Who’s Who Legal brings together two of of the leading practitioners in the world to discuss key issues facing regulatory specialists today.
Arnall Golden Gregory LLP
WWL: In your jurisdiction have there been any major regulatory changes or developments? What impact have they had on clients and your practice and how have you responded to the changes?
Alan Minsk: There are at least three major regulatory developments that are affecting clients. First, the US Food and Drug Administration, the FDA, is requiring more clinical data to support marketing authorisations, particularly in the medical device industry, than it has done previously. While the FDA might continue to reject an application, there seems to be an increase in “maybes” or, if the company can provide more information to satisfy the FDA, it offers the agency more comfort in approving the marketing application. We are encouraging clients to have contingency plans on negotiations with the FDA and be more anticipatory and responsive with potential agency requests. Similarly, the company should be self-critical of its product by knowing where the gaps or weaknesses are and be prepared to allay the FDA’s concerns.
A second development is the seemingly increased inspectional and enforcement scrutiny of companies based outside the United States. With many foreign companies selling into, or sourcing materials that are imported into, the United States, the FDA is carefully reviewing those firms and using its import detention authority to stop products or components where it has concerns, particularly in the quality-related area. Therefore, we encourage clients to enter into quality agreements with suppliers outside the United States, have contingency plans if something goes wrong with the FDA, and proactively conduct internal or external audits and take appropriate corrective action to pre-empt the FDA enforcement action.
A third development is the FDA’s increasing use of guidance documents to state agency policy or provide clarification or interpretation of regulatory requirements. This has placed increasing demands on the regulated industry that must review, react, and, in some cases, comment on these guidance documents.
The FDA seems to have determined that this is an easier and better route of regulation as it avoids the burdens of rulemaking (and the corresponding need to provide notice and comment). Even though not binding law, this guidance (even in draft form) is often viewed as such by agency officials. The effect on our practice is the increasing demands to stay on top of not only new laws and regulations, but also this “unofficial” stream of regulatory demands.
Koosje van Lessen Kloeke: In the last couple of years we have seen several significant changes and developments with regard to the financing and reimbursement of (expensive) medicinal products and medical devices. This has had a significant direct impact on our clients’ business. For example, in 2012 the Dutch system for the funding and reimbursement of hospital care and medical care provided by medical specialists, has changed significantly. Under very strict conditions medicinal products are now eligible for an “add-on”, meaning that hospitals are allowed to charge health-care insurers a higher maximum tariff for a specific medicinal product. More changes in the system have been announced for 2014 and 2015.
Furthermore, as of 18 October 2013, the Dutch Health Care Insurance Decree allows for the conditional reimbursement of medicinal products for a maximum of four years. During that period pharmaceutical companies can, for example, be required by the minister of health to do cost-efficiency research for health technology assessment purposes. In some instances the Health Care Insurance Board (CVZ) has advised the minister to combine the conditional reimbursement with a financial arrangement between the Dutch government and the company, for example, a pay-for-performance agreement or a price cap, or to combine the conditional reimbursement with a patient data registry.
In 2013 we have also seen the first purchase procedures (tenders) by health-care insurers for the reimbursed care with diabetes test materials and food for special medical purposes. This development has also had a major impact on our clients’ businesses, as well as on health-care providers and patients. We expect that there will be more tenders for other types of products as well.
On a different note, there are also major regulatory changes expected with regard to the marketing of medical devices. Very recently the Dutch minister of health announced that she intends to introduce new rules with regard to favouritism, more in particular with regard to gifts, hospitality, the provision of services by health-care professionals, and bonuses and discounts related to business transactions. The minister has stated that the new favouritism rules for medical devices will be similar to the existing rules with regard to favouritism and medicinal products in the Dutch Medicines Act.
Finally, in the area of enforcement of the rules and regulations, we have seen an increase in enforcement requests and requests for access to Dutch competent authorities under the Dutch Government Information (Public Access) Act regarding life sciences companies and their products.
These regulatory changes and developments have a high impact on our clients’ day-to-day business. We provide tailor-made updates about legislative and policy issues, but we also provide tailor-made client training and workshops.
WWL: Many lawyers have noted the increasing interaction between data protection law and life sciences, particularly in relation to clinical trials. Are you seeing much advisory or compliance work in this area? Have you noticed any other key trends over the past year?
Alan Minsk: Clinical trial sponsors and contract research organisations generally are not entities covered by the Health Insurance Portability and Accountability Act – which gives citizens rights over their health information – and, because they typically do not perform services on behalf of the research facilities, they would not be business associates, as that term is defined in the law. Nevertheless, sponsors and CROs are increasingly having to grapple with HIPAA issues. For example, some research sites will refer to a sponsor or CRO as a business associate and ask that they sign a business associate agreement. We have prepared replies explaining that sponsors and CROs are not business associates and have counselled clients against signing business associate agreements where not required. We have also advised research sites on HIPAA’s permissible scope of authorisations, which generally cannot be drafted to authorise future unspecified research purposes beyond the present research study.
Sponsors may reasonably insist on having oversight of the researcher’s form of authorisation, and even its notice of privacy practices, due to the sponsor’s need to rely on the researcher’s right to disclose study data. Sponsors and CROs may be subject to, and should be familiar with, the many potentially applicable US state and foreign privacy laws. Finally, a big issue that broke in 2013 was the US Department of Health and Human Services’ very nuanced guidelines on the HITECH Act Final Rule’s restrictions on marketing communications and refill reminders by pharmaceutical manufacturers, which came out in September.
Koosje van Lessen Kloeke: We are also seeing more and more work in the area of data protection law and across a number of life sciences disciplines. One of the key trends that we have seen over the past year are privacy issues related to the prescription and reimbursement of care with medicinal products and medical devices. For example, since mid-2013 doctors are legally obliged to include in their prescriptions for a number of medicinal products the reason why they have prescribed the product. This should enable the dispensing pharmacist to verify the strength and dosage regimen. Another example is the requirement on hospitals and health-care professionals to maintain a patient data registry as a condition for reimbursement of a medicinal product. In some cases pharmaceutical companies are even required to sponsor such a registry. Apart from data privacy issues, company-sponsored registries also give rise to questions with regard to whether trials could be considered non-investigational trial and pharmacovigilance.
WWL: Due to fast-paced technological advances in the pharmaceutical and medical devices sectors, companies are facing increased scrutiny from regulators. Have you seen a more stringent approach from regulators in your jurisdiction, and how has it affected your advice to clients?
Alan Minsk: As noted above, FDA scrutiny in some areas has increased. While we would not necessarily say “more stringent”, there is certainly more scrutiny. To some extent, the FDA is learning, on the job, about a number of new technological advances. Understandably, the FDA does not want to make a mistake, particularly where public health is at issue. Therefore, the agency acts cautiously and deliberately, asking questions and then more questions, frequently seeking more clinical or other data that it might not have sought five or ten years ago. Therefore, companies should be prepared to educate the FDA, try to get inside the regulator’s mind by looking at past agency decisions and actions and engaging advisers who work daily on FDA matters. It’s not only about understanding the laws themselves but the unofficial rules of the game, and helping regulators become comfortable with the technology or therapy so approval is a win-win for everyone.
Koosje van Lessen Kloeke: There is increasing regulatory scrutiny from the Dutch regulatory authorities in general.
As regards technological advances, the self-regulatory authority, Foundation for the Code for Pharmaceutical Advertising (CGR), has issued some guidance for pharmaceutical companies with regard to the use of digital media and social media. Furthermore, the Dutch Advertising code has very recently issued a self-regulatory code with regard to social media and advertising.
Another interesting development with regard to the increasing regulatory scrutiny relates to software and medical devices, in particular “medical apps” intended to be used for diagnostic or therapeutic purposes. In late 2013, the Dutch Health Care Inspectorate announced its policy and interpretation with regard to software and medical devices, including medical apps, and announced that it intends to enforce these rules. Under the Dutch Medical Devices Act, manufacturers who market a medical device, without, for example, proper CE marking, could face substantial fines.
Finally, we have also seen an increase in advisory and litigation work regarding the use of claims, and borderline issues with regard to medicinal products, medical devices, cosmetics, biocides and food.
WWL: How would you describe the current legal market in the regulatory life sciences field? In your jurisdiction, is the market dominated by large full-service firms or is there space for niche firms?
Alan Minsk: The FDA legal market is attractive. The FDA, similar to any government agency, is not going away. In addition, health care, in general, is a dominant feature of our lives and the economy. Many law firms, particularly those with corporate or intellectual property life science clients, attempt to establish FDA practices. However, it is not easy. There are a few excellent boutique law firms, but the marketplace is comprised primarily of larger firms, like ours, with a dedicated team of lawyers exclusively focused on FDA laws, which are known in the life science community and at the FDA. Therefore, companies will typically gravitate to these known law firms, making it more difficult for new entries to the market. As always, cost, value, responsiveness and specific industry knowledge are the primary drivers for clients.
Koosje van Lessen Kloeke: One of the particularities of the Dutch legal market in comparison with other markets is that the legal market in the regulatory life sciences field is dominated by niche or boutique firms and not so much by the large firms. Most of these firms focus on a particular niche, such as medical devices or food, or on a particular topic, such as pharmaceutical advertising. Only a few boutique law firms provide advice and litigate across a number of life sciences disciplines, and have a broad regulatory practice, covering pharmaceuticals, medical devices, food, cosmetics and biocides.