With the reelection of President Obama, the U.S. Food and Drug Administration (FDA) is likely to continue its current high level of regulatory oversight and enforcement. Current levels of appropriations, if not reduced under a proposed sequestration reduction of 8.2% across-the-board ($320 million), which is unlikely, also provides the agency with necessary resources to implement the 5-year agenda contained in the recently enacted prescription drug user fee bill, the “Food and Drug Administration Safety and Innovation Act” (FDASIA). New FDA regulations, which were delayed or stalled before the election, will likely be published in proposed or final form, potentially provoking a Congressional response, along with the potential expansion of existing authorities including regulation of cigars, e-cigarettes, pipe tobacco and dissolvable tobacco products under the Tobacco Control Act. On the Hill, the recent fungal meningitis outbreak associated with bulk pharmacy compounded products and extensive news coverage of food safety issues may drive additional FDA reform legislation in the next Congress, and the prospect of new, unfunded mandates.
Regulatory Implementation Activities.
Food Drug Administration Safety and Innovation Act (FDASIA). FDA will continue implementation of FDASIA (“PDUFA V”) by moving forward with a variety of pending rules, most notably for the newly established generic drug user fee program. Other key regulatory implementation initiatives will include finalizing rules for device unique identifiers, promulgating regulations for the registration of commercial drug importers, establishing purchasing controls, or similar requirements, as a part of current good manufacturing practices (CGMPs) for drug products, and defining key terms such as “life-supporting” and “life-sustaining” under FDA’s drug shortage authority. FDASIA enjoyed strong bi-partisan and agency support, and therefore is likely to remain the core of the Commissioner’s agenda for the next five years until a 6th reauthorization of agency user fees is required in 2017.
In addition, recent quality concerns with the New England Compounding Center (NECC) will lead to even more aggressive agency enforcement, including use of its drug supply chain authorities under FDASIA. For example, FDA is likely to be even more aggressive in surveillance to determine whether compounders are operating as drug manufacturers subject to FDA CGMP and quality system requirements, including establishment of standards for oversight and controls of raw material and component suppliers.
Food Safety Modernization Act (FSMA). Major rulemaking activity will occur in the next Congress with respect to FSMA implementation. FDA has fallen significantly behind on some of FSMA’s deadlines for rule promulgation. At present, the agency remains in a holding pattern as proposals remain under review by the Office of Management and Budget (OMB) involving preventive controls for food and animal feed facilities, produce safety standards, and the foreign supplier verification program. The agency has even been sued to compel implementation of these key FSMA provisions. As pressure to release and publish these rules continues to mount, publication of these rules will be a key priority for OMB and FDA. President Obama remains a strong proponent of food safety regulation. In addition, other FSMA mandates, for example rulemaking for sanitary food transportation, third-party audits, the voluntary qualified importer program, food testing laboratory accreditation, and food product tracing systems, will likely remain a regulatory priority with greater oversight likely in the 113th Congress.
Affordable Care Act (ACA). Of focus under the ACA are implementation activities surrounding the physician payment disclosure, drug sample reporting, and menu labeling authorities of the ACA.
- Sunshine Act. This directive requires manufacturers to disclose certain information regarding payments to physicians (including to physician groups or practices) and teaching hospitals. Earlier this year, the Centers for Medicare & Medicaid Services (CMS) released an update on Sunshine Act implementation, noting that no data collection will be required before January 1, 2013 (earlier CMS had said that a “partial collection” may be required for 2012). As such, payments made throughout 2012 are not required for disclosure. However, when CMS issues a final rule, we expect that 2013 payments will be subject to disclosure and the law requires reporting of payment information for the previous calendar year by the 90th day of the following calendar year (e.g., by the end of March 2014 for 2013 data). The December 2011 proposed rule received numerous comments from a widespread industry base of manufacturers, providers, and institutions. Among manufacturer concerns regarding the proposed rule are the definition of “applicable manufacturers” and a proposal to extend application of the rule to certain entities under common ownership with drug and medical device manufacturers.
- Drug Sample Reporting. The ACA requires drug manufacturers and authorized distributors to submit the following drug sample information to FDA annually: (1) the identity and quantity of drug samples requested; (2) the identity and quantity of drug samples distributed; (3) the name, address, professional designation, and signature of any person who makes or signs for the request, and (4) any other category of information determined appropriate by the Secretary. To date, FDA has not begun enforcing these requirements. It continues to review industry comments on its draft guidance. We expect that FDA will finalize its guidance, reporting system, and enforcement approach in 2013.
- Menu Labeling. Similarly, after industry stakeholders submitted comments identifying numerous complexities and challenges with menu labeling implementation under FDA’s proposed rules, the agency has been slow to finalize those regulations. Meanwhile, industry groups have mounted an active legislative effort to better clarify the scope of menu labeling implementation and the intent of Congress in the ACA. Bills are currently pending in both the House and Senate. We expect that this legislative effort will continue into the next Congress which may lead to additional legislation and/or FDA regulatory action to prevent legislative mandates.
Family Smoking Prevention and Tobacco Control Act (Tobacco Control Act). Industry user fees pour in and the staffing of its new Center for Tobacco Products currently exceeds 400 FTEs. FDA is likely to increase compliance pressure on tobacco manufacturers to adopt manufacturing controls, increase constituent testing and labeling, and remove products not deemed to be substantially equivalent to pre-2007 products from the market.
FDA is also moving forward to expand its statutory product jurisdiction by regulating “other tobacco products” including cigars, e-cigarettes, pipe tobacco, and dissolvables. There has been some early Congressional opposition to FDA’s attempt to regulate cigars. A House bill introduced last year seeks to curb FDA tobacco authority to regulate larger or hand-rolled premium cigars. Legislation introduced by Senator Bill Nelson (D-FL) and Representative Bill Posey (R-FL) currently has the bi-partisan support of 220 co-sponsors in the House. However, Senate report language in the recent FDA appropriations bill advises the agency to proceed with cigar regulation. Given the divide in Congressional opinion, and FDA’s planned expansion of its authority, we expect this area to receive Congressional oversight and direction.
Ripe for Congressional Reform.
Drug Compounding Authority. In response to the NECC fungal meningitis outbreak, Representative Edward Markey (D-MA) introduced new legislation to expand FDA authority over prescription drug compounders. The issue frequently pits drug manufacturers and consumer advocates against pharmacies and state pharmacy boards/attorney generals. The Senate Health, Education, Labor & Pensions Committee will hold an upcoming hearing on the NECC matter and the underlying division of responsibilities between FDA and state pharmacy boards. The role played by tough FDA enforcement of CGMP interpretations to close down generic injectable drug manufacturers may be examined as a model for enforcement in this area. FDA also might request an expansion of its establishment inspection authority under Section 704 of the Food, Drug and Cosmetic Act in order to determine if compounding pharmacies are operating as drug manufacturers. Committee Chairman Tom Harkin (D-IA) and Ranking Member Michael Enzi (R-WY) are preparing to introduce a bipartisan compounding bill after gathering more information at this hearing. Compounding legislation could serve as a vehicle for other FDA-related reform efforts for which consensus was not reached in the “must-pass” FDASIA legislation (e.g., electronic drug pedigrees).
Genetically Modified Organism (GMO) Food Labeling. California’s failure to approve Proposition 37, the GMO labeling law, may slow the momentum of federal GMO labeling initiatives. The defeat of Proposition 37 diminishes the prospects for a similar federal GMO law in the near future. Criticism of Proposition 37 focused on its potential for excessive litigation through citizen suits and the wide scope of liability that encompassed food retailers. In addition, opponents of Proposition 37 had significant financial backing from agribusiness and chemical companies as well as food manufacturers. Any federal initiative would probably need a different legal format than Proposition 37 and would also have to contend with significant opposition from industry.
Caffeine Labeling for Energy Drinks. Caffeine labeling is on FDA’s radar with the recent deaths associated with high caffeine energy drinks, which are marketed as dietary supplements. Adverse health events from these drinks often occur in youth, making this an issue of particular public concern. In addition, Senators Richard Blumenthal (D-CT) and Richard J. Durbin (D-IL) wrote a letter to FDA urging investigation into the health risks of high caffeine energy drinks. The agency is currently investigating the matter and there is a potential for new rules or guidance with respect to caffeine labeling in dietary supplements.
Track and Trace Requirements. Although Congress tackled a variety of drug issues as part of FDA user fee legislation in July 2012, the final version of FDASIA did not include pharmaceutical supply chain integrity requirements. During consideration of the user fee legislation, policymakers could not reach agreement on “track and trace” language, including whether the pharmaceutical supply should be tracked at the unit or lot level. With the user fee legislation moving forward without “track and trace” requirements – and with state level requirements in California set to take effect in the coming years – Congress is expected to return to this issue in the near future.
On October 24, 2012, a bipartisan, bicameral working group unveiled a “Draft Proposal to Improve Drug Distribution Security.” This discussion draft reflects the ongoing effort to develop consensus policy on drug distribution security, including track and trace requirements. The draft legislation would initially establish a lot level tracing system with a pedigree requirement. Under this system, manufacturers would be required to affix a product identifier to each saleable unit. The legislation also sets the groundwork for a unit level tracing system that would be put in place in later years through rulemaking, following a series of pilot programs and public meetings. Congressional staff is currently reviewing input from members of Congress and stakeholders on the draft and are working to develop consensus.
Authors: Julie K. Tibbets, Partner, Alston & Bird LLP, and Guillermo E. Cuevas, Associate*, Alston & Bird LLP. Both attorneys are members of the Food, Drug & Device practice in the Washington, DC office of Alston & Bird LLP.
*Admission pending in New York. Practicing under the supervision of a DC-licensed attorney.