United States: Enforcement Update: FDA Approval And The Road to DOJ's Radar Screen

William Gould is a Partner in our Washington, D.C., and Jeremy Sternberg is a partner in our Boston office.

President Trump recently expressed frustration with the Food and Drug Administration's (FDA) drug approval process. He believes that in some cases it is too slow. He is certainly not alone in this assessment. Others have criticized the significant hurdles that drug manufacturers have to traverse before a drug is approved as safe and effective. Though the 21st Century Cures Act, enacted by Congress in December 2016, expedited the process by which drugs and devices are approved. Stated persuasively, the argument goes, if a drug has been proved to be safe, why are we so strict in enforcing the requirement that it also be effective, particularly with potentially lifesaving drugs, like cancer therapies? More pointedly, should we be allowing the government to tell the family of a grandfather, or let's make it even harder, a child, who may benefit from a lifesaving drug that they cannot use the drug because it has only made it through a phase one trial?

In defense of the government's traditional interpretation of this portion of the Food, Drug, and Cosmetic Act (FDCA), there are some failsafes for this extreme situation built into the law, such as the compassionate use regulations. Putting that aside for the moment, it is going to be interesting for the pharmaceutical and medical device industries to watch how the new administration operationalizes its stated interest in getting drugs and medical devices to market more quickly and in turn, more economically. There are several cross currents here. One is whether the federal government will follow the many states which have adopted "right-to-try" laws that allow patients access to unapproved drugs from manufacturers without FDA involvement. However, as set forth above, the FDA does have an expanded access program for compassionate use and a number of commentators believe that it is industry's reluctance, in part from a product liability fear, not FDA barriers, that has made the program relatively little used to date. From another direction, the administration's just released budget outline proposes to cut The Department of Health and Human Services, which houses the FDA, by 18 percent or 15.1 billion dollars. Only four agencies have steeper proposed cuts. It is not yet clear how such a cut would impact FDA and its drug approval process. Nevertheless, if the FDCA continues to be implemented as it traditionally has been, budget reductions of that magnitude are likely to slow drug approval. Thus, in a land of fewer resources, there would probably need to be changes to the FDCA, which requires that a drug be proved to be both safe and effective for approval, in order for there to be meaningful streamlining of the US approval process.

The Department of Justice will also likely impact any evolution that occurs in the drug approval process. Pharmaceutical and medical device companies operate in one of the most, if not the most, scrutinized and regulated industries. A number of law enforcement and regulatory agencies (and potential whistleblowers and their lawyers) are constantly observing all aspects of the health care space, from drug trials, manufacturing, marketing, to distribution. Very recently, a South Florida clinic used an unapproved stem cell therapy on three women who subsequently went blind.  To make matters worse, the clinic operated with a website that could easily leave its patients with the impression that they were enrolling in an FDA approved clinical trial.  This appears to not have been the case. 

Several years ago, the lead prosecutor for DOJ's Southern District of NY Criminal Division was on a panel at the ABA's very enjoyable annual National Institute on White Collar Crime. In answer to a question about his office's priorities, he said that he began his day with coffee and three papers:  the New York Times, the Wall Street Journal, and the Washington Post.  The line appropriately drew a laugh.  He responded, "No, I'm serious." His point was that the press as a general matter knew first.  Whatever there was to know, some reporter was usually at the hospital room or the whistleblower's doorstep before the government. This is particularly true in complicated fraud and regulatory matters. This federal prosecutor was making the accurate point that the press is often an initial investigative source for the government.  There was also an unstated implication that if it is on the front page of the Times, and it is bad, the government cares.  This should be a sobering lesson for companies and people who serve in the health care industry. The South Florida clinic, mentioned above, may have been a candidate for government enforcement before receiving press; it now will clearly get a hard look by DOJ, FDA, and others. 

The same has been (and likely will be) true for pharmaceutical and medical device companies who price drugs and products in a way that draws public notice.  FDA's approval, or disapproval, timeline will be interesting to watch as the new administration populates the FDA's halls in Maryland.  However those matters land, accelerated approval of marketed drugs, should it occur, will likely have little impact on the significant enforcement exposure that the pharmaceutical and device industry faces each day.  If the front gate is opened a bit more for drug and device approval and use, it will be even more necessary to make certain that appropriate guiderails are in place to ensure compliance with the FDCA and all its companion laws and regulations.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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