March 5, 2020 - AI + Robotics, FDA, United States

February FDA Updates

As we move into 2020, we’re starting a regular blog series highlighting noteworthy FDA updates regarding regulatory compliance, fraud and abuse cases, and product development issues every month. Our February recap is below.

1. Two Owners of Telemedicine Companies Charged for Roles in $56 Million Conspiracy to Defraud Medicare and Receive Illegal Kickbacks in Exchange for Orders of Orthotic Braces (Feb. 5, 2020) 

The indictment alleges that the owners operated purported telemedicine companies ACC and Tele Medcare, which had locations in Bayonne, New Jersey, Boca Raton, Florida, and Richmond Hill, Georgia. The indictment further alleges that the owners agreed to solicit and receive illegal kickbacks and bribes from patient recruiters, pharmacies, brace suppliers and others in exchange for the arranging for doctors to order medically unnecessary braces for beneficiaries of Medicare from approximately March 2017 through April 2019. In order to obtain the orders that were transmitted in exchange for kickbacks and bribes, the two owners, through ACC and Tele Medcare, recruited and hired health care providers to order braces for Medicare beneficiaries, the indictment alleges. The owners allegedly paid illegal kickbacks and bribes to health care providers to order braces for Medicare beneficiaries that were medically unnecessary, ineligible for Medicare reimbursement and/or not provided as represented.

The indictment further alleges the brace orders were transferred to co-conspirator brace suppliers to support in excess of $56 million in false and fraudulent claims to Medicare that were submitted by brace suppliers and that Medicare paid these brace suppliers in excess of $28 million for these claims. This case underscores the importance of reviewing the entire financial and referral structure of healthcare and telemedicine businesses to ensure that all fraud and abuse laws are complied with in the structure and operation of the business.

2. FDA Authorizes Marketing of First Cardiac Ultrasound Software That Uses Artificial Intelligence to Guide User (Feb. 7, 2020) 

Cardiac diagnostic tests are necessary to identify heart conditions. Among them are electrocardiograms (more widely known as an EKG or ECG), Holter monitors and cardiac ultrasound examinations. The software authorized by FDA is the first software authorized to guide users through cardiac ultrasound image acquisition. The Caption Guidance software was developed using machine learning to train the software to differentiate between acceptable and unacceptable image quality. This knowledge formed the basis of an interactive AI user interface that provides prescriptive guidance to users on how to maneuver the ultrasound probe to acquire standard echocardiographic images and video clips of diagnostic quality. The AI interface provides real-time feedback on potential image quality, can auto-capture video clips, and automatically saves the best video clip acquired from a particular view. Importantly, the cardiologist still reviews the images for a final assessment of the images and videos for patient evaluation. In its review of this device application, the FDA evaluated data from two independent studies. The FDA reviewed the device through the De Novo premarket review pathway, a regulatory pathway for low- to moderate-risk devices of a new type.

In addition, this week, the FDA hosted a public workshop titled “Evolving Role of Artificial Intelligence (AI) in Radiological Imaging” that discussed emerging applications of AI in radiological imaging, including AI devices intended to automate the diagnostic radiology workflow, as well as guided image acquisition. Discussions focused on best practices for the validation of AI-automated radiological imaging software and image acquisition devices, which is critical to assess safety and effectiveness. MoFo had a team participating in the program by webinar and we will be posting follow up details to the Life Science Blog in the coming weeks.

3. FDA’s Actions in Response to 2019 Novel Coronavirus (COVID-19) at Home and Abroad (Feb. 14, 2020)

(NB: We will be hosting a free webinar on Friday, March 6th, at 12:30pm EST: What GCs Need to Know About Coronavirus, hosted by Global Risk + Crisis Management partner David Newman and FDA Regulatory partner Bethany Hills. Please click here to read more and register)

FDA is focused on critical issues of supply chain impact, product quality impact, quality surveillance through modified inspectional approaches, fraudulent claims about products in the US, and increased attention through import processes. FDA is taking actions based on the assumption that the outbreak will likely impact the medical product supply chain, including potential disruptions to supply or shortages of critical medical products in the U.S. To address this issue, FDA is not waiting for drug and device manufacturers to report shortages—they are proactively reaching out to manufacturers to identify potential disruptions or shortages.

FDA has confirmed that there are no vaccines, gene therapies, or blood derivatives licensed by the FDA that are manufactured in China. Raw materials used in manufacturing of these products that do come from China and other locations in Southeast Asia could theoretically increase the risk of biologic products manufactured elsewhere, and thus FDA is in contact with biologics manufacturers to gauge any supply concerns regarding raw materials.

FDA conducts approximately 500 inspections per year in China with the majority of these inspections being for drugs, foods and medical devices. The FDA is not currently conducting inspections in China due to the State Department warning advising against travel to China. For the month of February, the FDA identified all scheduled inspections in China, and they were either postponed or the agency was able to utilize other information to inform decisions allowing the products to enter our U.S. market. FDA has announced that the majority of routine surveillance inspections in China scheduled for March are for medical products and at this time are expected to be conducted at a later date.

The FDA Fraud Team monitors on-line products promoted with claims to prevent, treat, mitigate or cure 19-nCoV (or coronavirus, in general). FDA established a cross-agency task force dedicated to closely monitoring for fraudulent products and false product claims related to COVID-19 and has already reached out to major retailers to ask for their help in monitoring their online marketplaces for fraudulent products with coronavirus and other pathogen claims.

At this time, the FDA continues to review products imported from China using its routine import process and has not determined that additional measures are needed to protect public health. If necessary, the agency can increased import screening and foreign manufacturers importing into the U.S. should be aware of this potential risk.

More details in our three-part series the FDA’s efforts to address a number of important public health issues, including product safety (Part I), monitoring supply chain disruptions (Part II), and supporting emergency efforts to diagnose and treat the disease (Part III).

4. FDA Announces Collaborative Review of Scientific Evidence to Support Associations Between Genetic Information and Specific Medications (Feb. 20, 2020)

Pharmacogenetic testing is a type of genetic test that in some instances can predict how a person will respond to specific medications. Thus, this type of testing offers promise for informing the selection or dosing of some medications for certain individuals. When there is sufficient scientific evidence demonstrating a relationship between how a person’s genes may impact their metabolism of a drug or how they may respond to the drug, this information can be useful for health care providers. However, for many medications, there is not sufficient scientific evidence to support using pharmacogenetic test results to inform prescribing decisions.

In a 2018 safety communication, FDA warned the public about the FDA’s concerns with firms offering genetic tests making claims about how to use the genetic test results to manage medication treatment that are not supported by recommendations in the FDA-approved drug labeling or other scientific evidence. FDA considers this a public health concerns because clinicians order tests to help them and their patients make better informed decisions.

Many pharmacogenetic tests are being offered as laboratory developed tests (LDTs). For many years, FDA has, in an exercise of enforcement discretion, generally not enforced applicable regulatory requirements for LDTs, such as premarket review. The FDA developed its existing approach to LDT enforcement decades ago, when the field of LDTs was much different, and often relied on simpler technologies in local settings. FDA noted in its press release: “FDA should not and cannot stand idly by when safety issues arise. Consistent with our mission to protect and promote public health, we believe it is important to take steps now to help ensure that claims being made for pharmacogenetic tests offered today are grounded in sound science to avoid inappropriate management of patients’ medications—and to do so through approaches that both protect patients and advance the development of analytically and clinically validated pharmacogenetic tests.”

To address these concerns, FDA has introduced a unique collaboration between the FDA’s Center for Devices and Radiological Health and Center for Drug Evaluation and Research intended to provide the agency’s view of the state of the current science in pharmacogenetics. FDA’s new web-based resource includes a table that describes some of the gene-drug interactions for which the Agency believes there is sufficient scientific evidence to support the described associations between certain genetic variants, or genetic variant-inferred phenotypes, and altered drug metabolism, and in certain cases, differential therapeutic effects, including differences in risks of adverse events. What FDA has not indicated is how this public resource will affect existing pharmacogenetic products in the marketplace or how FDA will consider new information to be added to or compared against this public database.