FDA Law Update : FDA Regulation Lawyer & Attorney : Sheppard Mullin Law Firm : Food & Drug Administration Product Regulations

By Deborah M. Shelton

For years, the Food and Drug Administration has maintained that it has jurisdiction over laboratory-developed tests (“LDTs”) – those in vitro tests developed, validated and used for in-house pathology and diagnostic purposes – as medical devices. Yet the Agency has, with some few exceptions (e.g., IVDMIAs), exercised enforcement discretion, reasoning that most LDTs were simple, well-characterized, and reliant upon various FDA-regulated individual components. As LDTs have become increasingly complex and the laboratory setting increasingly large-scale, FDA has begun rethinking its regulatory approach.

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By Deborah M. Shelton

For years, the Food and Drug Administration has maintained that it has jurisdiction over laboratory-developed tests (“LDTs”) – those in vitro tests developed, validated and used for in-house pathology and diagnostic purposes – as medical devices. Yet the Agency has, with some few exceptions (e.g., IVDMIAs), exercised enforcement discretion, reasoning that most LDTs were simple, well-characterized, and reliant upon various FDA-regulated individual components. As LDTs have become increasingly complex and the laboratory setting increasingly large-scale, FDA has begun rethinking its regulatory approach.
 

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By Peter S. Reichertz

By letter dated May 27, 2010, the U.S. Trade Representative (“USTR”) sent a letter to the U.S. International Trade Commission (“ITC”) requesting that the ITC provide information about over 700 pharmaceutical products and chemical intermediates for which the elimination of custom duties may be proposed. As part of the “zero-for-zero” initiative of the Uruguay Round Agreements Act, the President can proclaim changes to duties for certain classes of goods as part of the “zero-for-zero” initiative. Pharmaceutical and chemical intermediates are in such categories. To date over 2,000 pharmaceutical products and intermediates have been added to the Pharmaceutical Appendix in the HTUS. The current review is the fourth periodic proposal to add additional pharmaceuticals and intermediates to the list. The United States and 21 other major trading countries agreed during the Uruguay Round to eliminate duties on pharmaceuticals and to periodically conduct reviews to identify additional products to be covered by the initiative. If added to the Appendix, the products included in the new USITC investigation would receive duty-free treatment.

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In a recent interview, Senator Herb Kohl (D-Wis.), Chairman of the Senate Judiciary Committee's subcommittee on antitrust, competition policy and consumer rights, discussed the subcommittee's legislative priorities for 2010. At the top of the list is passage of the Preserve Affordable Access to Generics Act, which would prevent anticompetitive "pay-for-delay" patent settlements in which a brand-name pharmaceutical company pays a generic drug maker millions of dollars in exchange for an agreement to stop selling a generic version of the drug.
 

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On May 19, 2010, FDA published on its website a series of proposals designed to promote “openness” and “transparency” in government. The document, entitled “FDA Transparency Initiative: Draft Proposals for Public Comment Regarding Disclosure Policies of the United States Food and Drug Administration” can be found here.  The document contains 21 specific proposals about changing the Agency’s policies of disclosure of information submitted to it and about interim decisions made by it.
 

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In a Business Review Letter[1] dated April 26, 2010, the U.S. Department of Justice, Antitrust Division (hereinafter, “the Division”) stated that it would not challenge a data sharing program proposed by three health care associations located in California. From the Division’s vantage point, the program posed little risk of facilitating anticompetitive conduct; rather, the most likely effect of the program would be to increase transparency about the relative costs and utilization rates of hospitals that participated in the survey.
 

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Manufacturers

As part of the recently enacted Patient Protection and Affordable Care Act (“PPACA”) – known to most as Healthcare Reform Legislation, new taxes will be imposed on manufacturers of “branded prescription drugs” and most medical devices. These taxes are in addition to the fees already charged by the Food and Drug Administration (“FDA”) for review of full new drug applications for drugs and 510(k)’s and Premarket Approval Applications for medical devices. And unlike user fees, the taxes will not be paid to FDA but assessed by the Department of Treasury and paid to support health insurance coverage.
 

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On March 29, 2010, FDA published a proposed rule setting forth how it would interpret the Congressionally mandated requirement that “major statements” in broadcast Director-to-Consumer (“DTC”) advertisements for prescription drugs be presented in a “clear, conspicuous and neutral manner." See proposed 21 C.F.R. § 202.1(e), 75 Fed. Reg. 15376 (March 20, 2010).  
 

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In the wake of a scathing March 4^th GAO Report, FDA has informed Congress that it will boost criminal prosecutions of pharmaceutical and food industry executives.[1] Although the Agency’s Office of Criminal Investigation (OCI) can prosecute ‘responsible corporate officials,’ according to the GAO Report OCI has failed to exercise this enforcement tool to achieve FDA priorities and has underperformed comparable agencies in bringing misdemeanor prosecutions.
 

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