The U.S. Food and Drug Administration (FDA) has announced an upcoming webinar on its proposed rule on the regulation of laboratory developed tests (LDTs).

The webinar is scheduled for October 31, 2023 from 1:00 – 2:00 PM ET and will include an overview of the proposed rule, a description of the proposed phaseout of FDA’s general enforcement discretion approach to LDTs, and a question and answer session. Stakeholders must submit questions by October 23, 2023 to be considered for the discussion.

For our detailed analysis of the 83-page proposed rule, please see our two-part Insight series: Part I: Underpinnings of FDA’s Proposed Rule and Part II: FDA’s Proposed Phaseout Policy – Key Considerations & Open Questions.

If you have questions on the proposed rule or its potential impact, contact the authors or a member of the Goodwin Life Sciences Regulatory & Compliance team.

After an over decade-long discourse amongst interested stakeholders, on October 3, 2023, FDA unveiled its proposed rule and policy to increase oversight over LDTs.

If finalized as proposed, FDA would implement a new “phaseout policy” that would, across five stages and within four years, apply the same regulatory requirements applicable to in vitro diagnostics (IVDs) on the majority of clinical laboratories offering tests as LDTs. Once implemented, tests offered as LDTs that do not meet the applicable regulatory requirements, including premarket review and the quality system regulation, may be expected to come off the market.

In our first post in this Insight series, we recapped the underpinnings of the proposed rule and policy, including the significant discussions contained in the proposed rule on (1) the rationale for the agency’s proposed phaseout policy and (2) FDA’s legal authority for issuing the rule.

In this Insight, we provide our full analysis of FDA’s proposed five-stage phaseout policy and the open questions that remain. Read the full Insight here.

Summary:

On September 29, 2023, the U.S. District Court for the District of Columbia vacated a Trump-era rule from 2021 that allowed insurers to exclude drug manufacturer co-pay support coupons and assistance from a patient’s annual cost-sharing caps.  This practice, commonly referred to as a copay accumulator program, is typically used by insurance companies and pharmacy benefit managers to control drug spending, especially for high-cost specialty drugs, like those required by HIV patients.

Under typical prescription drug insurance programs, patients are obligated to pay a deductible and cost-sharing (i.e. a copay) throughout the plan year, up to an out-of-pocket spend cap.  Once the patient hits that spend cap, the insurance company is responsible for the patient’s prescription drug costs.

Under an accumulator program, on the other hand, an insurance company does not count a manufacturer’s copay support (for example, a copay card that a patient presents at a pharmacy to cover the cost of the copay) towards a patient’s annual deductible or out-of-pocket maximum.  By excluding manufacturer copay support and coupons from patients’ cost-sharing cap, this means that, even after a manufacturer’s copay support is exhausted for the year, patients remain on the hook for all cost sharing obligations up to the insurance plan’s out of pocket maximums.  Many states have implemented laws to ban copay accumulator programs, asserting that such programs actually increase the financial burden on patients, especially with respect to specialty or more expensive drugs.  As of June 2023, 19 states have implemented copay accumulator program bans.

HIV and Hepatitis Policy Institute et al v. HHS was brought by patient advocacy groups including the HIV and Hepatitis Policy Institute and the Diabetes Patient Advocacy Coalition, among others, who challenged a May 2020 rule from HHS, the “Notice of Benefit and Payment Parameters for 2021” (85 Fed. Reg. 29164, 29230-35, 29261 (May 14, 2020)) (the “2021 NBPP”) that permitted insurers to impose accumulator polices.  Plaintiffs opposed the accumulator program, asserting that manufacturer copay support should count towards calculating patients’ cost sharing obligations and should not be excluded from such calculations.

In ruling in favor of the plaintiffs on their motion for summary judgment, the U.S. District Court set aside the 2021 NBPP, largely supporting plaintiffs’ challenges that the 2021 NBPP rule’s language is internally contradictory, that it runs counter to the statutory definition of “cost sharing” found in the Affordable Care Act, and that it runs counter to the agencies’ pre-existing regulatory definition of “cost sharing.”  HHS had previously defined “cost sharing” in a 2012 regulation as “any expenditure required by or on behalf of an enrollee with respect to essential health benefits,” which by its terms includes “deductibles, coinsurance, copayments, or similar charges, but excludes premiums, balance billing amounts for non-network providers, and spending for non-covered services.”  See 45 C.F.R. 155.20.  In other words, the regulation treats cost sharing is an “expenditure” by or on behalf of a plan enrollee.  According to plaintiffs, and as affirmed by the court, this includes manufacturer copay assistance support.

The court disagreed with the government’s technical arguments regarding the language of the 2021 NBPP (i.e. that manufacturer copay support is actually a “reduction” in the amount the patient owes towards cost sharing or a reduction in the “actual economic impact” on the drug manufacturer and not an “expenditure”), concluding that the 2012 regulation was likely intended to define “cost sharing” as costs that are (1) required of an insurance plan enrollee and (2) paid by or on behalf of that enrollee – including manufacturer copay coupons and assistance.

It is unclear if the ruling will be appealed; however, as a result of the District Court’s ruling, the government will use an earlier 2020 version of the rule which allowed insurers to exclude from cost-sharing caps only copay support coupons for branded drugs that have available generic equivalents; if there is no generic equivalent, under the 2020 version of the rule, manufacturer copay support must be counted toward cost sharing.

Conclusions:  The U.S. District Court ruling is a significant development for drug manufacturers who offer copay support as a means of providing relief to patients with respect to cost-sharing requirements under their insurance coverage as opposed to offering significant rebates, discounts, or other contracting strategies.  However, manufacturers of branded drugs with a generic equivalent will still need to consider how copay accumulator programs could affect access in those states that have not yet banned the practice.  Notably, in the wake of this ruling, patient advocacy organizations have indicated that they will continue to advocate for a comprehensive state and federal level ban on copay accumulator programs (e.g. Immune Deficiency Foundation).

Goodwin will continue to monitor any further developments in this case and the impact of copay accumulator programs on the market.

On October 3, 2023, the U.S. Food and Drug Administration (FDA) published its widely anticipated proposed rule on the regulation of laboratory developed tests (LDTs). The proposed rule and policy are the latest in an over decade-long discourse amongst interested stakeholders – laboratories, IVD manufacturers, regulatory agencies, Congress, providers, and patients – as FDA has sought to enhance oversight over LDTs.

In this Insight, we recap the underpinnings of the proposed rule and policy, including the two lengthy discussions contained in the proposed rule on (1) the rationale for the agency’s proposed phaseout policy and (2) FDA’s legal authority for issuing the rule.  Stay tuned next week for our additional analysis of the details of FDA’s proposed five-stage “phaseout” policy and the open questions that remain.

Contact the authors or a member of the Goodwin Life Sciences Regulatory & Compliance team for any questions. Read the full Insight here.

On September 29, 2023, the U.S. Food and Drug Administration (FDA) posted and scheduled for publication its long-awaited proposed rule concerning FDA regulation of laboratory developed tests (LDTs).  If enacted, the proposed rule would amend the Agency’s regulations to make explicit that in vitro diagnostic products (IVDs) are devices under the Federal Food, Drug, and Cosmetic Act; and this includes when the manufacturer of the IVD is a laboratory.

Upon finalization of the rule, FDA proposes to phase out its general “enforcement discretion” approach for LDTs so that tests manufactured by a laboratory would generally fall under the same enforcement approach as other IVDs.

Comments to the proposed rule are due 60 days after the date of publication of the proposed rule in the Federal Register. We will provide our full analysis of the proposed rule in the coming days. Contact the authors or a member of the Goodwin Life Sciences Regulatory & Compliance team for any questions.

Last week, FDA released a draft guidance, “Labeling for Biosimilar and Interchangeable Biosimilar Products” that—when finalized—will revise and replace its July 2018 final guidance, “Labeling for Biosimilar Products.”  FDA noted that this 2023 Draft Guidance reflects recommendations based on the “valuable experience about labeling considerations” that FDA has gained through its approval of 42 biosimilar products, including four interchangeable biosimilar products.

Notably, the 2023 Draft Guidance provides further recommendations regarding when to use a biosimilar or interchangeable biosimilar product name, and when to use the reference product name in labeling:

• The biosimilar or interchangeable biosimilar product’s proprietary name[1] (or if the product does not have a proprietary name, its proper name[2]) should be used when –
  • Information in the labeling is specific to the biosimilar (or interchangeable biosimilar) product, including such references to the product in the INDICATIONS AND USAGE, DOSAGE AND ADMINISTRATION, DESCRIPTION, and HOW SUPPLIED/STORAGE AND HANDLING sections, and/or
  • For “directive statements and recommendations for preventing, monitoring, managing, or mitigating risk,” including such references to the product in the BOXED WARNING, CONTRAINDICATIONS, WARNINGS AND PRECAUTIONS, and DRUG INTERACTIONS sections.
• When referring to the drug substance in the labeling, the biosimilar or interchangeable biosimilar product’s proper name should be used.
• When information specific to the reference product is described in the biosimilar or interchangeable biosimilar product’s labeling (for example, data from clinical trials of the reference product in the ADVERSE REACTIONS and CLINICAL STUDIES sections), the reference product’s proper name should be used.
• In sections of the labeling containing information that applies to both the biosimilar (or interchangeable biosimilar) product and the reference product—such as BOXED WARNING, CONTRAINDICATIONS, WARNINGS AND PRECAUTIONS, ADVERSE REACTIONS—the labeling should use the core name of the reference product followed by the word “products.”[3]

FDA acknowledges that the application of these recommendations is highly context-dependent and may not always be clear, but recommends that biosimilar and interchangeable biosimilar product sponsors evaluate all statements in product labeling carefully to determine the most appropriate product identification approach in each instance.

Another noteworthy aspect of the 2023 Draft Guidance is the Agency’s recommendation regarding the biosimilarity statement and footnote in the HIGHLIGHTS section of a biosimilar or interchangeable biosimilar product’s labeling.[4]  Previously, FDA recommended a biosimilarity statement for a biosimilar product and an interchangeability statement for an interchangeable biosimilar product.  The 2023 Draft Guidance now recommends a statement and footnote in the HIGHLIGHTS section that the product is biosimilar to the reference product, regardless of whether the product is a biosimilar or an interchangeable biosimilar to the reference product. In the Federal Register notice announcing the 2023 Draft Guidance, FDA acknowledges that this marks an “evolution in our thinking” and explains that “a labeling statement noting that certain products within a 351(k) [Biologics License Application] have been approved as interchangeable, and explaining the interchangeability standard, is not likely to be useful to prescribers, who can prescribe both biosimilar and interchangeable biosimilar products in place of the reference product with equal confidence that they are as safe and effective as their reference products.” FDA further states that “information about interchangeability is more appropriately located in the Purple Book rather than labeling.”

Other notable elements of the 2023 Draft Guidance include recommendations regarding how to describe pediatric use data in a range of scenarios and how to incorporate immunogenicity data. With respect to immunogenicity data, the 2023 Draft Guidance suggests that a contextual paragraph[5] generally be included in the relevant CLINICAL PHARMACOLOGY subsection before describing the available immunogenicity data for the reference product and the biosimilar or interchangeable biosimilar product.  The 2023 Draft Guidance also outlines the Agency’s expectations for patient labeling—such as a Medication Guide, Patient Information, or Instructions for Use—for a biosimilar or interchangeable biosimilar product, if the reference product has such patient labeling.

Information on how to submit comments on the 2023 Draft Guidance can be found at https://www.regulations.gov/docket/FDA-2016-D-0643.

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[1] The proprietary name of a biosimilar product is a brand name determined by the sponsor.  The fictitious example provided in the 2023 Draft Guidance is “NEXSYMEO.”

[2] The proper name of a biosimilar product is the nonproprietary name designated by FDA that consists of a biological product’s core name plus a unique four-letter suffix.  The fictitious example provided in the 2023 Draft Guidance is “replicamab-cznm.”

[3] The fictitious example provided by FDA in the 2023 Draft Guidance is “replicamab products”.

[4] The fictitious example provided by FDA in the 2023 Draft Guidance is “NEXSYMEO (replicamab-cznm) is biosimilar* to JUNEXANT (replicamab-hjxf)” and the accompanying footnote is “Biosimilar means that the biological product is approved based on data demonstrating that it is highly similar to an FDA-approved biological product, known as a reference product, and that there are no clinically meaningful differences between the biosimilar product and the reference product. Biosimilarity of [BIOSIMILAR OR INTERCHANGEABLE BIOSIMILAR PRODUCT’S PROPRIETARY NAME] has been demonstrated for the condition(s) of use (e.g., indication(s), dosing regimen(s)), strength(s), dosage form(s), and route(s) of administration) described in its Full Prescribing Information.”

[5] The Agency’s suggested paragraph is, “The observed incidence of anti-drug antibodies is highly dependent on the sensitivity and specificity of the assay.  Differences in assay methods preclude meaningful comparisons of the incidence of anti-drug antibodies in the studies described below with the incidence of anti-drug antibodies in other studies, including those of [proper name of reference product] or of other [core name] products.”

On September 6, 2023, the US Food and Drug Administration (FDA) released a trio of draft guidances in its efforts to “strengthen and modernize” the 510(k) Program and provide for more “predictability, consistency, and transparency” for the 510(k) premarket review process. In this post, we discuss the two new draft guidances with broad applicability to the 510(k) Program:

• “Best Practices for Selecting a Predicate Device to Support a Premarket Notification [510(k)] Submission”
• “Recommendations for the Use of Clinical Data in Premarket Notification [510(k)] Submissions”

The two draft guidances address a number of fundamental issues of concern with the 510(k) process.

Read the full client alert here.

Background

Earlier this year, the UK’s medicines regulator, the Medicines and Healthcare products Regulatory Agency (MHRA), announced that a new International Recognition Procedure (IRP) will be put in place for the approval of new medicines from 1 January 2024. On 4 September 2023, the MHRA announced the publication of detailed guidance on this new procedure, which will replace the European Commission Decision Reliance Procedure (ECDRP). The Decentralised and Mutual Recognition Reliance Procedure (MRDCRP), which allows the MHRA to have regard to approvals in the EU through the decentralised and mutual recognition procedures, will be incorporated under the umbrella of the IRP.

European Commission Decision Reliance Procedure

The ECDRP was introduced post-Brexit as a temporary measure to try and ensure continued access to new medicines from the EU for patients in Great Britain until 31 December 2023.

Under the ECDRP, the MHRA may rely on a decision taken by the European Commission on the grant of a new marketing approval in the EU through the centralized procedure, in order to grant a new marketing approval in Great Britain more quickly.

International Recognition Procedure

From 1 January 2024, the MHRA will have regard to decisions already made by medicines regulators in Australia, Canada, the European Union, Japan, Singapore, Switzerland and the United States (Reference Regulators).

The IRP will be open to applicants that have already received a marketing approval for the same product from one of the MHRA’s specified Reference Regulators. The MHRA defines “same product” as “as having the same qualitative and quantitative composition (active substance(s) and excipients), and the same pharmaceutical form, from applicants belonging to the same company or group of companies or which are licensees.”

There are two procedures that can be used for initial applications for a new marketing approval using the IRP:

• Recognition A – applications under this procedure will be approved within 60 days (excluding clock stops), unless there are any major objections which cannot be resolved within 60 days. If this occurs, the timetable may revert to Recognition B. To qualify for this procedure, the Reference Regulator must have given approval for the product within the last two years, the manufacturing process must be unchanged and the product must not meet any of the 24 listed conditions of Recognition B.

• Recognition B – applications under this procedure will be approved within 110 days (excluding clock stops), unless there are any major objections at day 110. If this occurs, the timetable will then revert to 210 days and formal advice from the Committee for Medicinal Products for Human Use will be sought on approvability. To qualify for this procedure, the Reference Regulator must have given approval for the product within the last ten years, and at least one of 24 listed conditions must apply. The conditions include if the product is: (i) designated as an orphan medicinal product in Great Britain, (ii) an advanced therapy medicinal product, (iii) a cutting-edge technology, or (iv) a first-in-class active substance.

Practical Implications

The IRP will allow the MHRA to take into account the expertise and decision-making of trusted medicines regulators when approving a new medicine from 1 January 2024.

It is unclear if there are any specific requirements for choosing the Reference Regulator if the product is approved by more than one eligible medicines regulator.

As a final note, the IRP will sit alongside the MHRA’s current national procedures. Any ECDRP and MRDCRP applications for marketing approval received by the MHRA after 1 January 2024 will be assessed under the new IRP. Any ECDRP and MRDCRP applications for marketing approval received by the MHRA before 31 December 2023 will be assessed under the current ECDRP and MRDCRP respectively.

Throughout August 2023, the Office of Information and Regulatory Affairs, Office of Management and Budget, Executive Office of the President (“OIRA”) has held stakeholder meetings regarding a proposed rule which, if enacted, would amend the U.S. Food and Drug Administration’s  (“FDA’s”) regulations to make explicit that laboratory developed tests (“LDTs”) are devices under the Federal Food, Drug, and Cosmetic Act. The next stakeholder meeting on the proposed rule is scheduled for September 6, 2023.

Per its website, OIRA received the proposed rule from FDA on July 26, 2023. The proposed rule was initially published this past spring on the Biden Administration’s Unified Agenda of Regulatory and Deregulatory Actions with a target publication date of August 2023. The forthcoming stakeholder meeting on September 6th suggests that OIRA may continue its review process well into September, if not later.

The publication of the proposed rule would mark the first significant FDA action on LDTs since its two 2014 draft guidances (available here and here) and 2017 discussion paper. The proposed rule is also expected to be controversial after prior U.S. Department of Health & Human Services statements concerning regulation of LDTs and legislative attempts to further define the LDT regulatory framework. Once cleared by OIRA, the proposed rule will be published in the Federal Register and subject to public comment.

We will continue to monitor for updates on the LDT proposed rule. Contact Goodwin Life Sciences Regulatory & Compliance team members for any questions.