Potential Effects of 2016 Elections on Medical Device Industry

Transcription

1 Potential Effects of 2016 Elections on Medical Device Industry Greg Levine December 8, 2016 LLP

2 2016 Presidential Election: Electoral College Results 2

3 Trump Administration Agency Leadership HHS Secretary Nominee: Tom Price Member of the House of Representatives (R-GA) Chairman of Budget Committee, Member of Ways & Means Committee health panel Practicing orthopedic surgeon for nearly 20 years Introduced his own legislation to repeal/replace the ACA Empowering Patients First Act of 2015 (HR 2300) Includes provision prohibiting HHS from using comparative effectiveness research or patientcentered outcomes research to deny coverage of an item or service Possible agenda: Replacing ACA, reforming Medicare (premium support program) and Medicaid (block grants to states), reducing government spending CMS Administrator Nominee: Seema Verma President, CEO, Founder of SVC, Inc., a health policy consulting company Architect of Indiana s Medicaid expansion plan, Healthy Indiana Plan 2.0 FDA Commissioner? 3

4 Trump Administration Agenda 1) 2) 3) 4) Reform Washington Term limits for members of Congress Federal hiring freeze (excluding military, public health/safety) Eliminate two existing regulations for every new one Trade Renegotiate or withdraw from NAFTA, TPP Label China a currency manipulator Tax Lower corporate tax rate to 15% Allow repatriation of corporate funds at 10% rate Establish tariffs to discourage relocation of U.S. companies overseas Health Care/Life Sciences/FDA Repeal & replace ACA (would eliminate device tax) Decrease red tape at FDA to speed approval of life-saving drugs 4

5 2016 Senate Election Results GOP maintains control of the Senate All races decided except for LA Likely Republican win in LA runoff (December 10 th ) would give Republicans a majority 5

6 2016 House Election Results 6

7 Congressional Leadership: Composition of Key Committees Senate House Health, Education, Labor & Pensions (HELP) Committee Committee Chairman: Lamar Alexander (R-TN) Ranking Member: Patty Murray (D-WA) Finance Committee Full Committee Chairman: Orrin Hatch (R-UT) Ranking Member: Ron Wyden (D-OR) Energy & Commerce New Full Committee Chairman: Greg Walden (R-OR) New Health Subcommittee Chairman: likely Michael Burgess (R-TX) Ways & Means Full Committee Chairman: Kevin Brady (R-TX) Health Subcommittee: Pat Tiberi (R-OH) 7

8 Congress: 21 st Century Cures Authorizes $500 million over 10 years for FDA Innovation Account to be used for (among other things) Medical device changes in Title III of Cures bill Creation of Intercenter Institutes within FDA for major disease areas Authorizes $4.8 billion over 10 years for NIH innovation projects, including Precision Medicine Initiative BRAIN initiative Cancer Moonshot initiative 8

9 Congress: 21 st Century Cures Changes to medical device regulation Establishes breakthrough pathway for 510(k), PMA, and de novo devices Expands HDE authority to diseases/conditions affecting <8,000 individuals Creates a process for proposing FDA recognize device consensus standards Requires FDA to evaluate Class I and II devices for 510(k) exemption upon passage of the bill and every 5 years thereafter Requires advisory committees that consider classification of specific devices to include appropriate clinical and technological expertise, with sponsor input Eliminates requirement that a device clinical trial always have a local IRB Requires FDA to clarify CLIA waiver requirements in guidance Requires training and auditing of FDA application of least burdensome requirements Requires cleaning validation data and instructions for reusable devices Identifies 5 categories of medical software that will not be regulated as devices 9

10 Congress: 21 st Century Cures Changes to combination product regulation Revised process for assigning a primary agency center Requires FDA to conduct premarket review under a single application, whenever appropriate Prohibits FDA from determining that a product s PMOA is that of a drug merely because the product has any chemical action Clarifies appeal options, use of studies to establish PMOA, and timelines on PMOA determinations Requires FDA to meet with sponsors within 75 days of a request to discuss approval standards and postmarket requirements Requires FDA to issue guidance on combo product regulation within 4 years 10

11 Congress: 21 st Century Cures Changes to clinical investigation requirements Allows FDA to waive or alter consent requirements for minimal risk studies, similar to existing flexibility under the Common Rule Requires FDA to harmonize differences between human subject regulations under the Common Rule and FDCA 11

12 Congress: MDUFA Reauthorization Current MDUFA expires end of FY 17 (Sept. 30, 2017) FDA, industry, and other stakeholders have agreed on performance goals, but Congress may add other reforms Draft MDUFA recommendations Continue Shared Outcome Goals to reduce Total Time to Decision for PMAs and 510(k)s (see next slide) Add performance goals for pre-subs and de novo submissions Create a CDRH Quality Management (QM) Unit for premarket submissions Establish an Accreditation Scheme for Conformity Assessment (ASCA) Program using FDA-recognized consensus standards Commit FDA to undertake activities to advance use of patient preference information and patient reported outcomes in the regulatory process Establish pilot to assess the utility of real-world evidence for expanding indications for use, new clearances/approvals, improved malfunction reporting Create a central digital health unit 12

13 Congress: MDUFA Reauthorization Shared Outcome Goals: Average Total Time to Decision Current MDUFA received beginning FY2013 Reauthorized MDUFA received beginning FY2014 received beginning FY2015 received beginning FY2016 received beginning FY (k) 135 days 135 days 130 days 130 days 124 days PMA 395 days 395 days 395 days 390 days 385 days received in FY received in FY received in FY received in FY received in FY (k) 124 days 120 days 116 days 112 days 108 days PMA 320 days 315 days 310 days 300 days 290 days 13

14 FDA Possible changes in leadership Trump likely to appoint new Commissioner Other key positions may (or may not) change: CDRH Director? Deregulatory agenda Trump s First 100 Days Action Plan: Reforms will also include cutting the red tape at the FDA: there are over 4,000 drugs awaiting approval, and we especially want to speed the approval of life-saving medications. Laboratory Developed Tests (LDTs) Following the election, FDA notified industry groups on November 18, 2016 that it no longer plans to finalize its draft guidance on LDTs FDA stated that it intends to work with the new administration and Congress to update the LDT framework Preservation of status quo for now Congress could use MDUFA legislation to establish new LDT scheme 14

15 FDA Other issues FDA will face Reforming policies on manufacturer dissemination of off-label information Pendulum swing: pressure to speed approvals Real World Evidence Patient preference information Shifting data collection to postmarket Conformity assessment Reciprocal approvals from trustworthy countries State right to try laws Resource burdens of implementing 21 st Century Cures, User Fee Act Non-device issues that will command substantial FDA attention Generic approvals to address drug prices Opioids Food safety 15

16 Government Enforcement/Whistleblower Environment DOJ likely to continue pursuing FCA cases Senator Grassley is a major proponent of the False Claims Act (FCA) FCA brings in major dollars to the U.S. Treasury Political appeal of addressing waste, fraud, & abuse Will change in administration mean less emphasis on pursuing off label device cases? Government thought it had a home run in the Vascular Solutions case, but lost Mixed Government win in Acclarant case (Facteau) being challenged, Government currently arguing 1 st Amendment not infringed What about government s willingness to intervene on other FCA theories premised on FDA regulatory violations (e.g., MDR, Part 806, 510(k) modifications, QSR)? Any change in individual liability: Park Doctrine/Yates Memo? 16

17 Supreme Court Trump to appoint justice to fill Justice Scalia s seat Others? Three justices will be 78 or older on Inauguration Day Narrow path to confirmation Republicans will have a narrow majority in the Senate Republicans will have a 1- or 2-seat majority on Senate Judiciary Committee Possible impact on medical device regulation Balance likely restored to 5-4 conservative-leaning split that prevailed before Justice Scalia s death Conservative majority might tend towards restricting federal agency authority First Amendment jurisprudence likely to continue trend towards greater protection of corporate speech 17

18 Questions? Greg Levine Ropes & Gray LLP 2099 Pennsylvania Avenue, NW Washington, DC (202)