FDA Issues 2019 Goals to Improve The Quality of Compounded Drugs

Just prior to departing the FDA (U.S. Food and Drug Administration) Commissioner Scott Gottlieb, M.D., and Deputy Commissioner Anna Abram issued a statement (the “Statement”) on the Agency’s 2019 goals to improve the quality of compounded drugs. While the change of leadership at the Agency may affect how these efforts will be managed and implemented, the Statement provides helpful insight into the timing of Agency action in the compounding space, including:

  • Maintaining Quality and Compliance for Outsourcing Facilities and Traditional Compounding Pharmacies
  • Regulating Compounding from Bulk Drug Substances
  • Finalizing the Agency’s Memorandum of Understanding with the States
  • Compounding by Hospital and Health Systems
  • Additional Compounding Priorities

Please read our client alert for a deeper summary of the Statement written by our compounding pharmacy team.

Supreme Court hearing oral argument on agency-deference question

The Supreme Court of the United States heard oral argument on March 27, 2019 concerning a case (Kisor v. Wilkie, No. 18-15) involving the Department of Veteran Affairs (VA). The case asks the Supreme Court to consider overruling the current doctrine which allows an agency to interpret its own regulation unless it is clearly incorrect. A merits brief has been filed by the Solicitor General of the United States (SG) in Kisor on behalf of the VA, in agreeance that the Supreme Court should clarify and narrow the deference standard applied to agency regulatory interpretations. A decision is expected prior to the Court’s recess in June. To read more on the case, please visit our Health Industry Washington Watch blog.

AdvaMed Issues Revised Code of Ethics on Interactions with U.S. Health Care Professionals

The Advanced Medical Technology Association (AdvaMed) – the national industry association of medical technology manufacturers – recently issued an updated Code of Ethics on Interactions with Health Care Professionals (HCPs) (the AdvaMed Code or Code). Last revised in 2009, AdvaMed’s updated Code will go into effect January 1, 2020. The Code speaks to the evolving regulatory risk landscape in relation to manufacturers’ interactions with the modern medical technology marketplace.

A select committee of AdvaMed members, with Reed Smith’s support, worked to revise the Code to include learning from the last decade, and to offer guidance on common, but not previously addressed, interactions and arrangements between medical technology companies and HCPs (which include virtually all manufacturer customers, and sales and marketing targets). The new Code includes the following sections:

  • Joint Education and Marketing Programs
  • Communications about Safe & Effective Use of Products
  • Consigned Products
  • Company Representatives providing Technical Support in the Clinical Setting

Reed Smith served as outside counsel to AdvaMed and was honored to help draft the original, current, and revised versions of the AdvaMed Code; our attorneys work with clients worldwide in optimizing their compliance programs to more effectively and efficiently manage organization risk in line with business and operational priorities. We are happy to provide additional information on the updated Code and the assistance it provides medical technology manufacturers.

To read our entire overview of the updated Code, please visit reedsmith.com.

Join Us: Life Sciences Health Industry Roundtable on “Identifying and Mitigating Risk in a Changing Global Economy”

In-house counsel at pharmaceutical, medical device, and health companies are invited to join their peers and leading Reed Smith life sciences lawyers for a roundtable discussion on how to identify and mitigate risk. The event will be held on 5 March in Reed Smith’s London office. A networking breakfast will be provided at 8:30 a.m., with the program itself starting at 9 a.m. and ending at 11:30 a.m.

Panels will cover “The Intersection of Digital Health and Data Protection: Devices, Data Collection and Analytics and Control,” “Patents: A Discussion of What Keeps the In-House Practitioner Awake at Night,” and “Global Investigations of Companies and their People: A Look at Current Issues through the Lens of a Case Study.”

We are pleased to welcome several in-house and industry speakers, including Helen Barraclough (Associate General Counsel, Smith & Nephew), Andrew Davies (Director, Market Access, Association of British HealthTech Industries), Alexander Povey (Consultant Patent Attorney, MSD), and Brooke Daley (Investigations and Compliance Counsel, Zimmer Biomet).

Reed Smith speakers will include partners Rick Robinson, Cynthia O’Donoghue, Daniel Kadar, Anette Gärtner, Rosanne Kay, Jeff Layne, and Eoin O’Shea.

To close out 2018, FDA published a revised draft guidance on human drug compounding for outsourcing facilities

In accordance with the United States Food & Drug Administration’s (“FDA”) 2018 Compounding Policy Priorities Plan, on December 11, 2018, FDA published its revised draft guidance regarding human drug compounding by outsourcing facilities entitled, “Current Good Manufacturing Practice—Guidance for Human Drug Compounding Outsourcing Facilities Under Section 503B of the FD&C Act Guidance for Industry,” (the Revised Draft Guidance). FDA released this Revised Draft Guidance to describe FDA’s current thinking on what FDA has described as a new flexible and risk-based approach to Current Good Manufacturing Practice (“cGMP”) requirements for outsourcing facilities.

Outsourcing facilities must comply with cGMP requirements, and failure to do so risks that the compounded drug will be deemed adulterated under Section 501(a)(2)(B) of the Federal Food, Drug, and Cosmetic Act (“FDCA”). FDA has taken the position that it intends to promulgate more specific cGMP requirements for Section 503B outsourcing facilities in the future, but until FDA does so, outsourcing facilities are subject to the cGMP requirements established in 21 CFR parts 210 and 211. The Revised Draft Guidance illustrates FDA’s current thinking on certain standards with examples of cGMP requirements where FDA would generally not take regulatory action as applied to outsourcing facilities.

Outsourcing facilities must comply with cGMP requirements, and failure to do so risks that the compounded drug will be deemed adulterated under Section 501(a)(2)(B) of the Federal Food, Drug, and Cosmetic Act (“FDCA”). FDA has taken the position that it intends to promulgate more specific cGMP requirements for Section 503B outsourcing facilities in the future, but until FDA does so, outsourcing facilities are subject to the cGMP requirements established in 21 CFR parts 210 and 211. The Revised Draft Guidance illustrates FDA’s current thinking on certain standards with examples of cGMP requirements where FDA would generally not take regulatory action as applied to outsourcing facilities.

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Join Us: Free CLE Webinar on Best & Worst Drug/Medical Device Decisions of 2018

Reed Smith’s Life Sciences Health Industry Group will be hosting an upcoming CLE webinar, “The Good, the Bad and the Ugly: The Best and Worst Drug/Medical Device Decisions of 2018” on Wednesday, January 16, 2019 at 12 p.m. ET.

Each year since 2007, Reed Smith’s Drug and Device Law blog contributors have compiled and posted lists of the 10 best and 10 worst drug and medical device court decisions for that year. Starting with their 2013 lists, the bloggers have followed up with a webinar discussing these decisions. These cases are selected based on their likely precedential value, their importance to drug and device manufacturers, and their inherent (and subjective) merit.

In this webinar, our litigators who blog for Drug and Device Law will explain the significance – whether good or bad – of each case and provide insight into how the cases will likely be influential in the future.

This program is presumptively approved for 1.5 general CLE credit in California, Illinois, New Jersey, Pennsylvania, Texas and West Virginia. For lawyers licensed in New York, this course is eligible for 1.5 credit under New York’s Approved Jurisdiction Policy.

You can register by clicking here.

FDA Announces Its Plan for Encouraging Reliance on Newer Predicate Devices and Medical Device Performance Criteria

On November 26, 2018, the Food & Drug Administration (FDA) announced its intent “to modernize the FDA’s 510(k) clearance pathway”1 by encouraging manufacturers to rely on newer (that is, 10 years old or less) medical devices as predicate devices in 510(k) notifications, and providing an alternative 510(k) pathway that allows manufacturers to rely on objective safety and performance criteria, at least for certain well-known devices. This revised approach comes at a time when advances in technology are rapidly outpacing FDA’s ability to review and clear new medical device technology for market. FDA has also come under increasing criticism in recent years for failing to detect problems in certain medical devices, which have, in some instances, caused injuries to consumers. FDA believes that this new approach will improve medical devices’ safety and performance, and expects hope that this new pathway will become the norm for approval of medical devices.

While the plan’s specifics remain to be seen, FDA’s new approach has the potential to greatly impact medical device manufacturers’ plans for the future. Below, we describe FDA’s plans for encouraging reliance on newer predicate devices and objective safety and performance criteria.

Reliance on Newer Predicate Devices

FDA has set forth a two-prong approach for its modernization efforts. First, FDA will encourage manufacturers to designate newer medical devices as predicate devices for comparative purposes in 510(k) clearance notifications. The agency believes that older predicate devices may not reflect accepted technological advancements or understanding of a device’s safety and efficacy profile. FDA proposes that newer devices should serve as the predicates because older devices may not be the best comparison the modern technologies incorporated into the newer devices.

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FDA to implement OIG suggestions on IoT cybersecurity

The Office of the Inspector General (OIG) published a report in September 2018 after a review of the Food and Drug Administration’s (FDA) policies, procedures, and guidance relating to cybersecurity reviews of networked medical1 devices. In its findings, covered in our recent client alert, the OIG determined that while the FDA has started to include cybersecurity concerns in its review process, the FDA should take steps to ensure their cybersecurity review is systematic and consistent. The OIG specifically provided three recommendations for the FDA:

  • Promote the use of the FDA’s pre-submission program (Pre-Sub Program) to discuss cybersecurity concerns
  • Include cybersecurity documentation as a criterion in the FDA’s current Refuse To Accept checklists
  • Revise its “Smart” template to prompt FDA reviewers with specific cybersecurity questions

The FDA has voiced its agreement with all three of the recommendations and intends to incorporate them in its next round of updates to these items. The FDA will likely promote new policies and procedures in response to OIG’s recommendations in the near future, and medical device manufacturers should prepare for these updates.


  1. U.S. Dep’t of Health & Human Servs., Office of the Inspector General, OEI-09-16-00220, FDA Should Further Integrate Its Review of Cybersecurity Into the Premarket Review Process for Medical Devices 1 (Sept. 2018).

OIG Gives Stamp of Approval for Innovative Warranty Program

The Office of Inspector General (OIG) recently gave the green-light on a medical device manufacturer’s proposed warranty program, wherein the company would provide a refund to the hospital at which a patient underwent joint replacement surgery using the company’s knee or hip implant and related products, if the patient was readmitted within 90 days because of a surgical site infection or need for implant replacement surgery. Advisory Opinion No. 18-10 concluded that although the suggested proposal did not meet the particular specifications of the warranty safe harbor to the Anti-Kickback Statute (AKS), it nonetheless posed an acceptably low risk of fraud and abuse. OIG’s approval of this warranty program is consistent with several other recent signals from OIG indicating its increasing interest in value-based arrangements.

Please visit reedsmith.com to read the full article.

OIG Issues RFI Regarding Federal Anti-kickback Statute and Beneficiary Inducement CMP

The Office of Inspector General (OIG) of the Department of Health Human Services (HHS) is seeking input on Medicare and State Health Care Programs: Fraud and Abuse; Request for Information Regarding the Anti-Kickback Statute and Beneficiary Inducements CMP. The OIG describes this request for information (RFI) as part of HHS’s endeavor “to transform the health care system into one that better pays for value.” The RFI looks to identify ways to amend or add new safe harbors to the Anti-Kickback Statute (AKS) and exceptions to the beneficiary inducements provisions of the Civil Monetary Penalty (CMP) statute, in order to foster arrangements that promote care coordination and advance the delivery of value-based care. The OIG notes that, through internal discussions and input from external stakeholders, it has identified the broad reach of these provisions as “potential impediment[s] to beneficial arrangements that would advance coordinated care.” Comments on the RFI will be accepted by the OIG through October 26, 2018.

Please visit reedsmith.com to read the full article.

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