whether the marking statute applies on a claim-by-claim or patent-by-patent basis. The case stemmed from a jury verdict in the Eastern District of Texas finding that Samsung infringed two patents asserted by Rembrandt (US Patent Nos. 8,023,580 and 8,457,228) and awarding Rembrandt $15.7 million in damages.  Samsung appealed, raising several issues, including whether the district court properly denied Samsung’s motion to limit damages in light of Rembrandt’s alleged failure to mark articles embodying the ’580 patent. Continue Reading

EU Medical Devices Regulation Series: Potential for Easing Borderline Determinations?

Earlier this week, in a plenary vote, the EU Parliament endorsed the texts of the Regulation on Medical Devices (the “Regulation”—latest version available here) and the parallel Regulation on In-Vitro Diagnostic Medical Devices (the “IVD Regulation”—latest version available here).  This presents a good opportunity to have a closer look at one of the essential questions of the revision of the medical device rules, namely, whether the scope of the Regulation changes in comparison to that of the main Medical Devices Directive 93/42/EEC (the “Directive”).  We examine below the changes to the definition of a medical device and whether the Regulation affects borderline determinations.

As discussed in our earlier post, the borderline between medical devices, medicinal products, cosmetics and foods or food supplements is often blurred.  The Regulation sheds some additional light on the definition of a medical device and strengthens the Commission’s power in relation to the borderline issues.  Nevertheless, important questions continue to exist, for instance in relation to the pharmacological versus physical (or purely chemical) mode of action of a product.

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House Discussion Draft Released on Regulatory Approach for In Vitro Clinical Tests

On March 20, 2017, Rep. Larry Bucshon (R-IN) and Rep. Diana DeGette (D-CO) released a discussion draft of the Diagnostic Accuracy and Innovation Act (DAIA).  DAIA would regulate “in vitro clinical tests,” defined in the discussion draft as a “laboratory test protocol or finished product” intended for clinical use “in the collection, preparation, analysis, or in vitro clinical examination” of human specimens for the purpose of “identifying, screening, measuring, detecting, predicting, monitoring, or assisting in selecting treatment for a disease or other condition.”  According to Rep. Bucshon, DAIA is intended to establish a “flexible, risk-based approach” to regulation of IVCTs.

The following are some of the highlights from the discussion draft of DAIA: Continue Reading

Medical Device Tax Repeal Included in the American Health Care Act

On March 9, the House Energy and Commerce Committee and the House Ways and Means Committee favorably reported out the American Health Care Act (AHCA) — the Republican Affordable Care Act (ACA) repeal legislation.  The AHCA includes a provision to repeal the medical device excise tax, which was originally enacted as a cost savings component of the ACA.  The bill will now go to the House Budget Committee, which will hold a markup hearing on the bill on March 15.  The political fate of the broader legislation is still to be determined, but to date, the device repeal provision has not encountered opposition.

The ACA’s medical device excise tax imposes a 2.3 percent tax on sales of medical devices (except certain devices sold at retail).  If the AHCA is signed into law, the medical device excise tax would not apply to sales after December 31, 2017.

Since its inception, there have been several bipartisan efforts to repeal or delay the medical device tax.  For example, in 2013, both the House and the Senate introduced bipartisan legislation to repeal the tax.  In December 2015, President Obama signed into law a two-year moratorium on the medical device excise tax as part of the Consolidated Appropriations Act of 2016.  The moratorium is set to expire on December 31, 2017.  See our previous coverage for more information on medical device tax legislative and regulatory activity.

The medical device tax repeal continues to garner bipartisan support and its inclusion in the AHCA is not expected to encounter significant opposition going forward.  The Congressional Budget Office recently estimated that the AHCA would reduce the federal deficit by $337 billion, so Congress would not need to rely on the medical device tax as an offset to generate revenue for the AHCA.  In the event that Congress does not enact repeal of the tax in the next few months as part of the ACA repeal and replace effort, repeal of the tax might resurface during consideration this summer of legislation to reauthorize the Medical Device User Fee Act (MDUFA).

President Issues New Executive Order, Requires Agencies to Establish Regulatory Reform Task Forces

On February 24, 2017, President Donald Trump signed an executive order entitled “Enforcing the Regulatory Reform Agenda” (the “Order”).  The Order is one of several actions the Trump Administration has taken concerning regulatory reform since the presidential inauguration, and directs federal agencies to identify personnel to oversee the implementation of the Administration’s regulatory reform initiatives.  Among other things, each agency is directed to establish a task force to evaluate existing regulations and prepare recommendations to the agency head for possible repeal, replacement, or modification.  The key elements of the Order are explained in our client alert, accessible here.

FDA Releases Draft Guidance on Manufacturers’ Communications with Payors

In January, FDA released a Draft Guidance on Drug and Device Manufacturer Communications with Payors, Formulary Committees, and Similar Entities (“Draft Guidance,” available here), which provides the Agency’s thinking on communications with payors in two areas:

(1) communication of health care economic information to payors regarding approved drugs; and

(2) communications to payors about investigational drugs and devices.

We focus here on the second category and how it affects medical device companies.  FDA is accepting comments on the Draft Guidance until April 19, 2017.

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2016 Year in Review: FDA Advertising & Promotion Enforcement Activity

Warning and untitled letters issued to manufacturers of medical products offer unique insight into FDA’s enforcement practices. To help identify themes and trends in the agency’s recent enforcement activity, Covington & Burling has reviewed all warning and untitled letters related to advertising and promotional materials issued in 2016 and tabulated the most frequently cited allegations.  The full 2016 End-of-Year Summary of FDA Advertising and Promotion Enforcement Activity can be found here.

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FDA Issues Discussion Paper on Possible Regulatory Approach for Laboratory Developed Tests

On January 13, 2017, the U.S. Food and Drug Administration (FDA or Agency) released a discussion paper synthesizing public feedback on FDA’s 2014 draft guidance documents and outlining a possible approach to regulation of laboratory developed tests (LDTs) (Discussion Paper). This approach is intended to “advance the public discussion by providing a possible approach to spur further dialogue” and “to respond to stakeholder feedback and attempt to balance patient protection with continued access and innovation.”

This Discussion Paper has no legal status, is not enforceable, and does not address the fundamental legal question regarding FDA’s assertion of jurisdiction over LDTs. In addition, the discussion paper “does not represent a final version of the LDT draft guidance documents that were published in 2014.”

As we previously reported, FDA announced on November 18, 2016, that it would not finalize the draft guidance entitled Framework for Regulatory Oversight of Laboratory Developed Tests (Draft Guidance) prior to end of the Obama Administration.

Our detailed client alert highlights key components of the Discussion Paper’s suggested approach for prospective oversight of LDTs, some of which significantly diverge from the approach outlined in FDA’s Draft Guidance.

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