Podcast: Developments in FDA & DOJ Regulation and Enforcement of Manufacturer Communications
The rules regarding truthful, non-misleading communications by medical product manufacturers have long been unclear. In recent years, there have been significant developments in the case law, as well as in FDA guidance and DOJ policy, with regard to manufacturer communications about unapproved uses of their medical products. In this Ropes & Gray podcast, life sciences partner Kellie Combs is joined by government enforcement and litigation partners Joan McPhee and Doug Hallward-Driemeier to discuss the most recent developments in this area, relating both to FDA policy development and DOJ enforcement priorities.
Kellie Combs: Hi, I am Kellie Combs, a partner in the Washington D.C. office of Ropes & Gray and a member of the life sciences practice group. Today, I am joined by Joan McPhee, a partner in our government enforcement group and resident in our New York office, and Doug Hallward-Driemeier, a partner in D.C. and the chair of the firm’s appellate & Supreme Court practice. Joan, Doug, and I frequently work together to advise pharmaceutical, biotechnology, and medical device companies on various issues associated with the FDA’s regulation of manufacturer communications. There have recently been several significant developments in this area, relating both to DOJ enforcement priorities and FDA policy development. Doug, would you like to kick us off by describing some of them?
Doug Hallward-Driemeier: Thank you, Kellie. Well, you're right, there's a lot going on, both at the DOJ and FDA, so it's good to level set about the most recent developments, even three in the last two months. At the DOJ, at the end of February, the Deputy Assistant Attorney General for the Consumer Protection Branch, which is responsible for enforcing laws like the Food, Drug, and Cosmetic Act, a man named Ethan Davis gave a fairly significant speech. He recognized that there are important First Amendment issues that relate to the government's enforcement efforts. And as a consequence, he said that the agency, the government, is focusing on cases where manufacturer speech is false or misleading, or where the off-label promotion had resulted in patient harm – and that marks a pretty significant clarification of the DOJ's enforcement priorities. At the FDA, actually there are a couple of developments even as recent as March. First, the FDA's Chief Counsel, Becky Wood, gave a speech acknowledging that the First Amendment has a significant role to play in the agency's regulation of manufacturer communications, and that a cross-cutting working group at the FDA is endeavoring to bring more clarity to regulated parties. She also indicated the agency is looking to modernize and refresh its approach to warning letters to promote clarity and consistency with the First Amendment. Then on March 16th, the FDA granted an industry petition that had requested an indefinite stay of revisions to the intended use regulations. Those amendments to the regulations would have authorized the government to consider a fairly amorphous totality of the evidence standard to determine when a manufacturer was promoting a new intended use. So, Kellie, you know the FDA's attempt to revise these intended use regulations has a long and fairly convoluted history – maybe you can tell us what exactly happened here, and what the current state of play is?
Kellie Combs: Sure. So long and convoluted is almost an understatement in this case. The industry had been advocating for changes to the intended use regulations for many years because, among other things, the regulations had allowed the government to consider mere knowledge of off-label use as evidence that a manufacturer intended to promote off-label. In September 2015, the FDA issued a proposed rule to remove that knowledge prong, but then in January 2017, when it issued the final rule, the FDA chose to completely rewrite the regulation, allowing the government to consider the "totality of the evidence"—including knowledge by the way—in determining intended use. This totality standard, to many of us, came completely out of left field, and so the industry groups banded together—PhRMA, BIO, and the Medical Information Working Group—which is a coalition of drug and device companies for which Ropes is co-counsel, and we petitioned the agency to indefinitely stay the final rule on two separate grounds. Number one, that it violated the Administrative Procedure Act because interested parties had not had the chance to comment on it. And number two, because the statute and case law did not support such a sweeping standard to determine intended use, and instead provided that the government should look only to a manufacturer's marketing claims. In response to those concerns, the FDA delayed the effective date of the intended use rule for a full year until March 2018. Then in January of 2018, the FDA proposed to delay the rule until, "further notice." And then finally on March 16th, that indefinite delay became official. So the question now, of course, is where does that leave us and what evidence can the FDA consider to determine intended use? The FDA has said it's reverting back to the standard from September 2015 in the proposed rule that mere knowledge will not constitute evidence of intended use. But a close read of the preamble to that rule and the various sources that the FDA cites there suggest that the FDA should not consider mere knowledge, and that the FDA should not consider mere knowledge in addition to non-promotional safe harbored speech, such as dissemination of reprints under relevant guidance, as evidence of intended use. Now ideally, the FDA would confirm exactly what its position is, but in any event, I think that the fact that the FDA has moved away from the totality standard, especially combined with those positive remarks from Becky Wood that you mentioned, is a really favorable development for the industry.
Joan, I'd be interested to hear your perspective. There have certainly been a lot of developments, many of which we haven't even touched upon yet. So what developments are you, as an enforcement lawyer, really focusing on?
Joan McPhee: Well, one development of significant interest is the government's recent and repeatedly expressed commitment to the rule of law. Beginning last fall and continuing into this year, in both public remarks and also in formal memoranda, senior DOJ officials have highlighted the rule of law and underscored the need for clarity and consistency if companies are to know the rules of the road, which is of course a prerequisite to being able to conform their conduct to the governing law. So the DOJ's focus on clarity and consistency has manifested itself in several ways. Back in October of last year, Deputy Attorney General Rod Rosenstein disclosed a Department of Justice-wide initiative to clean up old policy memoranda, and to update and finalize current policies in official compilations such as the U.S. Attorneys’ Manual. Separately and close on the heels of Rod Rosenstein's remarks, Attorney General Jeff Sessions and Associate Attorney General Rachel Brand took on an area that has been fraught with uncertainty for manufacturers for many years. Specifically in back-to-back memos, they clarified and confirmed that agency guidance documents do not have the force of law and will not be relied upon by the DOJ in bringing affirmative litigation or other enforcement actions. These developments are welcome. It's also encouraging that this new focus on clarity and consistency is not limited to the DOJ, but also appears to be front of mind and a priority for the FDA as well. In January of this year, as one example, FDA Commissioner Scott Gottlieb took on the issue of clarity and consistency and stated that the FDA is committed to providing clear rules to medical product manufacturers about fundamental issues such as how the FDA will determine the intended use of a medical product. So given the repeated attention to these issues at the DOJ and FDA, it seems there's room for cautious optimism that we could be seeing the early stages of a government-wide effort to provide clarity to manufacturers in an area that has long been plagued by uncertainty.
Kellie Combs: Important developments indeed. And is there anything else that you can tease out from those recent government pronouncements about where the DOJ might be headed?
Joan McPhee: There are some early indications in recent DOJ and FDA pronouncements that the government is focusing its regulatory and enforcement priorities in the area of manufacturer communications, specifically on false and misleading statements and other fraudulent conduct that causes patient harm and adversely affects the public health. And in February of this year, Deputy Assistant Attorney General Ethan Davis spoke directly to the DOJ's enforcement priorities regarding manufacturer communications about their medical products. Mr. Davis heads the Consumer Protection Branch at the DOJ which, as he noted, works closely with U.S. Attorneys' Offices and also Civil Frauds at the DOJ—and the Consumer Protection Branch is responsible for enforcing statutes like the Federal Food, Drug, and Cosmetic Act. Mr. Davis made several notable statements. He noted that the DOJ recognizes the value of off-label uses, and he made clear that the Department doesn't want to stand in the way of doctors providing the most appropriate medications and the best medical care to patients. He also made clear that DOJ doesn't want to go after technical regulatory violations, noting that pursuit of such violations can lead to inefficiencies, and it can chill innovation by detracting from manufacturers' efforts to invent new products and improve lives. He said that the DOJ's current enforcement priorities are on false and misleading or other fraudulent conduct causing patient harm. And likewise, over at the FDA, in March of 2018, Rebecca Wood, Chief Counsel at the FDA, gave a speech which echoed many of the points that had previously been made by Ethan Davis. She stressed that the FDA would take a risk-based approach to promotion-related Warning Letters as a way to focus the FDA's limited resources on those matters that posed significant public health risks to patients and consumers, and that they would focus their attention there rather than on overly technical or insignificant violations, really echoing quite closely the remarks that were made by Ethan Davis. And if the DOJ and FDA are in fact aligned on the notion that the government should focus its enforcement resources on cases that involve false and misleading statements or other fraudulent conduct, conduct that harms the public health, then an important and logical corollary from that is that where manufacturers are engaging in truthful, non-misleading communications about their medical products, those communications should not be the subject of enforcement activity going forward, either at the FDA or by the DOJ.
Kellie Combs: And finally, Doug, what about the constitutional concerns here? What position is the government taking in response to concerns raised by MIWG, PhRMA, and other industry groups?
Doug Hallward-Driemeier: Well, PhRMA, MIWG and others in the industry have actually raised two related constitutional issues. The first is a concern about overly broad restrictions on manufacturer speech that raise issues under the First Amendment. But second, and relatedly, they've expressed concern about the lack of clarity regarding which communications are permissible or in what circumstances they're permissible, and that lack of clarity raises a Fifth Amendment concern—Fifth Amendment being the Due Process Clause and the notion that you're entitled to have advance notice when your conduct would run afoul of the law. And especially when we're talking about speech, that lack of clarity tends to chill speech, and so that's why it's related, interrelated, with the First Amendment. And I think what we've seen over the last few months is an increasing recognition, both on the part of the FDA and DOJ, that these constitutional concerns are real and that the government needs to take account of them in deciding how it's going to enforce, but also how it's going to regulate, the industry. So I hearken back to when the Supreme Court first issued a decision in 2011 called Sorrell v. IMS, and then shortly thereafter, the Second Circuit, in a case called Caronia, where the courts really did make clear that the First Amendment applied to manufacturer speech about their products because of the important health consequences of getting truthful information about uses of these products out. And at the time, I remember serving on a couple of panels with DOJ attorneys who tried to really put those decisions in a box and say they really weren't that significant—they were really just about some poorly drafted jury instructions in the case of Caronia. And even as late as January 2017, when the FDA issued in the final weeks of the Obama administration, a memorandum regarding application of First Amendment to the FDA's regulation of manufacturer speech, there was the suggestion that really those decisions weren't that relevant because it was always acceptable for government to use speech as "evidence of illegal conduct" while really ignoring that, in a very real sense, it was the speech itself that the government was purporting to regulate, but that view seems to have changed in the last few months. And, you know, we can start actually at the end of last year with the new FDA Commissioner, Scott Gottlieb, in a statement that he made in September. He said, "It's very clear right now that the courts recognize commercial speech as constitutionally protected, and it's very clear that the agency has lost a series of First Amendment challenges." He went on to say, "We can't be operating from a platform where our regulation might be in perpetual conflict with the courts." And that recognition by him is, I think, itself a significant development. More recently, in the talk given by Becky Wood that we've mentioned, she stated that there is, "No question, in light of cases like Sorrell and Caronia that the First Amendment has a significant role to play in the agency's regulation of promotional materials." She went on to say that the agency has put together this cross-cutting First Amendment working group of senior career people at the FDA, and that they are really focused very, very closely on addressing the way that First Amendment implicates what the agency does. Of course, we'll have to stay tuned to see what that working group comes up with, but it's certainly very encouraging to know that the FDA is no longer with their head in the sand, but instead recognizing that the First Amendment really is a significant factor that they have to weigh.
Kellie Combs: Well, it certainly sounds like there is a lot more to come. We'll stay abreast of those future developments, but that's all the time we have for now. Thanks very much, Joan and Doug, for your insights. And thanks to all of you for listening. Please visit www.ropesgray.com for news and developments in the pharma and device industry.