Life Science Compliance Update

November 08, 2017

FDA Provides Guidance on Medical Devices

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Recently, the FDA released two final guidances and a new draft guidance to increase the regulatory clarity around medical devices, including software as a medical device. The agency also announced the first qualified tool under the voluntary Medical Device Development Tools (MDDT) program.

Final Guidances

The two final guidances released are designed to help developers understand when a modification to a device — which would include a software update — requires a new 510(k) clearance. The guidances, "Deciding When to Submit a 510(k) for a Change to an Existing Device” and “Deciding When to Submit a 510(k) for a Software Change to an Existing Device,” update a similarly-named guidance document from 1997.

For the guidance related to change to an existing device, it uses flowcharts and text to guide manufacturers through the logic scheme FDA recommends to arrive at a decision on whether to submit a new 510(k) for a change to an existing device. A single logic scheme containing all the necessary steps would be large and cumbersome and could be quite daunting.

This guidance will aid manufacturers of medical devices subject to premarket notification requirements who intend to modify a 510(k)-cleared device (or group of devices) or other device subject to 510(k) requirements, such as a preamendments device or a device that was granted marketing authorization via the De Novo classification process under section 513(f)(2) of the FD&C Act during the process of deciding whether the change exceeds the regulatory threshold for submission and clearance of a new 510(k).

Related to the other guidance, FDA issued the original guidance Deciding When to Submit a 510(k) for a Change to an Existing Device on January 10, 1997 to provide guidance on regulatory language. As stated in that guidance, the key issue in the interpretation of 21 CFR 807.81(a)(3) is that the phrase “could significantly affect the safety or effectiveness of the device” and the use of the adjectives "major" and "significant" sometimes lead FDA and device manufacturers to different interpretations.

The original guidance provided the FDA’s interpretation of these terms, with principles and points for manufacturers to consider in analyzing how changes in devices may affect safety or effectiveness and determining whether a new 510(k) must be submitted for a particular type of change. The current guidance preserves the basic format and content of the original, with updates to add clarity. The added clarity is intended to increase consistent interpretations of the guidance by FDA staff and manufacturers and provide a more transparent framework for determining when submission of a new 510(k) is required.

Draft Guidance

The draft guidance describes the FDA's new Breakthrough Devices Program, which will supersede the agency's Expedited Access Pathway. The program, which allows novel technologies that present a significant improvement over the status quo to move more quickly through the clearance process, was created in the 21st Century Cures Act that passed last year.

MDDT Program

According to Commissioner Gottlieb, the agency completed its “first qualification of a medical device development tool (MDDT) to provide a more objective platform for developing devices in a key area of medicine – cardiovascular health. Fostering the creation and validation of development tools that can be used to provide more efficient and accurate ways to measure risk and benefit, as part of the medical product development process, is a key goal of the FDA. At the FDA, we’re undertaking a comprehensive policy effort to facilitate the development and validation of these kinds of medical device development tools.”

He continues: “Today’s newly qualified MDDT is a 23-item questionnaire that measures health information that is reported directly by patients with heart failure. The tool can be used to measure a heart failure patient’s health status, including clinical symptoms and the physical and social limitations caused by this condition. Such a tool has the potential to help engineers designing heart failure devices to more efficiently and accurately quantify how much their device could actually improve a patient’s quality of life. By qualifying the tool under the FDA’s new, voluntary program, it will make it easier for product developers to rely on the outputs of this newly qualified tool as part of their development plans. Innovators can trust in advance that the agency has already found the outputs of these measures to be reliable.”

October 04, 2017

New Research Published on Generic Competition

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As the FDA looks to boost generic competition, a new working paper published by the National Bureau of Economic Research (NBER) suggests that competition among generic drugmakers slows over time, potentially leading to higher prices for older treatments and drug shortages. The analysis authored by Ernst Berndt and Stephen Murphy of the Massachusetts Institute of Technology, and Rena Conti from the University of Chicago, reveals that generic drug prices have risen by a statistically significant margin over time as the rate of new entrants to the market has slowed and the number of firms competing for individual drugs has fallen over time. After 2007, the authors say the median number of competitors for an individual generic dropped from between two and three to just two through 2016, with 40% of generics being made by a sole manufacturer.

Implications of the Research

The findings of this paper have several implications. First, the research indicates that the generic drug markets in the U.S. are supplied by monopolists. Some therapeutic classes and molecule formulations appear to be long characterized by this market structure. With such limited suppliers of generic drugs observed over the study’s time frame and high levels of concentration, the researchers wonder why prices of generic drugs and associated revenues have not risen more dramatically over the time they have observed.

Another implication of the paper’s findings is that while the Waxman-Hatch Act is founded on the assumption of the desirability of establishing competition through lowering initial entry costs, less policy focus has been placed on the long-term maintenance of competition in generic prescription drug markets. Over time, several forces may act to erode the latter. Alleged anticompetitive activities among generic manufacturers and between generic and branded firms include raising entry barriers by, for example, “pay for delay” agreements. The paper’s evidence suggests that federal policies in pursuit of worthy goals, including ACA and GDUFA I, might have inadvertently eroded generic competition through increased user fees that increased entry barriers and incentives to exit.

Future Research

The paper’s authors note their results are preliminary and their limitations suggest potentially fruitful areas for future research. One such area involves further analyzing of manufacturer “type” by identifying annual revenue, country of incorporation, year of incorporation, organizational structure, and the existence and timing of mergers and acquisitions among manufacturers using the databases on companies registered in the U.S. This could provide information on the roles of consolidations and merger and acquisitions on measures of concentration, and ultimately on price levels, price changes and revenues.

Finally, future research might explore use of semi-structural and structural models to relate cross-sectional and dynamic market structure to observed pricing and revenue trends among generic drugs under conditions of imperfect competition. To circumvent issues of endogeneity, one could limit the sample to triopolies, and examine the price and aggregate output effects of exits that result in a duopoly, or entrants that result in a four-firm market.

September 18, 2017

Ohio Drug Distribution Verification: America’s Key Battleground State Shakes Up the Pharmaceutical Supply Chain

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The pharmaceutical industry faces monumental challenges in the age of globalization within the United States: state laws and regulations that are more stringent than their federal counterparts. This article provides the historical context and current overview of Ohio’s laws, regulations, and sub-regulatory guidance concerning the distribution of prescription drugs, including drug samples, into and within the state, the verification requirements when distributing product to terminal distributors of dangerous drugs and prescribers, record retention responsibilities, and penalties for noncompliance. The article then examines the industry’s response from a major manufacturer, a distributor/third-party logistics provider, verification vendor, and compliance advisory vendors. It concludes with a call to action to the industry to form a new coalition to address state legislative and regulatory actions that have the potential to disrupt the entire supply chain.

The pharmaceutical industry faces a major dilemma: active state legislatures, administrative agencies, and state attorney generals. There is a plethora of reasons why states have turned their attention towards the manufacturers and trading partners, such as wholesale distributors and third-party logistics providers (“3PLs”). There is an opioid crisis gripping the nation, an ever-growing increase in healthcare costs, unstoppable negative publicity aimed at the pharmaceutical industry, an emboldened citizenry demanding their legislatures to do something, hospital and insurance lobbies joining the fight. As a result, state politicians are using all of this to their advantage to pass laws aimed at the industry.

This article discusses a law that has been on the books for over forty years, and amended numerous times, including a 2017 revision that lead to Ohio becoming pharma’s “key battleground state.”

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