United States: More Legislation To Watch

Last Updated: January 29 2018
Article by James Beck

Like a lot of large firms, Reed Smith has a number of blogs. We don't mention them much because, DDL has product liability pretty well covered, and the others mostly don't overlap a lot with what we do. But occasionally....

The other day, Reed Smith's Health Industry Washington Watch blog described a couple of pieces of legislation that, without much fanfare, passed a subcommittee of the House of Representatives (Energy and Commerce Health Subcommittee ) while everyone was distracted, watching the Senate's struggles to keep the government functioning.

We're interested because both of them, were they ever to be enacted into law, could affect our sandbox.

The first bill, H.R. 2026, is the Pharmaceutical Information Exchange ("PIE") Act (see here for more information) This bill would be another step forward in the now decades-long struggle to legalize truthful manufacturer communications about off-label uses. It's not very long – one paragraph:

Health care economic information or scientific information provided to a payor, formulary committee, or other similar entity with knowledge and expertise in the area of health care economic analysis carrying out its responsibilities for the selection of drugs for coverage, reimbursement, or other population-based health care management, shall not be considered false or misleading or any other form of misbranding . . ., if it is based on competent and reliable scientific evidence and relates to an investigational new drug or an investigational use of an approved drug. In order for information relating to an investigational use of an approved drug to be provided pursuant to this subparagraph, there must have been submitted to the Secretary a supplemental application for approval of such use, or the study or studies needed to support the submission of a supplemental application for such use must have been completed with the intention that a supplemental application will be submitted to the Secretary for approval of the use. For purposes of this subparagraph, scientific information includes clinical and pre-clinical data and results relating to an unapproved drug therapy, or drug indication, or other condition of use being investigated or developed.

We're not sure why, but as phrased PIE only applies to drugs, but not medical devices.

As passed by the House, PIE allows off-label communications basically to third-party payors ("TPPs"), about off-label uses. Communications can begin when "the study or studies needed to support the submission of a supplemental application [to the FDA] for such use . . . have been completed." If the supplemental application has been submitted, great, but it doesn't need to be. And more than just studies can be discussed – so can "clinical and pre-clinical data and results," as long as it qualifies as "competent and reliable scientific evidence."

PIE still doesn't comport with the First Amendment, since it limits both the audience and the circumstances under which manufacturers may speak about truthful scientific information, while not imposing any limits on anyone else. Thus it still discriminates both by topic and speaker under Reed v. Town of Gilbert, 135 S. Ct. 2218, 2230 (2015). Nonetheless PIE would be a decent step in the right direction in terms of litigation.

First, it would greatly reduce litigation by TPPs over alleged off-label promotion. Second, it would be another exception to the FDA's increasingly tattered prohibition of truthful off-label speech, and each exception makes the ban itself less defensible against First Amendment challenges. See Greater New Orleans Broadcasting Ass'n, Inc. v. United States, 527 U.S. 173, 190 (1999) (holding the "regulatory regime is so pierced by exemptions and inconsistencies that the Government cannot hope to exonerate it"). Third, it makes the other side's rhetoric against off-label promotion less credible, particularly on occasions when the exact same information is already being transmitted to TPPs. Indeed, one could argue that a prescribing physicians' medical practice is a "similar entity with knowledge and expertise in the area of health care economic analysis carrying out its responsibilities for the selection of drugs for . . . other population-based health care management."

The second bill is called the Over-the-Counter Monograph Safety, Innovation, and Reform Act ("OM-SIRA"). Apparently the subcommittee passed a "discussion draft" that doesn't even have an "H.R." number. Without making a word-for-word comparison, this draft appears substantively the same as S.2315, which is available here. OM-SIRA deals with nonprescription drugs that are marketed without an approved new drug application. Yes, there are such things, and we blogged about preemption issues related to them here. And preemption is what piques our interest about OM-SIRA. As summarized by the Reed Smith blog, OM-SIRA:

would create a system for future changes to drug monographs through an administrative order procedure with the opportunity for development meetings or other consultations, submission of comments on proposed orders, and dispute resolution procedures.

This means that OTC drugs under OM-SIRA would be subject to the administrative proceedings created by the bill before their manufacturers could modify those products or their labels. Interestingly, the FDA can act unilaterally to modify a label, but not OTC manufacturers. §505G(b)(4)(B)). Manufacturers can act unilaterally only as to "minor" changes that do not affect "safety and effectiveness" §505G(c).

If OM-SIRA were enacted in its present form, it appears to us that the administrative approval procedures in the bill would provide a basis for implied impossibility preemption under the " independence principle" of PLIVA, Inc. v. Mensing, 564 U.S. 604 (2011), and Mutual Pharmaceutical Co. v. Bartlett, 570 U.S. 472 (2013). Since implied preemption operates independently of express preemption, it would not be subject to the partial savings clause in 21 U.S.C. §379r(e), which would be very good thing for defendants in such litigation.

With respect to both bills, we'll see what happens. Maybe Congress won't be PIE in the sky this time around.

This article is presented for informational purposes only and is not intended to constitute legal advice.

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