Keeping pace with the ever-changing life sciences industry, Morrison Foerster stays on top of the trends and political, legal, and economic drivers to support striking the balance between innovative discovery and purposeful business planning to assure our clients continued success. MoFo Life Sciences shares timely legal and business insights and in-depth analyses on trends and the complex technologies at the heart of the global pharmaceutical, biotechnology, diagnostics, medical devices, digital health, and AgTech fields.Learn more about our <a href="https://www.mofo.com/capabilities/life-sciences-healthcare" target="_self">Life Sciences practice</a>.<h2 dir="ltr">ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Dr. Meghan Poon counsels clients on patent preparation and prosecution, portfolio strategy, and IP due diligence in the areas of biotechnology and biologics. She has significant experience in diverse technologies including antibodies, cell therapies, gene therapies, diagnostics, and gene-edited plants. She represents clients ranging from large international pharmaceutical companies to midsized companies, startups, and universities.Meghan has filed numerous Patent Term Extension applications to secure additional term for her clients’ patents, which cover FDA-approved products. In addition, Meghan has extensive experience addressing complex obviousness-double patenting and subject matter eligibility issues impacting her clients’ patent portfolios. Meghan also represents clients in both investor-side and target-side due diligence, in deals from seed funding to initial public offerings.Prior to law school, Meghan attended graduate school at the University of California, Los Angeles, where she received a Ph.D. in biological chemistry based on her work on protein-protein and protein-DNA interactions at a molecular level. Meghan is the author of several scientific publications and has presented her research at international conferences.Meghan received her J.D. from the University of Southern California Law School and spent a year as a visiting student at Santa Clara University, where she focused on intellectual property.

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Dr. Meghan Poon counsels clients on patent preparation and prosecution, portfolio strategy, and IP due diligence in the areas of biotechnology and biologics. She has significant experience in diverse technologies including antibodies, cell therapies, gene therapies, diagnostics, and gene-edited plants.

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Wolfgang advises clients on contentious and non-contentious matters involving their most valuable intellectual property assets in life sciences, digital, and high-tech industries.His subjects of focus include research and development collaborations, complex licensing agreements, and other technology transactions, as well as know-how protection strategies, and employee invention law. He also has substantial experience in litigating patents, trademarks, and other intellectual property assets, often in a multijurisdictional context. In addition, Wolfgang and his team frequently clear trademarks and ad campaigns and prosecute trademark applications.Wolfgang is co-editor of our <a href="https://lifesciences.mofo.com/" dir="ltr" target="_blank">MoFo Life Sciences Blog</a>.Wolfgang is a partner of Morrison Foerster based in our German office in Berlin.<h4 dir="ltr">Representative Transactional Matters</h4><ul dir="ltr"><li>U.S.-based BioTech fund on various research collaborations and other transactions with German start-ups or research institutions.</li><li>Negotiate multimillion-euro strategic partnership between two AgTech leaders concerning the development and commercialization of pest-resistant transgenic traits.</li><li>Craft global multi-million collaboration regarding AI-powered robotic MaaS.</li><li>UK-based digital health company on product roll-out of RPM applications in Germany; coordinate international expansion.</li><li>Advise numerous German start-ups on their U.S. expansion.</li><li>Draft diverse global patent and know-how license agreements in the areas of AgTech and life sciences—including gene licensing and licensing of genome editing technologies (e.g., CRISPR)—and medical devices; draft correlating supply and distribution agreements.</li><li>Structure IP rights in connection with joint ventures and other M&A transactions, including the carve-out of a patent-heavy semiconductor business comprising nine jurisdictions into a German–U.S. joint venture.</li><li dir="ltr">Advise on government-funded, multi-partner R&D projects and/or R&D projects with academic institutions, as well as on employee invention law.</li></ul><h4 dir="ltr">Representative Contentious IP Matters</h4><ul dir="ltr"><li>Lead counsel in an international dispute between software companies on rights and obligations following termination of a multi-million licensing and distribution arrangement; coordinate local counsel.</li><li>Defend Japanese chip manufacturer in high-profile SEP-litigation; advise on global settlement arrangement.</li><li>Represent leading internet retailer in patent infringement and concurrent invalidity proceedings in the context of a multijurisdictional dispute concerning touch-screen technology.</li><li>Represent diverse pharmaceutical and life sciences companies in national and cross-border patent infringement proceedings and other technology-related disputes, including preliminary injunctions as well as pre‑trial discovery and inspection proceedings, concerning, inter alia, drug-coating technologies, toner cartridges, medicinal gases, transgenic plants, and vaccines.</li><li dir="ltr">Conduct trademark, copyright, and false advertising litigation, including, most notably, a high-profile trademark litigation for a German bank, and a nine-country cross-border trademark litigation involving a famous pharmaceutical brand.</li></ul>

Dr. Wolfgang Schönig berät Mandanten zum Schutz des geistigen Eigentums sowohl in streitigen als auch nichtstreitigen Angelegenheiten, mit einem besonderen Fokus auf die IP-rechtliche Beratung von Unternehmen aus den Bereichen Life Sciences, Digitalwirtschaft und High-Tech.Zu seinen Beratungsschwerpunkten gehören Forschungs- und Entwicklungskooperationen, komplexe Lizenzvertragsgestaltungen und andereTechnologie-Transaktionen, sowie Know-how-Schutz-Strategien und das Arbeitnehmererfinderrecht. Er verfügt zudem über umfangreiche Prozesserfahrung zur Durchsetzung von Patenten, Marken- und anderen IP-Rechten, häufig auch in einem grenzüberschreitenden Kontext. Darüber hinaus bewertet Dr. Wolfgang Schönig zusammen mit seinem Team regelmäßig die Rechtskonformität von Werbekampagnen, prüft die Verfügbarkeit von Marken und entwickelt entsprechende Anmeldestrategien.Dr. Wolfgang Schönig ist Co-Editor des Life Sciences Blogs von Morrison Foerster.Er hat seinen Doktortitel an der Heinrich-Heine-Universität Düsseldorf und seinen LL.M. an der Fordham School of Law in New York erworben, jeweils mit Schwerpunkt im gewerblichen Rechtsschutz. Seinen MBA-Abschluss erhielt er von der European University in Barcelona.Dr. Wolfgang Schönig ist Partner des deutschen Büros von Morrison Foerster in Berlin.<h4 dir="ltr">Repräsentative Transaktionen</h4><ul><li dir="ltr">BioTech-Fonds mit Sitz in den USA bei verschiedenen Forschungskooperationen und anderen Transaktionen mit deutschen Start-ups oder Forschungseinrichtungen</li><li dir="ltr">Verhandlung einer hochvolumigen strategischen Partnerschaft zwischen zwei Technologieführern im Bereich Crop Science betreffend der Entwicklung und Kommerzialisierung von bestimmten Resistenzen</li><li dir="ltr">Gestaltung einer globalen Multi-Millionen-Zusammenarbeit für KI-gestützte Roboter</li><li dir="ltr">Ein in Großbritannien ansässiges Unternehmen für digitale Gesundheit bei der Markteinführung von RPM-Anwendungen in Deutschland; Koordination der internationalen Expansion</li><li dir="ltr">Beratung zahlreicher deutscher Start-ups bei deren US-Expansion</li><li dir="ltr">Strukturierung und Verhandlung diverser Patent- und Know-How-Lizenzen in den Bereichen Ag Tech und Life Sciences – einschließlich Fragen zu genome editing wie CRISPR-Medizingeräte, sowie Gestaltung von Softwarelizenzverträgen und Erstellung korrespondierender Liefer- und Vertriebsvereinbarungen</li><li dir="ltr">Strukturierung von IP-Rechten im Zusammenhang mit Joint Ventures und anderen M&A-Transaktionen, darunter die Koordination eines neun Länder umfassenden IP Carve-Outs im Rahmen eines Halbleiter-JVs</li><li dir="ltr">Beratung zu staatlich geförderten Multi-Partner F&E-Projekten und/oder F&E-Projekten mit akademischen Einrichtungen sowie zum Arbeitnehmererfindungsrecht</li></ul><h4 dir="ltr">Repräsentative IP-Streitigkeiten</h4><ul><li dir="ltr">Lead Counsel in einem internationalen Rechtsstreit zwischen Softwareunternehmen über Rechte und Pflichten nach Beendigung einer millionenschweren Lizenz- und Vertriebsvereinbarung; Koordinierung der lokalen Anwälte</li><li dir="ltr">Verteidigung eines japanischen Chipherstellers in einem prominenten Streitfall bezüglich Standardessentieller Patente (SEP); Beratung zu einer globalen Vergleichsregelung</li><li dir="ltr">Verteidigung einer führenden Internetplattform gegen Ansprüche eines Patenttrolls wegen vermeintlicher Verletzung von Patent bezüglich Touchscreen-Technologie sowie korrespondierende US-Streitigkeiten</li><li dir="ltr">Vertretung von Pharma- und Life Science-Unternehmen in nationalen und grenzüberschreitenden Patentverletzungsverfahren und anderen technologiebezogenen Streitigkeiten, einschließlich einstweiliger Verfügungsverfahren und vorprozessualer Beweissicherungs- und Besichtigungsverfahren, unter anderem in Bezug auf Arzneimittelbeschichtungstechnologien, Tonerkartuschen, medizinische Gase, transgene Pflanzen und Impfstoffe</li></ul>

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Wolfgang Schönig is a partner of Morrison Foerster (International) LLP based in our German office in Berlin. His practice specialty is advising on IP aspects relative to transactions in, among others, the life sciences, AgTech and pharmaceuticals industry, as well as legal representation in IP disputes. Wolfgang is specialized in research and development collaborations, complex licensing agreements, technology acquisitions, know-how protection strategies, and employee invention law.

Wolfgang Schönig focuses his practice on IP aspects relative to transactions in the digital, telecoms, high tech, life sciences, and pharmaceuticals industry, as well as legal representation in IP disputes.

Wolfgang Schönig advises clients on IP aspects relating to transactions in, among others, the life sciences, AgTech and pharmaceuticals industry, as well as legal representation in IP disputes. His additional focus areas include research and development collaborations, complex licensing agreements, technology acquisitions, know-how protection strategies, and employee invention law.

Wolfgang Schönig

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Telehealth services may be at a crossroads. While the COVID-19 pandemic brought about widespread adoption of telehealth services, the Department of Justice and the U.S. Department of Health and Human Services Office of Inspector General (OIG) appear primed to audit telehealth services and ramp up enforcement actions for services that it deems fraudulent.   Advocates of telehealth services have been touting their capabilities for years; however, it took the COVID-19 pandemic for the services to surge in popularity. The increased utilization of telehealth services is due to a confluence of factors, including Medicare and Medicaid removing regulatory barriers and opening doors for reimbursement of telehealth services during the state of emergency; patients seeking alternative forms of healthcare due to fears of COVID-19 and seeking in-person care; states reducing licensing and other barriers to provide telehealth services across state lines; and healthcare providers reacting to these developments and adapting their care models to respond to the increased demand. Accordingly, the public reacted and embraced receiving care via telehealth technologies. This has been a boon for the healthcare industry, especially with the number of in-person visits dropping in 2020 due to the pandemic. However, the increased utilization of telehealth services has made health law attorneys cautious, as a rapid increase utilization of a new service line has us waiting with bated breath for the other shoe to drop and result in fraud and enforcement abuse. In September 2020, OIG announced a healthcare fraud takedown of over 345 defendants and $4.5 billion in allegedly false and fraudulent claims. This crackdown focused on a variety of provider types, including genetic testing laboratories, pharmacies, medical practitioners, and durable medical equipment providers. The crackdown revolved around an alleged schemes where a marketing network lured individuals to obtain durable medical equipment, tests, or medications that OIG deemed worthless and medically unnecessary. OIG found that the healthcare providers performed many of the services with limited or no patient interaction. OIG focused on the misleading and fraudulent nature of the services, which, in some cases, delayed patients from seeking medically appropriate treatment for their complaints. Although OIG has not announced any official policy of auditing, the telehealth industry is reporting that OIG is set to increase audits in the telehealth space. Industry insiders claim that OIG is focused on whether the expansion of telehealth services has led to more fraud and abuse.Beyond the potential monetary enforcement impact of OIG’s audits, these audits will also likely aid in the continued transformation of the telehealth services industry, as OIG plans to release an audit report with policy recommendations by early 2022. Many of the changes to telehealth by the Centers for Medicare and Medicaid Services and on a state level were temporary for the pandemic. Now, the federal government and state legislators are debating whether they should make permanent any easing of regulatory burdens. OIG’s audit findings and policy recommendations could impact how telehealth services evolve, including the telehealth requirements that Medicare and Medicaid will determine are necessary for reimbursement.  Some of these impacts may include policy recommendations on what types of healthcare providers can offer telehealth services, what technological capabilities are required for telehealth (e.g., synchronous vs. asynchronous, audio/video requirements), and whether there are any location requirements for telehealth (e.g., only available in rural locations, must have an in-person visit every X months). We will continue to monitor the developments in this space.

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Is the Future of Telehealth in OIG’s Hands?

Is 2021 the Value-Based and Shared Savings Revolution?

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Telehealth services may be at a crossroads. While the COVID-19 pandemic brought about widespread adoption of telehealth services, the Department of Justice and 

Is the Future of Telehealth in OIG’s Hands?

It’s summer blockbuster season and that means sequels abound.  Now it seems that the U.S. Congress wants in on the action.  Just five years after Congress passed the 21st Century Cures Act, a bipartisan group of representatives is looking to enact follow-up legislation—“Cures 2.0.”  Last month, Representatives Diana DeGette (D-CO) and Fred Upton (R-MI) released draft legislation that proposed sweeping policy changes, many of them inspired by the COVID-19 pandemic.  If passed into law, the 127-page legislation would affect medical research, health insurance, and FDA regulatory policies; it would even establish a new agency.This life sciences blog hopes to explain the discussion draft for Cures 2.0.  It begins with a quick recap of the first Cures Act, then explains the content of the proposed legislation.  Finally, we forecast what to expect going forward.<h4>21st Century Cures Act</h4>Congress enacted the 21st Century Cures Act to speed up the development of medical products and encourage more innovation, all with the end goal of curing hard-to-treat diseases.  The Act authorized $6.3 billion in funding, with approximately three-quarters of that money allotted to the National Institutes of Health (NIH).  The legislation funded new medical research programs at NIH, including the Cancer Moonshot, the Brain Research Through Advancing Innovative Neurotechnologies (BRAIN) Initiative, and the Precision Medicine Initiative.  The Cures Act also addressed health information technology interoperability, including significant provisions prohibiting information blocking.With respect to the Food & Drug Administration (FDA), the Cures Act modernized the agency’s hiring authorities.  It directed FDA to create intercenter institutes, such as the Oncology Center for Excellence.  It updated FDA’s regulation of combination products (which combine drugs, devices, and/or biological products).  It sought to streamline the drug approval process by facilitating the use of surrogate-markers, such as real-world evidence.  It created expedited product development programs, including <a target="_blank" href="https://www.fda.gov/vaccines-blood-biologics/cellular-gene-therapy-products/regenerative-medicine-advanced-therapy-designation">Regenerative Medicine Advanced Therapy</a> (RMAT) and the <a target="_blank" href="https://www.fda.gov/medical-devices/how-study-and-market-your-device/breakthrough-devices-program">Breakthrough Devices</a> program.  And it amended the Food, Drug, and Cosmetic Act to exclude certain software functions from the definition for medical devices.[1]President Obama signed the Cures Act into law on December 13, 2016, just weeks before leaving office.  The law enjoyed overwhelming support from industry and other stakeholders.  Notably, then-Vice President Biden was a major proponent of the legislation.<h4>Cures 2.0 Draft Legislation</h4>Cures 2.0 features five substantive titles.  This blog post details some of the most significant provisions.Title I covers public health, with an emphasis on learning from the COVID-19 pandemic.  It would establish a national survey of patients with long COVID, create a learning collaborative, and assess sources of coverage.  It would direct the Department of Health and Human Services (HHS) to develop and implement a national strategy to prevent and respond to pandemics.  The strategy would be “based on lessons learned, and best practices developed, as a result of the COVID-19 pandemic”; it would focus on testing, expanding domestic drug manufacturing, and developing vaccines, therapeutics, and other medical supplies.  The Act would appropriate $25 million per year in grants to educate the public about vaccines.  And it would adopt the PASTEUR Act, which would create an innovative subscription model to pay for the development of novel antibiotics to address antimicrobial resistance.Title II covers patients and caregivers and directs the Centers for Medicare & Medicaid Services (CMS) to consider ways to improve patient health literacy, among other goals.  Title II would also work to increase diversity in clinical trials through, for example, public awareness campaigns and more user-friendly registration.  It would also require reporting on patient experience data in a clinical trial and require FDA to consider that data.Title III covers provisions relating to FDA.  It would direct FDA to report to Congress on the agency’s coordination of the regulation of digital health products, which include wearables, artificial intelligence, cloud services, and software.  It would create grants for innovative clinical trial design.  Title III also focuses on accelerated approval programs for drugs.  It would direct FDA to issue guidances on the chemistry, manufacturing, and controls information required for expedited approval and the use of real world evidence to evaluate the safety and effectiveness of drugs after approval or licensure under a breakthrough, fast-track, or accelerated pathway.  It would allow for earlier designation as an RMAT or breakthrough therapy before an Investigational New Drug (IND) and would allow for more sources of data to support post-approval study requirements.  Title III also addresses improving collaboration between FDA and CMS regarding designation of a product as a breakthrough therapy, a fast- track product, or a product eligible for accelerated approval. Title IV covers CMS separately, with a particular emphasis on telehealth coverage.  It would extend telehealth flexibilities offered during the pandemic to permanently remove geographic and originating site restrictions and it would encourage the use of telehealth  for Medicaid and the Children’s Health Insurance Program (CHIP).  It would also address patient access to breakthrough devices by codifying the current Medicare Coverage of Innovative Technology pathway.  It would provide federal support for the use of genetic and genomic testing for pediatric patients with rare diseases and would create a pilot grant program within CMS to test approaches to delivering personalized medicine consultations.Last, but certainly not least, Title V of Cures 2.0 would establish a new agency called the Advanced Research Projects Agency for Health (ARPA-H) within NIH.  Modeled after the Defense Advanced Research Projects Agency (DARPA), ARPA-H would promote bold breakthroughs in medicine.  Examples of potential ARPA-H projects include mRNA vaccines for most cancers, wearable monitoring devices for blood pressure/blood sugar, brain imaging technology for tracking responses to Alzheimer’s therapies, vaccine patches or oral sprays for mass vaccination campaigns, and programs aimed at healthcare access and equity, according to an article that the White House published in <a target="_blank" href="https://science.sciencemag.org/content/373/6551/165">Science Magazine</a> to coincide with the draft legislation.  Cures 2.0 would provide $6.5 billion to ARPA-H in FY2022.<h4>What to Expect</h4>Cures 2.0 already enjoys bipartisan support and is a legislative priority for President Biden.  Rep. DeGette has <a href="https://news.bloomberglaw.com/pharma-and-life-sciences/bidens-6-5-billion-biomedical-agency-backed-in-bipartisan-bill" target="_blank">publicly proclaimed</a> that she hopes to pass the bill later this year.  For now, Congress and the White House are focused on <a href="https://news.bloomberglaw.com/pharma-and-life-sciences/bidens-speedy-medical-lab-will-ideally-be-up-in-fiscal-2022" target="_blank">gathering feedback</a> from industry, academia, and other groups.  This process is already underway, with many notable organizations praising the discussion draft and providing detailed comments.  We encourage life sciences companies that are interested in providing feedback to submit comments to Congress as soon as possible.Even enactment of Cures 2.0 would be far from the final word.  The discussion draft delegates significant authority to regulatory agencies and requires those agencies to issue regulations and guidance on several topics.  Such regulatory actions would provide further opportunities for input from life sciences companies.  All in all, the next several years will be an exciting time for drug, medical device, and life sciences innovations, thanks in large part to Cures 2.0.  This is one sequel that promises to be as exciting as the original.[1] The FDA promulgated a <a target="_blank" href="https://www.federalregister.gov/documents/2021/04/19/2021-07860/medical-devices-medical-device-classification-regulations-to-conform-to-medical-software-provisions">new rule on this topic</a> earlier this year.

Cures 2.0: Will It Be Better Than the Original?

It’s summer blockbuster season and that means sequels abound.  Now it seems that the U.S. Congress wants in on the action.  Just five years after Congress passe

Cures 2.0: Will It Be Better Than the Original?

On July 9, 2021, President Biden enacted a sweeping <a target="_blank" href="https://www.whitehouse.gov/briefing-room/presidential-actions/2021/07/09/executive-order-on-promoting-competition-in-the-american-economy/">executive order</a> creating a “whole‑of-government competition policy.” Morrison & Foerster outlined the administration’s policy in a <a target="_blank" href="https://www.mofo.com/resources/insights/210714-president-biden-executive-order-antitrust.html">recent client alert</a> that provides a comprehensive summary of the efforts to change both the substance and the approach of the federal government to U.S. competition policy. Among the many initiatives addressed to more than a dozen federal agencies, the executive order seeks to combat increased market concentration and rising prices in prescription drugs and devices, health insurance, and hospital markets.The executive order’s healthcare initiatives instruct federal agencies to undertake projects as varied as standardizing healthcare options in the national Health Insurance Marketplace to proposing a rule to permit over-the-counter sales of hearing aids. It also encourages the Department of Justice (DOJ) and the Federal Trade Commission (FTC) to review and consider revising their merger guidelines to better address increased costs and inadequate options caused by hospital mergers, particularly in rural areas, and instructs the Department of Health and Human Services (HHS) to implement the price transparency initiatives required by the No Surprises Act. However, the focus of the executive order’s directives for the healthcare industry are designed to address drug‑pricing concerns. The most significant new proposal directs FTC to consider exercising its statutory rulemaking authority to address “unfair anticompetitive conduct or agreements in the prescription drug industries, such as agreements to delay the market entry of generic drugs or biosimilars.”  President Biden also commits his administration to lowering prescription drug prices through “aggressive legislative reforms” such as allowing Medicare to negotiate drug prices, imposing inflation caps, and supporting a public health insurance option.Other new policies include directing HHS to submit a plan within 45 days to combat excessive pricing, enhance domestic pharmaceutical supply chains, and address the “recurrent problem of price gouging,” as well as directing the FDA commissioner to write a letter to the Patent and Trademark office within 45 days outlining any concerns regarding whether the patent system unjustifiably delays generic and biosimilar competition.Many provisions in the executive order relating to drug pricing direct HHS and FDA to continue existing policy, including:<ul><li>Directing HHS to continue increasing the transparency, efficiency, and predictability of the approval framework for generic drug and biosimilars, in order to promote competition and lower prices for those products by continuing to implement the FDA’s Drug Competition Action Plan of 2017 and Biosimilar Action Plan of 2018;</li><li>Clarifying the standards for interchangeability of biosimilars;</li><li>Improving the understanding of biosimilar and interchangeable products among healthcare providers, patients, and caregivers;</li><li>Continuing to update the FDA’s biologics regulations to clarify existing requirements and procedures related to the review and submission of Biologics License Applications by advancing the “Biologics Regulation Modernization” rulemaking; </li><li>Working with the FTC to identify and address false, misleading, or otherwise deceptive statements about generic drug and biosimilar products and their safety or effectiveness;</li><li>Continuing to implement the CREATES Act of 2019 by issuing Covered Product Authorizations promptly and issuing guidance for industry; and</li><li>Requiring the administrator of the Centers for Medicare and Medicaid Services (CMS) to “prepare for Medicare and Medicaid coverage of interchangeable biological products, and for payment models to support increased utilization of generic drugs and biosimilars.”</li></ul>Notably, the executive order also directs HHS to continue implementing the controversial Importation of Prescription Drugs rule, which was finalized in President Trump’s last months in office. The rule is subject to litigation in federal court that the Biden administration has continued defending. Just a few days before issuance of the executive order, the Biden administration pulled two other Trump-era proposals to allow the reimportation of insulin and broad personal importation from anywhere. FDA reportedly said it pulled the proposals because it had not received any proposals in response to the request for proposals, but was considering other options.Last week CMS also submitted to the Office of Management and Budget (OMB) a new, economically significant proposed rule called “Most Favored Nation (MFN) Model,” which likely is the newest proposal of the rule President Trump issued to tie Medicare Part B drug prices to those paid in other wealthy countries. The previous rule was issued in the final days of the Trump administration without notice and comment and was enjoined by a federal court in Baltimore for violating the Administrative Procedure Act. While the newest MFN proposal from CMS may be a negotiating tool to prompt action from Congress, it could be a sign that President Biden is continuing some of the most aggressive and controversial of the Trump administration’s drug pricing initiatives.These recent actions on drug importation and the MFN proposal, combined with the proposals in the Executive Order on Promoting Competition in the American Economy, demonstrate the Biden administration intends to keep the pressure on drug pricing.

BIDEN ADMINISTRATION Executive Order on Promoting Competition in the American Economy: Drug Pricing and Healthcare Industry Initiatives

On July 9, 2021, President Biden enacted a sweeping executive order creating a “whole‑of-government competition policy.” Morrison & Foerster outlined the admini

BIDEN ADMINISTRATION Executive Order on Promoting Competition in the American Economy: Drug Pricing and Healthcare Industry Initiatives

Christine Lentz, a Morrison & Foerster summer associate in our San Diego office, contributed to the writing of this article.The outbreak of the COVID-19 pandemic in 2020 spurred rapid medical and technological innovation, leading to new medicines and devices designed in response to the virus. Under the traditional U.S. Food and Drug Administration (FDA) process, approval for these products could take months, if not years—time many Americans did not have. Fortunately, the FDA had a secret weapon in the fight against COVID-19: emergency use authorizations (EUAs). In April 2020, we <a target="_blank" href="https://lifesciences.mofo.com/topics/FDA-uses-EUAs-broadly-in-the-fight-against-Covid-19.html">reported</a> on the FDA’s use of EUAs in the early months of the pandemic. Now, over one year later, we revisit the topic of EUAs to highlight the role they have played in pandemic responsiveness and explain what to expect going forward.<h4>EUAs Related to COVID-19</h4>Congress first established the FDA’s power to issue EUAs through the Project Bioshield Act of 2004. Generally speaking, EUAs enable the FDA to authorize unapproved products (or unapproved uses of approved products) for temporary use as emergency “medical countermeasures” against threats to public health and safety. From 2004 until recently, the FDA seldom issued EUAs; across the Zika, Ebola, MERS Coronavirus, H1N1/Swine flu, and Anthrax crises, the FDA issued EUAs for only a few dozen products combined.The COVID-19 pandemic, however, led to the issuance of over 600 EUAs, including authorizations for three <a target="_blank" href="https://www.fda.gov/emergency-preparedness-and-response/coronavirus-disease-2019-covid-19/covid-19-vaccines">vaccines</a> and ten <a target="_blank" href="https://www.fda.gov/emergency-preparedness-and-response/mcm-legal-regulatory-and-policy-framework/emergency-use-authorization#coviddrugs">drug and biological therapeutic products</a>, as well as a wide range of personal protective equipment, in vitro diagnostics, ventilators, and more. Among these authorizations, the FDA responded to the testing and supply shortages prevalent at the start of the pandemic by issuing several umbrella EUAs for larger categories of devices—e.g., Surgical Masks and Independently Validated Serology Tests for SARS-CoV-2—which allowed those products on the market without individual review.Several treatments for mild-to-moderate COVID-19 were authorized for emergency use, such as Gilead’s <a target="_blank" href="https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-issues-emergency-use-authorization-potential-covid-19-treatment">remdesivir</a>, GlaxoSmithKline’s <a target="_blank" href="https://www.fda.gov/media/149532/download">Sotrovimab</a>, Eli Lilly’s <a target="_blank" href="https://www.fda.gov/media/145801/download" title="Bamlanivimab and Etesevimab EUA Letter of Authorization February 25 2021">Bamlanivimab and Etesevimab</a>, and Regeneron’s <a target="_blank" href="https://www.fda.gov/media/145610/download" title="Regeneron LOA 6.3.2021">REGEN-COV (Casirivimab and Imdevimab)</a>. In addition, Fresenius Kabi received an EUA for its <a target="_blank" href="https://www.fda.gov/media/137888/download" title="Fresenius Kabi Propoven Emergency Use Letter of Authorization">Propoven 2% Emulsion</a> IV, which maintains sedation in patients requiring mechanical ventilation in an intensive care setting. Baxter Healthcare received authorization for its <a target="_blank" href="https://www.fda.gov/media/141168/download" title="Regiocit EUA Letter of Authorization">REGIOCIT replacement solution</a> for adults treated with continuous renal replacement therapy in a critical care setting during the COVID-19 pandemic.<h4>When Do EUAs End?</h4>EUAs remain in effect until the circumstances justifying the authorization of emergency use during the pandemic end, the FDA revokes the EUA to protect public health or safety, or the FDA approves a marketing application for the product/use. To determine whether products temporarily authorized under EUAs remain necessary, the FDA periodically reviews the circumstances and appropriateness of existing authorizations, particularly the status of product approval. If the sponsor is not actively working toward approval, licensure, or clearance, the FDA may consider terminating the EUA. If an EUA remains in effect for more than one year, the FDA must provide the sponsor with a written explanation of obstacles to approval and specific actions to overcome them.[1]During the current pandemic, the FDA has revoked, for a variety of reasons, three of its umbrella EUAs and several individual EUAs. One typical explanation for revocation is that when the FDA approves a product, it renders any prior EUA redundant. For example, the FDA revoked the corresponding EUA upon <a target="_blank" href="https://www.fda.gov/news-events/press-announcements/fda-approves-first-treatment-covid-19">approving Gilead’s Veklury (remdesivir)</a> for use in adults and certain pediatric patients.Other times, however, the FDA revokes EUAs after learning that products are not completely effective or safe for use. Recent EUA revocations include reported adverse effects (<a target="_blank" href="https://www.fda.gov/media/138945/download">Chloroquine phosphate and hydroxychloroquine sulfate</a>); poor clinical performance (Chembio’s <a target="_blank" href="https://www.fda.gov/media/139109/download">DPP COVID-19 IgM/IgG System</a>); decreased effectiveness (Autobio’s <a target="_blank" href="https://www.fda.gov/media/140908/download">Anti-SARS-CoV-2 Rapid Test</a>; NovaSterilis’s <a target="_blank" href="https://www.fda.gov/media/145896/download">Nova2200 for Decontaminating Compatible N95 Respirators</a>); increased viral variant resistance (Eli Lilly’s <a target="_blank" href="https://www.fda.gov/media/147629/download">Bamlanivimab</a>); and/or excessive risk-benefit ratio.<h4>Re-prioritization of EUA Review for COVID-Related Products</h4>As the pandemic has evolved, so have public health needs and FDA priorities, which in turn have resulted in the discontinuation and de-prioritization of EUA application review for certain COVID-19 products.For example, according to recent guidance (May 2021), the FDA may decline to review or process new EUA requests for COVID-19 vaccines, unless those developers have previously engaged with the Agency on the development of their manufacturing process and clinical trials program. If a developer has already received feedback from the FDA, its EUA request is more likely to contain comprehensive data and information that meet authorization issuance requirements, whereas quality and data in new applications may prove difficult to verify.In addition to de-prioritizing new COVID-19 vaccine EUA submissions, the FDA no longer reviews requests nor adds new respirator models to the umbrella emergency use authorizations for <a target="_blank" href="https://www.fda.gov/media/136664/download" title="FFRS Manufactured in China Letter">Non-NIOSH-Approved Disposable Filtering Facepiece Respirators Manufactured in China</a> (as of Oct. 15, 2020) or <a target="_blank" href="https://www.fda.gov/medical-devices/coronavirus-disease-2019-covid-19-emergency-use-authorizations-medical-devices/personal-protective-equipment-euas#imported">Imported, Non-NIOSH-Approved Disposable Filtering Facepiece Respirators</a> (as of Mar. 24, 2021). Respirator manufacturers who are not listed under the existing EUAs may submit a separate EUA request; however, the FDA does not encourage such submissions, as there is decreased demand for those devices.Given the country’s continued recovery from the COVID-19 pandemic, we can likely expect additional classes of products to become deprioritized or ineligible for EUA. For example, as the proportion of vaccinated citizens increases and hospitalization rates decrease, many of the medical devices the country had scrambled to make available over a year ago will become less critical.<h4>Preparing for Post-Pandemic</h4>Companies with current EUAs or those considering applying for emergency use of their products should consult legal counsel to ensure continuity of product marketing and commercialization when the COVID-19 public health emergency is ended and/or EUAs are no longer effective.Unless FDA announces a transitional policy for EUAs, manufacturers should assume they will need to receive full approval or clearance from the FDA to continue marketing their products after the public health emergency ends. For example, <a target="_blank" href="https://www.fda.gov/medical-devices/emergency-use-authorizations-medical-devices/historical-information-about-device-emergency-use-authorizations">several</a> Zika- and Ebola-related tests with emergency use authorizations received market clearance before the declared end of their respective emergencies. In October 2020, the FDA approved <a target="_blank" href="https://www.fda.gov/news-events/press-announcements/fda-approves-first-treatment-ebola-virus">Inmazeb</a>, the first treatment for Ebola Virus in the United States. To date, <a target="_blank" href="https://www.pfizer.com/news/press-release/press-release-detail/pfizer-and-biontech-initiate-rolling-submission-biologics">Pfizer-BioNTech</a> and Moderna have submitted BLAs for their mRNA vaccines, along with requests for <a target="_blank" href="https://www.fda.gov/patients/fast-track-breakthrough-therapy-accelerated-approval-priority-review/priority-review">Priority Review</a> to accelerate the approval process, while simultaneously expanding their EUAs.The FDA <a target="_blank" href="https://www.fda.gov/medical-devices/coronavirus-disease-2019-covid-19-emergency-use-authorizations-medical-devices/faqs-emergency-use-authorizations-euas-medical-devices-during-covid-19-pandemic">encourages sponsors</a> of EUA products to follow up EUA issuance with an appropriate approval, biologics license application (BLA), or device premarket submission—such as 510(k), De Novo Classification Request, or Premarket Approval—so that authorized products can remain on the market with minimal interruption once the EUA is no longer in effect. The FDA further expects sponsors to include a plan for safety follow-up in their EUA requests, which will inform benefit-risk determinations in support of EUA continuation.The FDA also expects manufacturers who receive an EUA to continue their clinical trials to obtain additional safety and effectiveness information and pursue approval. Once enough data is available, EUA holders should consider submitting applications for FDA approval, as the process can take several months. Legal counsel can assist sponsors in navigating applications to accelerate the approval process, e.g., for Fast Track, Priority Review, or Material Threat Medical Countermeasure Priority Review Vouchers. Although the Secretary of Health and Human Services (HHS) must provide sufficient advance notice to allow for the disposition of an unapproved product, and of any other provided information/labeling related to an unapproved use before an EUA declaration terminates, this can unnecessarily disrupt the commercialization of your COVID-19 products.Stay up-to-date with the latest COVID-19 legal and regulatory developments at MoFo’s <a href="https://lifesciences.mofo.com/" target="_blank">Life Sciences</a> blog, or visit <a href="https://www.mofo.com/resources" target="_blank">Morrison & Foerster’s Resource Center</a> for additional industry insights and events. [1] 21 U.S.C. § 360bbb-3.

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EUAs and the FDA’s Fight Against COVID-19: An Evolving Landscape

Virginia Becomes the First State to Adopt COVID-19 Workplace Safety Mandates

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Christine Lentz, a Morrison & Foerster summer associate in our San Diego office, contributed to the writing of this article.
The outbreak of the COVID-19 pandem

EUAs and the FDA’s Fight Against COVID-19: An Evolving Landscape

ASTM International recently approved a new performance standard that will tell consumers just how much protection their cloth face masks offer. Some face coverings like N-95 respirators and surgical masks must meet certain filtration requirements enforced by government agencies like the U.S. Occupational Safety and Health Administration (OSHA) and the U.S. Food and Drug Administration (FDA). But, until recently, other masks like reusable gaiters and cloth face coverings had no performance standards whatsoever, making it impossible for consumers to judge how protective their masks were or to compare one mask to another.Last month, ASTM International approved the new voluntary standard <a href="https://www.astm.org/Standards/F3502.htm" target="_blank">ASTM F3502-21</a> (F3502) for Barrier Face Coverings. It applies to cloth face masks and gaiters intended for everyday use, not to masks used in a medical setting or for worker protection, which are already regulated. The goal is to provide a baseline performance standard, but masks that do not make the cut can still be sold.Like most product performance standards, F3502 contains design, construction, and labeling requirements. It offers two classification levels based on the mask’s filtration efficiency and breathability. For particulate filtration efficiency, masks can meet the minimum requirements by filtering 20% or more of particles during testing, or the higher level 2 requirements by filtering 50% or more. Two levels are also available based on the masks’ airflow resistance, with a more breathable mask achieving a higher result. Manufacturers must verify their results at a certified test laboratory, and can then claim that their mask “Meets ASTM F3502” requirements and describe the mask’s performance levels.F3502 presents an interesting opportunity for mask manufacturers, which can now sell a high-quality face covering without necessarily meeting the high standards for medical-grade or N-95 masks. Because this is not a federal standard, the masks are not subject to federal agency approval such as FDA’s Emergency Use Authorization process for various medical face masks. Likewise, barrier face coverings do not qualify as medical countermeasures, so manufacturers are not eligible for the Public Readiness and Emergency Preparedness Act’s liability protections.Some masks have already met the F3502 standard and are available for purchase. It remains to be seen how heavily consumers will support the new standard by purchasing certified masks. In a market with no easy way for buyers to know how much protection their masks offer, this new standard may help consumers make more informed choices and encourage manufacturers to make better masks.

New Face Mask Performance Standard Has Consumers Covered

ASTM International recently approved a new performance standard that will tell consumers just how much protection their cloth face masks offer. Some face coveri

New Face Mask Performance Standard Has Consumers Covered

On December 11, 2020, a SARS-CoV-2 (COVID-19) vaccine developed by Pfizer and BioNTech became the first to receive Emergency Use Authorization (EUA) from the U.S. Food and Drug Administration (FDA). Since then, two others (produced by Moderna and Johnson & Johnson) have also been granted EUA.<a target="_blank" href="https://www.fda.gov/media/144412/download">Pfizer</a>’s and <a target="_blank" href="https://www.fda.gov/media/144636/download#:~:text=On%20December%2018%2C%202020%2C%20FDA,Section%20564%20of%20the%20Act.">Moderna</a>’s vaccines have many features in common: both utilize relatively new mRNA technology in a two-dose administration and both claim around 95% efficacy. In contrast, <a target="_blank" href="https://www.fda.gov/media/146303/download">Johnson & Johnson</a> has developed an adenovirus-based vaccine, provided in a single shot, that offers around 66% efficacy. In total, some <a target="_blank" href="https://covid.cdc.gov/covid-data-tracker/#vaccinations">260 million doses</a> of these three vaccines have been administered in the United States since December 2020, and just over one third of the population has been fully vaccinated. Though there is still a long way to go before the United States reaches herd immunity (<a target="_blank" href="https://www.nytimes.com/2021/05/03/health/covid-herd-immunity-vaccine.html">if it ever does</a>), promising <a target="_blank" href="https://www.cdc.gov/coronavirus/2019-ncov/science/science-briefs/fully-vaccinated-people.html">data</a> indicate that fully vaccinated people gain protection against different variants of COVID-19, are more resistant to developing asymptomatic infections, and may be less likely to spread COVID-19 to other people.All U.S. residents over 16 have been eligible to be vaccinated since mid-April 2021, and the Johnson & Johnson shot will likely play a key role in the nationwide rollout: as a highly effective, single-dose vaccine, it is seen as a particularly attractive “one-and-done” candidate for accessing hard-to-reach communities (for example, isolated rural areas and poorer neighborhoods in major cities). However, since the Johnson & Johnson vaccine received authorization in late February 2021, its distribution in the United States has been met with a number of setbacks that have hampered its ability to help accelerate the national immunization effort.In March 2021, up to <a target="_blank" href="https://www.nytimes.com/2021/03/31/us/politics/johnson-johnson-coronavirus-vaccine.html">15 million doses</a> of the Johnson & Johnson vaccine were contaminated by manufacturing mishaps at the Emergent Biosolutions plant in Baltimore, Maryland. Emergent, a multinational biopharmaceutical company, had partnered up with both Johnson & Johnson and AstraZeneca (whose vaccine is not yet authorized in the United States) to manufacture COVID-19 vaccines. It was discovered that workers at the plant had mixed up the two vaccines’ ingredients, meaning millions of doses of the Johnson & Johnson vaccine had to be discarded. According to an FDA <a target="_blank" href="https://www.fda.gov/news-events/press-announcements/fda-continues-important-steps-ensure-quality-safety-and-effectiveness-authorized-covid-19-vaccines">report</a> released on April 21, 2021, Emergent agreed to “pause new production while it works with the FDA to resolve potential quality issues,” meaning there could be significant delays in future shipments of the Johnson & Johnson vaccine from the Maryland production site.By mid-April 2021, more than 6.8 million doses of the Johnson & Johnson vaccine had been administered to the American public. However, following reports of six different cases of a “rare and severe type of blood clot” in recipients of the vaccine, including one fatality, the FDA and the Centers for Disease Control and Prevention (CDC) jointly <a target="_blank" href="https://www.fda.gov/news-events/press-announcements/joint-cdc-and-fda-statement-johnson-johnson-covid-19-vaccine">recommended</a> a pause in the use of the vaccine while they took time to review the available data.It is important to bear in mind that the Johnson & Johnson vaccine (like its Pfizer and Moderna counterparts) has not been approved by the FDA; rather, it has been granted <a target="_blank" href="https://www.fda.gov/vaccines-blood-biologics/vaccines/emergency-use-authorization-vaccines-explained">Emergency Use Authorization</a>. An EUA is “a mechanism to facilitate the availability and use of medical countermeasures, including vaccines, during public health emergencies” when “there are no adequate, approved, and available alternatives.” An EUA can be revoked or terminated at any time if the FDA determines that the need for emergency authorization is no longer met. Following the successful rollout of its vaccine under EUA, Pfizer-BioNTech submitted a <a target="_blank" href="https://www.fda.gov/vaccines-blood-biologics/development-approval-process-cber/biologics-license-applications-bla-process-cber">Biologics License Application</a> (BLA) for full FDA approval of their two-shot regimen on May 7, 2021, which, if granted, could have important implications for vaccine mandates and marketing strategies. Moderna and Johnson & Johnson have not yet initiated BLAs (which require six months of post-immunization safety and efficacy data) for their vaccines.Notably, even in light of the reports of blood clots in a small number of individuals, the FDA did not decide to revoke the Johnson & Johnson vaccine’s EUA—instead, it recommended that states temporarily halt the use of the vaccine while the CDC’s Advisory Committee on Immunization Practices (ACIP) convened to study the reported blood-clot cases. Following a 10-day pause, the ACIP (which is made up of medical and public health experts from across the country) and FDA released a joint <a target="_blank" href="https://www.fda.gov/news-events/press-announcements/fda-and-cdc-lift-recommended-pause-johnson-johnson-janssen-covid-19-vaccine-use-following-thorough">statement</a> on April 23, 2021 recommending that the use of the Johnson & Johnson vaccine be resumed, asserting that the vaccine’s “known and potential benefits outweigh its known and potential risks.” The FDA and ACIP further noted that the Johnson & Johnson <a target="_blank" href="https://www.fda.gov/media/146305/download">Fact Sheet</a> had been updated to explain that there is a very low risk of developing blood clots after receiving the shot, particularly in women under 50.Now that the Johnson & Johnson vaccine is back in play, many hope that it will help meet the Biden administration’s new <a target="_blank" href="https://www.nytimes.com/2021/05/04/us/biden-covid-vaccine-strategy.html">goal</a> of having 70% of American adults receive at least one shot by July 4, 2021. A further boost to the national vaccination effort came on May 10, 2021, when the FDA announced that the Pfizer vaccine EUA had been amended to permit administration to 12- to 15-year-olds.

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Associate

Dr. Garreth McCrudden is a member of the Intellectual Property Group and focuses his work on patent prosecution and portfolio management for clients in the chemical and pharmaceutical fields.
Prior to

Garreth W. McCrudden, D.Phil.

Garreth McCrudden

COVID-19 Vaccines: And Then There Were Three (Again)

On December 11, 2020, a SARS-CoV-2 (COVID-19) vaccine developed by Pfizer and BioNTech became the first to receive Emergency Use Authorization (EUA) from the U.

COVID-19 Vaccines: And Then There Were Three (Again)

By now you are likely aware of the new safe harbor provisions of the federal anti-kickback statute (AKS), which the U.S. Office of Inspector General (OIG) finalized as of January 19, 2021. Among other changes to the AKS regulations, OIG created new safe harbors for: (i) value-based arrangements and (ii) arrangements related to the Centers for Medicare & Medicaid Services (CMS) sponsored model arrangements and modeled patient incentives. These new safe harbors emphasize the idea of value-based care and involve some level of risk sharing between entities in the provision of health care or services adjacent to health care.Prior to the promulgation of these new safe harbors, parties found it difficult to creatively structure arrangements to neatly fit into an AKS safe harbor. However, since the beginning of the new year, and the finalization of the new safe harbors, we have witnessed a sharp uptick in these types of value-based arrangements, as health care providers, medical device companies, and insurers attempt to get more creative with partnerships and their delivery of health care services. Accordingly, in order to take advantage of the more flexible pricing structures that these safe harbors allow, we expect to continue to see these types of arrangements increase.While the CMS-sponsored model safe harbor clearly maps out specific models adopted by CMS, the value-based arrangement safe harbors allow parties to innovate in their relationships to provide care that aligns with a “value-based purpose.” Under the AKS safe harbor language, value-based purposes include: coordinating and managing the care of a target patient population; improving the quality of care for a target patient population; appropriately reducing the costs to or growth in expenditures of payors without reducing the quality of care for a target population; and transitioning from health care delivery and payment mechanisms based on the volume of items and services provided to mechanisms based on the quality of care and control of costs of care for a target patient population.Notably, OIG prohibits medical device manufacturers from utilizing two of the new value-based safe harbors: value-based arrangements with substantial downside risk and value-based arrangements with full financial risk safe harbors. However, there are still two additional value-based safe harbors that medical device manufacturers may employ. Specifically, medical device manufacturers can utilize: (i) the safe harbor for care coordination arrangement to improve quality, health outcomes, efficiency, and patient engagement; and (ii) the safe harbor for support to improve quality, health outcomes and efficiency.The care coordination safe harbor focuses on digital health tools. The AKS regulations define digital health tools as “hardware, software, or services that electronically capture, transmit, aggregate, or analyze data and that are used for the purpose of coordinating and managing care; such term includes any internet or other connectivity service that is necessary and used to enable the operation of the item or service for that purpose.” Effectively, this safe harbor allows a company wider flexibility in structuring arrangements, particularly for new products that may assist health care providers with care coordination and provide higher quality health care services at lower costs, particularly where these products may be untested and could therefore benefit from a risk-sharing arrangement until the true impact and value of the products becomes known.For the new AKS safe harbors pertaining to substantial downside and full financial risk, we expect to see insurance companies and various types of health care providers employ new digital health tools when providing health care services. These companies will test the tools against patient populations to examine whether the tools increase the quality of health care services provided while simultaneously lowering health care costs. When risk sharing, both sides have skin in the game to incentivize providing high-quality care at lower costs.With the influx of innovation and new health care delivery models, it is important to note that all of the new AKS value-based safe harbors contain guardrails to ensure that health care providers and ancillary companies enter these arrangements for a value-based purpose; health care providers do not ration medically necessary care; parties do not prevent health care providers from making decisions in the best interests of their patients; parties do not limit patients’ preferences for different practitioners, providers, or suppliers; and that arrangements have clear outcome-based benchmarks and measures for evaluating the value-based arrangements.

Is 2021 the Value-Based and Shared Savings Revolution?

By now you are likely aware of the new safe harbor provisions of the federal anti-kickback statute (AKS), which the U.S. Office of Inspector General (OIG) final

On Friday, March 26, 2021, over 180 attendees worldwide attended McKinsey & Company’s first Global HealthTech CEO Connect of 2021. The discussion focused on regulatory and legal considerations for software as a medical device (SaMD) in both the United States and Europe and specific use cases for digital therapeutics and other digital health products. Speakers included Morrison & Foerster partners Bethany Hills and Wolfgang Schönig as well as special guest Corey McCann, president and CEO of Pear Therapeutics, in a fireside chat at the end of the program. Globally, the convergence of software technology and life sciences creates a massive opportunity for growth, and the market for these products is growing exponentially. Both the U.S. Food and Drug Administration (FDA) and European regulators have focused on establishing a regulatory framework for oversight of SaMD.After key definitions and concept overviews by the McKinsey team, Bethany Hills set the foundation of the FDA’s evolution in regard to SaMD in the United States and provided insights into the specific pathways impacting digital therapeutics. The FDA has not specifically defined SaMD, instead relying in the guidance documents on the definition provided by the International Medical Device Regulators Forum (IMDRF), which define the term as software intended to be used for one or more medical purposes that perform these purposes without being part of a hardware medical device. In essence, the software must act on its own, and have indications or be intended for the diagnosis, treatment, prevention, or monitoring of a condition. Medical devices in the United States are assigned one of three regulatory classes based on the risk and safety and effectiveness of the device. Most SaMD would fall under Class I or II, which then determines the type of submission required for authorization to market, including the 510(k) and De Novo pathways. Most devices are cleared under the 510(k) pathway; however, that trend is changing more recently, with many de novo submissions and authorizations involving SaMD. Areas to keep a close eye on include FDA’s finalization of its Clinical Decision Support Software Guidance, currently in draft form, and the Pre-Certification Pilot Program that could significantly impact SaMD if implemented outside the pilot program, by providing a faster, more efficient pathway to FDA authorization. The FDA does not make reimbursement-related decisions, however, a recent <a target="_blank" href="https://www.federalregister.gov/documents/2021/01/14/2021-00707/medicare-program-medicare-coverage-of-innovative-technology-mcit-and-definition-of-reasonable-and">CMS Final Rule</a> creates the Medicare Coverage of Innovative Technology (MCIT) pathway that will result in four years of national Medicare coverage starting on the date of the FDA’s market authorization of a device holding a Breakthrough Device Designation.  Providing the European perspective, Wolfgang took the stage to discuss the EU’s current regulatory landscape, and reimbursement for Digital Health Apps in Germany. The EU Medical Device Directive (MDD) will soon be replaced, effective May 26, 2021, by the EU Medical Device Regulation (MDR), directly applicable across the EU and significantly stricter for medical device software (MDSW) in three areas: prediction and prognosis applications, impact on the Class I categorization, and enhanced quality and safety requirements. After a review of the MDSW classifications and key changes to the Quality Management Systems, including more stringent requirements for Post-Market Surveillance activities, additional responsibilities along the supply chain, and stricter timeframes for document retention and incident reporting, the discussion turned to Unique Device Identification, which aims to enhance the effectiveness of post-market safety-related activities and traceability. Finally, the discussion focused on the application requirements for low risk apps (Class I or IIa) to receive reimbursement in Germany per the regulation on the Eligibility of Digital Health Applications for Reimbursement by the State Health Schemes (DiGAV), including certain interoperability requirements with the Electronic Patient File system, data protection requirements, and positive healthcare effects to be shown.Below are some highlights from the Q&A:1. Are there exceptions for software developed in a research setting/environment?a. In the United States, a software product can be used in a research and development setting without requiring the FDA’s authorization. However, there are nuances if the research setting involves human subjects.b. In the EU, the MDR generally applies to SaMD that is made available to others, including in a research setting. Yet, one important exception allows for the in-house development and use of SaMD in health institutions with only limited regulation (Article 5(5) MDR). The requirements to fulfill in order to benefit from this exception are rather strict. Most notably, they include that the specific needs for the targeted treatment cannot be met by any equivalent device on the market and that the SaMD is not transferred to another legal entity.2. Is there different regulatory treatment if the use of the medical device is for healthcare providers only vs. patients?a. In the United States, the answer depends on the category of the SaMD. For example,<a href="https://www.fda.gov/media/109618/download" target="_blank"> Clinical Decision Support</a> software has different standards applied for provider users v. patient users.b. The MDR in the EU does not expressly distinguish between groups of end-users; however, some regulatory requirements can make differentiated measures necessary. For example, instructions for use under certain circumstances may be delivered to professionals in electronic form while non-professional users can demand a printed version. Additionally, member states of the EU can decide that the instructions must be delivered in a certain language. In this regard, Germany requires documents to be in German for non-professional users but deems English instructions sufficient for professional users.3. What are some of the reimbursement options for SaMD companies?a. Reimbursement options and pathways seem elusive for SaMD companies, although there does seem to be an evolving path for the category of digital therapeutics.b. In the EU, reimbursement options for SaMD are not harmonized, i.e., each member state has established its own rules on the matter. This means, that the requirements to qualify for reimbursement differ significantly from country to country. Since the COVID-19 pandemic has seriously boosted the acceptance and demand for digital health products, some member states are currently revisiting their frameworks for reimbursement for SaMD. Germany, for instance, has enacted the DiGAV under which certain low risk apps (Class I or IIa) can receive reimbursement (see above and <a href="https://www.bfarm.de/SharedDocs/Downloads/EN/MedicalDevices/DiGA_Guide.pdf;jsessionid=04D2120BC0B889420CDDF02A652FA0D2.2_cid354?__blob=publicationFile&v=2" target="_blank">here</a>).4. What are the implications of GDPR on SaMD regulation in Europe? Among other issues to consider, the GDPR sets up restrictions for transfers of personal data from within the European Union to a country outside the EU. Please note that the meaning of “transfer” is understood quite broadly, and includes situations in which personal data becomes accessible to a third party, even if such third party does not actually access the data. Cross-border data transfers require a so-called transfer mechanism, which can usually be an adequacy decision by the European Commission for a particular country, EU model clauses, or binding corporate rules. Following the judgment of the European Court of Justice in the case “Schrems II,” in which the Court invalidated the EU-U.S. Privacy Shield, transfers to the United States have become particularly onerous to facilitate. Furthermore, EU member states may have introduced additional restrictions for transfers in the context of SaMD. For example, in Germany under the DiGAV, data transfers to the United States or any other non-EU country without an adequacy decision by the EU Commission is generally impossible. However, the German Federal Institute for Drugs and Medical Devices has issued guidance explaining under which circumstances it may be possible to use EU subsidiaries with parent companies in non-EU countries. More information is available <a href="https://www.bfarm.de/SharedDocs/Downloads/EN/MedicalDevices/Data_Processing_outside_of_Germany_FAQ.pdf?__blob=publicationFile&v=3" target="_blank">here</a>. Please note, however, that this topic is hotly debated and far from settled.5. How critical is HIPAA for companies in the U.S. market? HIPAA is a critical set of federal standards for privacy and security of protected health information. However, HIPAA is only one piece of the patchwork of privacy and security laws in the United States spanning federal and state requirements that could be applicable to SaMD.Related posts <a target="_blank" href="https://lifesciences.mofo.com/topics/Progress-and-Concerns-of-FDAs-Plan-for-Regulatory-Oversight-of-Artificial-IntelligenceMachine-Learning-AIML-Based-Software-as-Medical-Devices-SaMDs.html">FDA’s Plan for AI/ML-Based Software as Medical Devices: Progress and Concerns</a><a target="_blank" href="https://lifesciences.mofo.com/topics/FDA-Clinical-Decision-Support-Software-vs-EUs-Medical-Device-Regulation.html">FDA Clinical Decision Support Software Vs. EU’s Medical Device Regulation</a>  MoFo Life Sciences also features a six-part blog series discussing software as a medical device in Europe and the current regulatory landscape in more detail. Catch-up on parts 1-5 below and subscribe to our blog to receive the latest updates. <ul><li><a target="_blank" href="https://lifesciences.mofo.com/topics/Software-as-a-Medical-Device-in-Europe--New-Regulatory-Regime-About-to-Enter-into-Force--Part-1-of-6.html">New regulatory regime about to enter into force</a></li><li><a href="https://lifesciences.mofo.com/topics/Software-as-Medical-Device-in-Eu--New-Reg-Enter-into-Force--Part-2-of-6.html" target="_blank">A more detailed approach to the “intended purpose” </a> </li><li><a href="https://lifesciences.mofo.com/topics/Software-as-Medical-Device-in-Europe-New-Reg-Regime-to-Enter-into-Force-Part-3.html" target="_blank">Risk class re-categorization</a></li><li><a href="https://lifesciences.mofo.com/topics/Software-as-a-Medical-Device-in-Europe--New-Regulatory-Regime-About-to-Enter-into-Force-Part-4-of-6.html" target="_blank">Additional quality assurance and documentation requirements for MDSW</a></li><li><a href="https://lifesciences.mofo.com/topics/Software-as-medical-device-in-Europe--New-Regulatory-Regime-About-To-Enter-Into-Force--Part-5-of-6.html" target="_blank">Introduction of a Unique Device Identification requirement for MDSW</a></li></ul>

Wolfgang advises clients on contentious and non-contentious matters involving their most valuable intellectual property assets in the digital, high-tech, life sciences, and pharmaceutical industries.

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Global HealthTech CEO Connect: Software as a Medical Device in the U.S. and EU Recap

FDA Clinical Decision Support Software vs. EU’s Medical Device Regulation

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On Friday, March 26, 2021, over 180 attendees worldwide attended McKinsey & Company’s first Global HealthTech CEO Connect of 2021. The discussion focused on reg

Global HealthTech CEO Connect: Software as a Medical Device in the U.S. and EU Recap

In follow-up to our colleagues recent <a target="_blank" href="https://lifesciences.mofo.com/topics/Software-as-Medical-Device-in-Europe-New-Reg-Regime-to-Enter-into-Force-Part-3.html">post</a> about the newly implemented Medical Device Regulation (“MDR”) in the European Union, this post will discuss some of the similarities between FDA’s Clinical Decision Support (“CDS”) Software Draft <a target="_blank" href="https://www.fda.gov/media/109618/download">Guidance</a> (together the “CDS Draft Guidance”) and the MDR. While still in draft form, we note that FDA has signaled its intent to finalize the CDS Draft Guidance in 2021.<h4>Statutory Framework</h4>Under the current CDS Draft Guidance, FDA first bases its approach to CDS on criteria set forth in the 21st Century Cures Act (the “Cures Act”). Excluded from the definition of a “device” under the Cures Act are software functions that met all four of the following criteria:(1) not intended to acquire, process, or analyze a medical image or a signal from an in vitro diagnostic device or a pattern signal from a signal acquisition system;(2) intended for the purpose of displaying, analyzing, or printing medical information about a patient or other medical information (such as peer-reviewed clinical studies and clinical practice guidelines);(3) not intended for the purpose of supporting or providing recommendations to a health care professional about prevention, diagnosis, or treatment of a disease or condition; and(4) intended for the purpose of enabling such health care professional to independently review the basis for such recommendations that such software presents so that it is not the intent that such health care professional rely primarily on any of such recommendations to make a clinical diagnosis or treatment decision regarding an individual patient.Notably, these criteria do not include software functions intended for a patient or caregiver; rather, these criteria apply only to those software functions for “health care professionals.” Accordingly, software device manufacturers must analyze all software functions utilized by patients and caregivers carefully using the CDS Draft Guidance to determine whether FDA will either exercise its oversight focus, requiring the software to receive FDA approval as a device, or its enforcement discretion.  <h4>IMDRF Framework</h4>FDA’s CDS Draft Guidance also relies on the International Medical Device Regulators Forum (“IMDRF”) Framework for Software as a Medical Device (“SaMD”) in approaching its interpretation of the criteria from the statue that would exclude a software from the definition of a medical device. The MDR also utilized this IMDRF framework for SaMD. IMDRF focuses on two factors, which are critical to the analysis of SaMD: (1) whether the user uses the information provided by a SaMD to treat or diagnose, to drive clinical management, or to inform clinical management; and (2) whether the patient’s healthcare situation or condition is critical, serious, or non-serious.The CDS Draft Guidance utilizes the IMDRF framework, and includes a variation of the classification used under Rule 11 by the European Commission’s <a href="https://ec.europa.eu/docsroom/documents/37581" target="_blank">Guidance on Qualification and Classification of Software in Regulation (EU) 2017/745-MDR and Regulation (EU) 2017/746-IVDR</a>, to similarly categorize different types of SaMD.<table border="1" cellspacing="0" cellpadding="0"><tbody><tr><td width="156" rowspan="2" style="width: undefined%; height: auto;">State of healthcare situation or condition</td><td width="468" colspan="3" style="width: undefined%; height: auto;">Significance of information provided by SaMD tohealthcare decision</td></tr><tr><td width="156" style="width: undefined%; height: auto;">Treat ordiagnose</td><td width="156" style="width: undefined%; height: auto;">Drive clinical management</td><td width="156" style="width: undefined%; height: auto;">Inform clinicalmanagement</td></tr><tr><td width="156" valign="top" style="width: undefined%; height: auto;">Critical</td><td width="156" valign="top" style="width: undefined%; height: auto;">IV</td><td width="156" valign="top" style="width: undefined%; height: auto;">III</td><td width="156" valign="top" style="width: undefined%; height: auto;">II</td></tr><tr><td width="156" valign="top" style="width: undefined%; height: auto;">Serious</td><td width="156" valign="top" style="width: undefined%; height: auto;">III</td><td width="156" valign="top" style="width: undefined%; height: auto;">II</td><td width="156" valign="top" style="width: undefined%; height: auto;">I</td></tr><tr><td width="156" valign="top" style="width: undefined%; height: auto;">Non-serious</td><td width="156" valign="top" style="width: undefined%; height: auto;">II</td><td width="156" valign="top" style="width: undefined%; height: auto;">I</td><td width="156" valign="top" style="width: undefined%; height: auto;">I</td></tr></tbody></table> FDA uses the risk-categorizations described above to apply a risk-based policy to its regulation of Device CDS functions.<h4>Other Components of the CDS Draft Guidance</h4>In addition to the above framework from IMDRF, the CDS Draft Guidance also focuses on whether the intended user is a healthcare provider or a patient or caregiver and whether the user can independently review the basis for the recommendation from the software.  This focus on user-type and independent review, rooted in the Cures Act language, is a departure from the IMDRF (and the MDR’s) framework, which focuses more upon the intended use of the software and the medical conditions the software covers. As you can see in the table below, FDA has a demonstrated interest in those software functions where the intended user is a patient or caregiver, particularly when the device is informing clinical management for serious or critical healthcare situations or conditions. Similarly, when the intended user is a healthcare provider, FDA does not consider the software to be a device so long as the healthcare provider can independently review the basis for the recommendation.Combining the IMDRF Framework with FDA’s focus on the user-type and whether the user can independently review the basis for the recommendation, results in the following table:<table border="1" cellspacing="0" cellpadding="0"><tbody><tr><td width="249" colspan="2" valign="top" style="width: undefined%; height: auto;"> </td><td width="125" valign="top" style="width: undefined%; height: auto;">Intended User is HCP</td><td width="234" valign="top" style="width: undefined%; height: auto;">Intended User is Patient or Caregiver</td></tr><tr><td width="125" valign="top" style="width: undefined%; height: auto;">IMDRF Risk Categorization</td><td width="125" valign="top" style="width: undefined%; height: auto;">Can the User Independently Review the Basis?</td><td width="125" valign="top" style="width: undefined%; height: auto;">FDA Regulation</td><td width="234" valign="top" style="width: undefined%; height: auto;">FDA Regulation</td></tr><tr><td width="125" rowspan="2" valign="top" style="width: undefined%; height: auto;">InformxCritical</td><td width="125" style="width: undefined%; height: auto;">Yes</td><td width="125" style="width: undefined%; height: auto;">Not a Device</td><td width="234" style="width: undefined%; height: auto;">Oversight Focus</td></tr><tr><td width="125" style="width: undefined%; height: auto;">No</td><td width="125" style="width: undefined%; height: auto;">Oversight Focus</td><td width="234" style="width: undefined%; height: auto;">Oversight Focus</td></tr><tr><td width="125" rowspan="2" valign="top" style="width: undefined%; height: auto;">InformxSerious</td><td width="125" style="width: undefined%; height: auto;">Yes</td><td width="125" style="width: undefined%; height: auto;">Not a Device</td><td width="234" style="width: undefined%; height: auto;">Oversight Focus</td></tr><tr><td width="125" style="width: undefined%; height: auto;">No</td><td width="125" style="width: undefined%; height: auto;">Oversight Focus</td><td width="234" style="width: undefined%; height: auto;">Oversight Focus</td></tr><tr><td width="125" rowspan="2" valign="top" style="width: undefined%; height: auto;">InformxNon-Serious</td><td width="125" style="width: undefined%; height: auto;">Yes</td><td width="125" style="width: undefined%; height: auto;">Not a Device</td><td width="234" style="width: undefined%; height: auto;">Enforcement Discretion</td></tr><tr><td width="125" style="width: undefined%; height: auto;">No</td><td width="125" style="width: undefined%; height: auto;">Enforcement Discretion</td><td width="234" style="width: undefined%; height: auto;">Oversight Focus</td></tr></tbody></table> <h4>Examples</h4>The CDS Draft Guidance provides a number of examples where FDA works through its framework. These examples walk through the IMDRF framework while considering the intended user and whether the user can independently review the recommendation from the SaMD.Non-Device CDSFDA considers the following software to not be a device: software that compares patient signs, symptoms, or results with available practice guidelines (institutions-based or academic/clinical society-based) to recommend condition-specific diagnostic tests, investigations, or therapy to healthcare providers. In this example, the software uses practice guidelines as the basis for the recommendation and provides such guidelines to the healthcare provider to review, such that the health care provider does not rely primarily on the software’s recommendation.Enforcement DiscretionFDA plans to utilize its enforcement discretion on software that assist a patient in identifying an over-the-counter cold or allergy medication to consider purchasing based on symptoms. In this example, the software would include appropriate warnings about products with overlapping ingredients. This software is device CDS because it is intended for a patient; however, FDA does not intend to enforce compliance because the software is intended to provide options to patients for the treatment of a non-serious situation or condition and because the patient can independently review the basis for the software’s recommendations.Oversight FocusFDA plans to focus its regulatory oversight on device CDS functions intended for patients, where the software is informing clinical management of serious or critical conditions. For example, FDA intends to regulate the following as device CDS: a software function that recommends when the parent or caregiver of pediatric patients with cystic fibrosis should take a child to the emergency room by aggregating information based on patient-specific symptoms and care guidelines. This software is device CDS because a caregiver uses the software and the software informs clinical management for a critical situation or condition, particularly because of the fragility of the target population.   <h4>Conclusion</h4>Recognizing that companies with global offerings face a complexity of issues, companies should seek to leverage similarities amongst the regulatory classification of SaMD and CDS. However, companies should simultaneously be acutely attuned to the critical differences in how those frameworks are applied by the applicable regulatory bodies. There is a need for attention to these issues, particularly with the upcoming finalization of the CDS guidance in FY2021 by FDA and the MDR coming into effect on May 26, 2021.

FDA Clinical Decision Support Software vs. EU’s Medical Device Regulation

In follow-up to our colleagues recent post about the newly implemented Medical Device Regulation (“MDR”) in the European Union, this post will discuss some of t

During the COVID-19 pandemic, governments across the globe have become increasingly involved in the private sector.[1] State-owned enterprises have long been common in Asia, but the pandemic has increased their prominence in Europe. In Italy and Norway, for instance, governments are taking equity stakes in the airline industry to help distressed companies. Now, with vaccine manufacturing ramping up, it makes sense that governments would intervene in the life sciences and pharmaceutical sectors as well. In our article published earlier this month on, we analyzed the <a target="_blank" href="https://lifesciences.mofo.com/topics/COVID-19-State-Intervention-in-Times-of-Vaccine-Shortages.html">legal framework for state intervention in vaccine production in Germany</a>. Since then, the German government has <a target="_blank" href="https://www.reuters.com/article/health-coronavirus-vaccine-supply-insigh/as-vaccine-nationalism-deepens-governments-pay-to-bring-production-home-idUSKBN2B40IX">increased its support </a>for local vaccine production. But what is happening across the pond in the United States?Here, too, the federal government has intervened to ramp up the vaccine supply. On March 2, 2021, President Biden announced an historic partnership between Johnson & Johnson (J&J) and Merck to increase production of J&J’s COVID-19 vaccine. While this partnership between two pharmaceutical behemoths is significant in its own right, it also made headlines for the role government played in brokering the deal. The Biden administration agreed to pay $268.8 million to upgrade two Merck production facilities and is helping Merck procure necessary equipment. Of course, this was not the first time during the Coronavirus crisis that the federal government has intervened to shape the private sector’s pandemic response.[2] Nevertheless, it is notable that President Biden is engaging the private sector at this scale and so soon into his presidency. The Biden administration’s early approach to state intervention during the COVID-19 pandemic may portend even greater involvement down the road, which would present both opportunities and risks for life sciences companies doing business in the U.S.<h4>The Statutory Framework</h4>Over 90 percent of constitutions in the world contain emergency clauses, but not the U.S. Constitution.[3] Instead, the federal government’s authority to intervene in a pandemic comes from a patchwork of statutes and regulations. At the center of this constellation is the Defense Production Act, 50 U.S.C. § 501 et seq. (DPA). The origins of the DPA trace back to the War Powers Act of 1941 and 1942, passed during WW2 to give President Roosevelt more control over the wartime economy. Congress enacted the DPA in 1950 during the Korean War and has re-authorized it ever since then—most recently in the John S. McCain National Defense Authorization Act of 2019. In short, the modern DPA authorizes the executive branch to mobilize private actors and allocate resources during moments of national crisis. The president can compel companies to prioritize orders from the government, allocate materials/resources, offer loans or loan guarantees, make purchase commitments, and authorize companies to work together. Historically, the federal government has used the DPA to procure defense contracts and respond to natural disasters. For more information about the DPA, see MoFo’s articles providing a <a target="_blank" href="https://govcon.mofo.com/coronavirus/a-summary-of-the-defense-production-act/">summary of the Defense Production Act</a> and <a target="_blank" href="https://govcon.mofo.com/coronavirus/the-defense-production-act-a-little-known-statute-that-may-soon-be-running-your-company/">three key takeaways about the DPA</a>. In addition to the DPA, the executive branch derives authority to respond to public health emergencies from several other sources. First, the National Emergencies Act, 50 U.S.C. § 1601 et seq., allows the president to declare national emergencies, which essentially unlock statutory powers that the executive branch cannot otherwise access. President Trump declared the COVID-19 pandemic a national emergency on March 13, 2020. Second, the Stafford Act, 42 U.S.C. § 5521 et seq., organizes federal emergency assistance with respect to state and local governments. Third, the Pandemic and All-Hazards Preparedness Reauthorization Act of 2013, 42 U.S.C. ch. 6A § 201 et seq., allows the Food & Drug Administration (FDA) to prepare and stockpile medical countermeasures (drugs, vaccines, and devices), and streamlines the FDA’s emergency responsiveness. Fourth and most recently, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) gives the FDA a greater role in drug/vaccine supply chains. This is not an exhaustive list of emergency legislation. But when it comes to intervening in private contracting to boost vaccine production, the DPA is the most significant legislation.<h4>The Biden Administration’s Response to COVID-19</h4>On his very first day in office, President Biden passed Executive Order 13987. E.O. 13987 established the position of Coordinator of the COVID-19 Response (currently Jeffrey Zients) and organized that office in the White House. Among other responsibilities, President Biden charged the COVID-19 Response Coordinator with coordinating the government’s efforts to produce and distribute personal protective equipment, vaccines, and tests, “including through the use of the Defense Production Act[.]”[4] President Trump depended somewhat on the DPA for his early COVID-19 response, but critics, including then-candidate Biden, argued that he did not fully take advantage of the <a target="_blank" href="https://www.nytimes.com/2020/09/22/health/Covid-Trump-Defense-Production-Act.html">Act to manage the medical equipment supply chain</a>. Thus, President Biden’s early focus on the DPA signaled a shift from the prior administration.The next day, on January 21, 2021, President Biden signed Executive Order 14001, ordering the secretary of state, secretary of defense, secretary of health and human services, secretary of homeland security, and the heads of relevant agencies to review the inventory of critical pandemic response supplies and fill any shortfalls. In particular, section 2 of the E.O. directs executive officers to “take appropriate action using all available legal authorities, including the Defense Production Act, to fill those shortfalls as soon as practicable by acquiring additional stockpiles, improving distribution systems, building market capacity, or expanding the industrial base.”[5] Section 3 lays out steps to address the pricing of pandemic supplies. Section 4 seeks to develop “a strategy to design, build, and sustain a long-term capability in the United States to manufacture supplies for future pandemics and biological threats.” Section 5 provides that the federal government will communicate with Tribal governments to ensure access to the Strategic National Stockpile.The Biden administration <a target="_blank" href="https://www.politico.com/news/2021/02/05/biden-defense-production-act-coronavirus-466130">announced its first significant anti-COVID-19 measures</a> on February 5, 2021. Specifically, it announced plans to sign DPA contracts with six diagnostic companies to make at-home and point-of-care testing more widely available. It also announced that it would use the DPA to give Pfizer priority access to certain materials that are essential in vaccine manufacturing. At that time, the FDA had only approved the Pfizer and Moderna vaccines, while the J&J single-shot vaccine was still under review. The White House expected J&J to get FDA approval, but <a target="_blank" href="https://www.politico.com/news/2021/02/05/biden-defense-production-act-coronavirus-466130">under-produce in terms of quantity</a>. Of course, the Biden administration later addressed that shortfall when it facilitated the J&J-Merck partnership.<h4>Opportunities for Collaboration Among Private Actors</h4>Given President Biden’s early reliance on the DPA within the first 60 days of his presidency, it is likely that the federal government will continue to intervene in private contracting. This is exciting for life sciences companies because government purchase orders and loan guarantees can provide businesses with reliable revenue streams. Moreover, the DPA may create unique opportunities for businesses to collaborate that might not otherwise be possible. Most notably, Section 708 of the DPA provides for voluntary agreements among private parties to meet national defense requirements or needs. Section 708(j) creates a limited defense to antitrust enforcement if anticompetitive behavior was done “in the course of developing a voluntary agreement initiated by the President or a plan of action adopted under any such agreement [or] to carry out a voluntary agreement initiated by the President and approved in accordance with this section[.]” In other words, collaboration between competitors, such as J&J and Merck, does not risk antitrust enforcement when it has the president’s seal of approval. And while subsection (j) requires the president to initiate voluntary agreements, there is little antitrust risk if entities pitch these agreements to the White House. Thus, the DPA may create new opportunities for businesses during COVID-19.Yet would-be collaborators should still be wary of antitrust risks. In April 2020, MoFo antitrust lawyers published an <a target="_blank" href="https://www.corporatecomplianceinsights.com/collaboration-pricing-covid-19/">article highlighting several antitrust risks</a> specific to the COVID-19 pandemic. They warned that the Department of Justice and Federal Trade Commission will still go after anticompetitive behavior, especially behavior that seeks to take advantage of the ongoing pandemic such as price gouging, price fixing, and stockpiling/hoarding resources. The article also highlighted possible consumer protection issues related to COVID-19. For instance, consumer protection laws in many states also proscribe price gouging. And although the DPA provides a <a target="_blank" href="https://fas.org/sgp/crs/natsec/LSB10534.pdf">limited defense with respect to antitrust enforcement</a>, it is not clear that subsection (j) applies to consumer protection laws as well. Ultimately, businesses hoping to collaborate with pandemic responsiveness/vaccine production should be cautious and seek counsel.<h4>The Outlook for Late 2021 and Beyond</h4>President Biden’s intervention to ramp up vaccine production has been an unqualified success. Entering office, his goal was to provide 100 million vaccinations within his first 100 days. After reaching that target on day 59, President Biden announced a bold, new goal: 200 million vaccinations within the first 100 days. Given that there are 260 million adults living in the U.S., that is good news; experts predict that approximately <a target="_blank" href="https://www.nytimes.com/live/2021/03/25/world/covid-vaccine-coronavirus-cases">80 percent of the population, or 208 million, must be vaccinated to achieve herd immunity</a>. Altogether, the Biden administration hopes to make vaccines available to <a target="_blank" href="https://www.nytimes.com/2021/03/02/us/politics/merck-johnson-johnson-vaccine.html">every adult in the United States by May 1</a>.Yet that will not mark the end of vaccine production in the United States. First, as new variants of the coronavirus emerge over the summer, vaccinated individuals may require <a target="_blank" href="https://www.npr.org/sections/health-shots/2021/02/25/971345409/covid-19-vaccine-makers-booster-shots-aim-at-a-moving-target-coronavirus-variant.">booster shots</a> to keep up their immunity. Fortunately, Pfizer and Moderna have already started preparing to bring variant-specific third doses to clinical trial. Second, the FDA is likely to approve COVID-19 vaccines for children at some point in the future. To date, the FDA has only approved vaccines for adults. Just last week, however, Pfizer announced a <a target="_blank" href="https://www.cnbc.com/2021/03/25/covid-vaccine-pfizer-begins-trial-on-infants-and-young-kids.html">clinical trial for its COVID-19 vaccine involving healthy 6-month-old to 11-year-old children</a>. With over 70 million children living in the U.S., it is likely that demand for the COVID-19 vaccines will remain high through the end of 2021. Third, the U.S. will remain involved in vaccine production even after reaching domestic herd immunity. Soon after entering office, President Biden entered <a target="_blank" href="https://www.bbc.com/news/world-55795297">Covax</a>, a partnership with the World Health Organization to deliver COVID-19 vaccines to the developing world. Low- to middle-income countries lag behind wealthy nations in terms of vaccine procurement, and current models estimate that there will not be enough vaccines for the global population until 2023–24.What exactly does all of this mean for life sciences companies doing business in the United States? It means that, although there appears to be a light at the end of the COVID-19 tunnel, the pandemic will continue to unfold both domestically and abroad well into the future. Correspondingly, private-public partnerships and state interventions into vaccine production should persist into the future as well. Businesses that are currently fighting COVID-19 should brace themselves to continue long-term. And businesses that have not been involved with the pandemic response thus far may yet find opportunities to contribute going forward.<h4>Short-Term Authority and Long-Term Preparedness</h4>Looking beyond COVID-19 vaccine production and rollout, the DPA will also play a prominent role in general pandemic preparedness going forward. Again, E.O. 14001 sought to increase vaccine production capacity for future pandemics. On the surface, it may seem odd that the president could wield emergency powers to achieve long-term objectives. Yet the DPA actually contemplates such prophylactic measures; in fact, preparedness is one of the primary objectives of the policy.[6] Of course, life sciences companies may not be able to produce vaccines in anticipation the next deadly virus outbreak, but they can begin to replenish the national stockpile of personal protective equipment and medical devices, such as ventilators. Already, President Biden has used <a target="_blank" href="https://www.wsj.com/articles/biden-to-address-chip-shortages-supply-chain-problems-with-executive-action-11614160803">executive authority to bolster supply chains</a> for critical pharmaceutical materials. Look out for similar measures in the future.Over one year into COVID-19, even with vaccines rolling out across the country, there is still a long way to go in responding to this pandemic and preparing for the next one. And while the Biden administration is still in its infancy, it is already clear that the White House will take a hands-on approach in public health and emergency preparedness—before, during, and after crises. Healthcare and life sciences companies should prepare for—and look forward to—that new reality.[1] OECD Policy Responses to Coronavirus (COVID-19)The COVID-19 crisis and state ownership in the economy: Issues and policy considerations. The Wall Street Journal: <a target="_blank" href="https://www.wsj.com/articles/western-economies-embrace-state-intervention-emulating-asia-11604574001">Western Economies Embrace State Intervention, Emulating Asia</a>.[2] <a target="_blank" href="https://www.lawfareblog.com/understanding-trumps-invocation-defense-production-act-meat">Understanding Trump’s Invocation of the Defense Production Act for Meat</a>.[3] Harvard Law Review: States of Emergencies Part I. Oxford Academic: <a target="_blank" href="https://academic.oup.com/icon/article/16/1/101/4995561?login=true">The architecture of emergency constitutions</a>.[4] Federal Register: <a target="_blank" href="https://www.federalregister.gov/documents/2021/01/25/2021-01759/organizing-and-mobilizing-the-united-states-government-to-provide-a-unified-and-effective-response">Organizing and Mobilizing the United States Government To Provide a Unified and Effective Response To Combat COVID-19 and To Provide United States Leadership on Global Health and Security</a>.[5] Federal Register: <a target="_blank" href="https://www.federalregister.gov/documents/2021/01/26/2021-01865/a-sustainable-public-health-supply-chain">A Sustainable Public Health Supply Chain</a>.[6] The Stafford Act defines “emergency preparedness” to include “[m]easures to be undertaken in preparation for anticipated hazards[.]” 42 U.S.C. § 5195a(3)(A).

Brigid is a food, drug, and medical device lawyer who counsels life sciences companies on a wide range of U.S. Food & Drug Administration pre- and post-market regulatory issues.

Brigid DeCoursey Bondoc

Brigid is a food, drug, and medical device lawyer who counsels life sciences companies on a wide range of U.S. Food & Drug Administration pre- and post-market regulatory issues.