View from Washington Hot Topics in Health Care Regulation CMS & FDA

© 2015 Epstein Becker & Green, P.C. | All Rights Reserved. ebglaw.com
View from Washington
Hot Topics in Health Care Regulation
CMS & FDA
October 30, 2015

Hot Topics in CMS

Hot Topics in FDA Regulation

© 2015 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com
Agenda
34
I. Diagnostics
A. Laboratory Developed Tests
B. Point of Care Tests
II. Pharmaceuticals
A. Drug Compounding
B. 505(b)(2)s
III. Medical Devices
A. Novel technologies
B. Mobile Health
IV. Combination Products
V. Challenging FDA

Diagnostics

Diagnostic Tests
Characteristics LDT IVD
What are they? Diagnostic Tests Diagnostic Tests
Who regulates right now? CMS (under CLIA) FDA (under FDCA)
Who makes them? Clinical Labs Manufacturers
Path to Market? • Validate internally
• Start offering the test
• Spends years dealing
with FDA to get approval
On-going Requirements Limited A real pain
Two Broad Categories of Tests
• Laboratory Developed Tests (LDT): Developed for in-house (single lab) use
• In Vitro Diagnostics Tests (IVD): Developed to sell to multiple laboratories

LDT Horizon
1. Big differences in IVD and LDT regulation have biased against IVDs
2. FDA says it has authority to regulate LDTs like it regulates IVDs . . . and has
just chosen not to do so for ~ 40 years, though that may be changing
3. FDA proposed a draft guidance that describes regulations of LDTs (not in
use yet). Key takeaways from draft:
i. Risk-based Regulation
ii. Long phase in of requirements
iii.Retains limited ‘enforcement discretion’ for
a. Tests for unmet needs
b. Tests for rare diseases
c. “Traditional” LDTs

Proposed Phase-In of Regulations

LDT Horizon
1. Billions of dollars at stake
i. Most high value genetic tests, advanced diagnostics for cancer, etc. are LDTs
ii. Many large and small labs rely heavily on LDTs for revenue
2. Congress is very interested
i. Competing proposals on Capitol Hill
ii. If clinical labs and IVD manufacturers can come up with an approach both like, it
has the best chance of becoming law
a. Labs and manufacturers are both big constituents
b. Cogresspersons need to have the support of both
iii.Current best guess – Absent Congressional action, FDA issues final guidance in the
spring/summer

Point-of-Care Testing
1. LDTs are tests run in-house by laboratorians
i. Doctors take samples and send them to labs
ii. Results come back days/weeks later
2. With point-of-care testing, on the other hand –
i. Tests are run in an exam room or at the bedside
ii. Results in minutes
3. Most customers for point-of-care testing are “certificate of waiver” sites
i. These are physicians offices, urgent care clinics, minute clinics, etc.
ii. Non-traditional labs
iii.“Waiver” refers to the fact that CLIA lab requirements are waived for certificate
of waiver sites
4. FDA decides which tests can be used at certificate of waiver sites
i. Test developers submit an application to get a CLIA waiver from FDA

 ~70% of all clinical testing
facilities are Certificate of
Waiver (“CoW”) sites
 CoW sites represent the vast
majority of POCT sites
 By law, CoW sites can only
perform CLIA-waived tests
 Conclusion: The CLIA Waiver
Process Is Essential to Patients
Receiving the Full Benefits of
POCT
Promise of Point of Care Testing
41

 The current FDA process is stacked against CLIA waivers
• FDA created regulatory barriers that slowed development of POCT
 There is increasing recognition this is bad for innovation and bad for patients
 Reform is being pushed from all quarters, e.g.,
• Coalition for CLIA Waiver Reform
oLaunched by EBG in May 2014
oIncludes IVD manufacturers and public interest groups
• AdvaMed
• STD/AIDS Advocacy Groups
 Real traction – hope to see major reforms in the next two years
• Secured bills in the House and Senate to require revision of FDA standards
• Ongoing discussions with FDA on ways to improve regulation
CLIA Waivers and Point-of-Care Testing
42

Pharmaceuticals

Pharmaceuticals
44
Characetistics Compounded Drugs FDA-approved Drugs
What are they? Drugs Drugs
Who regulates right now? FDA, States FDA, States
Who makes them? • Pharmacies
• Outsourcing Facilities
Manufacturers
Path to Market? Make and sell (no
premarket review)
FDA review and approval
required
On-going Requirements Increasingly a real pain A real pain
Two Broad Categories of Drugs
• Compounded Drugs: Historically, drugs made based on patient specific prescription
• Less individualized drugs have become more common in recent years
• FDA-approved Drugs: Made for the masses

 Compounding Quality Act of 2013 (applies to human drugs)
• Increases FDA oversight of small, traditional compounders (“503A” pharmacies)
• Creates a new kind of compounding entity: FDA-licensed compounders for sterile
drugs (“503B” outsourcing facilities)
• Compounders chose which kind of compounder they want to be
Pharmacy Compounding
45
503A 503B
Prescriptions Must have a patient-
specific prescription
Call sell to doctors before receiving
prescriptions
Products that you
can make
Can compound with
many active
ingredients
Soon to be ltd. to compounding with:
- Shortage drugs ingredient (~250)
- A list of ingredients FDA is developing
Quality Standards State/USP FDA/cGMP
Interstate limits Soon (5%/30%) No limits

 FDA is revamping its animal drug compounding guidelines
 FDA has an “anti-503A” campaign
• They don’t want these compounders making sterile drugs
• They are rigorously enforcing the specific prescription requirement
• They are frequently inspecting 503As, finding problems, and pressing them to
become 503Bs subject to FDA cGMPs if they sterile compound
 It’s unclear how limited the menu of active ingredients will be for 503Bs
• FDA is making its list now
• The final list will constrain what 503Bs can make
 It’s unclear how the 503A interstate shipment limits will shake out
• Currently proposed a 30% limit
• May not be as bad as it seems….
Pharmacy Compounding
Other important points
46

 There are three basic kinds of new drug applications
• “Stand-alone” applications that contain all data to support approval (“505(b)(1)”)
• Applications that rely on previous FDA approvals (“ANDA” and “505(b)(2)”)
oThese applications rely on approvals of “Reference Listed Drugs” or “RLDs”
 505(b)(2)s are a pathway for lower cost innovation
• You rely on previous approval to cut down work substantially
• You can introduce new, market differentiating feature through the path, e.g.,
oNew dosage forms (e.g., from immediate release to extended release)
oNew delivery systems (e.g., from syringes to transdermal patches)
oNew combinations (e.g., combining two+ active ingredients in a single pill)
 With exponentially increasing costs to bring entirely new active ingredients
to market under 505(b)(1), teaching old drugs new tricks through the
505(b)(2) path holds increasing appeal for small/mid-sized pharma
505(b)(2)s
47

Devices

Devices, Generally
1. The FDA Center for Devices and Radiological Health (CDRH)
i. Regulates medical devices (and IVDs)
2. Different processes from bringing products to market
i. Pre-market Approval (“PMA”) for high risk devices
ii. 510(k)s for moderate risk devices
iii.De Novo Applications (used to bring new technologies to the 510(k) path when
they don’t initially qualify for 510(k) review)
iv.Low risk devices = no FDA premarket review
3. Regulation of different device types is laid out in various FDA device
“classifications,” e.g.,
§870.3545 Ventricular bypass (assist) device.
(a) Identification. A ventricular bypass (assist) device is a device that assists the left or right
ventricle in maintaining circulatory blood flow. The device is either totally or partially implanted in the body.
(b) Classification. Class III (premarket approval).

Novel Devices = Tremendous Potential
1. Newer implants for hip, knee, etc.
i. Better materials
ii. Embedded monitoring technologies
2. 3-D printing for customized devices (and drugs)
3. Robotics (assisted surgery, orthotics, etc.)
4. Software
i. Clinical Decision Support
ii. Mobile Health Applications (Apps)
iii.Telemedicine

Mobile Health
1. New FDA Guidances
i. Mobile Medical Applications (Feb. 2015)
ii. Clinical Decision Support Guidance (Scheduled for this year)
iii.Taking a more innovator-friendly approach
a. CDRH recognizes potential public health value of products
b. Taking a hands-off approach to low-risk apps
2. Still a lot of work being done on the policy development and application
side
i. EBG Coalitions
a. mHealth Coalition
b. Clinical Decision Support Coalition
ii. Activity on Capitol Hill

Combination
Products

 Combo Product: A combination of a drug/biologic and device
 The Lead Review Center is based on the “Primary Mode of Action” of the
product, but Centers must work together too
• Deciding PMOA is not always easy
• FDA has been defaulting to finding drug PMOAs for products
oAdds lots of time/expense relative to device pathways
oFDA is getting fought on these decisions by innovators
 Various problems on policy side that are being addressed by many players
• Combination Products Coalition (EBG managed Coalition of industry leaders)
• AdvaMed/PhARMA/BIO
• Capitol Hill (Reform Bills in Congress)
Combination Products
53

Do Burdensome Combination Products Policies Hold a Key to Extending the
Profitable Life of Drugs?
 Example: Drug delivery systems
• Novel drug delivery systems are being developed to add assurance of safe and
effective use
• The standards being applied to assessment of these systems are increasing
oWhat was previously more of an engineering / human factors evaluation
exercise is now transforming into actual use studies with products
 Example: Mobile devices
• Interest in new technologies to monitor patients, assure compliance, adjust dose
• If embedded in pivotal trials, they may be part of the conditions for approval
Could patents on these ancillary products provide additional, indirect, avenues
of protection for drug products from generic competition?
Problems May Create Opportunities
54

Challenging FDA

 Policy challenges can be successful
• FDA Guidance for Industry: New Chemical Entity Exclusivity Determinations for
Certain Fixed-Combination Drug Products (Oct. 2014)
• Responded to 2013 citizen petition, and driven by public health needs
• Changed longstanding interpretation of 5-year exclusivity to extend it to
combination drug products with old active moieties
oIntended top motivate development of combination antibiotics
 Product-specific challenges
• Formal Dispute Resolution (Appeals)
• Provide persuasive public health arguments based in science and law
• Always consider this as an option when you are struggling with FDA
oBe respectful and practical in appeals
oDon’t let concerns about ‘retribution’ from reviewers keep you from trying it
Challenging FDA
Challenging FDA at the Agency Level
56

 Court challenges
• Law is the dominant consideration
• Courts will not overrule FDA public health or scientific conclusions
• Focus on –
oDecision-making process
oDeviations from precedent
oDeviations from words or intent of the law
oDisparate treatment (Bracco Diagnostics v. Shalala arguments)
Challenging FDA
Challenging FDA in Court
57

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